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Logistics 

International Equities 

Separate Swcfions 


FINANCIAL TIMES 


;g‘jroiDe^Bilsine^.NewspaDefr 


WEDNESDAY SEPTEMBER 2t'TS94' ^ 


Buthelezi sacked 
in feud over 
Zulu leadership 

The feud between King Goodwill Zwelithini and 
Chief Mangosuthu Buthelezi, two leaders of South 
Africa s 9m Zulus, came to a head yesterday when 
the king dismissed Chief Buthelezi as his prime 
minister. The rift could bring a change in the politi- 
cal control of Natal's provincial parliament, cur- 
rently held by the chiefs inkath fl Freedom party. 
Separately British prime minister John Major (pic- 
tured below right with South African president Nel- 
son Mandelat, urged the government to Awihr qr*. 
free market policies that would create prosperity by 
attracting “hard-headed investors". Page 14; ZoIq 
court split, Page 4; Major stresses free trade. Paged 



US bid attacked: UK waste group Attwoods 
attacked a £364m ($S6L2m) hostile bid from Brow- 
ning Ferris Industries of the US as ar. opportunistic 
attempt to take advantage of one shareholder’s 
desire to selL The bid was sprung after a ETC deal 
with Canada's Laidlaw, Attwoods' biggest share- 
holder. Page 15; Lex. Page 14; Background, Page 23 

Franca In air row: France is appealing to the 
European Court of Justice in a bid to delay liberal- 
isation of two profitable domestic air routes. It 
wants a Commission deadline for opening the 
routes suspended pending a court ruling. Page 14 

EKI enlargement move: France and Germany 
are to ask the European Commission to produce a 
consultation paper next spring setting out a pro- 
gramme for enlarging the European Union to east- 
ern Europe. Page 14 

Tokyo dose to agreement on tax r efo r ms: 

Hie three parties in Japan's coalition government 
said they were close to resolving a long-standing 
dispute over tax reforms. Page 5 

Taiwan pressed to open markets: Taiwan is 
under pressure from the US to open its rice market 
and from Japan to drop restrictions on Japanese car 
imports as it enters talks on joining the General 
Agreement on Tariff and Trade. Page 3 

if Pearson restructures publishing I nte res ts: 

Pearson, owner of the Financial Times, announced 
a restructuring of its publishing interests to reflect 
its strategy of concentrating on information, educa- 
tion and entertainment Page 22 

Swissair: International airline Swissair reported a 
SFr48m ($S6-3m) interim net loss compared with a 
SFr65m loss in the same period last year despite 
continuing fare wars and the strength of the Swiss 
franc. Page 17 

CS Holding, international financial services 
group built around Credit Suisse, launched a 
SFr905.6m ($686m) rescue packa ge and agreed take- 
over bid for Neue Aargauer Bank, Switzerland’s 
largest regional bank. Page 15 

Adams seeks IIS visa: Gerry Adams, head of 
Sinn F*in, the political wing of the Irish Republican 
Army, has applied for a OS visa. Page 7 

Australian fire alert An emergency was 
declared in areas of the Australian state of New 
South Wales as winds fanned about 200 bushfires in 
drought-stricken areas. Growth bit, Page 4 

Italian ex-minister held: Former Italian 
interior minister Antonio Gava was arrested in 
Naples on suspicion of having links with organised 
crime. 

Iran bans TV dishes: Iran's parliament voted to 
ban satellite TV dishes used by thousands of Irani- 
ans to watch western and Asian programmes con- 
sidered as corrupting influences by Moslem clerics. 

Burmese rulers meet opposition leader: 

Burma's military rulers met opposition leader Atmg 
San Suu Kyi in her first high-level encounter with 
the junta since she was placed under house arrest 
five years ago. Burmese television said the t alk s 
were cordial but gave no details. 

Void In Bulgaria polities: Bulgaria's opposition 
Union of Democratic Forces rejected an offer to try 
to form a government. The Bulgarian Socialist 
Party of former communists turned down the chal- 
lenge last week. 


■ STOCK M ARKET U ttHCES _ 

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FT-SE ftiotra* 100 .. t.34233 (-1453) 

FT-SE-A Aft-Stare ..... 1J32&22 H-«l 

me! 1M37.Z7 {+283.161 

Net) York tacUnift _ 

Dow Jones bid Aw _. 3£9L03 f-3859) 

S$P Composite 467.12 (-3.73) 

■ US LUHCHTWE RATES 

Federal Funds 

3-mo Treas Bite Yld ... 4.7195J 

Long Bond 9613 

flew 7.799% 

■ LONDON JBONEV 

3 mo We+ta nfc (same) 

Ute long git lutorfc --DK (0ec98, 7 ,) 

■ WO RTH SEA OfL (Ar^ua} 

from 15stay"iNov) ...1.-516.19 (1535) 

■ QoW 

tew Ytrt Comes (Decl .... J397.1 (393.6) 

London . $ 393.6 0 (39025) 


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Clinton seeks broader backing for Haiti accord 

Aristide refuses to acknowledge Carter’s pact with ruling junta 


By George Graham 
in W ash ington 

The Clinton administration 
yesterday tried to win broader 
support for the agreement it 
reached with the Haitian junta 
on Sunday, as the first sign 
emerged that the country's noto- 
rious militias might not prove 
entirely compliant to the wishes 
of US occupying force. 

Haitian riot police used clubs 
to disperse thousands of support- 
ers of exiled President Jean- Ber- 
trand Aristide as they rushed to 
Port-au-Prince harbour to wel- 
come the US troops. At least one 
Haitian was badly injured. 


Apart from this incident, how- 
ever, US deployment was greeted 
peacefully. Earlier, General John 
Shaiikashvili c hairman of the US 
joint chiefs of staff, insisted that 
the Haitian troops were continu- 
ing to co-operate with the US 
occupation force. 

Gen Shaiikashvili, the US’s top 
military officer, strongly 
defended Sunday's agreement, 
which provides for General Raoul 
Cddras and other military leaders 
to leave power, but not necessar- 
ily the country, by October is. 


“I am absolutely convinced 
that an agreement that allowed 
us to now be in Haiti this morn- 
ing already . . . without a single 
shot fired up to now, without a 
single American having been 
wounded or died or without a 
single Haitian being wounded or 
died, must be pretty good." be 
said. 

Gen Shaiikashvili said Penta- 
gon officers planned to brief Fr 
Aristide on their plans for occu- 
pying Haiti. 

Fr Aristide broke his silence on 


the deal yesterday with a frosty 
statement reaffirming his com- 
mitment to last year’s broken 
Governor’s Island Agreement - 
under which Gen Cedras had 
promised to leave power a year 
ago - but pointedly ignoring the 
agreement brokered by former 
US president Jimmy Carter. 

The ousted Haitian president 
s aid he would "remain vigilant to 
the declaration of democracy 
expressed by the people of Haiti, 
as together with the people of 
Haiti we move toward a new 


beginning". But Fr Aristide’s 
advisers said the omission of any 
endorsement of the new agree- 
ment was deliberate. 

Briefing congressional leaders 
yesterday, Mr Clinton said; “This 
is a very different and a much 
better day than it would bave 
been had we uot been able to 
successfully combine the credible 
threat of force with diplomacy." 

He added that Washington 
“must be prepared for the risks 
that remain for the troops, but 
we should recognise that we are 


in a much stronger and safer 
position to achieve our goals in 
Haiti today". 

Members of the US Congress 
from both parties remained scep- 
tical about the chances of suc- 
cessfully restoring democracy to 
Haiti, and unhappy about the 
prospect that US troops would 
have to remain in large numbers 
probably until at least February. 

The House or Representatives 
voted by 353-15 in Favour of a 
resolution offering muted sup- 
port for Mr Clinton but also call- 
ing for the withdrawal of US 
troops as soon as possible. 

Priest in exile. Page 6 


US trade gap widens in July M German and Dutch markets down 


Bonds and 
stocks fall 
amid fears 
of inflation 


London 

FT-SE100 

Index 


10-year bond yield 
Percent 


New York 

Dow Jones 
Industrial Average 


10-year bond yield 
Per cent 



Lex 

Bonds - 


.Page 14 
.Page 20 


■ STERLING 

Umliosk hmcifine 

S 

London: 

15749 


S 

15764 

(1.568) 

DM 

24446 

P-4347) 

FFr 

8357 

(8.3175) 

SFf 

24284 

(2.023 

Y 

54588 

(154564) 

Elude* 

708 

(796) 

■ DOLLAR 


New York tndifrnir 1 

DM 

15518 


FFr 

55035 


SFr 

1-2960 


Y 

97505 


London: 

DM 

15508 

(1.5528) 

Fr 

55015 

(53045) 

SFf 

1.2855 

(1.2895) 

Y 

97.75 

(98.765) 

S Index 

62.0 

(6L3) 

TOKYO Close Y 9850 


By GSfian Tett in London and 
Frank McGurty in New York 

World bond and stock markets 
slid yesterday after worse- than- 
expected US trade figures and 
mounting concerns about the 
outlook for inflation and interest 
rates in Europe and the US. 

The immediate spur was US 
Commerce Department figures 
showing that the US trade bal- 
ance deteriorated significantly in 
July and recorded the second- 
largest monthly deficit ever for 
trade in goods. The data added to 
market fears about inflation pros- 
pects in the US and sharply 
depressed the US bond and stock 
markets. 

The Dow Jones Industrial 
Average plunged 41.05 in a 
broadly based retreat to 3,895.67 
in the morning. In the Treasury 
market, foreign investors sold 
heavily in response to fears of a 
weaker dollar, with the US and 
Japan preparing for a fresh 
round of trade talks. By early 


afternoon in New York, the price 
of the benchmark 35-year govern- 
ment issue was down £ at 96-*, 
raising the cost of long-term 
finance. Meanwhile, the dollar 
sbd against the yen in European 
and US markets. By early after- 
noon in New York, the dollar was 
quoted at Y97.72. down from 
Y9S51 late on Monday. 

The fall-; exacerbated a broader 
slide in most European bond and 
equity markets. Economists 
emphasised that the underlying 
reason for the fall was not so 
much the US trade figures but a 
growing fear in European and US 
markets that US inflation pres- 
sures are mounting while the 
European interest rate cyde is 
likely to rise. 

The FT-SE 100 share index fell 
41.8 points to close at 3.037.3. US 
government bonds also fell 
sharply in the morning, with the 
December pit contract touching 
a low of 97.50 before rebounding 
at the end of the day to close at 
98.03, down from the opening 


London stocks Page 25 

Currencies Page 32 

World stocks Page 36 

price of 98.15. Short sterling 
futures were also weak amid 
heavy trading. Meanwhile, yields 
on 10-year government bonds 
also rose through the psychologi- 
cally important ’*ve) of 9 per 
cent. 

The declines were reflected in 
most European markets, where 
stock markets in the Netherlands 
and Germany fell by about 1 per 
cent. European bonds also bad a 
volatile day, further strained by 
concerns that German money 
supply figures, expected today, 
might be worse than expected. 

The main factor driving the 
equity markets Hall, economists 
said, was the volatility in inter- 
national bond markets, where 
dealers apparently remain uncon- 
vinced about governments’ abil- 
ity to maintain low inflation and 
continue to focus disproportion- 
ately on bad economic news. 

Mr Keith Skeoch, chief econo- 


Russia demands control as 
Azerbaijan oil deal is signed 


By John Lloyd in Moscow and 
Robert Corzine in Baku 

The largest deal between foreign 
oil companies and a former 
Soviet republic was signed yes- 
terday in the Azerbaijani capital 
Baku - but Russia immediately 
refused to recognise the SBbn 
agreement 

The refusal from Mr Grigory 
Karasin, chief spokesman for the 
Russian foreign ministry, follows 
Moscow's stated Intention to con- 
trol mid if necessary stop ail oil 
and gas exploitation in the Cas- 
pian Sea unless it dictates the 
terms. 

Russia is demanding that the 


,* Russia vy r-’ t 

v 

AZERBAIJAN bakujU) 



However, the deal omitted 


Representatives from a censor- 




variously described by Mr Aiiyev 
as “tense” and “not easy at all". 

The Russian deputy energy 
minister was present at the sign- 
ing ceremony, which suggests a 
clash of interests between the 
Russian energy and foreign min- 
istries. 

The consortium is likely to use 
oil swap deals with Russia or 
Iran to export the relatively 
small volumes of early oil pro- 
duction. That will begin within 
18 months and build up to 80.000 
barrels a day by 1997. 

The consortium plans to 
develop the fields in phases. The 
offshore fields contain potential 
reserves of about SBbn barrels of 
high-quality crude oiL Peak out- 
put could reach 700,000 barrels a 
day, a level that might “reshape 
the pattern of trade in energy 


supplies”, according to Mr John 
Browne, managing director of BP 
Exploration. Azeri production is 
160,000 b/d at present. 

Mr Browne said the risk that a 
long-term transport solution 
might prove elusive would be 
reduced by “pacing investment 
according to the means of getting 
the oil out”. 

In addition to BP, consortium 
members include Amoco, Unocal 
McDermott and Pennzoil all of 
the US, Statoil of Norway, Ramco 
of the UK, Turkish Petroleum, 
Lukoil Russia’s largest oil com- 
pany, and Delta, a private Saudi 
company. Socar, the Azerbaijani 
state 03 company, has a 20 per 
cent interest 

The most recent member of the 
consortium is Lukoil the Rus- 
sian semi-private oil company 
which was given 10 per cent erf 
the project from the Azeri gov- 
ernment stake after strong pres- 
sure from Russia for its inclu- 
sion. However, it appears that 
that share - thought sufficient to 
satisfy Russian demands - is not 
enough for the Russian govern- 
ment to bless the venture. 

The deal must still be ratified 
by the Azeri parliament - a body 
whose majority is pro-Aliyev, but 
which has in the past proved vol- 
atile when presented with deci- 
sions it judges to be against the 
national interest. A strong strain 
of opinion is against the entry of 
western oil companies. 



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52 



Souse. FT Grapftrta 

mist at UK brokers James Capel 
said “The faff in the Footsie is 
being generated as much by 
international factors as from 
domestic figures." 

Broader inflation concerns, 
economists said, were likely to 
continue to depress UK gilts In 
spite of the UK government’s 
interest rate rise last week. With 
the UK company results' season 
now coming to an end, gilt mar- 
kets are expected to act as the 
key factor driving equity markets 
in the month ahead 

Mr George Magnus, interna- 



tional economist at brokers S.G. 
Warburg in London, said “There 
is a feeling in the markets that 
we have now crossed the Rubi- 
con, and what we have seen in 
the US in terms of rising infla- 
tion and interest rates is migrat- 
ing over to Europe now." 

Meanwhile, Mr Michael Saun- 
ders, UK economist at Salomon 
Brothers, said “It is a combina- 
tion of growth coming out stron- 
ger than expected, further 
upward pressure on US rates and 
a sense that the German interest 
rate cycle has changed." 


Michelin 
in profit 
as market 
recovers 

By John Ridding in Paris 

Michelin. the world's largest tyre 
maker, reported a strong turn- 
round this year with a first-half 
net profit of FFr4 10m (S77.7m) 
after minority interests, com- 
pared with a loss of FFr3.19bn in 
the sam p period last year. 

The result reflected a recovery 
in the European car mar ket after 
last year's sharp recession and 
the effects of the group's restruct- 
uring programme, according to 
Mr Eric Bourdais de Charbon- 
niere, finance director. 

He said Michelin was on course 
with its rationalisation plan 
launched last year. It aims to cut 
FFr3.5bn in costs by mid-1995. 
The workforce is about 120,000 
against 129.000 at the start of 
1993. Salary costs have fallen 
from 43.5 per cent of sales in the 
first half of i993 to 39.7 per cent 
in the first six months this year. 

While he expressed satisfaction 
with the results. Mr Bourdais de 
Charbonnidre said “They mark 
only the beginning of the re- 
establishment of Uie company's 
financial situation." The com- 
pany had taken FFrSlOm of provi- 
sions to cover further staffing 
changes in France. 

He cited continued growth in 
the US market and recovery in 
Europe as the factors behind a 
rise in sales from FFr30.6bn to 
FFr33.27bn. In both markets, 
however, the impact on profits 


Continued on Page 14 
Lex, Page 14 


TIIF FINANCIAL TIMES LIMITED 1994 No 32.477 Week No 38 LONPOM ■ PARIS ■ FWAMKFURT ^NEW YORK ■ TOKYO 


* 


VACHERON CONSTANTIN 

Geneva, since 1755 




if 



The world's oldest watch manufacturer 


VkMW ConyanSn I rur del MoufcnS. CH 1204 GenAwe 




-1 . 


By Robert Graham in Rome 


cesco Di Lorenzo - only laced 
corruption charges. But the 
Gava case is the most serious 
accusation linking the world of 
organised crime with politics 
since that of former prime min - 
Liter Giulio AndreottL 

As interior minister from 
1988-92. he had direct control 
over the fight against the 
Mafia. Earlier in 1987 as 
finance minister he had 
responsibility for the Guardia 
di Plnanza. the financial police. 

Mr Gava is alleged to have 
been part of the clan of Car- 
mine Alfieri, the leading figure 
in the Camorra, who was cap- 
tured in September 1992 after 
having been on the police 
wanted list for ten years. 
Naples magistrates claim that 
at the time of his capture Alfi- 
eri was ru nning an empire 
which spanned illicit construc- 
tion and investment activities 
alongside drug dealing, extor- 
sion and racketeering with a 
combined annual turnover of 
Ll.500bn ($965m). 

Extensive information on the 
Alfieri empire has been sup- 
plied by Pasquale Galasso, a 
former close associate who has 
been under police witness pro- 
tection since December 1992. 
Galasso’s evidence has already 
led to hundreds of arrests and 
has been the principal means 
of implicating the bulk of the 
former ruling elite on the 
Naples city council as well as 
leading business figures and 
national politicians. 

Mr Cava is alleged to have 
developed his Camorra links in 
the early eighties. 

This was in the wake of the 
transfer of vast funds to 
Naples and the surrounding 
region to make good the dam- 
age caused by the devastating 
Irpinia earthquake. These 
funds were diverted for politi- 
cal use and business Invest- 
ment which required Mafia 
protection, the magistrates 
allege. 

In return for such protection 
the politicians headed by Mr 
Gava agreed to provide politi- 
cal cover for the Camorra. 

■ The majority of journalists 
in RA1. Italy's state-run broad- 
casting corporation, yesterday 
staged a 24-hour stoppage in 
protest at government-imposed 
changes in the editorial control 
of the three television channels 
and national radio network, 
writes Robert Graham. 

The changes were agreed 
over the weekend and reflected 
efforts by the Berlusconi gov- 
ernment appointed manage- 
ment board to shake up the 
existing editorial structure. 
The RA1 main union claimed 
the new board had Tailed to 
observe proper procedures and 
was determined to place gov- 
ernment-friendly journalists in 
key positions of editorial con- 
trol. 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 1994 


NEWS: EUROPE 


Naples 
politicians 
accused of 
Mafia link 


Mauroy hitches bandwagon to TGY 


By David Buchan in LiBe 


Mr Antonio Gava, a former 
Christian Democrat interior 
minister and a big political fig- 
ure in Naples, was yesterday 
arrested on charges of alleged 
association with the Camorra. 
the Neapolitan Mafia. 

The arrest was one of 76 
ordered by Naples magistrates 
on charges of association with 
the Camorra. Those arrested 
included two other former 
prominent local politicians. A 
further 22 arrest warrants were 
issued in the same inquiry Tor 
various types of corruption. 

Naples magistrates first 
sought to implicate Mr Gava 
on similar charges in March 
1993. Parliament subsequently 
agreed that his immunity 
should be waived. However, 
the magistrates have waited a 
good six months before moving 
to arrest Mr Gava who was 
widely known as the most pow- 
erful Christian Democrat fig- 
ure in the Naples region for 
much of the past two decades. 

He now becomes the second 
former minister from Naples to 
be arrested. But his colleague - 
former health minister Fran- 


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Mr Pierre Mauroy yesterday 
inaugurated a FFrSOOm (£96m) 
shopping centre, the latest 
stage in the colossal “Earal- 
1116'' commereial/transport 
project in the centre of the 
north French city. 

The venture forms a key 
part of his campaign to win a 
fifth six-year term as mayor of 
Lille next year. 

The former Socialist prime 
minister has been mentioned 
as a possible Socialist presi- 
dential candidate if Mr Jac- 
ques Delors decides not to nm. 
Bnt despite recent conserva- 
tive inroads into his Socialist 
bastion. Mr Manroy’s enthusi- 
asm for municipal politics 
seems undimmed. To bolster 
his record as mayor since 
1971, he is counting heavily on 
the Earalille project and on Mr 
Delors' own daughter, Mrs 
Martine Aubry, the former 
labour minister, who is run- 
ning on his ticket as first dep- 
uty mayor hi the Jane 1995 
municipal elections. 

Bnt the politically dou- 
ble-edged nature of the Eural- 
ille project was underlined 
yesterday when organisers of 
the new 66,500 square metre 
commercial centre admitted 
that they had deliberately 
turned away textile and cloth- 
ing companies wanting to 
install themselves in the new 


centre in order to protect these 
traditional industries of Lille, 
where unemployment is 
already more than 13 per cent 
“In the interests of diversifica- 
tion, we decided to make lei- 
sure and beauty a major theme 
of the centre which is now 95 
per cent filled,” one organiser 
said coyly. 

Exploiting the local textile 
industry's anxiety, Mr Alex 
Turk, a Ga all 1st RPR law pro- 
fessor running far mayor 
against Mr Mauroy has critic- 
ised the Earalille project for 
siphoning too much money 
away from other social ser- 
vices and for over-emphasising 
commercial development, 
rather than just settling for 
the still-ambitious goal of 
making Lille the hub of new 
TGV high-speed train services 
between Paris, London and 
eventually Brussels. 

Mr Jean-Pani Baietto, over- 
all director of Earalille, said 
yesterday that the city had 
only sunk FFr84m directly 
into the project, with its main 
contribution being the gift of 
70 hectares city centre site 
which had been in French 
army bands from the 17th cen- 
tury until the early 1980s. 
More than FPr3bn of the total 
investment was from the pri- 
vate sector, and much of the 
balance from central and 
regional government and 
French railways. 


1*1 Q Mtea 2QQ 


• Y“"*SFPp..l 0 Km 3Z0 

'■**0*\ 

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The political ambitions of the 
Socialist mayor of Lille. Pierre 
Mauroy (right), have rested on 
making the city a rail hub of 
west Europe; one hour away 
from Paris; two hours from 
London once the Chunnel 
opens; and soon to be half-an- 
hour from Brussels by TGV 



But the delayed start to full 
commercial TGV services 
through the Channel Tunnel 
was in danger of mthalnnnlng 
the project, he conceded. 

Some delay has been wel- 
come, he said, because Lille 
started its TGV station well 
after work on the Channel 
began. But the Lille station 


was finished last May, “and 
we will be in trouble if the 
Euros tar (TGV) trains don’t 
start arriving by next May”, 
he said. 

The next chunks of Enral- 
iHe, described as Europe’s big- 
gest city renewal project, due 
to open are a 5.000 seat 
theatre in November and a 


World Trade Centre next Janu- 
ary. The latter is supposed to 
provide a variety of services to 
travelling businessmen. 

The trade centre wQl include 
apartments, temporary offices, 
and banks and travel agencies, 
and as such it is highly depen- 
dent on toe Eurostars bringing 
in the businessmen. 


Rasmussen senses 


Dutch budget 


backing for welfare deficit below 


By Hugh Camegy and Hilary 
Barnes In Copenhagen 


DANISH 


September 21 


Mr Foul Nyrup 
Rasmussen, 
f'/ \ Denmark’s 
\ /N_J Social Demo- 
'2 cratic prime 
a gg| minister, yes- 
■ / terday prom- 

JSP^JI ised to bolster 
■f the country’s 
extensive wel- 
• '"imr fare system if 
JpF he is returned 
r to office, as 
DANISH expected, in 
ELECTIONS today’s general 

election. He 
September 21 toU a fmal 

campaign press conference he 
had sensed a change of atti- 
tude among Danes in favour of 
welfare spending after a 
decade of restraints by centre- 
right governments between 
1982 and early last year. 

“I am convinced that after 
the election we shall find there 
is wide support for spending 
more money on the care of the 
elderly, home help services and 
the hospitals," he said. 

The welfare state has been a 
central issue, as it was in the 
Swedish election won on Sun- 
day by the Swedish Social 
Democratic party. Although 
government spending in Den- 
mark is equal to 64 per cent or 
GDP - second only to Sweden 
among industrialised countries 
- Denmark has not incurred 
the big budget deficits amassed 
by its northern neighbour, 
allowing Mr Rasmussen to 
avoid the cuts Sweden is now 
facing. 

His chances of a second term 
were strengthened yesterday 
when the three small centre 
parties in his coalition govern- 
ment reacted coolly to calls 
from the Conservative and Lib- 


eral parties to join them in a 
new centre-right coalition. 

“If there is a non-socialist 
majority, there ought to be a 
non-socialist government,” 
said Mr Uffe EUeman-Jensen, 
the Liberal leader and opposi- 
tion candidate for prime minis- 
ter who is campai g nin g for 
restraints on public spending 
to allow for lower taxes and 
higher private sector growth. 

But his call was promptly 
rejected by the Radical Liberal 
party and the Centre Demo- 
crats. who remain loyal to a 
partnership with the Social 
Democrats. The Christian Peo- 
ple’s party, who opinion polls 
show may be eliminated from 
the FoUreting (parliament), 
were non-oommittaL 

Opinion polls indicate the 
four-party coalition, which 


took office in January 1993 
without an electron. wUI lose 
its oneseat majority. But they 
suggest Mr Rasmussen will be 
able to continue as head of a 
minority government depen- 
dent on the left-wing Socialist 
People's party. The Conserva- 
tive and Liberal parties are set 
to make gains, but not suffi- 
cient to unseat Mr Rasmussen 
without the help of centre par- 
ties. 

The prospect of a Social 
Democratic victory has led to 
speculation that Mr EUeman- 
Jensen. foreign minister 
between 1982 and. 1993, may 
seek to become fNalk secretary- 
general in succession to the 
late Mr Manfred WOraer. Yes- 
terday. however, he empha- 
sised his ambition to become 
Danish premier. 


expectations 


By Ronald van de Krai 
in Amsterdam 



Poul Nyrup Rasmussen: made pledge on care for the elderly 


Unexpectedly strong tax 
receipts allowed the new Dutch 
cabinet to submit a budget for 
1995 yesterday that manages 
to keep the country's budget 
deficit well below the 
projections made last month 
when the coalition government 
took office. 

The rise in tax receipts, 
fuelled by a resurgence in 
economic growth, means that 
the 1995 deficit will represent 3 
per cent of gross domestic 
product (GDP), compared with 
the government’s own ceiling 
of 3.3 per cent set in August 
The 1994 deficit, which was 
also originally expected to 
stand at 3.3 per cent of GDP. is 
also now expected to come in 
at 3 pa- cent 

The buoyancy of the Dutch 
economy was underlined 
yesterday when the Central 
Planning Office forecast that 
GDP would grow by 3 per cent 
rise in 1995, the sharpest rate 
in the 1990s. 

It also revised its forecast for 
growth in the current year to 
2 per cent double the 1 par 
cent forecast released in the 
spring. 

Government spending will 
rise to F1233.3bn (£86bn) in 
1995 from Fl2Q0-2bn this year, 
reflecting a large, one-off 
payment of subsidies to public 
housing co-operatives. 

Tax revenue is projected to 
rise to FI I53.5bn from 
FI I50.4bn in 1994, which is 
itself F12.3bn higher than 
originally forecast 

Despite the better than 
expected economic and fiscal 


outlook for 1994 and 1995, the 
new left-right coalition 
government led by Mr Wim 
Kok, file Labour leader, said it 
aimed to tackle structural 
problems in the Dutch 
economy, such as stubbornly 
high unemployment and 
the country's big public 
debt 

“You can't allow yourself 


Mr Wim Kok, the 
Labour leader, says 
‘you can’t allow 
yourself to be 
blinded by a 
short-term 
economic recovery’ 


to be blinded by short-term 
economic recovery,” Mr Kok 
said. 

Mr Gerrit Zalm, the finance 
minister, said that the 
cabinet's budgetary policies, 
drawn up in August had bean 
purposely based on cautious 
economic assumptions so that 
the government would not 
have to modify spending plans 
if it encountered economic 
setbacks. 

The government previously 
set a deficit ceiling of 2J per 
cent for 1998, the final year of 
its four-year term. Yesterday, 
it said it would use any further 
tax windfalls to reduce this to 
2.7 per cent 

If there is any money 
remaining, the government 
will also seek to earmark up to 
FI 10Qm for extra spending on 
policing. 


Central bank set to regulate Irish SE 


By John McManus in Dublin 


The Central Bank of Ireland is to take 
over regulation of the coontiy’s stock 
market after the splitting of the Irish 
stock exchange from the London stock 
exchange, scheduled for next April, the 
government announced yesterday. 

Under the Stock Exchange Act due to 
become law by the end of this year, the 
newly independent Irish stock 
exchange and its 10-member firms will 

have to apply to the Central Bank for 
permission to trade. However during 
the transition period they will be con- 
sidered as approved while their appli- 
cations are being dealt with. 


Under the new Act, which fulfils 
Ireland's EU obligation to regulate its 
own stock market, firms authorised in 
other EU states w® be able to operate 
in Ireland and firms authorised In 
Ireland will have the right to operate 
in other EU states. 

In order to be approved the Irish 
stock exchange will have to become a 
limited company and its current coun- 
cil, made up of representatives of mem- 
ber firms will be replaced by a new 
board. 

The board wifi have to “represent a 
balance between the interests of mem- 
ber firms and stock exchange users and 
pnblic interests and must Include 


enough independent members to pro- 
mote the protection of investors and 
the maintenance of proper standards," 
according to the Irish minister for 
finance, Mr Bertie Ahern, who 
launched the bill yesterday. 

The Central Bank will he able to 
block appointments to the new board, 
said Mr Ahern. The rules of the Irish 
stock exchange will have to be 
approved by the Central Bank and the 
bank will be able to investigate 
breaches of them. 

The Irish stock exchange has indi- 
cated that it intends to adhere to the 
rules of the London stock exchange fol- 
lowing the split. Breaches of these 


rules are currently dealt with under 
the disciplinary procedures of the Lon- 
don stock exchange. 

The Central Bank will also be able to 
impose its own conditions and regula- 
tions on the exchange and investigate 
breaches of them- Fines of np to 
IR500.000 ($780,000) may be imposed 
for breaches of Central Bank condi- 
tions and regulations while fines of 
IRlm and prison sentences of up to 10 
years may be imposed of breaches of 
(he Stock Exchange Act itself. 

Hie bank will also have the power to 
object to file acquisition or disposal of 
significant shareholdings in the Stock 
Exchange or member firms. 


Confusion surrounds EU directive 


By David Goodtiart, 
Labour Editor 


The European Commission has 
finally agreed a revised version 
of the controversial Acquired 
Rights Directive but there is 
widespread disagreement 
about what the revision means. 

The directive affects the 
rights of workers whose ser- 
vices are contracted out. 

European employers and 
unions welcomed the amend- 
ment but disagreed radically 
about what effect it mil have. 
Employers bodies, and several 
countries such as Britain and 
Germany, have been pus hing 
hard for a narrowing of the 


directive's scope while unio ns 
have been strongly resisting 
any significant change. The 
revisions win still have to be 
unanimously approved by the 
EU social affairs co uncil 

The original directive passed 
in 1977 protects the jobs and 
working conditions of workers 
whose businesses are trans- 
ferred. It first became a big 
issue when it began to inter- 
fere with the British govern- 
ment's attempt to contract out 
public services to the private 
sector. Contracting out has 
been severely impaired by the 
directive in Britain. 

The German government 
swung its weight behind 


reform of the directive after a 
recent ruling from the Euro- 
pean Court of Justice decreed 
that a single woman cleaner 
whose job was transferred to a 
contractor should be covered 
by the directive. 

The revised directive seeks 
to clarify what type of opera- 
tion will remain covered by the 
directive. It also revises the 
rules on insolvent companies. 

The key new paragraph 
states that the transfer of an 
economic entity which retains 
its identity” will still be 
regarded as a transfer but the 
transfer of “only an activity of 
an undertaking... does not in 
itself constitute a transfer". 


Employers* organisations 
claim this represents a signifi- 
cant narrowing of the direc- 
tive’s scope and could rule out 
many of the activities - such 
as cleaning and catering - at 
the centre of the UK govern- 
ment’s contracting out strat- 
egy. Mr John Hall, director- 
general of the Business Ser- 
vices Association, which repre- 
sents UK private contractors, 
said: “This is a vast improve- 
ment on the existing directive, 
and is even some improvement 
on the earlier revisions, but it 
could still mean a field day for 
the lawyers." 

However Mr David Lea, 
assistant general secretary of 


the British Trades Union Con- 
gress, said that the revision 
merely codified recent judg- 
ments of the European Court 
and was welcomed by Euro- 
pean trade unionists. In the 
judgment on the single Ger- 
man cleaner the judge said 
that the woman alone did rep- 
resent an “economic entity". 

Ms Melanie Tether, a British 
lawyer specialising in the 
directive, said that it was not 
so much the new language but 
the political signal that was 
being sent to the European 
Court to narrow the scope of 
the directive which was likely 
to be crucial. 

Editorial comment, Page 13 



EUROPEAN NEWS DIGEST 


Finland raises 
new EU doubts 


Mr HeGcki Haavisto. the Finnish foreign minister, yesterday 
caused consternation in the government when he suggested 
the country would quickly be able to renegotiate its entry 
terms to the European Union if voters reject membership in 
ng*t month's referendum. 

By (prrw^ ffing uncertainty over the outcome and importance 
of the referendum his suggestion is likely to increase tensions 
j between his own Centre party and the pro-EU Conservative 
party, the main coalition partners in Finland’s centre-right 
government 

The Centre party, which leads the coalition, backs member- 
ship but it has been anxious not to offend the anti-EU fanning 
community on which it relies for much of Its support Writing 
in the Social Democratic newspaper, Demari, Mr Haavisto said 
he believed EU enthusiasm for Nordic membership of the 
community was sufficiently strong for the two sides to be able 
to negotiate a new membership package within a year. The 
general view has been that the Nordic countries would have to 
wait at least five years before they could re-apply for member- 
ship. Last week Mr Esko Aho. the Centre party prime minis- 
ter, upset the Conservatives and the opposition Social Demo- 
crats when he said parliament should wait until after the 
Swedish referendum before deciding whether to Approve the 
country's membership campaign. 

Parliament has to approve the move by a two-thirds major- 
ity. Finnish enthusiasm for the EU has been waning, with the 
latest opinion poll showing 38 per cent of voters in favour of 
membership and 31 per cent against. Christopher Broom - 
Humes. Stockholm 


Swedish Liberals await a call 


Mr Bengt Westerberg. the leader of Sweden’s Liberal party, 
said last night that he had received a party mandate to 
negotiate with the Social Democrats, the winners of Sunday’s 
general election, over a possible coalition. 

But he thought it was more likely that the Social Democrats, 
who fell just 13 seats short of a majority In the 349seat 
parliament, would form a minority government. A coalition 
between the Social Democrats and the Liberals would be 
warmly welcomed by financial markets and Swedish business 
because they believe It would bring tough action to curb the 
country's budget deficit However, political analysts say the 
weak showing of the Liberals in Sunday's election, when they 
lost 20 per cent of their votes, makes the alliance unlikely. 
Yesterday Mr Ingvar Carlsson, prime-minister elect delayed 
until today an announcement on his efforts to form a govern- 
ment following preliminary contact with the leaders of the 
other parties. The uncertain political situation continued to 
weigh on the markets, with bond yields edging higher and the 
Swedish krona and shares both losing ground. Christopher 
Broum-Humes, Stockholm 


French minister in villa row 


France's trade and industry minister, Mr Gdrard Longue t, 
yesterday denied a magistrate’s report that he had effectively 
allowed a contractin' from his home region of Lorraine to pay 
for much of the building of his Riviera villa, and that what he 
had paid came from other corporate sources. The minister 
claimed the leaking of judge Mr Renaud Van Ruymbeke’s 
report to the Justice Ministry was a malicious attack on him, 
and dismissed any idea of resigning. Mr Van Ruymbeke has 
put the head of St Gobain, Mr Jean -Louis Beffa, under formal 
investigation in an attempt to track down what happened to a 
FFrL4m (£530,000) commission paid by a St Gobain subsidiary 
to win a water pipe contract in Nantes. 

In seeking to verify claims that the missing money ended up 
with Mr Longuet, the judge has unearthed other information 
about Mr Languetis St Tropez villa, his Lorraine-based con- i, . 
tractor, and his Paris consulting company, which he believes v 
warrants investigation. Mr Pierre Mehaignerie, the justice 
minister, now has the delicate task of deriding whether to call 
in another magistrate to investigate his cabinet colleague. 
David Buchan, Paris 


Slovak poll delays privatisation 


The Slovak government yesterday suspended part of its priva- 
tisation programme, postponing decisions on direct sales of 
state assets until after next week’s general election. The move 
is designed to remove political uncertainty from the process 
ahead of the vote, scheduled for September 30 and October l, 
and Is in response to a pledge made by Christian Democrat ; 
members of the ruling coalition that no privatisation decisions 
would be made during campaigning. The National Property : 
Fund, which administers state assets, opened on August 1 for 
bids for stakes in state companies not included In the voucher 
privatisation programme, which is not affected by the suspen- 
sion. The tender dosed cm August 30 and the NPF is expected 
either to consider the bids after the election or to open a nother 
tende ri ng process. The latter option seems likely if the outgo- 
ing government of prune minister Jazef Morav&k is replaced 
by one dominated by the Movement for a Democratic Slovakia, 
the largest opposition party. Its leader, Mr Vladimir Metiar, 
has said that if he becomes prime minister he will scrap 
current government privatisation plans and “start all over 
again". Vincent Boland, Prague 


Jobs burden for women 


Economic recession and structural changes in central and 
eastern Europe have led to more unemployment, increased 
part-time work and lower wages for women, according to the 
United Nations Economic Commission for Europe. A report 
prepared for a UN conference next month In Vi enna on the 
situation of women in Europe says that wo man account for a 
growing share of the labour force. However, particularly in the 
service sector, women's jobs are still segregated at the lower 
end of the labour market, upward mobility and career pros-, 
pects are limited and many women are left outside the 
full-time jobs market A new employment pattern is emerging 
which is “highly feminised", the report says. This comprises 
highly s kill ed foil-time workers and a large “periphery”, usu- ! 
ally lower skilled, and employed “when needed”. The report , 
notes that in western Europe unemployment hits women con- ! 
s istently harder than men, while in central and eastern 1 
Europe women have been most affected by the rise to poverty, j 
Frances WiUiams. Geneva i 


ECONOMIC WATCH 


Swedish trade balance in deficit 


Vfeftjte trade balance, SKrbn 

10 — 1 


Sweden's balance of trade 
Sweeten swung into a SKrtOOm (£34m) 

^ o*, . deficit in August after a July 

_ surplus of Skr9.6bn, according 

10 * I ' to preliminary figures from 

_ I the Swedish statistical 

- Tt agency. Although the figures 
e i _ __ | L B are distorted by summer boh- 

5 * lit "- days and represent a narrow- 
ly M I hImI toff of the SkrGOOm deficit 

' di : yi n • m " during the same month, last 
• Is J II mil year, they represent a trade 

6 Br r 111® tSSm Performance well below the 

predicted Skr 2 . 5 ba surplus. 

o „ , ■ The victory of the Social 

, , Democratic Party in Sunday's 

" Z 1992 sb 94 vote has tended to firm rather 

^ . than weaken the Swedish 

krona as markets wait to see 
if SDP leader Ingvar Carlsson can establish a strong govern- 
ment Reuter, AP. Stockholm. 

■ Unemployment in Finland fell during August to 19,1 per 
cent, down from 20.1 per cent a month earlier, according to the 
Finnish labour ministry. 

■ Switzerland's balance of payments position worsened in 
August The Federal Customs reported a deficit of SFr290-hn 
(£I415m), and a revised surplus of SFr315J3m for July. 


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FINANCIAL TIMES WEDNESDAY 


SEPTEMBER 21 1994 ★ 


3 


a 


‘Bloody 
fight’ for 
emerging 
markets 


By Nancy Dunne 
in Washington 

Mr Jeffrey- Garten, US 
commerce undersecretary 
responsible for international 
trade, yesterday predicted that 
large emerging markets, such 
as China. Indonesia and India, 
will be the battlefield for “a 
bloody fight" as companies 
0*0111 industrialised countries 
vie for markets and govern- 
ment contracts. 

In a speech prepared for 
delivery yesterday in Chicago. 
Mr Garten said the aggressive 
commercial policy adopted by 
the Commerce Department is 
being, integrated into US for 
eign policy (V as never before”. 
Hie US wilr continue to cham- 
pion human rights, but it has 
now accepted business’s con- 
tention that commercial 
engagement furthers human 
rights goals. 

Mr Garten, who has become 
the chief interpreter of Clinton 
< administration trade policy, 
outlined Washington’s mobili- 
sation of both government fin- 
ancing and resources for the 
US assault on 10 "big emerging 
markets". These BEMs also 
include Brazil, Argentina. 
South Korea, South Africa, 
Poland, Turkey and Mexico. 

Export promotion, he said 
had "moved out of the shad- 
ows" to the centre of trade pol- 
icy. This has been demon- 
strated by the significant 
deregulation of export controls, 
expansion of trade financing 
facilities, and the establish- 
ment of export assistance cen- 
tres around the US and com- 
mercial centres abroad. 

The aggressive US strategy 
deploys the president, cabinet 
members and other senior offi- 
cials in a coordinated pursuit 
of business. President Clinton, 
for example, contacted the Bra- 
zilian president, Mr Itamar 
Franco, to push a successful 
Raytheon bid for a Ji.Sbn envi- 
ronmental technology project 
Mrs Hazel O'Leary, US 
energy secretary, is due to 
arrive in Pakistan today with 
more than SO US business exec- 
utives "to support Prime Minis- 
ter Benazir Bhutto's plans to 
boost Pakistan's electricity 
supply”. 

US government and business 
leaders meet frequently to co- 
ordinate business strategies 
and government policy. The US 
plans to expand training of for- 
eign managers and techni- 
cians, who would be be 
“inclined to buy American 
goods and services," Mr Garten 
said. 

"Stronger bilateral links 
between Washington and each 
of the BEMs are critical” Mr 
Garten said. In the Cold War. 
US linkages were often 
through military exchanges 
and training programmes: 
“Now and in the future, the 
most important links will not 
be men in uniform carrying 
weapons, but men and women 
in blue suits carrying laptops." 

Mr Garten said the BE BAs 
must feel the new World Trade 
Organisation is sensitive to 
their interests. "Because they 
have such large internal mar- 
kets. they have mare of an 
option of slowing their integra- 
tion into the world economy 
with protectionist measures 
than do smaller nations," he 
said. 


NEWS: WORLD TRADE 


Former Italian trade minister to challenge Mexican president for top trade job 


EU backs 
Ruggiero to 
head WTO 


By Frances WDDams in Geneva 

The race for the top job at the 
World Trade Organisation, due 
to be created next January, 
hotted up yesterday when Mr 
Rena to Ruggiero, a former Ital- 
ian trade minis ter, was for- 
mally nominated as the Euro- 
pean Union candidate. 

Unless others enter the race, 
the contest now seems likely to 
be between Mr Ruggiero and 
Mr Carlos Salinas, outgoing 
president of Mexico. Though 
Mr Salinas has been widely 
billed as the front-runner, 
many trade diplomats in 
Geneva believe Mr Ruggiero 
has a better chance of securing 
the necessary consensus of 
Gaft's 123 members. 

Mr Ruggiero's nomination, 
agreed by EU foreign ministers 
when they met in Usedom, 
Germany, this month, was yes- 
terday handed to Mr AndrSs 
Szepesl Hungary’s ambassador 
to the General Agreement on 
Tariffs and Trade and chair- 


Fincantieri 
starts 
work on 
cruise ship 

By Andrew HIM in Milan 

Fincantieri, the Italian 
shipbuilder, yesterday began 
building its fourth and last 
cruise ship for Holland Amer- 
ica Line, part of the Carnival 
cruise group. 

Like its predecessors, the 
54^000- ton, 220-metre Veendam 
will carry 1,600 passengers. 

Fincantieri handed over the 
first ship in the series in 
December 1992, and the third - 
the Ryndam - only last Satur- 
day. The Veendam should be 
handed over in mid-1996. Fin- 
cantieri, part of Italy's state 
holding company hi, claims to 
be the world leader in the con- 
struction of cruise ships, with 
a 30 per cent share of the world 
market in terms of tonnage. 

Including the Crown Prin- 
cess, a 70,000-ton cruise vessel 
delivered to P&O in June. 1990. 
the company has built or is 
building 12 cruise ships this 
decade, fulfilling orders worth 
an estimated $3.6bn. They 
include contracts, for Carnival 
and P&O respectively, for two 
vessels of around 100,000 tons, 
the largest cruise ships ever to 
be built 

Separately, Fincantieri and 
Finmeccanica, the defence and 
engineering group which is 
also controlled by Iri. have set 
up a joint company to contrib- 
ute to the Horizon project, 
which will develop a new gen- 
eration of frigates for the Ital- 
ian, French and British navies. 
The new Italian company. Oriz- 
zonte, will join an interna- 
tional consortium with DCN 
International of France and 
Yarrow Shipbuilders in the 
UK. part of GEC Marconi 
Naval System. 


Asean may raise 
free trade pace 


By Victor Mallet in Bangkok 

The six members of the 
Association of South-east 
Asian Nations (Asean) are 
expected to accelerate the 
establishment of their pro- 
posed free trade zone when 
economic ministers meet in 
Chiang Mai. northern Thai- 
land. later this week. 

Ministers are likely to 
approve a plan drafted by 
senior officials to shorten the 
phase-in period for the Asean 
Free Trade Area (Afta) to 10 
years from 15; this would put 
Afta formally in place at the 
beginning of the year 2003 
instead of 2008. 

"The sooner it's effective the 
better," Mr Anwar Ibrahim, the 
Malavsian finance minister 
and deputy' premier, said yes- 
terday during a visit to Bang- 
kok. Asean comprises Brunei, 
Indonesia, Malaysia, the Philip- 
pines. Singapore and Thailand. 

Ada’s aim is to reduce tariffs 
on trade within Asean to 
between zero and 5 per cent. 
But its relevance has been 
questioned because of the low 
volume of intra-Asean com- 
merce (most trade is with 
Japan, the US and Europe), 
because of global tariff cuts by 
Asean members and above all 
because each country has the 
right to exclude from Afta any 
| it nms it regards as sensitive. 


So many products have been 
exempted from the Afta tariff 
cuts that some Asean govern- 
ments are trying to draft rules 
to restrict the practice. Some 
unprocessed farm products, 
hitherto excluded from Afta, 
may in future be included. 

According to the latest draft 
agreement, tariffs on so called 
“fast-track" products will be 
cut to between zero and 5 per 
cent within five or seven years, 
depending on whether the 
starting tariff is below or 
above 20 per cent; for “normal 

track" products, tariffs will be 

cut within seven or 10 years. 

Asean 's economic ministers 
will also discuss the protection 
of intellectual property rights 
In the region and the future of 
the Asia-Pacific Economic 
Cooperation (Apec) forum. 

Mr Jesus EstanislSo, a for- 
mer finance secretary who rep- 
resents the Philippines at 
Apec, said recently Afta could 
become a “building block" for 
a broad Apec free trade area 
mooted for the year 2020. 

Malaysia, however, is resist- 
ing attempts to make Apec into 
a formal free trade zone that 
would include Australia, the 
US and Canada 3S well as 
Asian countries, and has 
sought to win support for a 
proposed Asians-only organisa- 
tion known as the East Asian 
Economic Caucus. 


man of the contracting parties 
(members), who is in charge of 
the selection process. 

EU officials said yesterday 
that the frill weight of Euro- 
pean diplomacy would now be 
turned on winning the WTO 
post for Mr Ruggiero, who was 
nominated by his own govern- 
ment last June. Mr Ruggiero 
himself, a senior executive 
with Fiat, the Italian motor 
manufacturer, will be touring 
world capitals to gamer sup- 
port. His main objective is to 
convince doubters that Brus- 
sels’ backing will not make 
him a champion of narrow EU 
interests. 

Mr Szepesi has called an 
informal meeting of Galt mem- 
bers tomorrow morning at 
which he is expected to 
announce that Brazil is with- 
drawing its nomination of Mr 
Rubens Ricupero, the former 
finance minister. 

Mr Ricupero was forced to 
resign suddenly this month 
after the accidental broadcast 



RIVALS; Fnmt-nnmer Salinas (right) faces a stiff fight from ; 


of remarks implying he was 
using an anti- inflation plan to 
boost the election campaign of 
Mr Fernando Henrique Car- 
doso. the government's presi- 
dential candidate. 

Mr Ricupero's discomfiture 
has clearly strengthened the 
chances of President Salinas, 
who may now hope to win the 
backing of all Latin American 
states as well as Washington. 

However, Mr Salinas has 
also attracted strong opposi- 
tion. This is based partly on 
fears, especially among Asian 


nations, that be will have too 
cosy a relationship with the 
US, Mexico’s partner in the 
North American Free Trade 
Agreement, and partly on wor- 
ries by some that his “presi- 
dential" style may not be what 
the WTO needs. 

The only other declared can- 
didate, Mr Kim Chul-su, 
Korea's trade and industry 
minister, is said to have Asian 
and Australian support but is 
generally considered to have 
little chance of success. EU 
officials are hopeful that Mr 


Kim's backers will subse- 
quently line up behind Mr Rug- 
giero. 

The appointment is a more 
complicated choice than last 
year’s selection of Mr Peter 
Sutherland as Gatfs director- 
general, a post he is vacating 
for personal reasons. 

Mr Sutherland's candidacy 
swiftly gathered support 
because he was widely per- 
ceived as the right man to 
tackle the completion of the 
protracted Uruguay Round 
negotiations. 


Gatt targets 
Taiwan rice 


By Laura Tyson in Taipei 

Taiwan is under pressure to 
open its rice market and drop 
restrictions on Japanese car 
imports as it enters fresh talks 
on joining the General Agree- 
ment on Tariff and Trade. 

Taiwan, which hopes to join 
the world trade body by the 
end of the year, has sent Mr 
Sheu Ke-sheng. vice-minister of 
economic affairs, to a final 
round of meetings in Geneva 
with the US. the EU. Switzer- 
land, Singapore and Argentina, 
before decisive Gatt meetings 
in October and November. 

The US is urging Taiwan to 
open its market to rice 
imports, a politically sensitive 
area in Taiwan. 

Taiwan is lobbying for an 
approach similar to that agreed 
with Korea, under which 
imports will be phased in grad- 
ually over 10 years. But it may 
be forced, like Japan, to accept 
a six-year adjustment period. 

Beer-exporting countries 
such as Australia and New 
Zealand want Taiwan to end 
discrepancies in grading of 
beef imports which they 
believe grant favourable tariff 
rates to US beef. And fruit 
exporters want tariffs lowered 
from a maximum of 40 per cent 
to a maximum of 20 per cent 


on imports of eight kinds of 
fruit. 

Japan is keen that Taiwan 
end its ban on direct imports of 
cars from Japan. Japanese cars 
may be sold in Taiwan only if 
they are made locally through 
a joint venture or if they are 
produced in n third country. 

Taiwan has already agreed 
in principle to get rid of this 
after entering Gatt. 

However the tariffication 
system to be imposed in its 
place is also under debate. 
Taiwan is also being asked 
to cut tariffs on imported 
motor parts. 

Gatt members are pressing 
Taiwan to dismantle its alcohol 
and tobacco monopoly by the 
end or this year and accord for- 
eign suppliers of cigarettes and 
alcohol national treatment. 
Taiwan is proposing to send 
revised legislation to parlia- 
ment before the end of the year 
and implement a new system 
by the end of Juue 1995. 

Taiwan has also been asked 
to remove import quotas on 
fisheries products, which it has 
agreed except in the case of 
squid and mackerel. Services is 
the least contentious area, 
with the main Gatt members 
having in principle accepted 
Taiwan's proposed conces- 
sions. 











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FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 1994 


NEWS: INTERNATIONAL 


Major 
stresses 
S African 
free trade 


UK calls for African peacekeeping body 


Guerrillas 


By Kevin Brown, Political 
Correspondent, in Cape Town 


By Kevin Brown, Political 
Correspondent, in Cape Town 


Mr John Major, the British 
prime minister, yesterday 
warned South Africa not to 
allow demands tor a rapid 
improvement in black living 
standards to block free market 
economic reforms. 

In u wide-ranging address to 
parliament. Mr Major urged 
President Nelson Mandela's 
government of national unity 
to embrace free market policies 
that would create jobs and 
prosperity by attracting "hard 
headed investors". 

He said business confidence, 
the key to meeting high expec- 
tations. could only be main- 
tained through policies encour- 
aging private initiative and 
competition, and discouraging 
bureaucratic meddling: “Your 
people are impatient for 
results. Yet no government on 
earth, however benevolent, can 
develop an ecuiiomy with 
strokes of the pen." 

UK officials said the prime 
minister's message, which was 
repeated in talks with Mr 
Thabo Mbeki and Mr F.W. de 
Klerk, deputy presidents, was 
intended to bolster free market 
sympathisers within the Afri- 
can National Congress-domi- 
nated government. 

British ministers have been 
encouraged by the govern- 
ment's gradual acceptance of 
the need to privatise part of 
the state-owned economy to 
finance Us ambitious redevel- 
opment proposals, which will 
be outlined in a white paper 
today Mr Chris Lfebenberg, 
finance minister, said earlier 
this week that government dis- 
cussions on privatisation were 
“progressing very nicely". 

Mr Major gave details of a 
£1.25bn assistance package for 
South Africa, announced In 
July, which is described by 
British officials as the biggest 
offered by any country since 
the elections. The package 
includes £100m in aid, partly 
delivered through the Com- 
monwealth and the European 
Union, £lbn In export credit 
guarantees, and measures to 
help education, health, sport 
and small businesses. 


Britain yesterday called for a fresh 
international effort to bring peace to 
Africa through a regional peace-keep- 
ing organisation based on the Confer- 
ence for Security and Cooperation in 
Europe. 

Mr John Major, the British prime 
minis ter, said the UK wanted to work 
with South Africa and other African 
countries to “turn the tide" against 
violence and war on the continent 


Mr Major announced the initiative 
during an historic address to an infor- 
mal joint sitting of parliament at the 
beginning of the first official visit to 
South Africa by a British prime minis- 
ter since I960. 

Earlier, he met South African Presi- 
dent Nelson Mandela for talks on 
rebuilding the two countries' tradi- 
tionally dose relationship, which was 
weakened during South Africa’s inter- 
national isolation under the former 
wbites-only government 
Officials said the talks were con- 


ducted in “an atmosphere of great 
warmth", suggesting that the ANC-led 
government of national unity has for- 
given Britain for its less than enthusi- 
astic endorsement of sanctions 
against the former regime, 

Mr Major urged South Africa to join 
the International community in bring- 
ing prosperity to the whole of Africa 
by helping to preempt outbreaks of 
violence, rather than trying to limit 
trouble after it had started. 

"An entirely new effort at preven- 
tive diplomacy is long overdue. With 


our friends in Africa . . . Britain wants 
to develop new mechanisms to head 
off conflicts before they become 
unstoppable,” he said. 

"We have in mind, for example, set- 
ting up regional peacekeeping ceils. 
We need more people trained to medi- 
ate and act as peace brokers. We 
would not need a cumbersome 
bureaucracy, but a tight and property 
resourced infrastructure in Africa.” 

The British proposals will be 
spelled out in more detail to the 
United Nations next week by Mr 


Douglas Hurd, the UK foreign secre- 
tary, who has long sought a bigger 
rote for pre-emptive mediation in 
international peacekeeping efforts. 

However, officials said the plan was 
intended to braid an a recent resolu- 
tion by ihe Organisation of African 
Unity calling for better conflict reso- 
lution procedures on the continent 

They said the initiative was not 
intended to involve large numbers of 
troops, although the final shape of the 
peacekeeping force was likely to be 
determined by the UN and the OAU. 


sink Sri 


Lanka 


navy ship 


Zulu court split will reshape Natal politics 


Buthelezi and the king square up in struggle for traditional support, writes Mark Suzman 


T wo bulls cannot share 
the same kraal, runs an 
old African proverb. 
This traditional wisdom is 
about to be tested in the South 
African province of KwaZulu/ 
Natal as yesterday the stage 
was set for a confrontation 
between Chief Mangosuthu 
Buthelezi, leader of the 
Ink at ha Freedom party and 
minister of home affairs in the 
government of national unity, 
and the traditional monarch of 
the 9m-strong Zulu nation. 
King Goodwill Zwelithini, his 
nephew. 

The outcome of the confron- 
tation, triggered by the king's 
decision yesterday to dismiss 
Chief Buthelezi as his "prime 
minister”, will shape the poli- 
tics of the province for the 
foreseeable future. For it could 
determine whether its loyalty 
shifts from Chief Buthelezi, 
whose IFP secured 51 per cent 
of the provincial vote in this 
year’s election, to Nelson 
Mandela's African National 
Congress. 

What tipped the balance in 
the April election was the over- 
whelming backing for the IFP 
In rural Natal, conservative, 
traditional and loyal to the 
king, for the ANC’s strength 
lay mainly in the towns «nd 
cities. 

It is over this rural turf that 
Chief Buthelezi and the king 
will now be fighting for con- 
trol 

By dismissing Chief Buthe- 
lezi from the honorary post of 
traditional prime minister to 
the royal house, the King is 
attempting Co deprive the chief 
of his most powerful political 
weapon: the ability to claim to 



After 20 years under Us ancle's thumb. King Goodwill’s dtamissai of Chief Buthelezi (left) may transform Zulu politics 


act on behalf of the Zulu 
nation. 

Political analysts estimate 
that between 15-30 per cent of 
Inkatha's vote was the direct 
result of the king's entry into 
the political fray on Inkatha’s 

hphalf 

Although Inkatha’s powerful 
political machine and complex 
patronage network will con- 
tinue to be able to mobilise 
large numbers of supporters, 
many floating voters may now 
shift their allegiance to the 
ANC, damag in g Inkatha ’s pros- 
pects in next year’s planned 
local elections. 

It may also re-inflame politi- 
cal passions In KwaZulu-Natal, 
where Inkatha and ANGsup- 
po iters have been in a virtual 
state of war that has claimed 
thousands of lives since the 
mid-1980s. 

Since the election, and 






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FINANCIAL TIMES 

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Pr cHca « ji'U 31 k’i a«ei fc> uCer <drs ijuJr. Lrr p?r,.% rjlcy li< pepras 


Inkatha's decision to serve in 
the constitutionally mandated 
government of natinnai unity 
with the ANC and the National 
party, violence has dropped 
markedly. 

In the ongoing dispute 
between the ANC and TnVatha 
in the provincial legislature on 
the allocation of cabinet posts 
and the location of the regional 
capital the king has remained 
studiously aeutraL 

However, in recent months 
there have been persistent 
rumours that the relationship 
between the king and the chief 
had started to sour, partly as a 
result of an apparent thawing 
of the king's attitude to the 
ANC. 

King Goodwill has also dis- 
missed his former bodyguards, 
who were political appoint- 
ments from the KwaZulu 
police controlled by Chief 


Buthelezi, replacing tham with 
national troops, and also held 
several personal meetings with 
President Mandela. 

For his part. Chief Buthelezi 
has consistently denied reports 
of a rift with the king. How- 
ever in the last two weeks he 
has lashed out at attempts to 
“vilify" him by members of the 
royal family - an apparent ref- 
erence to the growing influ- 
ence of Prince Mcwayizeni 
Zulu, a long-standing rival of 
Chief Buthelezl’s and a mem- 
ber of the ANC’s national exec- 
utive, in the Royal Household. 

The row over President 
Mandela’s planned attendance 
at Sbaka Day celebrations this 
weekend, a ceremony central 
to the Zulu nationalist tradi- 
tion as a tribute to the king- 
dom’s founder, appears to have 
brought matters to a head. 

Althoug h President Mandela 


announced after meeting with 
Chief Bnfhalflgi and the king 

on Monday ni ght that he had 
decided not to attend the cere- 
mony, the king appears to 
have c h o se n to use the Issue as 
an excuse to break off ties with 

TnVatha 

The roots of the oonflict run 
back to King Goodwill’s acces- 
sion to the throne in 1971. 
Before his coronation, the 
prince had sought to marginal- 
ise Chief Buthelezi in Zulu pol- 
itics. However after the corona- 
tion. the chief used his 
newly-formed Tniratha move- 
ment to take control of the 
Zulu "homeland", forcing the 
young monarch to follow his 
lead. The chief also used his 
position as the king's uncle to 
claim the post of traditional 
prime minister. 

In the late 1970s Chief Buthe- 
lezi forced legislation through 


the KwaZulu parliament that 
severely circumscribed the 
king's political independence 
and since then has used his 
power over the KwaZulu bud- 
get, which provided the mon- 
arch's salary, to insure that 
the king took no action con- 
trary to Inkatha’s interests. 

It is ironic that the King’s 
new freedom to speak out 
against his former mentor is in 
part the result of Chief Buthe- 
lezi’s success in playing the 
royal card daring negotiations 
with the ANC earlier this year. 

By making recognition of the 
monarch’s status a condition of 
his participation in the elec- 
tion, Chief Buthelezi was able 
to gfttrend i the position at the 
king as traditional ruler of 
KwaZulu in the new constitu- 
tion. 

As a result King Goodwill's 
status and salary are no longer 
dependent on inkatha and 
Chief Buthelezi has no direct 
authority over the king. 

The king yesterday was 
reported to have cancelled the 
Shaka Day celebrations this 
weekend. So for Inkatha offi- 
cials are putting a brave face 
an the split ami insist that the 
celnhratinng will gO ahead with 
or without the king’s participa- 
tion. 

However without the mon- 
arch’s blessing. Inkatha will 
find it difficult to generate the 
level of support the celebra- 
tions have traditionally 
epjoyed. 

“It’s a bit like celebrating 
Christmas without acknowl- 
edging the Christian tradi- 
tion," said Mr David Welsh, 
political araentist at the Uni- 
versity of Cape Town. 


The newly-elected Sri Lankan 
government's efforts to make 
peace with separ atist 
insurgents in the north of the 
Island yesterday suffered a 

severe setback when guerrillas 
sank a naval patrol boat, 

Mervyn de Silva and Stefan - 
Wagstyl write. 

At least 30 sailors were 
report e d dead or missing in 
the attack, 90 miles north of : 
Colombo. The raid came in the 
wake of attempts by Mrs 
Chandrlka Kranar atunge, the . 
prime minister who took office 
a month ago, to start talks 
with the Tamil Tigers, fighting 
for an independent homeland - 
for ethnic Tamils. To show 
goodwill she liftatdan 
economic embargo qnd hinted, 
at a passible ceasefire. 

Hopes of an early settlement 
were raised when Mr 
Vehrpillai Prabhakaran, the ; 
Tigers’ leader, gave a rare 
interview on the BBC’s Tana! 

language service, and voiced . 
his support for peace. But be . 
set tough conditions for talks, 

demanding tin> Sri Timken 

army abandon a 
heavily-fortified camp at 
Pooneryn at the base of the 
Jaffiia peninsula, the Tamil 

sfnnghold. 


Growth hit 


The severe drought which has 
affected key agricultural areas 
in Australia’s eastern states is 
expected to shave at least half 
a percentage point off the 
country's annual growth rate, 
Nikki Tait reports from 
Sydney. 

The prediction comes from 
the Australian Bureau of 
Agricultural and Resource 
Economics, the government ' 
forecasting agency, and is one 
of the first official assessments 
of tire national impact of the 
climatic conditions. 


Beijing deaths 


An I ranian diplomat and his 
son were among eight people 
killed in a shootout in Beijing 
yesterday and two other of his 
children were injured, an - 
embassy official fntirli Banter 
reports from Beijing. - 


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FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 1994 


NEWS: INTERNATIONAL 


Jobs for 
life hit 
by Tokyo 
reversal 

By WaHant Dawkins in Tokyo 

The Japanese government 
yesterday gave its blessing to a 
symbolic challenge to the 
industrial elite's system of life- 
time employment, by approv- 
ing leading airlines' plans to 
hire stewardesses on 
short-term contracts. 

The decision, by Ur Shlguka 
Kamei, transport minister, con- 
firms his humiliating climb- 
down at the end of last month, 
when he was forced to with- 
draw Initial opposition to 
Japan Airlines’ plans to recruit 
part-time staff to cot costs. All 
Nippon Airways. Japan's sec- 
ond largest airline after JAL, is 
planning to dp the same. 

This is a Mm setback for the 
traditional practice of adminis- 
trative guidance, where gov- 
ernment ministries exert 
behind-the-scenes control on 
companies, backed up with 
implied threats. Mr Kamei had 
■ » hinted that the ministry might 
• refuse new JAL route applica- 
tions If the airline refused 
adminis trative guidance. 

This is the latest example of 
how Ur Kamei's Liberal Demo- 
cratic party, the largest part- 
ner in the three-party coalition, 
has been striving with mixed 
success to re-establish author- 
ity over the bureaucracy and 
industry since returning to 
power at the end of June after 
a year’s absence. The outcome 
of the row could signal a weak- 
ening in government influence 
on the private sector. 

Mr Kamei's attempt to block 
recruitment of contract staff, 
ostensibly on safety grounds, 
drew sharp protests from 
Japan’s main business lobbies, 
sensitive to increasing use of 
nan-salaried labour. 

Lifetime employment has 
come under growing strain, as 
the rise of the yen has obliged 
employers to sharpen cost com- 
petitiveness. 

JAL diplomatically gave Mr 
Kamei a reason for changing 
his mind by revising its plans, 
increasing wages of the con- 
tract stewardesses although 
they will stQJ earn , much less 
than galarfrd staff. 


Japanese parties ‘within 
days’ of tax reform deal 


By wsBam Dawkins m Tokyo Japan’s tax revenue compared 


Officials of the three parties in 
Japan's coalition government 
last night said they were 
within days of unblocking a 
long-standing deadlock over 
controversial tax reforms. 

They are aiming to reach an 
outline accord, by today or 
tomorrow, to extend this year’s 
Y5,500bn (£35bn) income tax 
cut to next year and make a 
permanent cut of Y3,500bn 
thereafter, said officials. Coali- 
tion. members were also mov- 
ing towards increasing the 
unpopular 3 per cent sales tax 
by an unspecified amount tn 
April 1997. 

The government was hoping 
to release its tax package yes- 
terday, but was held up by the 
Social Democratic party's con- 
tinued reluctance to accept any 
rise in sales tax. 

The SDP. many of whose 
members were elected last year 
on a promise to scrap sales tax, 
yesterday agreed to leave a 
final decision to Mr Tomiichi 
Murayama, the party leader 
and prime minis ter. 

The final details, closely 
watched by an anxious US gov- 


ftevenuffl as a percentage of GDP.(1992] 
50 - - 



eminent, will have a critical 
influence on domestic demand, 
just as Japan is at the early 
stage of a tentative, consumer 
spending led economic recov- 
ery. This is the biggest test of 
the unity of the coalition of 
conservatives and socialists 
since it took power at the end 
of June. 

Mr Lawrence Summers, US 
treasury undersecretary for 
international affairs, yesterday 
urged Japan to ensure ‘‘there 


SoucccOECO 


Is no premature withdrawal of 
fiscal support for recovery”. 
Japan had faded to cany out 
its promise to deregulate, to 
create an economy driven by 
consumption and demand, he 
said. 

"There is not enough 
strength in demand to dispel 
caution about the outlook,” 
said Mr Summers, a view 
likely to be confirmed with 
todays publication of Japan's 
gross domestic product for 


tbe second quarter to June. 

Washington wants the rise in 
sales tax to be delayed as long 
as possible, to give fun scope 
for domestic demand for 
imports to reduce the huge 
trade surplus. 

The tax package will there- 
fore influence the US stance on 
whether to impose economic 
sanctions on Japan, a decision 
due in io days' time, the dead- 
line for an elusive US- Japan 
trade accord. 

A divided Japanese govern- 
ment last year agreed a one-off 
YS^oobn tax cut for 1994, pend- 
ing further debate on a rise in 
consumption tax, sought by 
the finance ministry, which is 
eager to bolster its dedining 
tax revenue. 

Another factor in the delay 
has been the insistence of the 
New Harbinger party, the 
smallest member of the coali- 
tion, that any rise on sales tax 
must be accompanied by cuts 
in spending on government 
administration. 

Not surprisingly, civil ser- 
vants have resisted the NHFs 
plan, tbe latest round in a long 
power straggle between politi- 
cians and the bureaucracy. 


Productivity advances expected at D-Ram facility in central Japan 

Toshiba plans YlOObn chip plant 


By Michiyo Nakamoto in Tokyo 

Toshiba, the Japanese 
integrated electronics com- 
pany, is to invest YlOObn 
(£S4Sm> over three years in a 
new semiconductor factory k 
will build in Japan that will 
significantly boost its chip pro- 
duction capacity. 

The proposed investment, 
announced yesterday, helps 
ease fears that Japan's indus- 
trial base Is ‘hollowing out” as 
a growing number of Japanese 
manufacturers have stepped 
up investments in overseas 
plants in order to combat the 
adverse effects of a high yen. 

When completed, Toshiba's 
chip factory - to be built in 
Mie Prefecture in central 
Japan - will be the largest in 
the country. 


With the new plant, Toshiba 
will add production capacity of 
4.5m. 16-megablt dynamic 
random access memory chips 
(D-Rams) per month to its 
current capacity of 3m a 
month. 

The company also plans to 
raise productivity in its semi- 
conductor operations by 2.5 
times over the next three years 
by cutting development time 
and reducing the number of 
processes involved in manufac- 
turing. 

The new plant will eventu- 
ally produce next generation 
64-megabit D-Rams, which are 
expected to be in strong 
demand by about 1997. 

The race to increase semi- 
conductor manufacturing 
capacity has been spurred by 
buoyant demand for semicon- 


ductors, particularly D-Rams, 
from the computer industry. 

Toshiba, for example, saw 
revenues grow 6 per cent last 
year and expects to see a 14 per 
cent rise to YSHfon in the year 
to March 1995. 

Industry leaders, however, 
believe there is a pressing need 
for greater investment in 
capacity to meet expected 
buoyant demand. 

Japanese semiconductor 
makers have slipped behind in 
their capital spending in recent 
years, compared with invest- 
ments by US companies. 

Korean semiconductor man- 
ufacturers, which have been 
fierce competitors in the 
D-Ram market, are also step- 
ping up investments. 

Not to be left behind, Japa- 
nese semiconductor companies 


are increasing spending this 
year on manufacturing facili- 
ties. 

NEC, which is one of the 
largest semiconductor manu- 
facturers in the world, is build- 
ing a new chip plant in 
southern Japan, at a cost of 
Y95bn. to make advanced gen- 
eration chips and has indicated 
Its intention to invest a similar 
amount in another plant, possi- 
bly in Scotland. 

Altogether NEC plans capital 
spending of YllDbn this year, 
up from Y90bn last year and in 
lime with its peak level of 
expenditure in the semiconduc- 
tor business in 1990. 

Toshiba plans capital spend- 
ing in its semiconductor 
operations of Y90bn this year 
compared with YSOhn last year 
and a peak of Yl25bn in 1990. 



Aung San Sun Kyi before her arrest five years ago » 

Burmese junta 
meets Suu Kyi 


By Victor MaBet In Bangkok 

The leaders of Burma's 
military junta yesterday met 
Ms Aung San Suu Kyi, the 
detained pro-democracy cam- 
paigner, in the first such 
face-to-face talks since they 
placed her under house arrest 
five years ago. 

Gen Tan Shwe. head of the 
ruling State Law and Order 
Restoration Council (Slorc). 
and Lt-Gen Khin Nyunt, the 
powerful chief of military intel- 
ligence. were shown on state- 
controlled television meeting 
Ms Suu Kyi at an official guest 
house in Rangoon. The com- 
mentary described the talks as 
cordial but no further details 
were released; it was appar- 
ently the first time she has 
been let out since being held. 

Burma's military rulers are 
attempting to liberalise the 
economy after years of stagna- 
tion while trying to improve 
their international image. 

The economy is growing 
with the help of Singaporean, 
Thai and other foreign invest- 
ment, but efforts to regain 


international respectability 
have been hampered by 
repeated human rights abuses. 
The armed forces killed hun- 
dreds of people when they 
crushed a pro-democracy upris- 
ing in 1938, and then ignored 
the results of an election in 
1990 won overwhelmingly by 
Ms Suu Kyi's National League 
for Democracy. 

The origins of yesterday's 
meeting lie in a trip to Ran- 
goon in February by Mr Bill 
Richardson, a US congressman 
and ally of President Clinton. 
He became the first foreigner 
other than her relatives to 
meet Ms Suu Kyi and said then 
she and Gen Khin Nyunt 
would determine Burma's 
future. 

Reconciling the two sides, 
however, will be not easy. Ms 
Suu Kyi, daughter of Gen 
Aung San, the man who led 
Burma to the brink of indepen- 
dence from Britain, says she 
respects the army as an insti- 
tution, but she has refused to 
leave the country as demanded 
by the Slorc and insists on the 
need for democracy. 


Biological 

weapons 

under 

scrutiny 

By Frances Wilflams in Geneva 


Officials from 80 countries are 
meeting in Geneva to discuss 
how to strengthen the 1972 
treaty banning biological 
weapons, with measures to 
guard against cheating. 

The treaty currently has no 
pro visions to check 
compliance. 

The two-week conference, 
which ends on September 30, 
will examine a report 
produced last year which 
concluded that verification 
measures would be both 
feasible and useful. The report 
lists 21 types of procedure, 
ranging from data exchange to 
on-site inspections, although It 
concedes that no foolproof 
method exists. 

According to US 
intelligence. China, Iran. Syria 
and Russia possess biological 
arms; and Eygpt, Taiwan and 
Libya may have them. Iraq's 
programme has been 
terminated by the United 
Nations. 

Verification of biological 
weapons poses technial and 
political problems, which were 
thought insuperable when tbe 
131-member Biological and 
Toxin Weapons Convention 
was negotiated in the 1960s. 

Biological weapons are 
harder to detect than nuclear 
or chemical arms; they can be 
easily produced and stored In 
tiny quantities; and the agents 
and equipment often hare 
peaceful as well as belligerent 
uses, for instance vaccines. 

This has raised fears that 
checking for biological 
weapons would involve 
snooping around unrelated 
military facilities. Western 
countries, notably the US, are 
also concerned to protect the 
commercial secrets of private 
biotechnology companies. 

Mr Tibor Toth of Hungary, 
conference chairman, said he 
did not expect anti-cheating 
measures to be approved this 
time. The likely outcome is a 
decision to launch 
negotiations on verification 
procedures, which could be 
endorsed at the next 
conference in 1996. 


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FINANCIAL TIMES 


WEDNESDAY SEPTEMBER -1 


1994 


NEWS: THE AMERICAS 


Overall July deficit $llbn 

Trade gap in 
US goods 
near record 


By George Graham 
in Washington 

The US trade deficit continued 
its steadily worsening path in 
July, recording the second 
largest monthly deficit ever for 
trade in goods. 

The overall trade deficit 
climbed to SlQ.99bn (£7hnl in 
July, compared with a deficit 
of S9.04bn in June, the Com- 
merce Department reported 
yesterday. 

Total exports fell to $56.47bn 
from $58.3tibn in June, while 
imports remained virtually fiat 
at S67.46bn. 

Most of the swing resulted 
from a Sl.Tbn drop in exports 
of goods, which took the goods 
deficit to $15.7bn, a total the 
US has exceeded only once, in 
December 1985. 

Mr Ron Brown, the US com- 
merce secretary, said that most 
of the decline in exports was 
caused by one-time factors, 
including a gap in aircraft pro- 
duction as makers sought to 
absorb slack in their order 
books, which cut aircraft 
exports to their lowest in five 
years. 

In addition, he said, the new 
car model year meant a decline 
in exports of vehicle compo- 
nents for assembly in Canada, 
and there was an unusual 
S200m drop in exports of art- 
work. 

“These factors are not indica- 
tive of the economy's long 
term trend,” Mr Brown 
insisted. “US exports, which 
have shown consistent growth, 
are still 10 per cent higher than 
this time last year.” 

Despite the weakness of the 
dollar, which might have been 
expected to improve US export 
performance, the trade deficit 
has continued to worsen all 
year as the US, much further 
into its economic recovery 
than its main trading partners, 
has sharply increased its 
imports of goods. 

Using three-month rolling 
averages, US goods imparts 
have risen by 10 per cent since 


By Nancy Dunne 
in Washington 

The International Finance 
Corporation, the World Bank's 
private sector arm, expects to 
double its financing in the next 
five or six years to $5bn to 
keep pace with the rapid 
growth in emerging markets 
and the shift towards private 
sector development. 

According to its annual 
report released yesterday, it 
approved a record $2.5bn in fin- 
ancing last year and increased 
its net income 82 per cent to a 
record $258m (£166m). 

■If you put together policy 
reform plus a vibrant private 
sector, the result is a strong 
demand for financing in the 
developing countries. That 
means a strong demand on the 
services or the IFC." said Mr 
Jannik Lindbaek. the executive 
uce president. 

Last year's 15 per cent 
increase in financing helped to 
fund 23 1 projects valued at 
Sis.sbn. The projects ranged 
from farm privatisation in Rus- 
sia. to capita! market develop- 
ment in Zambia, privatisation 
of telecommunications systems 
in eastern Europe, investment 
ui the first leasing company in 
Romania, and the formation or 
private pension funds in Peru 
and Argentum. 

Past IFC projects have 
proved to be profitable Invest- 
ments. Sell-off of mature 
investments last year produced 
£MIm in capital gains. 

The IFC has been placing 
increased emphasis on develop- 
ing infrastructure, where a 
quarter of financing went last 
year. However, the IFC's 
efforts in infrastructure pall 
next to the need, which the 


US overall trade balance 


Sbn 



1883 84 


Source 1 . P at a al ram 

the beginning of this year, 
while goods exports have risen 
by only 3 per cent. 

A 15 per cent improvement 
in the US's surplus in services 
over the same period has not 
been enough to offset this dete- 
rioration. 

But economists expect that 
faster growth in Europe and 
Japan in the second half of this 
year, coupled with slower 
growth in the US, will eventu- 
ally narrow the trade deficit. 

The US's trade balance with 
most of its main trading part- 
ners worsened In July. Its 
goods deficit with Japan wid- 
ened to $5.67bn. compared with 
$5.52bn In June, while the defi- 
cit with the European Union 
widened to $i.93bn, from 
$l.32bn in June. 

The failure to narrow the 
trade deficit with Japan fuelled 
speculation of a clash when the 
deadline tor completing the US- 
Japan framework talks expires 
at the end of next week. 

The only area where the US 
trade balance unproved last 
month was Latin America. 
Mexico led the way, with the 
US goods surplus rising from 
$l98m in June to $595m in July 
as the benefits of the North 
American Free Trade Agree- 
ment began to be felt. The US 
also recorded larger surpluses 
with Argentina and Colombia, 
and smaller deficits with Brazil 
and Venezuela. 


World Bank Development 
Report estimated at S200bn a 
year over the next decade. 

To mobilise investment in 
Infrastructure, the IFC is creat- 
ing special investment funds 
like the Asian Infrastructure 
Fund, which has a target of 
Slbn. 

The IFC has also stepped up 
Its efforts to develop capital 
markets, including setting up 
finance and leasing companies, 
commercial banks, pension 
funds and life insurance com- 
panies. 

According to Mr Lindbaek, 
this Is “tor the long term the 
only acceptable solution” to 
sustained development because 
“domestic savings are then 
channeled through domestic 
financial institutions into the 
project of the country." 

The 8579m in capital markets 
projects approved by the IFC 
last year include four credit 
lines to commercial banks in 
Lebanon, investment in 
Romania's first leasing com- 
pany, and assistance in Viet- 
nam and China for the develop- 
ment of legal and regulatory 
frameworks in their capital 
markets. 

Sub-Saharan Africa remains 
a big challenge for the IFC. and 
Mr Lindbaek expects the 
agency to beef up efforts to set 
up small and medium enter- 
prises in the region. 

Last year EFC approved fin- 
ancing of $157m for 57 projects, 
including investments through 
the Africa Enterprise Fund. 

It has also begun work on 
two initiatives in sub-Saharan 
Africa, the first to provide 
post-investment operational 
advice to small and medium- 
sized companies and the other 

to finance micro-enterprises. 


Brazilian 
candidates 
ignore 
fears of 
violence 

By Angus Foster m Sflo Paulo 

Heavy machine guns and 
assault rifles are commonplace 
on the streets of Vigario Geral, 
a shanty town 20 minutes' 
drive from Rio de Janeiro’s 
banking district. The town's 
drug den, at the end of the 
main street, is patrolled by 
heavily armed “soldiers” 
working for the local traf- 
ficker, Flfivio Neg&o. 

In most respects Vigario 
Geral is just another Brazilian 
shanty town, or favela. Its 
streets are unpaved and Its 
sewage untreated. Although it 
was settled more than 30 years 
ago, there is still no road 
access and the only entrance is 
an elevated walkway over a 
railway line. The population of 
25,000 has two telephones. 

But in August last year 21 
residents of Vigario Geral 
were executed by about 30 
masked gunmen. The gunmen 
were alleged to have been 
police officers, many of whom 
are now on trial, seeking 
revenge either for the murder 
of some colleagues or for an 
extortion attempt that had 
gone wrong. The 21 dead resi- 
dents turned oat to be ordi- 
nary workers and none was 
involved In the drug business. 

Violence is common in Bra- 
zil but the scale of the Vigario 
Geral massacre stunned the 
country. It prompted the set- 
ting up of the Viva Bio move- 
ment to tackle violence and 
improve the city’s image. 

According to most national 
polls, people rank violence as 
their first or second concern 
but it is hardly addressed by 
the main candidates in presi- 
dential and congressional elec- 
tions next month. 

Mr Fernando Henri que Car- 
doso, the front-runner for pres- 
ident, says security is one of 
his five priorities. But Id 
nightly TV broadcasts, winch 
all candidates are allowed 
under elections rules, he has 
spent much more time discuss- 
ing economic issues, health 
and even agriculture. 

Mr Caio Ferraz, a sociologist 
living in Vigario Geral, said 
he invited candidates for the 
governorship of Rio state to 
debate public security. None 
turned up, and two candidates 
did not even reply. 

Politicians blame rising vio- 
lence on the Brazilian state 
which, in the last past 10 years 
of mounting economic and 
soda] problems, has steadily 
lost credibility as the police, 
justice system and prison ser- 
vice have been underfunded 
and overburdened. 

Sio Paulo's 70,000-strong 
police force is 17,000 less than 
the level required by state law. 
The state has one judge for 
every 20,000 people, compared 
with one for 5,000 in Europe. 
The Justice system is slow and 
bureaucratic. 

“If we arrested all known 
criminals there would not be 
room to lock them up," says 
Colonel Hermes Bittencourt 
Cruz of the Sdo Paulo police. 

It is probably worse in Rio, 
where the police force has 
been seriously undermined by 
corruption and involvement in 
drug trafficking. Mr Antdnio 
Carlos Biscaia, attorney gen- 
eral, complains: “Police go to 
drag traffickers with arrest 
warrants but instead of arrest- 
ing them, they negotiate the 
price to let them go free. 
Crime is not unique to Brazil 
but our mechanisms to fight 
crime don't work. Yet the poli- 
ticians say Brazil has lots of 
other social problems, and 
security is relegated down the 
list” he says. 

More important, according 
to Mr Ferraz, is the political 
will to change the way the 
state acts. He points to Vigario 
Geral's shortage of phones and 
on paved roads. By compari- 
son, the government this 
month opened a 21km stretch 
of dual carriageway road that 
runs right past the favela. 

“The state has always 
excluded us in the favelas 
says Mr Ferraz. it is not doing 
anything here to help us, only 
we are." 

Brazil’s presidential hope- 
fuls may ignore such com- 
plaints bat dealing with these 
problems and tackling vio- 
lence will be urgent priorities 
for whoever wins the elec- 
tions. 


IFC to double 
financing to 
$5bn by 1999 


Fears of overvalued Real 


By Angus Foster 

Brazil's central bank yesterday 
intervened in the foreign 
exchange markets for the first 
ilrae since the July launch of a 
new currency, the Real. The 
bank was reported to be buy- 
ing moderate quantities of dol- 
lars in return tor Reals- 
The move follows mounting 
concern that the Real Is over- 
valued against the US dollar. 


Foreign investment, mainly via 
the stock market, has flowed 
into Brazil since the currency's 
launch, amid rising optimism 
about the country's economic 
outlook. 

The Real has appreciated 
nearly 15 per cent since July 
and yesterday opened at 0.85 to 
the dollar. 

But the rise in the Real has 
led to worries, especially 
among exporters, that Brazil's 


trade performance might suf- 
fer. With foreign exchange 
reserves of more than $40bn, 
and a trade surplus of $13.1bn 
last year, the country faces no 
serious balance of payments 
risk. But the government is 
also in the process of lifting 
import tariffs and is trying to 
soften the impact of greater 
foreign competition on some 
less-competitive sectors of the 
economy. 


Aristide sees rivals still in power 

Jurek Martin profiles Haiti’s turbulent priest in exile 


T he agreement producing 
the peaceful US occupa- 
tion of Haiti has been 
broadly approved, even if with 
some reservations, in the US. 
But the one man in whose 
name it was effected remained 
noticeably unenthnsiastic. 

Father Jean -Bertrand Aris- 
tide, the ousted president who 
now lives in a modest gne-bed- 
room apartment in the middle 
of Washington, stayed silent 
tor a day and a half after Presi- 
dent BUI Clinton announced 
the deal negotiated with the 
Haitian military leaders. Yes- 
terday he issued a terse state- 
ment nailing for “a state of law 
so that there will be neither 
violence nor vengeance in our 
nation", but pointedly refusing 
to endorse the agreement 
Ft Aristide's supporters have 
been less reticent Randall Rob- 
inson, the human rights activ- 
ist Michael Barnes, the former 
congressman from Maryland in 
charge of public relations tor 
Ft Aristide and Robert White, 
the ex-diplomat, have all critic- 
ised Sunday's agreement on 
the grounds that it leaves the 
military junta free fr om crimi- 
nal charges for human rights 
abuses and under no obligation 
to leave Haiti. 

Nor was Fr Aristide's name 
other than perfunctorily men- 
tioned in the ceremonies mark- 
ing the return of the US team 
headed by former President 
Jimmy Carter. One of its mem- 
bers, Senator Sam Nunn of 
Georgia, even went so far as to 
disclose that he Had told the 
junta not to equate democracy 
with one man - Jean -Bertrand 
Aristide. 

In reality, the ousted presi- 
dent probably has little alter- 
native but to accept once again 
the hand he has been dealt, if 
he wants to return to his 
homeland for the year-plus left 
of his term. But he will surely 
go back a different man. 


The US administration has 
found Him hard to characterise 
over the last three years. A 
typical assessment came over 
the weekend from BUI Gray, 
the US special envoy to Haiti. 
“Who Is Aristide?" he asked 
rhetorically. “He's a Haitian. A 
priest An inteUectuaL An ideo- 
logue. Not your practical pol 
who has lived in a functioning 
democracy.” 

Fr Jean-Bertrand Aristide 
certainly was - and perhaps in 
some measure still is - a clas- 
sic product of the school of lib- 
eration theology which has 
caused so much controversy in 
the Roman Catholic Church 
over the last generation. What 
separates Hhn from the large 
class of politically activist 
priests is that he carried his 
beliefs in defiance of Rome all 
the way into the elected office 
of the presidency of his coun- 
try. 

H e was born, on July 15 
1953. in the southern 
fishing village of Port 
Sal ut. His father, a land-own- 
ing peasant, died when he was 
young and in 1959 he moved, 
with his mother and sister, to 
Port-au-Prince. 

His education was at schools 
and seminaries run by the 
Salftfrian Fathers in the Haitian 

capital, with his novitiate 
spent, in 1974-75, in the neigh- 
bouring Dominican Republic. 
He obtained his bachelor's 
degree in psychology from the 
University of Haiti in 1979 and, 
after farther studies in Italy, 
Israel, Britain and Canada, was 
ordained a priest in the Sale- 
sman Order on July 3 1982, and 
was assigned as curate in the 
St Joseph parish on the out- 
skirts of Port-au-Prince. 

From the very outset Fr 
Aristide was an outspoken 
critic of the Duvalier dictator- 
ship. He used his religion as a 
club - or, as he once put it, 


“the Gospel, in its raw form, 
could act like a stick of dyna- 
mite”. More practically, he set 
up centres tor the homeless, 
community stores, car washes 
and schools to cater, to the 
needs of the destitute. 

Duvalier’s exile in 1988 in no 
way calmed his social and 
political activism and he was a 
thorn in the side of the subse- 
quent military regime. Twice, 
in 1987 and 1988, he barely 
escaped assassination 
attempts, in the second of 
which 12 of his parishioners 
were killed and over 70 
wounded at his church, now 
Saint-Jean Bosco in Port-au- 
Prince. 

But his relentless criticism of 
the status quo also brought 
him into severe conflict with 
the local Catholic hierarchy, 
always close to successive 
authoritarian regimes in Haiti, 
and with the Vatican. In 1987, 
the Sales ian Fathers tried to 
persuade him to stop preach- 
ing in favour of the poor and to 
leave Haiti, but he resisted. 

In 1988 he was expelled from 
the order. He appealed, but 
received no response from 
Rome for two years - until the 
month he was elected presi- 
dent He then spent more than 
a year, admittedly depressed at 
the conflict with his religious 
superiors, but also writing 
extensively. 

The military regime was 
overthrown early in 1990 and 
general elections called. Ini- 
tially, Fr Aristide refused to 
run for office, but he registered 
as a presidential candidate on 
October 18, the deadline for fil- 
ing. On December 16, he won 
over two-thirds of the vote and 
became Haiti’s first democrati- 
cally elected president. 

He was sworn into office an 
February 7 1991, but only after 
an attempted coup in January, 
led by Roger Lafontant, former 
head of the Tonton Macon tes. 


was undone by massive street 
protests by his supporters. In 
the course of this, the Catholic 
cathedral in Port-au-Prince was 
burned and the Vatican 
embassy sacked. 

As president, Fr Aristide 
confounded expectations based 
on his lifelong criticism of neo- 
colonialism and international 
financial institutions by enter- 
ing negotiations with the IMF 
and World Bank. He accepted 
the need for reform, includi n g 
higher taxes, a devalued cur- 
rency and cuts in the state 
bureaucracy. 

His heart, however, 
remained clearly well to the 
left of centre on any political 
chart, with programmes pro- 
moting literacy and radical 
reorganisation of the peas- 
antry. 

B ut his party, the 
National Front for 
Change and Democracy, 
did not command the legisla- 
ture and increasingly he relied 
on organised popular demon- 
strations to get his way. 

At least twice Fr Aristide 
spoke approvingly of the use of 
the “necklace” (the burning 
tire placed round the neck of 
the victim). He also established 
his own armed presidential 
guard, evidence, to his critics, 
of increasing paranoia. 

He attended the UN general 
assembly session in New York 
In September 1991, at a time 
when coup rumours were rife. 
The denouement finally came 
after his return, on September 
30, with the army coup led by 
Lt Gen Raoul COdras. Fr Aris- 
tide fled to Venezuela and later 
in the year took up residence 
in Washington. 

His financial sustenance 
since then has come from the 
approximately $35m (£22. 5m) in 
Haitian official financial assets 
in the US frozen by the Bush 
a dminis tration in the Wake of 




Haitians wave and salute at a low-flying US army helicopter as American troops arrive in dow nt own Port-au-Prince, the Haitian 
capital, to implement the agreement between Washington and the Haitian junta 


Aristide: unenthusiast ic 


the coup. These funds have 
also helped underwrite the vig- 
orous international public rela- 
tions campaign tor his restora- 
tion to power. 

In Washington, he has been 
a predictably controversial fig- 
ure. Conservatives; including 
powerful forces ins&e the CIA. 
had long ago suspected him of 
anti-Americanism and began 
publicly to question his mental 
stability. His brief term in 
office, during which he com- 
pared himself with Robes- 
pierre. provided plenty of 
ammunition for those deter- 
mined to cast doubt on his 
democratic credentials. 

But he established influen- 
tial alliances with the US con- 
gressional black caucus, which 
proved pivotal in the unfolding 
Clinton administration policies 
towards Haiti. He was also cir- 
cumspect in criticising both 
the Bush and Clinton admlnia - 
trations and demonstrated, in 
the abortive Governor’s Island 
agreement, considerable flexi- 
bility. 

But in recent weeks, as the 
momentum towards his resto- 
ration by force gathered pace, 
it became clear that Fr Aristide 
accepted that he had to con- 
vince his US patrons of his 
democratic credentials. 

Thus, last Friday, he con- 
firmed what Mr Clinton had 
said the night before - that, in 
accordance with the Haitian 
constitution, he would not 
stand in presidential elections 
due in December next year. He 
had maintained that the 1991 
coup bad deprived him of three 
years of his term of office, 
which he was entitled to 
reclaim. 

The words he used were 
music to the administration's 
ear. In a democracy, he said, 
“it is the second election that 
is the most important”. He also 
committed himself to amnesty 
and reconciliation and held out 
the hope that his people could 
now move “from misery to pov- 
erty - with dignity". 

But that was spoken under 
the assumption, reasonable 
given Mr Clinton’s commit- 
ment, that the junta would be 
physically gone when he got 
back - even if out of the reach 
of Haitian or other justice. 
Now they are being spoken of. 
If not as heroes, then as simple 
military men of honour with 
whom past and present US 
presidents can do business. 
Swallowing this bitter pill will 
surely test the Christian char- 
ity that was not always his 
most visible trademark while 
president 


US armed forces sink their differences 


By George Graham In Washington and 
James Harding in Port-au-Prince 

When US Army troops took off in 
helicopters from the deck of the aircraft 
Eisenhower this week to land in Haiti, 
they were taking part in the first 
full-scale experiment in getting the dif- 
ferent branches of the armed forces to 
work together more flexibly. 

Although the landing was not, in the 
end, opposed, it still provided an opera- 
tional test for the Pentagon's new con- 
cept of Adaptive Joint Force Packages, 
which attempts to break down the tra- 
ditional demarcations between the vari- 
ous services' roles. 

Amphibious assaults have in the past 
been the province of the marines, who 


operate under the navy’s flag. Yester- 
day the marines took over the city of 
Cap Haitian, on Haiti’s north coast, in a 
traditional amphibious landing from 
the assault ship Wasp. 

But the main landing in Port-au- 
Prince came from the 1st Brigade of the 
army’s 10th Mountain Division, using 
the Eisenhower as a “lily pad", in the 
wards of Captain Alan Gemmfll. the 
carrier’s commander, for their Black- 
hawk and Cobra helicopters. 

This is believed to have been the first 
time that aircraft carriers have 
deployed for hostilities without their air 
wings. 

Service rivalries have been a perva- 
sive problem for the US armed forces, 
which still maintain separate air forces 


for the navy, marines and army, quite 
apart from the air force itself. 

Each, service’s insistence , on develop- 
ing its own equipment has greatly 
increased procurement costs, and 
co-operation on joint operations has 
sometimes broken down. 

But budget constraints have made 
each branch of the armed services eager 
to demonstrate its flexibility. The navy 
has a particular stake in showing that 
its carriers can be adapted, since one of 
the areas in which the Pentagon is most 
often suggested to be overweight is in 
its 12 aircraft carriers 

The Adaptive Joint Force Packages 
concept is credited in particular to 
Admiral Paul Miller, who as command- 
er-in-chief of the US Atlantic Command 


is the overall commander for the Haiti 
operation. 

All services seemed happy with the 
first army/navy co-ordinated landing of 
its kind. Officers from the Eisenhower 
showed a touch of pride in having car- 
ried 51 army helicopters and the full 
array of surveillance aircraft 

Army Private Mazur, now landed in 
Haiti, said he had a new respect for his 
colleagues on the water, who not only 
ferried him there but also built new 
parts for army machinery on demand. 
They also showed him the way round 
the aircraft carrier when he got lost 

By Monday evening, along with Pte 
Mazur, most of the 2,000 light infantry- 
men on board had been lifted into Port- 
au-Prince. 


Welcome, and scepticism, for soldiers 


James Harding reports from Port-au-Prince 


Thousands of people took to 
the streets of Port-au-Prince in 
a festive mood yesterday as 
more and more US troops 
rolled ashore and took up posi- 
tions throughout Haiti. 

Many Haitians came simply 
as spectators. Others, buoyed 
up by (he US presence, cele- 
brated what they saw as the 
end of a military rule. 

But as “Operation Restore 
Democracy” continued into its 
second day without a logistical 
glitch, Haitian expectations 
looked set to run beyond the 
parameters of a peace-keeping 
mission. 

Whether the US can end the 
operation as smoothly as it 
began will depend on how it 
limits its role in reviving a 
decrepit political culture and a 
bankrupt economy. 

The display of US army high- 
tech machinery was satisfying 
people in the meantim e . Huge 
crowds lined the mile-long 


quayside jostling for a glimpse 
of the trucks and jeeps rolling 
off US supply ships. 

At the airport, people clung 
to the perimeter fence to watch 
the troops landing in vast C5 
and Cl 41 transport aircraft. 

On the balconies and roof- 
tops around the city, those res- 
idents not yet fed up with the 
relentless drone watched con- 
voy after convoy of low-flying 
helicopters ferry army supplies 
to US positions. 

By early yesterday morning, 
over 3,300 US personnel had 
landed in Haiti. With an 
amphibious landing at Cap 
Haitien due later in the day to 
secure a bridgehead in the 
north of the country and com- 
mercial flights employed with 
army aircraft to carry more 
people in, the number of troops 
was expected to have at least 


doubled by this morning. 

US troops Canned out from 
secure points through Monday 
night and during the day yes- 
terday to set up patrol stations. 
The American units have been 
sent with French-speaking 
interpreters. 

The intention is clearly to 
move towards multinational 
patrol groups, including either 
a Haitian soldier or member of 
the UN coalition of forces as 
soon as possible. 

The expanding US presence 
inspired jubilation in some 
quarters. Dancing celebrations 
gathered momentum quickly. 
In one instance, a group of 
Aristide supporters rallied 
round a line of 10 US trucks 
beaded into one of the city’s 
poorer districts. 

As they walked, they 
chanted the increasingly com- 


mon cry, “mi no te CGdras" 
(“handcuff CSdras”). Soon the 
walk had turned into a skip- 
ping march and the chant into 
a song, "ba ma Aristide too 
suit” (“give me Aristide right 

now”). 

The group of hundreds grew 
to thousands who, having 
ripped branches from the trees, 
waved them in a fren2y. 
Observers were overwhelmed 
by big hugs, big smiles and the 
big promise that “Aristide will 
bring peace, will bring money, 
will bring food”. 

In some areas, the ecstasy 
seems to have been premature. 
There were reports of anti-Ced- 
ras demonstrations ending hi 
violent beatings from militia 
still loyal to the army general. 

The failure of US forces to 
intervene highlighted the inad- 
equacy of operational instruc- 


tions delivered to date - plans 
were still evolving as to how 
the US would police the coun- 
try in co-ordination with Hai- 
tian officers. 

Up on the hills above the 
city, in the contiguous town of 
P4ttonviUe, Haiti’s wealthy 
elite remain sceptical that US 
forces will satisfy popular 
needs or aspirations. 

Many of the Hai tian bour- 
geoisie expect that an Aristide 
government would be no better 
than rule by C6dras, and possi- 
bly worse. 

“One man is not a democ- 
racy," said the manag pr of 
Haiti's only functio ning brew- 
ary. According to his point of 
view, the Clinton administra- 
tion has made a miscalcula- 
tion. “This is not a h uman 
rights problem, there aren't 
cadavers piled up on street cor- 
ners. This is not a political 
Issue alone. The problem Is 
poverty - It is economics." 


FINANCIAL TIM ES WEDNESDAY SEPTEMBER 21 1994 


NEWS: UK 


7 


* 


Lonrho in sanctions 


By Robert Paston 

and Roland Rudd 

The Bank of England is 
investigating whether Lonrho 
breached United Nations sanc- 
tions by selling a film about 
the Lockerbie bombing to an 
Egyptian company with Units 
to Libya. 

The outcome of the investi- 
gation is likely to have an 
important influence on the bat- 
tle between Lonrho's joint 
chief executives, Mr Dieter 
Bock and Mr Tiny Rowland. 
Mr Bock wants to depose Mr 
Rowland, who took a personal 
interest in both the making 
and disposal of the film 

Three weeks ago, Mr Bock’s 
position in the company was 
weakened considerably when 


his fellow directors forced him 
to abandon a plan to propose 
at a board meeting that Mr 
Rowland should be stripped of 
his executive powers. 

He is likely to try to regain 
the initiative in the battle for 
power by arguing to the inter- 
national tradin g group’s board 
that Mr Rowland is responsi- 
ble. if sanctions are found to 
have been breached. 

The investigation into the 
film sale is bring carried out 
by the Bank of England’s Sanc- 
tions Emergency Unit, whose 
role Is to ensure that the fiuan- 
rial aspects of UN sanctions 
are not breached by UK enti- 
ties. 

Under the latest version of 
the sanctions, Introduced on 
December 1 1993, UK compa- 


nies are required to seek the 
Bank's permission before 
“parting with ... investments 
to ... a Libyan person [a com- 
pany or individual]”- The 
Bank’s permission in this case 
was not sought 

The film, which is dose to 
completion, argues that the 
Libyans were not responsible 
for the bombing of Pan Am 
flight 103 over Lockerbie. Its 
£632£48 budget was financed 
by Lonrho's Metropole subsid- 
iary, a third owned by the Lib- 
yan Arab Finance Company. 

Earlier this year, after Mr 
Bock complained about Lon- 
rho's involvement in the film, 
it was sold to the Cairo-based 
Joint Arab International 
Investment Company, or Jaico. 
for £200,000- On April 7, Bar- 


probe 

clays Bank in Birmingham 
received a payment of £199,989 
from the Cairo branch of Arab 
International Rank, Cairo. 

However, the signatory on 
the sale agreement on behalf of 
Jaico was Mr Mohamed El 
Huwej, who is chairman of Laf- 
ico. the main investment 
vehicle of Colonel Muammer 
Gadaffl. the Libyan leader. 

Because of this apparent con- 
nection between Jaico and Laf- 
ico, Mr Rowland was formally 
requested in writing by Mr 

Martin Boll and, Metropole’s 
managing director, to obtain a 
written statement from Mr El 
Huwej on his relationship with 
Jaico. It is not known whether 
this statement was provided. 

Mr Rowland was last night 
unavailable for comment. 


Lloyd’s cost control ‘lamentable’ 


* 


By Christcfcher Price 

A leading underwriter 
yesterday attacked the “amaz- 
ing £500m per year” Lloyd’s of 
London insurance market 
spends on outside advisers who 
assist in handing insurance 
claims. 

Mr Mark Brockbank, chief 
underwriter to the largest 
Lloyd's syndicate, told a con- 
ference in Singapore that the 
expenditure must be reduced. 


“Our control over these costs 
has, quite frankly, been lamen- 
table," he said. “However, 1 am 
determined that Hii< situation 
should change.” 

Lloyd's handled around £7bn 
in claims last year. Those 
involved in Haima assistance 
include lawyers, accountants, 
surveyors and loss adjustors. 

Mr Brockbank said: “We 
must begin to set out formal 
terms of reference and not be 
shy about discussing rates, 


estimates and in certain cases 
require tendering in those we 
employ. 

“In faiHng to do thi s we have 
been too gentlemanly. This 
cannot continue, because while 
we have good relationships 
with many of our advisers, you 
are our clients and it is you 
who end up paying the bill in 
future rates for this approach.” 

He said that the NewCo proj- 
ect, a reinsurance company 
being set up by Lloyd’s to ring 


fence liabilities incurred before 
1986, was a positive initiative 
which would allow the market 
to control its costs. 

Mr Brockbank also urged 
underwriters to take “a more 
proactive role in the claims 
process” by appointing adjust- 
ers empowered to approve cer- 
tain repairs and expenses. 

In an interview later, Mr 
Brockbank identified legal fees 
as “by far the biggest cost com- 
ponent". 


Retailers 
sign for 
Camelot 

By Raymond Snoddy 

Camelot, the consortium that 
will launch the UK’s National 
Lottery on November 19, has 
signed up most of the 
country's lgwRnp retail rhalns 
for its initial network of 
10,000 stores to sell tickets. 

The list Includes selected 

stores from Tesco, Sainsbury. 

Safeway, WJL Smith, Menzles, 
Woolworth and the Coop. But 
at least 55 per rent of the first 
10,000 retailers will be 
independently owned outlets, 
including independent grocers 
and newsagents, off-licences 
and post offices. 

Shops had to be in prime 
locations with normally at 
least 500 customers a day and 
long opening boors. 

Mr Norman Hawkins, 
Camelot* s commercial 
director, said he was confident 
the initial retail outlets would 
“enable more than SO per cent 
of the adult population in the 
UK to be within easy distance 
of a lottery outlet at home or 
at work”. 

The jackpot prize for the 
first live draw on BBC1 on 
November 19 could be as much 
as 

Camelot expects to sign a 
three-year television deal with 
the BBC later this week. 



FagusMHkn 

Tickets for the national lottery will be available initially from 10,000 stores 




if 


Ada] 


s set to meet 


Congress 

By George Graham 
In Washington 

Mr Gerry Adams, head of Sinn 
Frio, is expected to meet mem- 
bers of berth houses of the US 
Congress when he visits Wash- 
ington next month. Mr Adams 
yesterday applied for a US 
visa. 

Although congressional com- 
mittees traditionally do not 
hold full-scale hearings for for- 
eign visitors, Mr Adams is 
expected to meet members of 
the Senate foreign relations 
committee for a “committee 


Britain in brief 



Lib Dems 
sketch terms 
for pact 

Mr Paddy Ashdown, leader of 
Britain’s third political party, 
the Liberal Democrats, has 
begun to sketch out bis terms 
for a future partnership with 
the opposition Labour party, 
believing that both parties 
could combine forces to defeat 
the Conservatives at the next 
election. 

Mr Ashdown has been 
unwilling to publicly discuss 
relations with other parties at 
the Liberal Democrats' confer- 
ence this week. But he is 
understood to believe that Mr 
Tony Blair's election as Labour 
leader has created an opportu- 
nity to transform British poli- 
tics. 

He has set out a series of 
conditions which Labour must 
meet before be would consider 
serious co-operation. They 
include unequivocal backing 
for proportional representa- 
tion, a stance which the 
Labour leader has so far 
refused to adopt. 

With the clear divisions 
wi thin his own party and seri- 
ous doubts over Labour’s 
response, the Liberal Democrat 
leader is determined not to 
rush into the arms of Mr Blair. 

Mr Ashdown faced his latest 
defeat when the conference 
defied party leadership and 
aligned itself with Labour by 
backing the Introduction of a 
system of minimum hourly 
wage rates. 

The conference did unite 
when it voted by an over- 
whelming majority not to abol- 
ish the British monarchy, but 
called instead for “a radical 
trimming" of the royal family's 
budget. It marked the first 
debate at a political party con- 
ference on the issue. 


members 

coffee", and meetings are also 
likely with members of the 
House of Representatives. 

On his first visit to the US 
earlier this year, Mr Adams 
was restricted to New York by 
the terms of his visa, and was 
not able to meet members of 
Congress in Washington. 

Other leading Northern Irish 
politicians have also been beat 
ing a path to Congress’s door. 
Mr John Hume was due to 
meet senators yesterday after- 
noon, and a delegation of 
Ulster Unionists is to arrive in 
Washington today. 


regime to provide investors 
with more information about 
certain investment products 
and about their fees and 
charges. 


Fall in building 
societies’ new loans 

A fresh reminder of the fragil- 
ity of the recovery in the UK 
mortgage market came yester- 
day with figures showing a 
slight drop in new net lending 
by building societies in 
August 

The fall came before the 
impact of higher interest rates 
on home loans, reinforcing 
fears among lenders that the 
housing market recovery 
might be delayed until next 
year. 


Traffic plan for 
Channel link 

An ambitious traffic manage- 
ment and driver information 
scheme which could eventually 
cover the entire UK motorway 
network was unveiled at the 
Channel tunnel terminal in 
southeast England yesterday. 

The Pleiades project, partly 
funded by the European Union, 
involves the collection of 
weather and traffic data for 
transmission to variable mes- 
sage signs at the roadside and 
to in-car receivers. It is part of 
a wider evaluation of traffic 
man ?B* >ir>>mt systems on both 
sides of the Channel and 
Includes motorways linkin g 
the tunnel with Paris and 
Brussels. 


Brewers demand 
50% cut in beer duty 

A delegation from the Brewers 
and licensed Retailers Associ- 
ation, representing brewers 
and pub operators, will meet 
Mr Kenneth Clarke, cha nc ellor 
of the exchequer, today to 
demand a 50 per cent cut in 
beer duty in the November 
Budget. Brewers argue that 
only a cut of this size will solve 
the problem of crosfrChamisl 
beer imports, now ru nni ng at 
about lm pints a day. 


Watchdog paper on 
investment products 


plans for giving cus- 
lore information about 
■nt products such as 
ts were set out yester- 
j consultation paper 
1 by City of London 

fersonal Investment 
y. the watchdog to 
he private investor, is 
comments by late 
on applying a new 


Nurses to press for 
8% pay increase 

Nurses’ representatives will 
this week press for a pay rise 
of more than 8 per cent, setting 
themselves on a collision 
course with the government. 

Mr Kenneth Clarke, chancel- 
lor of the exchequer, recently 
confirmed that pnblic sector 
pay bills would be frozen for 
the second year. 




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s 


MANAGEMENT 


FINANCIAL TIMES 


WEDNESDAY SEPTEMBER 21 1994 


★ 


Anglo-German differences are still profound despite 
the single European market, writes Vanessa Houlder 

The divide Europe 
failed to bridge 


T he traditional differences 
between German and 
British management styles 
were underlined this week by the 
first comparative study of middle 
management in the tiro countries. 

The report*, by the 
Anglo-German Foundation, looked 
at 60 German and UK middle 
managers working in the brewing, 
insurance and construction 
industries between 1991 and 1993. 
It found striking differences in 
their qualifications, career paths, 
attitudes and their whole concept 
of “management". 

The German managers saw 
themselves primarily as 
specialists who owed their 
authority to their superior 
technical knowledge. They aimed 
to convince others primarily by 
the content of their arguments, 
not their presentation. They 
wanted consistency and 
punctuality, rather than personal 
drive or enthusiasm, from their 
subordinates. They guarded their 
home life jealously, kept rigidly to 
office hours and some even chose 
to “clock in". 

In the UK, technical work was 
viewed as something that should 
be abandoned in the search for 
promotion into management. 
British middle managers saw 
themselves as scaled-down senior 
managers whose role was to take 
the "larger view". They were 
comfortable with uncertainty and 
had a notion of the job being 
“what you make it". Their 
subordinates were expected to 
display initiative, responsibility 
and honesty. 

They relied on persuasion and 
networking to win support and 
tolerated long, relatively 
unfocused meetings. They were 
prepared to work late and at 
weekends, but had few qualms 
about making private phone 
conversations or visiting the bank 
or dentist during working hoars. 

The research found that 
qualifications played a larger part 
m propelling people through the 
organisation in Germany. Those 
middle managers with only a 
technical or commercial 
apprenticeship stayed in each job 
for an average of eight years. 


Those with university degrees 
stayed in their positions for an 
average of four years. 

In the British companies, there 
was "a striking willingness" to 
ignore prescribed qualifications if 
the "right candidate” did not 
happen to possess them. 

The British managers had 
greater Internal job mobility, 
partly to avoid stagnation and 
partly because jobs were less tied 
to q ualifi cations. The German 
manag ers were used to middle 
managers staying within the same 
functional area of a firm through 
their working life. 

The German companies put a 
greater emphasis on cooperation 
than their British counterparts. In 
Britain, objectives were set up in a 
way that fostered "ownership” 
and accountability, rather than 
cooperation. 

British and American 
managers should ask 
whether emphasis on 
‘management’ is 
overdone 

S t r u c tu ral, as well as cultural, 
factors played an important part 
in explaining this gulf in 
attitudes. In contrast to the 
organic growth of German 
companies, the UK companies 
were likely to have expanded 
through mergers, making it more 
difficult to Integrate functions. 

As a result the British 
managers tended to take part In 
more cross-over meetings in 
steering committees, working 
parties and project groups. 

German companies bad at least 
one and sometimes two fewer tiers 
of hierarchy than the UK ones. 

One reason why German middle 
managers tended to identify 
downwards was that industrial 
unions encompassed every type 
and grade of employee. Another 
was that managers tended to 
share an apprenticeship 
background with their workforce. 
This system instils occupational 
pride, reducing the onus on the 
manager to motivate workers. 


Hie findings of this report, 
which were discussed at a Coopers 

& Lybnrnd seminar this week, 

may have important implications 
tor both nationalities which go 
beyond the much-rehearsed 
arguments about the advantages 
of vocational qualifications. 

Rosemary Stewart, a fallow in 
organisation behaviour at 
Templeton College In Oxford and 
one of the report's authors, urges 
British and American managers to 
ads whether their emphasis on 
"management” is overdone. 
“Perhaps more involvement in, 
and more knowledge of. 
operations would make for greater 
effectiveness,” she says. 

She also urges British managers 
to look at the more simplified 
organisations of the German 
companies - possibly why 
Germans produce equivalent 
output with fewer staff. 

German managers may need 
more job mobility and could 
benefit from teaming from the 
experience of other managers. At 
a time of rapid change, German 
managers may need to be more 
adaptable, flexible and innovative. 
Benedikt Koehler, General 
Manager at Norddeutsche 
Landesbank in London, says: “The 
British style of management is 
superior when it comes to 
innovation.” 

Bryan Rigby, chairman of the 
employment policy committee at 
the CBI and trustee of the 
Anglo-German Foundation, sees 
changes coming as German and 
British companies face up to 
similar p r ess u res. "The British are 
starting to plan better, ” he says. 
“The Germans may be becoming 
more flexible and adaptable.” 

The single European market 
will help narrow the gap between 
management styles, according to 
Alfred Kieser of the University of 
Mannheim, an author of the 
report "A degree of convergence 
is unavoidable,” he says. "But it 
will take a long time.” 

* Managing in Britain and 
Germany, price £5. Available from 
Anglo-German Foundation Book 
Saks, BEBC, 15 Albion Close, 
Parkstone, Poole, Dorset, BSU23LL. 



Gold rustc Kazakh minora at the Bakyrdft Joint venture cam £C4 a month and ragdariy saw 70 par cant of theb wages 

Capitalism on 
the steppes 

Kenneth Gooding visits a Kazakhstan gold mine - one 
of the first to use western-style business techniques 


T his is a country where you 
discover that the office 
manager is a prominent 
heart surgeon. He can no 
longer afford to follow his profes- 
sion because it does not pay enough 
to support him and his family. 

This is a country where the plant 
has a "vodka room” rather than a 
vending machine dispensing tea 
ami coffee. With vodka costing the 
equivalent of 5 cents for a full- 
strength bottle, it is a cheap perk. 

This is a country where prices 
have risen 20 fold since 1989 so 
there are not enough bank notes to 
go round. For the past six months 
most public-sector workers have 
instead been given vouchers to 
exchange for food and other essen- 
tials. Sometimes cheques are issued 
to top up the vouchers. But the 
local banks do not have any money 
to honour them. 

This la Kazakhstan once part Of 

the former Soviet Union. 

Mark Wilson, who has worked for 
mining companies in many western, 
countries, says managing in Kaz- 
akhstan Is different from anything 
he has previously experienced. 

He found It difficult to adjust to 
the feet that while people were well 
educated - it is rfaimad that the 
literacy rate in Kazakhstan Is 
highar than in the US - they had 
not been taught to show initiative 
or be willing to take responsibility. 

Set Kazakhs a target and they 
will attempt to achieve it, even 
when common sense suggests that 
pressing on regardless could have 
costly, even disastrous, results. For 
example, at first Wilson found his 
employees would keep a machine 
r unning at full stretch to achieve 
production targets, ignoring all 

wa rning gi g ns fhat it iwpHed atten- 
tion until it ground to a noisy halt 
It was also impossible to persuade 
any Kazakh to admit migtakfls. Wil- 
son recalls one frustrating conver- 
sation with a group of employees 
after something had gone wrong. 
“Ok. who stuffed it?” he inquired. 
All heads were shaken. He said: 
"Well, it couldn't have been me, I 
was in bed.” They brightened. “Ah! 
Then you must have dreamt it" 
After decades of Communist rule, 
when everyone was promised cra- 
cQe-to-grave care, many Kazakhs do 
not understand the western 
approach to work, Wilson suggests. 
“Why bother to turn up for work on 
timp and why stay sober after lunch 
when you get the same treatment 
and pay. no matter what?" 

The first Hmp he fired someone 
for persistent lateness and drunken- 
ness, policemen were at his door 
early the next day to tell him he 
could do no such thing . Wilson had 
a har d time convincing them that 
the man was working for a priva- 
tised company and could be fired. 

Wilson is project manager at the 
Bakyrchik Gold joint venture, one 


of the first in Kazakhstan to involve 
western capital and management. 
For the past year he has overseen 
the installa tion of new process 
plant to extract gold from the ore at 
the Bakyrchik gold mine, on Kaz- 
akhstan's north-eastern steppes, 
1,000km from the capital Almaty. 

hi the past, Russian metallurgists 
had tried various ways to extract 
the gold without success. They set- 
tled for sending the ore to nearby 
copper smelters so the gold could 
add value to the concentrate they 
produced. But this meant that the 
arsenic in the Bakyrchik ore went 
Up tile smelter chimn eys into the 
atmosphere. 

W ilson applies western psy- 
chology when attempting 
to instill the "fair day's 
work for a fair day's pay” concept 
He suggests that if you have to fire 
a Kazakh employee, it is a good idea 
to wait until he or she has collected 
a first pay packet at the end of the 
month. That way the employee 
knows what rewards are available 
provided the rules are followed. 

Bakyrchik joint venture employ- 
ees are paid cash, not vouchers. 
They earn an average of <100 (£64) a 
month, which in theory is about 20 


per cent more than the gold miners 
who are still employed by the state 
precious metals organisation. But 
the miners are having to make do 
with vouchers. Many of them can- 
not wait for the time when the joint 
venture takes over the mine as well. 

Wilson is helping to spread the 
capitalist message. Already about 20 
per cent of the joint venture 
employees have been persuaded of 
the benefits of having savings 
accounts In local banks and regu- 
larly deposit 70 per cent of their 
earning s in them (personal tax rates 
are very low). As there is little to 
buy in the small town of Auezov, 
the frontier town next to the mine, 
Wilson arranges buses to take 
employees to Semipalatinak two 
hours away by road, where there 
are at least a few goods ta the shops 
or on sale in the markets. 

The relative affl uence of the joint 
venture employees has divided the 
local community. Those who work 
for the western-managed company 
are given the cold shoulder by the 
rest of the town. 

Recruiting is a problem because 
local people are not used to the Idea 
that they can. be fired if they do not 
perform adequately. Wilson used to 
ask an employee who had been 


working well if he or she had a 
friend who might be interested in 
joining the joint venture. That does 
not work any more because, when 
newcomers did not meet require- 
ments and were fired, they fre- 
quently blamed the friend who rec- 
ommended them for the job. 

The venture needs two more driv- 
ers, Wilson says, and he knows his 
personal driver has two out-of-work 
brothers with driving licences. But 
his driver will not ask his brothers 
if they would like to join Bakyrchik. 
"He says that if they do not mea- 
sure up and I have to fire one or 
both of them, I will be angry with 
him," says Wilson. 

Than have bear some cost bene- 
fits to operating in Kazakhstan, 
according to Wilson. Some tanks in 
the new plant are made of titanium, 
bought at a cost of <16 a kilo com- 
pared with the $110 it would have 
cost to have them delivered from 
the US. The joint venture's ball mill 
was bought locally fin- <93,000 com- 
pared with the $850,000 it would 
have cost in the west 

On the other hand. Wilson points 
out: “A light bulb yon could buy in 
the west for a few pennies costs $10. 
And it is impossible to get a tooth- 
brush here, or a toilet roll-" 



Whether it’s easy access to international telephone lines, or setting up interoffice 
computer links, fast and efficient two-way communications are an absolute 
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Consumers’ champion 
to leave her Shelter 


Continued turbulence at the 
Consumers’ Association is 
guaranteed with the appoint- 
ment of Sheila McKecimie, cur- 
rently head of the housing 
charity Shelter, to the direc- 
tor’s post at CA. 

McKechnle, 46, will take over 
in January from John fiteishon, 
who retires at the end of the 
year after a controversial eight 
years in the post 

Belshon’s abrasive style has 
not endeared him to many of 
the staff at the organisation 
which publishes the consumer 
bible. Which? magazine. Hostil- 
ities came to a head recently 
when onion members at the 


association wait on strike over 
pay. 

Insiders who bad hoped, 
after Belsbon's departure, for a 
return to the more gentle- 
manly old ways will be disap- 
pointed. McKechnie, a forth- 
right and energetic Scot, has 
not been known to sidestep 
confrontation during her 10 
years at Shelter. 

It is just as well that CA is 
going to be kept an its toes; the 
number of subscriptions to 
Which?, the organisation’s 
main source of income, has 
plunged to about 600,000 from a 

peak of nearly a million in the 
mid-1980s. 



McKecimie Is widely credited 
in the voluntary sector with 
having re-established Shelter's 
role, bringing it back into the 
limelight after a period of lan- 
guishing In obscurity. Her job 
now will be to update Consum- 
ers' Association's appeal to 
today’s Increasingly sophisti- 
cated consumers. 


Non-executive 

directors 




Robert Wilkinson (above), the 
Stock Exchange’s survefflance 
supremo during the 1960s. has 
joined the board of Tradepoint 
Financial Networks as a non- 
executive director. 

Tradepoint, whose founders 
include a core of former Stock 
Exchange electronic systems 
gurus, intends to operate as a 
screen-based system for the 
trading of equities and other 
financial instruments in direct 
competition with the Stock 
Exchange. 

It plans to become a Regis- 
tered Investment Exchange, 
like its competitor, a regula- 
tory status which will require 
it, among other things, to 
maintain a surveillance func- 
tion to detect market manipu- 
lation and to ensure that its 
own requirements for listed 
companies and members are 
met 

Wilkinson says he will be 
assisting Tradepoint in setting 
up a surveillance capability, 
familiar territory to him. 

In 1966 he joined WX Carr 


and Co and subsequently 
became an equity partner. In 
1978 he was elected to the 
Stock Exchange Council, serv- 
ing a term OH the Financial 
Accounts Committee which 
monitored members' solvency. 
“It was not a popular commit- 
tee," he recalls. In 1981 he 
became Stock Exchange 
Inspector and, in 1984, the 
Exchange’s first surveillance 
director, a post he retained 
until retirement in 199L 

■ Sir Clive Whitmore, recently 
retired permanent secretary at 
the Home Office and a former 
permanent secretary at the 
Ministry of Defence, at 
MORGAN CRUCIBLE. 

■ Waniteh Grossart. chairman 
of Eclipse Blinds, EFT Group, 
Kicking Pentecost and 
SraHiah Hi ghland Hotels 
Group, at CAIRN ENERGY; he 
is resigning from BRITISH 
THORNTON HOLDINGS. 

■ David Probert chairman of 
w Canning ; at wtt.t.tam 
SINCLAIR HOLDINGS. 

■ Jonathan Cooper has 
resigned from BULLERS. 

■ Michael Brady, BP Professor 
of Information Engineering at 
Oxford University, at AEA 
TECHNOLOGY. 

■ William Mathieson, retired 
direct or of Land Securities, at 
CITY SITES ESTATES. 

■ Wong Cfaoon Sbein, a 
director of Hang Leong 
Industries Berhad, at RAMUS 
HOLDINGS; Steven Y bong Kin 
Pin has resigned. 

■ David Heywood as chairman 
of QS HOLDINGS. 

■ Roger Young, chief 
executive of Hydro-Electric, as 
an ordinary director at the 
BANK OF SCOTLAND. 


Finance moves 

■ Roy Lecky-Thompson has 
been appointed personnel 
director of the Bank of 
England. He is at present per- 
sonnel director of Cameron 
Markby Hewitt, the City law 
firm, and will be joining the 
Bank on December 1. Now 46. 
Lecky-Thompson read History 
at Oxford and is a Fellow of 
the Institute of Personnel and 
Development He joined BP in 
1969 and worked in personnel 
and training positions in the 
UK and overseas before mov- 
ing to Arthur Young as direc- 
tor of personnel in 1986. He 
joined Cameron Markby Hew- 
itt in 1987. 

Lecky-Thompson is a lec- 
turer and writer on human 
resource issues; he spear- 
headed Cameron Markby Hew- 
itt’s achievement of a National 
Training Award and Investors 
in People accreditation. 

This appointment completes 
the senior manag ement of the 
central services area of the 
Bank, which was re- shaped 
earlier this year with the 
appointment of Gordon Midg- 
ley as finance director and 
John Footman as secretary and 
Lionel Price as director OF the 
Centre for Central Banking 
Studies. 

■ Malcolm Phillips has been 
promoted to md of Property 
Leeds (UE). part of LEEDS 
PE RMAN ENT BUILDING 
SOCIETY; he succeeds Jim 
Breaiiey, who remains a 
director. 

■ Larry Prager has been 
promoted to md of NlKKO 
EUROPE'S equity research 
division. 


Constructive 

careers 

Capital Shopping Centres, the 
property company which made 
its Stock Exchange debut in 
March, ha* found a new man- 
aging director in Douglas Les- 
lie. 

Leslie. 47, will join CSC from 
commercial property agents 
Donaldsons, but spent 17 years 
with British Rail op to 1992. He 
is credited with developing 
retail outlets in stations and 
having a hand in the develop- 
ment of numerous shopping 
centres and offices on 8R land. 

Having never worked for a 
quoted company, though, he is 
unknown to most investors 
and stock market analysts. 
CSC’s shares have fallen to 
209p from its 230p offer price. 

"He win need to be strong to 
stop the company becoming 
another comer of Donnie Gor- 
don’s empire,” commented one 
analyst. TransAtlantic, the 
property and insurance com- 
pany also chaired by Gordon, 
holds 75 per cent of CSC’s 
shares. 

But Gordon says the new md 
will have a free hand. ‘Tie is 
very strong and shows great 
poise.” he said. “I don’t have 
time to deal with the fine 
details of a shopping centre 
operation.” 

■ Gerald Hirst has been 
appointed joint md of BILTON, 
following the resignation of 
Ronald Rosenblatt 

■ Roger Venthen, a former 
operations director of John 
T -fling Construction's EPL 
Plant and Access Hire, has 
been appointed md of Castle 
Plant, part of TARMAC 
Construction in succession to 
Brian Tock. 

■ Roy rcnfa (below left), 
formerly finance director and 
company secretary of Alfred 
McAlpine Homes East has 
been appointed finance 
director of Taywood Homes, 
part of TAYLOR WOODROW. 

■ Steve Simpson (below right) 
haq been appointed finance 
director of Leech Homes, part 
of the BEAZER Homes Group; 
he replaces Paul Smith who 
has been promoted to md of 
Beazer Homes East. 




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International Secretariat, 1196 Gland, Switzerland. 


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FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 1994 


BUSINESS AND THE ENVIRONMENT 


Non-whites are more likely to live near toxic waste, reports James Harding 

Not in my back yard 


N on-whites in the US are 
more likely than whites 
to be living in an area 
with a commercial haz- 
ardous waste facility, according to a 
recent US study. The disproportion- 
ate exposure to pollution of blacks 
and Hlspanics was first acknowl- 
edged 10 years ago, but research 
shows that the problem of “environ- 
mental racism” is worse today. 

Yet the waste management indus- 
try is a vocal part of the emerging 
consensus oF businesspeople, envi- 
ronmental activists and government 
who agree that “environmental rac- 
ism” is a trend that must be 
reversed. But African-American 
researchers say the problem contin- 
ues to grow in spite of the consen- 
sus and support for environmental 
justice in the Environmental Pro- 
tection Agency. 

The study. Toxic Waste and Race 
Revisited, was sponsored by the 
Centre for Policy Alternatives, the 
National Association for the 
Advancement of Coloured People 
(NAACP) and the United Church of 
Christ Commission for Racial Jus- 
tice. It analysed 530 commercial 
"off-site" hazardous waste treat- 
ment, storage or disposal facilities 
operating in the early 1990s and 
compared them with demographic 
profiles of postal code areas in the 
1990 census report. 

It showed that last year non- 
whites were 47 per cent more likely 
than whites to live near a toxic 
waste site. In 1990 it was nearly 31 
per cent; in 1980 it was 25 per cent 
Ben Goldman, one of the authors 
of the report acknowledges that the 
study does not explain the causes of 
the growing inequality, but says its 
findings are a “disturbing setback 
that is ail the more disturbing 
because of all the attention being 
paid to environmental racism*. The 
term was coined by Benjamin 
Chavis, former NAACP executive 
director, after an environmental 
demography report in 1987 showed 
evidence of a persistent link 
between toxic waste sites and eth- 
nic communities. 

Last year, Irma Hunter Brown, a 
black representative in the Arkan- 
sas state legislature, who lives near 
a toxic waste facility, pushed 
through the Environmental Equity 
Act, which prohibits a new indner- 
ator or toxic waste facility within 12 
miles of an existing site unless 
approved by the affected commu- 
nity. 

In the Albuquerque area of New 
Mexico, the South West Organising 



ImWbv 

Waste not industrial ak poButlon is said to be having a tfa proportionate effect on America’s black and Ifcpanic communities 


Project, a non-profit environmental 
group, has been campaigning 
against the disproportionate 
Impacts of groundwater contamina- 
tion and industrial air pollution on 
the state's Hispanic communities. 

Business leaders in waste man- 
agement, who might be expected to 
dismiss environmental racism as 
part of the same economic system 
which fails to distribute wealth 
evenly, echo the environmentalists. 
Charles McDermott, government 
affair s director for WMX Technolo- 
gies, the global environmental ser- 
vices company, says: “Our society 
has not done enough to ensure envi- 
ronmental equity." 

However, he disagrees with Gold- 
man’s methodology and says the 
Toxic Waste and Race Revisited sur- 
vey renders “skewed results”. 
McDermott argues that using large 
and irregular postal code areas as 
measures of community give an 
inaccurate picture of the whole. 

To provide a meaningful study, 
he suggests using census data that 
give smaller boundaries of 4,000 
people as a community. Research 
using this method at the University 
of Massachu setts claims treatment, 
storage and disposal facilities are 
more likely to be located In predom- 
inantly white, industrial, work- 
ing-class neighbourhoods. 

Although McDermott endorses 


the University of Massachussetts 
research, he agrees that “environ- 
mental justice is a very real and 
serious problem". He points to the 
EPA's 1992 study on lead poisoning 
which found that in low-income 
families, 68 per cent of African- 
American children suffer lead poi- 
soning, double the percentage of 
white children affected. 

Another piece of EPA research, 
he says, has shown that in compari- 
son to the white population, a 
higher proportion of African- 
Americans and Hispanics live in 
areas where air pollutants exceed 
federal limits for carbon m onrnrirlp 

Sulphur dio xid e and load 

But McDermott cautions delicacy 
in dealing with the “complex prob- 
lem". In particular, he believes that 
dealing with the problem lo calit y by 
locality is the best way to protect 
America’s communities. Rather 
than blanket regulation industry by 
industry, he wants state licensing 
for waste facilities to include 
requirements to assess the cumula- 
tive effects of sites emitting pollut- 
ants over a single area. 

The suggestion is shared by sev- 
eral prominent people on Capitol 
Hflf- The Environmental Justice 
BUI, which has yet to come to com- 
mittee in Congress, indudes provi- 
sions to make permits for waste 
facilities issued by the federal Envi- 


ronmental Protection Agency con- 
tingent on tests for cumulative 
damag e in the area. 

The Clinton administration, 
which counts itself a member of the 
environmental justice movement, 
pre-empted the legislation by issu- 
ing an executive order last Febru- 
ary to address environmental jus- 
tice in minority and low-income 
populations. 

The EPA's envi ronmental justice 
office has invested in education for 
non-white communities to “help 
them make better choices”, but it 
shies away from suggestions of sit- 
ing regulation. Bob Knox, deputy 
director erf the Offiee of Environ- 
mental Justice at the EPA, says t h** 
road to environmental equity, on 
which they have been travelling 
only two years, is a long one. Dis- 
crimination and pollution were 
endemic for many generations. 
“Remember that the voting rights 
act was only 1965 and a lot of sites 
were placed before that,” he says. 

There is also debate ova which is 
more important in contributing to 
the problem: whether blacks are 
moving into low-cost housing areas 
where there is already a build-up of 
polluting industries, or whether 
industry is locating polluting facto- 
ries in areas where there is a rela- 
tively high proportion of non- 
whites. . . . 


Aerosol industry tries 
to clear the air 

Now that CFCs have gone, manufacturers are phasing 
out other harmful ingredients, writes Peter Knight 


I f yon cannot be bothered to 
shine furniture, just spray the 
polish in the air and the boss 
will believe you have done the job. 
This practice is one of the many 
reasons why people love aerosols. 

Except for Swedes and Finns, 
who prefer to roll on their 
deodorants, all leading world 
markets are showing increased 
aerosol sales. The UK alone 
produced 935m aerosols in 1993, 
up 6J25 per cent on the previous 
year, according to the British 
Aerosol Manufacturers’ 
Association. 

There was a small dip in aerosol 
sales in the late 1980s as 
consumers became more aware of 
thee ffect of CFCs. The drop was 
sufficient to prompt the industry 
to look at alternative propellants. 

“Oar research across Europe 
confirms that since CFCs were 
removed from aerosols, consumers 
are largely unaware of any 
r emaining gHvir omnenfaii fasqes , 
such as recyclability. 
flannmMM y, volatile organic 
compounds (VOCs) and amounts 
of packaging." says Paul Scott, 
environment consultant with 

Dragon International, a corporate 
reputation consultancy. 

“But the aerosol industry is 
addresting all the envir onmental 
issues and some new products will 
show significant improvements in 
VOC emissions and the ratio of 
packaging to usase." he says. 

VOCs axe the vapours given off 
by a range of volatile chemicals 
used in industry, such as solvents, 
and rvmtnm»d In consumer 
products, such as bouse paint, 
petrol and those aerosols which 
use hydrocarbons (for instance, 
butane) as a propellant or as part 
of the formula. 

VOCs collect in the atmosphere 
and react with sunlight to form 
photochemical smog and tow-level 
ozone. These city smogs, which 
also drift into rural areas, affect 
br eathing and rap he particularly 
harmful to young children end the 
elderly. European countries have 
signed a UN treaty to reduce VOC 
emissions by a third of 1988 levels, 
by 1999. 

Industry is also looking at ways 
to reduce its VOC emissions. S.C. • 


Johnson, the multinational that 
owns leading cleaning, polishing 
and hygiene brands such as 
Hedge, Glade and MY Muscle, has 
taken a lead by replacing butane 
propellant with compressed air in 
its Fledge polish spray. The 
company is committed to reduce 
the ratio of VOCs to its raw 
materials by 25 per cent between 
1990 and next year. This will help 
the company meet the UN target 
Aerosol dispensers create a fine 
spray by propelling the liquidised 
product through a small hole. The 
propellant is usually a liquid gas 
which occupies the same space in 
the canister, sometimes separated 
from the product, sometimes 
mixed, depending on the 
formulation. Press the release 
valve and the pressure exerted by 
the gas forces the product up the 

Cynics say that the 
industry has failed to 
promote and develop 
the environmentally 
more acceptable 
pump-and-spray 
technology 

spout and through the nozzle. The 
gas evaporates, leaving the 
product to settle. 

CFCs - non toxic and non 
flammable - were the ideal 
propellants until it became known 
that they damaged the ozone 
layer. Hydrocarbon gases, such as 
butane, were established 
propellants before CFCs were 
invented and they were generally 
used to replace CFCs In household 
and Industrial aerosols. Other 
benign gases, such as nitrogen and 
nitrous oxide, are used in food and 
personal hygiene products, but are 
unsuitable or too expensive for 
more general use. 

In the late 1980s various 
technologies were offered to 
provide aerosol delivery without 
gas propellants. Few have been 
taken up. Most new technologies 
required the reformulation of the 
products because CFCs and 
hydrocarbons were integral to 


their performance, helping to 
disperse or foam the product as tt 
came out of the can. 

Much hope was placed in 
compressed air. There were two 
possibilities: pressurise the 
container when filling it, or 
provide a pump for the customer 
to create the pressure for each 
spraying session. Hairsprays using 
the pump-and-spray technology 
were launched in the late 1980s. 
But after an initial take-up 
customers tired of pumping and 
reverted to traditional aerosols. 

The aerosol industry points to 
the market's rejection of 
pump-and-spray as an 
endorsement of liquid-gas 
propellants. But cynics 
that the industry has fai 
promote and develop the 
technology sufficiently and is 
using the market’s reaction as an 
excuse to use options that are less- 
en vironmen tally acceptable. 

Johnson argues that the 
customer will not tolerate any 
reduction in quality. It has 
therefore taken the technically 
more complex route and used 
compressed air in a pressurised 
container to propel its Pledge 
f ur nitu re polish in much the same 
way as with butane. 

Johnson set about overcoming 
the known problems of using 
com p re sse d air, especially the 
gradual reduction in pressure as 
the container empties: The 
product was also reformulated to 
work witti the new delivery 
System. Solvent is still used, but . 
VOC emissions have been reduced 
by a third overall. 

After five years of research and 
development Johnson perfected 
the technology and converted its 
Dutch factory filling line, which 
serves Europe. Compressed-air 
Pledge was launched in Italy and 
is being introduced to other 
countries this year. 

Philippe Danpder, 

vice-president, group director for 
Europe, says compressed air will 
become the dominant propellant 
in. the fatnre: This is good for the 

enrin rnmpnt and Johmon 'S 

business. “We see great 
commercial advantage from being 
the first in,” he says. 




“Partnership may be a ciictid in business vocabulary; 
for us It's simply a fact of life. It has to be, if we're 
to achieve the quality we're after in the textile fibers 
business. I encourage our people to work closely 


with our clients- In these partnerships we developed 
successful marketing programs for well known 
brands such as Enka* Viscose and Sympatex*. And 
even though our organization chart is made up of neat 


little squares, really crucial work Is done In interlinking 
dixies. Partnerships, in which we mix youth and ex- 
perience, unbound by hierarchy or tradition. Getting 
doser. That’s our way of creating the right chemistry." 



CREATING THE RIGHT CHEMISTRY AKZO NOBEL 


f 


P 


Akzo Nobel is one of the world’s leading companies in selected areas of chemicals, coatings, health care products and fibers. 
More than 73.000 people, active in 50 countries around the world, make up the Akzo Nobel workforce. For more Information, write or 
call: Akzo Nobel nv. ACC/F7, P.O. Box 9300, 6800 SB Arnhem, the Netherlands. Telephone [31] 85 66 22 66. 






FINANCIAL TIMES WEDNESDAY SEPTEMBER. 21 1994 


ARTS 


U 


Television/ Christopher Dunkley 


Comedy gets the specialist treatment 


C omedy on television 
today is Car more varied 
than it used to be 
which is surely a good 
thing. However, even 
more than most programme areas, 
comedy is becoming subject to polit- 
ical correctness which is surely a 
bad thing. If you doubt the 
increased breadth of comedy con- 
sider It’s Just A Ride, the tribute to 
the late Bill Hides screened 10 days 
ago by Channel 4. Even 10 years ago 
it would have been unthinkable for 
any chann el to transmit this. True, 
there was little, if anything, from 
Hicks' own material in this pro- 
gramme which had not already 
been shown in the last few years on 
British television, albeit late at 
night, but even on a second viewing 
it still had the power to surprise. 
Many would describe Hicks, who 
died earlier this year at the age of 
32, as foul mouthed, and it is true 
that he used four letter words with 
a frequency which virtually drained 
them of value. That alone would 
have kept him off television until 
recently. 

But Hicks’ value was as a social 
commentator, even if some people 
found his material more painful 
than fimny. He was a comedian in 
the tradition of Lenny Brace and all 
those licensed jesters down the cen- 
turies who have used their position 


and their flair to show us unpleas- 
ant truths about ourselves and our 
societies. One of his fellow comedi- 
ans. paying tribute in this pro- 
gramme, said “With me. Td do a 
joke, then a little bit of truth; a 
spoonful of sugar helps the medi- 
cine go down. But with Bill there 
weren't no spoonful or sugar”. That 
is undeniable and consequently 
watching Hicks could be uncomfort- 
able, but the significant point is 
that today viewers can see what 
was prohibited 10 years ago, and 
that is progress. Anyone offended 
by his language could switch off at 
the Erst swear word. Nor is the 
Increased variety in comedy merely 
a question of access to "stronger" 
material 

Where there used to be only two 
categories - situation comedy and 
stand up comedy - we now have 
shows such as Have I Got News For 
You, Whose Line Is It Anyway? and 
Clive Anderson Talks Back. Ander- 
son began a new series on Friday 
with an edition that showed off all 
his strengths; funny and flirtatious 
with Goldie Hawn and startlingly 
honest with football expert Jimmy 
Hill and comedian Jim Davidson, 
who readily admitted that he was 
willing to ridicule anyone - "Welsh 
women with beards, black people, 
daft Irish” and so on. 

In this Davidson now looks dar- 


ingly old fashioned, even shocking, 
because comedy is rapidly becom- 
ing the paradigm of political cor- 
rectness. The irony is that apart- 
heid ("separate development") so 
recently the number one hate on 
every liberal agenda. Is now being 
positively - some would say obses- 
sively - pursued by supposedly lib- 
eral broadcasters. We are given a 
separatist comedy programme for 
gays, and a special enclave is set 
aside for black comedians so that 
they can develop their own material 
within their own culture, uncon- 
laminated by whites. At this rate it 
will take the broadcasters very little 
time before they start providing 
special series of the sort described 
with such scorn by the late James 
Cameron (yes, lovely liberal Mr 
Cameron - after all his years as a 
war reporter he saw humanity frith 
a sad but clear eye). When Channel 
4 began, he declared that its more 
“specialised" output seemed to be 
aimed at “black lesbian social work- 
ers 11 ring in Hull". 

If you really did make such a pro- 
gramme the target audience would 
probably give it a phenomenally 
high “RT or Reaction Index which 
is the researchers' calculation of the 
viewers’ appreciation of a pro- 
gramme. This has always shown 
that the more specialised the 
appeal, the higher the RL Steam 


train freaks appreciate steam train 
programmes even more than soap 
fans like Coronation Street. But 
however much homosexuals hi»»h 
Channel 4‘s Just For Loughs: The 
Queer Comics, and however much 
black people may enjoy BBCS’s 
black enclave The Real McCoy 
(well, some homosexuals and some 
black people, anyway) they consti- 
tute only a minority of the viewing 
population. In fnUHILng their 
desires, what are the broadcasters 
doing to everybody else? 

F or straight viewers Just 
For Laughs managed to 
be simultaneously embar- 
rassingly over defensive 
and irritatingly arrogant 
On the one hand gays wanted pity 
because even their own parents did 
not understand them and on the 
other hand homosexual men want 
to be seen as superior to straight 
men for all sorts of reasons - they 
understand women so well, for 
Instance. The Real McCoy, which 
excludes white people, features 
some performers who certainly 
could bold their end up in a multi- 
racial talent contest and others who 
seem to get into this programme 
solely because their patois or some 
other aspect of their material 
ensures that they will not be under- 
stood by whites. 


No doubt the broadcasters would 
claim Indtgnantly that their 
motives in making these pro- 
grammes were of the highest, 
designed solely with the interests of 
frequently persecuted groups in 
mind - precisely the claim made by 
South Africa's late white govern- 
ment. But whether preached in 
Johannesburg or London, the argu- 
ment suffers from the samg innate 
condescension, the unspoken 
assumption that members of the 
group concerned are Incapable of 
making their way in the world with- 
out special treatment 
The odd thing about this belief, 
seemingly so widespread among 
broadcasters today, is that all the 
evidence Is against it You only 
have to have one Julian Clary star- 
ring in his own very explicitly 
homosexual series, aT| d one clearly 
black Lenny Henry starring in his, 
to prove that those with talent can 
succeed regardless of whatever 
minority they may belong to. When 
the non-black, non-homosexual 
viewing majority see the success 
achieved by Clary and Henry with- 
out recourse to any special 
enclaves, what are they expected to 
think about the ahiiitifts of tft vwe 
selected by the broadcasters to 
appear in their blacks-only or gays- 
onJy programmes? The answer 
seems unavoidable. 





Julian Clary: comes up smelling of roses 



Anne-Marie Duff as Emma and Hugh Lee as Frank Churchill in Mike Alfreds* production at the Theatre Royal, Richmond 

Jane Austen adapted for the stage 


D ickens translates well to 
the stage, Jane Austen 
does not One jostles us 
with a teeming kaleido- 
scope of places, people and events or 
almost grotesque vividness, the 
other, as Charlotte Bronte disdain- 
fully observed in a brilliantly 
wrong-headed piece of criticism, is a 
Chinese miniaturist. The narrator’s 
Ironic tone Is alL Present the plot of 
an Austen novel as a series of hap- 
penings, even with the help of the 
author's dialogue, and an element is 
missing . 

Mike Alfreds' production of 
Emma for the Cambridge Theatre 
Company recognises the danger. As 
director-adaptor Alfreds seeks to 
remedy this not so much through 
the occasional sound-track narra- 
tion as with ironic devices all the 
stage’s own. Paul Dart's light set is 
paved with a Greek- revival pattern 
inscribed with such Austenesque 


concepts as "genteel address", 
“principle”, “conversation”, “man- 
ners" - as well as such vices as 
"folly”. Inscriptions appear, too, as 
a sort of surtitle, on the back wall, 
setting the scene or commenting: 
"Marriage - a Grim Era”, “The 
Countryside - No City Dust Here" 
and “Night Waned - the Dawning”. 

Martin Hoyle 

reviews 'Emma 


Crossword addicts will detect the 
anagrams. 

Ultimately the play skims the 
novel's surface. This is in part due 
to Anne-Marie Duff In the title-role, 
as yet lacking the ability to chart 
Emma's sublime self-confidence and 
final chagrin, painfully achieving 
self-knowledge as she meddles with 


other people’s lives for their own 
good and gets it all wrong. Emma 
should be stripped bare, as Walter 
Allen put it In The English Novel, 
but this slightly monotonous yoimg 
woman has little to strip away. Like 
Juliet, the character needs to 
express youth, indeed callowness, 
leading to transfigured maturity. 
The actress ably suggests the bossy 
pushfulness that might have char- 
acterised the older Emma without 
her emotional come-uppance and 
own good sense; beyond that an 
all-purpose cheerfulness does not 
quite suggest the depth of Emma's 
involvement with others or her own 
ripening feelings. The production 
reflects the ripples on the pool of 
Jane Austen's society but fails to 
suggests the currents beneath. 

The appreciative Richmond audi- 
ence laughed gently at the jokes, 
and there is much to enjoy in the 
fluid transformation of crate-like 


chests into furniture, carriages and 
even a grassy bank. At the moment 
not ail the cast (including Emma) is 
audible or sufficiently pointed, 
though Carolyn Jones is funny and 
touching as humble, grateful, garru- 
lous Miss Bates. Emma’s father is 
reduced to a running gag about 
hypochondria which Michael Elwyn 
pleases the groundlings with might- 
ily. Peter Hamilton Dyer's Mr Elton, 
the fortune-seeking curate, is a 
rounded individual, not a set of 
mannerisms which emphasise the 
Quality Street trap that Austen sets 
for actors. And everyone could do 
with lessons in voice projection 
from Celia Bannerman who bright- 
ened your critic’s youth with a 
huge-eyed, heavy-lidded Bennett 
girl in a television Pride and Preju- 
dice. Her Mrs Weston is still radiant 
and good-humoured, which is more 
than can be said for her admirer 
after all these years. 


The South Bank puts in its bids for lottery money 


T he Sooth Bank Centre, the 
UK’s largest arts complex, 
re-launched itself yet 
again yesterday. It pres- 
ented a new Image in expectation 
that its £65m redevelopment plan 
for a brand new building (or rather 
the re ten tion of most of the exist- 
ing ones, but covered by architect 
Sir Richard Rogers in a transparent 
canopy) will be accepted as a 
worthwhile National Lottery 
funded millennium project 
Research suggests that ' the very 
words “South Bank* deter poten- 
tial visitors, so in future It will 
stress its constituent parts, like the 
Royal Festival Hall and the Purcell 
Room. So welcome the abbreviated 
logo, SBC. 

The SBC win also persevere in 


broadening its range of music. 
Audiences have fallen from 80 per 
cent to under 60 per cent in the last 
two decades. In future there wiD be 
less rfaerirai music but it win be 
better themed and promoted. “No 
bread mod butter concerts - all 
jam”, in the words of mode direc- 
tor Graham Sheffield. 

To this end £150,000 will be spent 
on an advertising campaign alrneH 
at building a new audience: there 
has been a sharp slide in regular 
concert goers. At the same time 
some of the outside bookings at the 
Festival Hall, which were sched- 
uled by tradition rather than the 
expectation of a large audience, 
like youth orchestras and the 
annual NatWest concert, are bring 
encouraged to switch to the smaller 


Queen miMtoii Wall. 

Non-classical audiences are 
courted with jazz at the Purcell 
Bimum; all night concerts of Imllan 
music; and six nights of Shirley 
Bassey in early October. 

Apart from the major Deutsche 
Roman tik festival starting next 
week and a Purcell tercentenary 
season, the SBC is marking time 
until it knows the fate of its lottery 
bid. Sir Richard Rogers said yester- 
day that he aimed to create “a peo- 
ple’s palace. This is the obvious 
bridge joining the southern London 
community and the northern.” His 
reputation makes the SBCs appli- 
cation for £45m from the lottery 
much more feasible. 

Antony Thomcroft 


Theatre / /Alastair Macualay 

Timothy West’s ‘Macbeth’ 


I f the last two Macbeths you 
saw were Alan Howard 
(National Theatre, spring 1993) 
and Derek Jacobi (Royal 
Shakespeare Company, winter 
1993-4), then you may well find it 
refreshing to turn to Timothy West 
(Theatr Clwyd, right now). It is rare 
today to hear anyone speak Shake- 
speare so naturally (I wish I had 
seen his Falstaff), and to hear an 
actor speak verse with such com- 
municative ease. His technique is 
virtually invisible: no bravura feats 
of legato breath-control, no iieder- 
llke strokes of special word-paint- 
ing, no here’s-something-I-prepared- 
eariier calculation. He simply utters 
the words, in calm phrases, as if he 
was thinking them for the first 
time. 

So It sounds ungrateful to say 
that West almost never convinces 
as Macbeth. His kind of naturalness 
is Itself wrong, for it involves scal- 
ing the nervous heights of the role 
down to a level too ordinary. Early 
on in the big dagger soliloquy, he 
began to remind me of a housemas- 
ter confronting some baffling dis- 
turbance in the corridor outside the 
dormitories; and, once I had seen 
the resemblance, I could not shake 
it off. 

He addresses the hallucinatory 
dagger with utmost reasonableness: 


how strange that he cannot grasp 
the thing. Then, it hits him: this is 
indeed a hallucination. Well, he is 
resigned to that; hall^nstimni do 
happen, after all. in difficult circum- 
stances; but we must all just buckle 
down and help him through this 
trying time. When it comes to 
“Nature seems dead”, he can 

darken his V01C8 am) enlar ge his 

vision to something beyond the 
everyday. But not for king. Even 
Banquo's ghost only disturbs him 
for as short a while as possible. IBs 
spirit does harden, and he does 
grow distant from his wife, and he 
wears his criminality with greater 
ease, yes; but the vast scale of Mac- 
beth's overwrought thoughts eludes 
him wholly. 

S till, his way of speaking 
affords the simple and 
invaluable pleasure of keep- 
ing our attention on Mac- 
beth as it unfolds moment by 
moment This pleasure is provided 
nowhere else in Helena Kaut-Hbw- 
son’s staging. Everyone works very 
hard indeed to project Earnestness 
and eagerness hang heavy in the 
air, but never dispel the produc- 
tion’s basic dullness of spirit Alex- 
andra Mathie (heroine of Helena 
H-FCs recent Jane Eyre ) brings a 
genteel vein of spinster ly anxiety to 


Lady Macheth. As usual, the 
witches are ghastly; these ones wail 
a great deal, thrash artificially 
around the stage, and seem much 
more unhappy than Macbeth, him- 
self. (They reminded me of the act- 
ress Kathryn Hunter even before I 
noted that she is listed as Kaut- 
Howson’s co-director.) 

But nobody here seems to be in 
the same play as anybody rise. The 
production boasts some of the worst 
lighting - by Nick Beadle - f have 
ever seen. Sometimes it tries to be 
naturalistic, as for the nocturnal 
scene after Duncan’s murder - and 
yet when the torches leave the 
stages, Malcolm and Donalbain are 
left in as much stage tight as before. 
Or it triee to be eerily dramatic, as 
when Lady Macbeth is suddenly lit 
by si delights and a Eootlight to give 
three huge shadows; the effect, 
however, is one of tawdry melo- 
drama. Often the person speaking is 
none too visible. Pamela Howard's 
Hpgjg nu have all kinds of unusual 
touches. I enjoyed the backpack 
Macbeth wears, and the curious 
black-feather ruff his wife wears 
with her Victorian tartan frock for 
the banquet But my favourite was 
the pair of Eskimo boots she wore 
for her first appearance. 

At Theatr Clwyd, Mold 


l 

I 


1 International \ 

1 A 

ARj 

rs 

Gun 

DE 


■ COLOGNE 

Philharmonic Tonight Christine 
SchSfer song recital. Tomorrow: 
Vladimir Fedosseyev conducts 
Moscow Ftadlo Symphony Orchestra 
in works by Brahms, Kikta and 
Sviridov, with violinist Julian Rachlin 
and cel fist Mischa Maisky. Sun 
morning, Mon and Tues evenings: 
James Conlon conducts Gurzenich 
Orchestra in Mahler’s Seventh 
Symphony. Sun evening: Alexander 
Lazarev conducts Cologne Radio 
Symphony Orchestra and Chorus in 
concert performance of 
Rbnsky-Kbcsakov’s May Night, with 
soloists of the Bolshoi Opera 
(0221-2801) 

Opemhaus Tonight new production 
of Puccini's Trittico, conducted by 
James Conlon and staged by Willy 
Decker (repeated Sep 29, Oct 1, 4, 
9). Tomorrow. Sun: Der fliegende 

Hol|- 

tinder with Wolfgang Schdne. Fri: 
TanzForum production of Peer Gynt 
(0221-221 8400) 

■ DRESDEN 


Semperoper Tonight Siegfried 
Jerusalem song recital. Tomorrow, 
Sat La boheme. Fri: new ballet 
mixed bill. Sun: Capriccio. Oct 2: 
new production of Un ballo In 
maschera (0351-484 2323) 
Kutturpalast Sat and Sun: 
Jdrg-Peter Weigle conducts Dresden 
Philharmonic Orchestra in works by 
Rudi Stephan, Sibelius and 
Beethoven, with violin soloist 
Vladimir Spivakov (0351-486 6666) 

■ FRANKFURT 

Alto Oper A new chamber opera by 
Franz Hummel, entitled Blue 
Danube, is premiered tonight in the 
Mozart Saal, with a repeat 
performance tomorrow. Gennady 
Rozhdestvensky conducts the 
Chamber Orchestra of Europe 
tomorrow in the Grosser Saal in 
works by Britten, Shostakovich and 
Dvotek, with piano soloist Viktoria 
Postnlkova. The Israel Philharmonic 
Orchestra gives concerts on Sat and 
Sun, the first conducted by Georg 
Solti, the second by Noam Sheriff. 
Next Tues: Wendy Warner cello 
recital. Sep 29: Anne Sophie Mutter. 
Oct 3: Alfred BrendeJ (069-134 0400) 
Oper The opening production of the 
1994-95 season is The Ring, staged 
by Herbert Wernicke and conducted 
by Syfvain Cambreiing. The first of 
three cycles begins on Oct 1 1 
(069-236061) 

■ GOTHENBURG 

• Andrew Litton conducts the 
Gothenburg Symphony Orchestra in 
Ravel's Plano Concerto in G 
(Krysttan 2 merman) and 

Rakhmaninov’s Symphonic Dances 
tomorrow and Sat afternoon at the 


Konserthuset Sep 27-30: festival of 
music by Swedish composer 
Sven-Eric Johanson (031-167000) 

• Gothenburg’s new harbour-side 
opera house opens on Sep 30 with 
the first of three gala performances. 
The first opera production is 
StomdaW’s Aniaras, opening Oct 15 
(031-131300) 

■ HAMBURG 

Stoats oper Tonight and Sat: 
Hamburg Ballet mixed bill, 
choreographies by Buhl, Neumeier 
and Brown. Tomorrow: EntfOhrung. 
Fri: Das Rheingold. Sun: Henze's 
opera The Bassarids. Next Tues: 
Henze's ballet Undine, choreography 
by John Neumeier (040-351721) 
Musikhalle Tomorrow: Alfred 
Srendel plays Beethoven piano 
sonatas. Sun morning, next Mon 
evening: Muhai Tang conducts 
Hamburg State Philharmonic 
Orchestra in works by Haydn, Bruch 
and Nielsen, with violin soloist 
Kyung-Wha Chung. Sep 30: Anne 
Sophie Mutter. Oct 5: Mitsuko 
Uchlda (040-354414) 

■ HELSINKI 

Finnish National Opera The main 
event this week is the first night on 
Frf of a new production of Joonas 
Kokkonen's 1975 opera The Last 
Temptations, conducted by Kart 
Tikka and staged by Paavo Liski. 
Repertory also includes Lohengrin. 

Le nozze di Figaro and the 
Bourmeister production ot Swan 
Lake. Andreas Schmidt gives a song 
recital tomorrow (0-4030 22 11) 

■ LEIPZIG 


Opemhaus Tonight (Dreilinden): 

Le bar’s Die lustige Witwe. 

Tomorrow: choreographies by Uwe 
Scholz. Fri: Lortzing's Zar und 
Zimmermann. Sal: Stravinsky ballets 
choreographed by Uwe Scholz. Sun: 
Tosca (0341-291036) 

Gewandhaus Sat Leopold Hager 
conducts Gewandhaus Orchestra in 
a Johann Strauss evening, with 
soprano Gabriele Fontana and tenor 
Robert S wen sen. Sun: John Nelson 
conducts Middle German Radio 
Symphony Orchestra and Chorus in 
works by Mendelssohn, Brahms and 
Kantscheli. Next Tues: Freiburg 
Baroque Orchestra plays Zelenka, 
Telemann and Bach (0341-713 2280) 

■ MUNICH 

Stoatsoper The 1994-95 season 
opens tonight with a revival of Der 
Rosenkavalier starring Felicity Lott, 
Yvonne Wiedstruck and Kurt Moll 
(repeated on Sat). Repertory for the 
next two weeks includes Le nozze di 
Figaro, Tannhauser, Nabucco, John 
Neumeier's choreography of A 
Midsummer Night's Dream and an 
American mixed bill of ballets. The 
first new production is Don 
Giovanni, conducted by Colin Davis 
and staged by Nicholas Hytner, 
opening Oct 31 (089-221316) 
Gasteig Georg Solti conducts the 
Israel Philharmonic Orchestra 
tomorrow in Mendelssohn's Fourth 
Symphony and Shostakovich's Fifth. 
Sergiu Celibidache conducts the 
Munich Philharmonic in a French 
programme on Fn. Sun morning, 

Mon and next Wed. Anne Sophie 
Mutter gives a violin recital on Tues 
(089-4809 8614) 

Herkulessaal der Resident Alfred 
Brendel plays Beethoven piano 


sonatas on Sat and Mon. Carlo 
Bergonzi gives a farewell song 
recital on Sep 30 (089-299901) 
Ofympiahalle Phil Collins gives 
concerts tonight, tomorrow and Sat 
(089-260 3249) 

Refthafle Peter Stein's Moscow 
production of the Orestria opens on 
Sun for a week of performances 
(089-225754) 

Prinzregententheater Anatomy 
Titus Fall of Rome, a Shakespeare 
commentary by German dramatist 
Heiner Mater's, opens on Sun for 
five nights (089-2916 1414) 

• Munich’s traditional Oktoberfest 
runs daily till Oct 3 at venues 
throughout the city. Tickets and 
information from Veranstoftungs- 
dienst Mayr (089-725 8095) 

■ OSLO 

Konserttius The Oslo Philharmonic 
Orchestra celebrates its 75th 
anniversary tomorrow and on Fri 
with gala performances of 
Schoenberg's Gurrelieder conducted 
by Mariss Jansons. featuring Jane 
Eagten. Anne Sofie von Otter and 
Ben Heppner (2283 3200) 

■ STOCKHOLM 

Royal Opera Tonight, tomorrow. 

Sat Royal Swedish Ballet In a mixed 
programme comprising Jiri Ky) Ian’s 
Stool game (to Nordheim), Ulysses 
Dove's Dancing on the Front Porch 
of Heaven (to Part) and Balanchine's 
Theme and Variations (to 
Tchaikovsky). Fri; Ingvar Udhokn’s 
Strindberg opera A Dream Play. Fri 
and Mon: new production of Ada. 
Tues: La boheme (tickets 
08-248240; Information 08-203515) 
Konserthuset Tonight Johannes 


WDdner conducts Johann Strauss 
Ensemble In a Viennese p ro gr a mme . 
Tomorrow, Sat afternoon: Joseph 
Swansea conducts Royal Stockholm 
Philharmonic Orchestra In works by 
Mozart and Brahma, with violin 
soloist Frank Peter Z immer mann 
(tickets 08-102110; I nfor mation 
08-212520) 

• Stockholm is hosting this year's 
World Music Days, promoted by the 
international Society of 
Contemporary Music (Oct 1-8). The 
festival win present contemporary 
music from 40 countries. There will 
also be works by some of the 
composers who have featured 
strongly in toe ISCM’s 72-year 
history, including Varese, Ginastera, 
Webern and Ruggtes. Concerts are 
In venues around Stockholm, 
featuring some of Sweden's leading 
ensembles. Festival co-ordination 
and information: Swedish National 
Concert Institute (Svenska 
Rikakonserter), PO Box 1225, 

S-11 182 Stockholm (tel 08-791 
4600, fax 08-676 0018) 

■ STRASBOURG 

Musrca, Strasbourg’s annual 
contemporary music festival, opens 
tomorrow with a new chamber opera 
by Ahmned Essyad, staged at the 
Theatre (repeated an Sun). The 
opening week features several 
performances of music by Finnish 
composer Kaija Saariaho, including 
a concert on Fri at the Palais de (a 
Musique by toe Finnish Radio 
Symphony Orchestra under 
Jukka- Pekka Saraste. Morton 
Feldman. John Cage and Gyfirgy 
Ugeti are also wen represented at 
the festival, which runs till Oct 8 
(8821 0202} 


ARTS GUIDE 

Monday: Berlin. New York and 
Paris. 

Tuesday; Austria, Belgium, 
Netherlands, Switzerland, Chi- 
cago, Washington. 
Wednesday: France, Ger- 
many, Scarxfinavfa. 

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

Friday: Exhibitions Guide. 

European Cable and 
Satellite Business TV 

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

MONDAY 

NBC/Super Channel: FT 
Reports 1230. 

TUESDAY 

E uro ne w s : FT Reports 0745, 
1315, 1545, 1815, 2345 

WEDNESDAY 

NBC/Super Channel: FT 
Reports 1230 

FRIDAY . 

NBC/Super Channel: FT 
Reports 1230 

Shy News: FT Reports 0230, 
2030 

SUNDAY 

NBC/Super Channel: FT 
Reports 2230 

Sky News: FT Reports 0430. 
1730; 


fr •: 


L- 


r 


tfi'T- 


?l 

1 1--45U 

m"- 



i 




12 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 1994 


★ 


Edward Mortimer 


On the eve of its latest directive, the UK regulatory 
body faces intense criticism, says Andrew Jack 

No accounting 
for standards 



Numbers game: G-r) Nigel Stapleton, of the 100 Group of finance directors; the Financial Reporting 
Review Panel's Edwin Glasgow QC; and Sir David Tweedie, of the Accounting Standards Board 


What is an 

est of hands 
jPpfcgHw shoots up in 
jlg5§|r9* one coiner of 
SBiBjjBitfjr the classroom, 

where the stu- 
KlFfl dents doing the 
Mil special course 
in “global governance and 
humanitarian diplomacy" sit 
Elsewhere, blank faces. 

How about this then: what is 
a quango? A smile of recogni- 
tion spreads across the class. 
Yes. a quango is a "quasi non- 
governmental organisation". 
Logically there must have been 
NGOs before there were quan- 
gos. but somehow the simula- 
tion has become better known 
than the real thing. 

Both terms are cumbersome, 
which Is no doubt why both 
are better known by their acro- 
nyms. Why should one need to 
define an organisation as “non- 
governmental”? Surely that 
must apply to the vast major- 
ity of organisations that exist 
Can one not take it for granted 
that organisations are non-gov- 
ernmental unless otherwise 
specified? 

It depends on the context. 
The reason you hear about 
NGOs mainly in an interna- 
tional context Is that until 
recently international relations 
was presumed to be exclu- 
sively the affair of govern- 
ments. In a domestic context 
we think of bodies like Oxfam 
or Save the Children as simply 
charities. But when they 
appear at a UN conference, or 
distribute western aid in 
Africa, they become NGOs 
because in these roles we 
expect, or would in the past 
have expected, to find govern- 
ment officials. 

Conversely the term quango 
is better known in the domes- 
tic context because it refers to 
bodies set up by governments 
in areas where they do not feel 
entitled to act directly - areas 
which belong in some sense to 
the private rather than the 
public domain. Those areas 
have greatly expanded in the 
last 20 years or so, with the 
advance of ideologies that seek 
to limit the rale of the state, 
and the virtual rout of those 
that cherish the state as an 
organ of popular sovereignty 
and/or social engineering. 
What the proliferation of quan- 
gos tells us is that, in practice, 
the state does not find it easy 
to abandon its responsibilities, 
even when controlled by peo- 
ple whose ideology commits 
them to “rolling it back”. 

It is perhaps a tribute to the 


NGOs 

rule 

OK 

Politicians are 
widely regarded 
as unrivalled in 
incompetence 

success of that ideology that 
the two terms carry opposite 
value judgments. NGOs. 
almost by definition, are good, 
because government, almost by 
definition, is bad. Quangos are 
bad because they are in fact 
governmental, though hiding 
behind the benign mask of 
non-governmentalism. Or, to 
use another term that has 
lately become very fashionable, 
after two centuries on the 
dusty shelf of political science 
jargon, NGOs are part of “civil 
society”. Quangos wish to be 
seen as part of civil society, 
but are not 

As Ernest Gellner points out 


It is as if asking 
people to vote 
for you renders 
you unworthy 
of their support 


in his recent book on the sub- 
ject (reviewed by David Good- 
hart in the FT of September 3). 
the rise of civil society is 
directly related to the Call or 
Marxism. Marxism sought to 
abolish “the separation 
between the social and the 
political". It followed the path 
charted by Jean-Jacques 
Rousseau in seeking to do 
away with any autonomous 
organisation that might come 
between the citizen and the 
state. Civil society, which 
could be defined as the sum 
of all such organisations, 
became the key slogan of anti- 
Marxist intellectuals in the last 
years of communist eastern 
Europe. 

But they were up against an 
undemocratic regime. Against 
a government imposed by 
force, non-governmental 
groups, formed by the free 
choice of their members, could 
claim a superior democratic 


legi tima cy What Is more sur- 
prising is that a similar moral 
hierarchy seems to obtain in 
democratic societies. One 
might suppose governments 
chosen by the people In free 
elections would be in a quite 
different category from those 
imposed by force. Yet appar- 
ently they are not. It has 
became a cHch£ to say that all 
the democracies are affected by 
a crisis of legitimacy; that elec- 
torates throughout the world 
are disillusioned, not just with 
ruling parties, but with politi- 
cians as such. 

Half a century ago it seemed 
obvious to J.B. Priestley - 
whose English Journey the 
BBC has been re broadcasting 
on Radio Four - that, if an 
industry was badly run, a state 
representing the people had a 
right and duty to take it over 
and run it better. One scarcely 
hears that argument now - 
certainly not from Tony Blair's 
Labour party. We now assume 
that, however incompetent cap- 
italists may be, politicians 
would be worse. 

We would rather entrust 
famine relief in Africa to a 
rock singer than to the minis- 
ter for overseas development 
Yet the minister belongs to a 
government we chose (even if, 
In Hw current British case, the 
minis ter herself was rejected 
by her constituents at the last 
election and now sits in the 
House of Lords). No one voted 
for Bob GeldoE he never asked 
anyone to. It is as though the 
very act of asking people to 
vote for you is so demeaning as 
to render yon unworthy of 
their support 

In the area of humani t arian 
relief, NGOs have taken such a 
leading role in some develop- 
ing countries that they are 
now becoming unpopular, 
because they are indeed quan- 
gos: aimed with western gov- 
ernment funds in countries 
whose own governments are 
acutely dependent on it, or 
have collapsed, the NGOs often 
both decide and implement 
what should be government 
policy. But their own ideology 
is often well to the left of the 
western governments which 
give them the money to spend. 

Not surprisingly those west- 
ern governments sooner or 
later find this irritating. Con- ! 
ser va t iv e politicians can occa- 
sionally be heard to wonder 
why these unelected dogood- 
ere should be regarded as supe- 
rior in virtue and wisdom to 
themselves. But that is a rod 
conservatives have pickled for 
their own backs. 


T here were only three 
things wrong with 
British accounting 
when the the US's 
Accounting Standards Board 
began life four years ago, says 
Sir David Tweedie, the board’s 
chairman: the profit and loss 
account, the balance sheet and 
the cash-flow statement 
In other words, just about 
everything. 

In the late 1980s, following 
the collapse of many seemingly 
healthy companies, his view 
was shared by many, and the 
ASB was welcomed as a poten- 
tial saviour. 

Seven accounting standards 
later, the board itself is under 
attack, as secretive, unaccount- 
able and over-prescriptive, and 
with tomorrow's issue of 
accounting standard FRS 7, it 
faces the strongest wave of 
criticism yet 

Tm damn sure this new 
standard is going to be badly 
received by industry," says Sir 
David. “If there was ever a 
honeymoon, it will end In 
divorce after this.” 

FRS 7 is designed to limit the 
costs that a company can meet 
through setting up a reserve 
on its balance sheet when it 
buys another company. Such 
reserves have been used by 
same companies to cover all 
sorts of costs which would oth- 
erwise have appeared on their 
profit and loss account. By 
removing these costs from the 
profit and loss account, compa- 
nies can boost their haadTma 
profit figure. 

The board’s aim in curbing 
this practice is to ensure that 
users of financial accounts get 
a fair picture of a company’s 
true profit But the financial 
directors and auditors that pre- 
pare and oversee companies* 
financial accounts say that 
FRS 7 is unnecessarily hard- 
line, and far too detailed. 

Mr Nigel Stapleton, finance 
director of Reed Elsevier, and 
riiairman of the 100 Group of 

tending com pany finance direc- 
tors, typifies the c hang in g 
mood. T am not a critic of the 
ASB. but I do think there is a 
trend over time for it to 
become much more prescrip- 
tive,” he says. 

Audit partners in the leading 
UK accounting firms say that 
auditors and company direc- 
tors need to be able to exercise 
judgment in the way in which 
financial results are presented. 
It is never the case that there 
will be a single correct way of 
presenting something in order 
to give a true and fair picture, 
they say. Nor is it necessary to 
ban, outright, a particular 
practice to prevent it from 
being abused. 

Sir David says he would love 


to issue streamlined standards, 
which allow auditors to exer- 
cise judgment, hut that, pri- 
vately, auditing firms often 
welcome detailed guidelines so 
that they can stand up to pres- 
sure from companies that want 
to bend the rales. 

Auditors are, in effect, hired, 
fired, and paid by executive 
managemen t, which may want 
to present financial informa- 
tion in the best possible light 

“You need a tough auditing 
profession. It will never be 
lnttepprirtent an l ong as the peo- 
ple who mark the homework 
are the students,” says Sir 
David. “Auditors are put under 
terrible pressure." 

In an effort to protect audi- 
tors from this pressure, the 
board has issued seven stan- 
dards, produced a statement of 
principles to underpin them, 
and issued guidelines on an 
“Operating and Financial 
Review” in which directors can 
describe their company’s per- 
formance in their own words. 
It has also circulated draft 
standards on a range of other 
topics. 

But both preparers and users 
of accounts have criticised the 
board for this pace of change, 
saying they are overloaded 
with draft regulations. 

Sir David is robust in defend- 
ing the board on this charge. 
“We consulted people on what 


to do, and we’ve actually hit 
the scams,” he says. “We are 
tearing about two standards a 
year. That is hardly excessive. 
And industry can’t have it 
both ways: they can’t ask to be 
consulted and then complain 
about the consultation docu- 
ments we produce." 

A more fundamental criti- 
cism, however, is of the way in 
which the ASB makes its deci- 
sions. Its nine members are 
selected by an appointments 
committee, and weighted 

The board is 
under attack, as 
secretive, 

unaccountable and 
over-prescriptive 

towards auditors and finance 
directors. Its meetings are held 
in secret and the minutes are 
not made public. 

While the ASB engages in 
extensive consultation, its sub- 
committee, the urgent issues 
task force, does not The task- 
force acts swiftly to change 
rules to prevent companies 
exploiting individual loopholes 
that are too narrow to justify a 
full accounting standard. 

Its lack of openness has 
raised concerns that it may 
bow too pressures from inter- 


est groups, or abandon rule 
changes for reasons that would 
not have been considered suffi- 
cient if aired in public. 

Several of the more contro- 
versial topics the task force 
planned to tackle were dropped 
before they reached the 
agenda, while others were sub- 
stantially diluted, abandoned 
or introduced with long imple- 
mentation dates allowing com- 
panies already planning such 
practices to adopt them 
unscathed. 

Sir David admits that there 
is a problem, and says he 
would ultimately like to see 
both the hoard and the urgent 
issues task force meet in the 
open. However, with other 
board members opposed, this 
could be some way off. 

In the meantime, the board 
plans tO hold public hearings 
in the next few months on 
accounting for goodwill - an 
area on which it will be diffi- 
cult to reach a consensus. 

Views are mixed on what the 
ASB’a achievements have been 
in improving financial report- 
ing. 

“It has done a valuable job 
but I think it's still too early to 
judge,” says Mr Peter Scott, 
head of Hemmingtan Scott, a 
financial information com- 
pany. “There is Ear better qual- 
ity of information now and it 
was necessary to have clearer 


rules. But I’m not sure we're 
up to interpreting them yet “ 
Mr a mater Wilson, a techni- 
cal partner with accountants 
Ernst & Young, says: “I think 
the whole financial reporting 
scene has certainly changed 
for the good. But that reflects a 
combination of the recession, 
the Cadbury committee on cor- 
porate governance and other 
factors as well as the Account- 
ing Standards Board" 
Arguably more Important 
than the board itself is its sis- 
ter body, the Financial Report- 
ing Review Panel chaired by 
Mr Edwin Glasgow, QC. It has 
the power to reprimand compa- 
nies or take them to court to 
force restatements if they 
breach standards. No such 
enforcement power previously 
existed. 

The panel has so far found 
against companies in 22 of its 
completed cases. No company 
has yet challenged the review 
panel in court And, with its 
authority unsullied, it has 
instilled a new sense of fear in 
both finance directors and 
auditors that they will be pub- 
licly criticised if they do not 
comply with accounting stan- 
dards. 

B ut the paa$ is still 
only in a position to 
act on accounting 
abuses that are obvi- 
ous from inspecting the public 
accounts - in which many 
manipulations will not be 
transparent Furthermore, Mr 
Wilson argues, the review 
panel “only gives out parking 
tickets” - picking on smaller 
companies and less conten- 
tious issues while leaving some 
more important abuses 
untouched 

Some companies have dem- 
onstrated quite clearly that 
they are still determined to 
exploit loopholes. A decline in 
acquisition and merger activity 
during the recession has 
reduced the scope for compa- 
nies to account creatively. 

Whether the fragile struc- 
tures now in place will be suffi- 
cient to prevent long-term 
abuses as industry comes out 
of recession is less certain. 

The standards and their 
interpretation by the review 
panel could yet be tested in 
court, with the possibility of a 
verdict that could undermine 
the ASB’s credibility by over- 
turning its view of what consti- 
tutes a true and fair picture of 
a company’s health. 

Mr Wilson is one of many 
who believe that only a US- 
style Securities and Exchange 
Commission, which could not 
be challenged in court, would 
guarantee the quality of finan- 
cial reporting in the future. 


G 


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EXPANSION CAPITAL 



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£8 million expansion capital investment led, underwritten and structured by 

GRANVILLE PRIVATE EQUITY MANAGERS 


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Granville Private Equity Managers Limited is a member of IMRO 



LETTERS TO THE EDITOR 



Number One Southwark Bridge, London SE1 9HL 

Fax 071 873 5938. Letters transmitted should be dearly typed ana not hand written. Please set fax for finest resolution 


Nitrate level incompetence 


From Mr AS Monckton. 

Sir, Alison Maitland's article 
on livestock farmers threat- 
ened with being forced out of 
business by the government’s 
plans to cut nitrates in drink- 
ing water was accurate 
(“Farmers attack proposals on 
nitrate levels”, September 13). 
But it did not include the latest 
incompetence. 

The government says it most 
reduce the level of nitrates (to 
5Qmg per litre instead of about 
55) because the EC nitrate 
directive says it must. But it 
does not admit it signed this 


From MrBrynley Sidaway. 

Sir, Your report, “Fifth of UK 
companies expecting to relo- 
cate” (August 30), stated that a 
recent survey by Black Horse 
Relocation placed Sunderland 
second bottom in a league 
table of 40 best cities for reloca- 
tion. 

We are, of course, all aware 
of the limitations of statistics - 
I could produce a survey by an 
equally reputable organisation 
which places this area at the 
top of the league for attracting 
inward investors. 

Perhaps the difference 
between the two surveys is 
that Black Horse spoke only to 
UK companies. Could it be that 
UK businessmen are stuck 
with out-of-date preconceptions 
about the north east? Foreign 
investors come to the north 
east with an open mind and 
what they find is ideal sites, 
superb workers and substan- 
tial help and encouragement 
from a range of regional agen- 
cies and local authorities, hi 
the last decade Sunderland has 


From John Siddons-Doume 
Sir, In your “Guide to the 
week” (September 12) you men- 
tion the auction of Charles 
Chaplin's costume that he 
wore in the film The Great Dic- 
tator. As Adenoid Hynkel he 
was a great parody of a simi- 
larly ridiculous dictator with 
the fiama initials. But you are 
mistaken in saying Chaplin's 
uniform incorporated swasti- 
kas - the motif was a parody 
of the original and at no point 
was a swastika shown. 


directive in 1991, knowing that 
it was based on false statistics. 
If it had not signed. It would 
not be binding. 

Its own statistics are that, if 
you lower nitrates, you 
increase the risk of cancer. It 
has known this since 1985 
(CMD 85/14 spells it out). It 
also says that the level was 
based on World Health Organi- 
sation figures, which it must 
obey. 

The published WHO docu- 
ment (in 1993) states that the 
lower limit is solely because of 
methaemoglobinaemia (blue 


and US companies and. as 
“seals of approval" go, I don’t 
think you can say fairer than 
that 

In the last 15 months TRW, 
the American components 
company, Lucas, the British 
electronics company, and Gold- 
star, the South Korean elec- 
tronics giant, have all voted 
with their feet by moving into 
the city - creating more than 
1,200 jobs between them. The 
Bristol-based company, The 
Insurance Service, has also 
just chosen to open in Sunder- 
land and it plans to create 
another 300 jobs over the next 
three years (ironically Bristol 
was top of the Black Horse sur- 
vey). 

I hope it is now dear for all 
to see that Sunderland is the 
choice of several of the world's 
leading companies who are 
capable of judging for them- 
selves without the burden of 
outdated prejudices. 

Biynley Sidaway, 
leader of the council, 

City of Sunderland, 

Cioic Centre. 

Sunderland SR 2 7DN 


Indeed it seems strange that 
years before, these two men of 
small stature both adopted the 
toothbrush moustache and a 
most individual manner of 
walking (or marching) as their 
prime visual features. If only 
today we could have such a 
brilliant satire of, say, Mr 
Zhirinovsky . . . now there's a 
thought to rescue the British 
film industry. 

John Siddons-Downe 
3 Vine Place, 

London WS 3JF, 


baby syndrome); and it says 
that in areas where there have 
been no cases over many years 
the timit need not be applied. 
There have been no cases in 
the UK for more than 20 years. 

The government has publi- 
cised that toe reason for the 
new nitrate level Is because of 
cancer risk and blue baby syn- 
drome - I have been to just 
such a public meeting. It lies, 
and it knows it. 

A S Monckton, 

The Estate Office, 

Street HalL 
Stafford, ST19 9LQ 


Good result 
in Canada 

From Mr AJnoor Balari 

Sir, The headline, “Canada 
crumbles” (September 14), 
seemed to be contradictory and 
presumptuous in the face of 
good news from the election 
results in Quebec. The narrow 
margin of the popular vote in 
the election demonstrated that 
Quebeckers do not want inde- 
pendence. The result would 
also have been a non for inde- 
pendence even if the vote had 
been held soon after the con- 
tentious Meech Lake and Char- 
lottetown accords. 

I am a Canadian from the 
west and have discussed with 
several Quebeckers the possi- 
bility of separation daring my 
visits to Quebec. I always get 
the feeling that it is the politi- 
cians and the media who have 
been wanting and propagating 
independence. The people of 
Quebec have never wanted and 
will never want independence 
from Canada. 

Your editorial headline 
therefore should have been 
more thoughtful and have read 
“Canada wins”. 

Alnoor Halari, 

25 St Mary’s Road, 

Ealhtg. London W55RE 


Prom Mr Geoffrey Lawson. 

Sir, May I respond to Colin 
Amery's thoughtful tribute to 
Then Crosby (Architecture, 
September 19) . We at the Barbi- 
can Centre are greatly sad- 
dened by his death last week. 
We sincerely hope and believe 
that the ideas and concept that 
he bad for our improvement 
scheme which Is half way to 


Trends in 
Swedish 
jobs growth 

From Mr Per AhlstrOm. 

Sir, Your report, “Swedish 
elections" (September 15), 
repeats the questionable state- 
ment, often made in the Swed- 
ish election campaign, that 
Sweden “saw all of its employ- 
ment growth between 1960 and 
1993 derive from the public sec- 
tor”. Statistics should be used 
in a more careful way. I do not 
have the employment figures 
from 1960, but from 1963 to 
1993, employment in the pri- 
vate sector (excluding agricul- 
ture) has developed like this: 


Period Jobs Gov. 

1963-1976 +432.600 soc 

1978-1982 -9&200 con. 

1982-1991 +214400 soc. 

1991-1993 -304-50Q con. 

It is a curious fact that there is 
such strong correlation 
between the political colour of 
the government and the devel- 
opment of the private sector. 
For a non -biased observer It 
might look as if the economic 
policy of social democrats was 
more advantageous for the pri- 
vate sector than the conserva- 
tive's. Managers in the private 
sector argue that conservative 
governments - in spite of their 
performance statistics - are 
better for business than social 
democratic governments. Con- 
servative governments have 
just had bad luck, they say. 

Be that as it may. the 
so-called Swedish model which 
really is a social democratic 
model has performed well 
under social democratic gov- 
ernments. It' cannot be 
declared a failure because of 
the present crisis, which has 
been managed by parties 
opposed to the Swedish model 
even though they are Swedish. 
Per AhlstrOm, 
editor, Nya Nortnmd 
Htimdstmd, 

Sweden 


completion will be finteh^a as 
be had planned and on target 
and hopefully within budget, 
_We agree that his scheme 
will bring colour and joy to the 
Barbican Centre. 

Geoffrey Lawson, 

Cfarir man to Barbican Centre 
Committee, 

Barbican, 

London EC2YSDG. 


Not bottom of league 


attracted one of the UK’s larg- 
est cooDentratians of Japanese 


Great parody - but no swastika 


Bringing colour to Barbican 




FINANCIAL TIMES WEDNESDAY SEPTEMBER 2 1 1 994 


FINANCIAL TIMES 

Number One Southwark Bridge, London SE1 9HL 
Tel: 071-873 3000 Telex: 922186 Fax: 071-407 5700 

Wednesday September 21 1994 


The role of a 
third party 


Britain's Liberal Democrats are 
right. Cannabis should be decri- 
minalised. The law prohibiting use 
or possession of small amounts of 
the drug Is difficult to enforce and. 
In consequence, low on the list of 
police priorities. Chief constables 
would like to see it removed horn 
the statute books. As matters 
stand, its distribution is 
by gangsters at the wholesale 
level and petty c riminals at the 
retail. This is absurd. There would 
be some risk in decriminalisatton, 
since all drugs are potentially dan- 
gerous. Yet there is no evidence 
that cannabis is any more harmful 
than ejfiier tobacco or alcohoL 

The above would be a sensible 
set of propositions for Mr Paddy 
Ashdown to put forward. Instead 
the leader of the Liberal Demo- 
crats has expressed distaste, bor- 
dering on alarm, following his par- 
ty's vote at its annual conference 
in Brighton in fevour of ending 
prosecutions of “pot" smokers. 
Perhaps be anticipated the prissy 
horror expressed by some of 
Britain’s tabloids. Possibly he 
feared the loss of some support for 
his party, which has in the past 
been dogged by its image as a 
home for sandal-wearing, muesli- 
eating activists. 

If so. his concerns were mis- 
placed. The Liberal Democrats 
may or may not be destined to 
play a role in national govern- 
ment That depends upon whether 
the Labour party finds that it can 
govern with their support, but not 
without it after the next election. 
Meanwhile the third party com- 
mands the allegiance of between a 
shcth and a fifth of the voters, a 


mandate substantial enough to 
support its aspiration to be taken 
seriously. 

To deserve to be taken seri- 
ously, Liberal Democrats must put 
forward radical ideas, particularly 
when many people know in their 
bones that a particular proposal is 
right That above all is their role, 
and they can claim some success 
in pursuing it They have brought 
political opinion a long way 
towards constitutional reform, 
with a large part of the Labour 
programme lifted straight from 
Lib-Dem manuals Notions such as 
the earmarking of taxes may yet 
become topics for respectable 
debate. Some activists’ favourite 

schemes, SUCh as a minimum 

wage or the abolition of the mon- 
archy, deserve to be rejected by 
the party leadership, but that is 
no reason why they should not be 
aired. 

The two larger parties are 
extremely cautious about saying 
anything that has not been mar- 
ket-tested. sanitised and measured 
against its supposed impact on the 
electorate. Mainstream politicians 
who come up with original ideas 
find themselves forced to abandon 
them by the relentless inquisition 
of the popular press. This is a stul- 
tifying atmosphere, in which fresh 
approaches to intractable prob- 
lems are unlikely to emerge. 

The Liberal Democrats should 
be different Mr Ashdown should 
loosen up a little. He would do us 
all a favour, and perhaps win 
greater respect and support that 
way than by trying to be Little Sir 
Echo. 


Frontier finance 


To boldly go where no bank has 
gone before is the mission of the 
International Finance Corpora- 
tion, the private sector arm of the 
World Bank Group. The question, 
however, is whether the b ank ’s 
Starship Enterprise retains a use- 
ful role and, if so. what 

The IFC is small compared to 
the World Bank Itself: its annual 
report, published yesterday, shows 
that it approved $&3bn for 231 new 
projects in fiscal 1394. But for 
most of its 35 years, the IFC has 
been able to claim, with some 
plausibility, that it provides an 
important if peripheral service in 
bringing equity and loan finance 
to projects in developing countries 
that private banka would not 
touch. 

Since the late-1980s, two things 
have changed. Some of the coun- 
tries in which it has been most 
active, notably in east Asia but to 
some extent even in hitherto lag- 
ging Latin America, have made 
large strides in development of 
their private sectors. At the same 
time, the availability of capital for 
companies based in emer ging mar- 
kets, which are the IFC’s potential 
clients, has soared. 

The problem the IFC feces is 
that the “window" in a country’s 
development during which its 
f u n ds can play a uniquely valu- 
able role is narrowing. On one 
side, it is limited by its insistence 
on a “commercial" rate of return 
(although this criterion is some- 
what fuzzy in the least developed 
sectors). On the other side, it has 
the whole pack of international 
commercial banks and investors 


at its heels, sniffing for any sign 
that country and project risk has 
fallen to tolerable levels. The prob- 
lem is acute in a ride of which the 
IFC is particularly proud, that of 
helping the development of capital 
markets themselves. 

In Africa and the former Soviet 
Union, for example, both regions 
that are particularly in need of 
assistance, the IFC has invested 
and lent comparatively little 
because of the difficulty erf finding 
projects which meet its criteria. 
Yet success stories, such as South 
Korea and Chile, have already out- 
grown the need for IFC participa- 
tion. 

In defence of its role, the IFC 
points out that demand for its 
funds is increasing. It also argues 
that international finance houses 
often fall to service second-tier 
companies in developing coun- 
tries. It is right, too, to stress that 
financial markets may lose their 
current taste for developing coun- 
tries as quickly as they gained it 

However its principal donors 
will put the IFC under increasing 
pressure to justify its role. Fearing 
budgetary cutbacks, it has started 
to explore raising its own funds by 
issuing bonds secured against 
mature assets. If it does sustain its 
activities by raising, funds in that 
way, it will still have to demon- 
strate that an adequate supply of 
reasonably high-quality invest- 
ments remains available to it. The 
challenge to the IFC, therefore, is 
to demonstrate that It is not tak- 
ing on excessive risk and, more 
fundamentally, that it still has an 
essential role. 


Workers' rights 


The complex wrangle around the 
European Commission’s final revi- 
sion of the Acquired Rights Direc- 
tive has become a test for 
Europe’s legislative procedures - 
and for the Commis sion’s commit- 
ment to a new balance between 
social protection and job creation. 

The directive, which protects 
the rights of workers when organi- 
sations change ownership, became 
a political issue when it started to 
interfere with the UK govern- 
ment’s programme for contract- 
ing-out public services. In its 
attempts to narrow the scope of 
the directive to exclude tbe con- 
tracting out of activities like 
cleaning and catering, the UK ini- 
tially stood alone. But as public 
sector reforms spread across 
Europe, the UK government has 
acquired allies. 

The result is a rather obscure 
paragraph in the revised directive 
which says that only whole eco- 
nomic entities are subject to the 
directive, as opposed to more nar- 
row activities. However lawyers 
are quick to point out that in the 
famous Schmidt case, involving a 
German bank, the European Court 
of Justice ruled that one woman 
cleaner represented an economic 
entity. So there may be less room 
for manoeuvre than is implied by 
the revision. 

Part of the problem is the 
immense complexity involved in 
drafting legislation for countries 
with 12 different approaches to the 
transfer of ownership. Just as 
awkward is the unpredictability of 
the European Court itself, which 
is not bound by precedent and 


which has recently been handing 
down judgments which have out- 
raged several conservative govern- 
ments. 

Underneath all this is an even 
more Important issue for Sinope's 
labour markets. The original 
directive was based on the laud- 
able premise that long-term rela- 
tionships should be encouraged 
between employers and employ- 
ees, and that a change of owner- 
ship should not introduce instabil- 
ity into those relationships. 

That principle cannot, however, 
be applied to the short-tom con- 
tracts which are typical for ser- 
vices contracted out from the pub- 
lic sector. So any revision of the 
directive which excludes low- 
skilled services is likely to rein- 
force the trend towards a dual 
labour market, of well-protected 
insiders and less secure outsiders. 

That in turn would create a 
problem for Europe’s social dimen- 
sion. Beginning with last year’s 
Delors white paper, a welcome 
new balance has been struck 
between social protection and job 
creation, which points towards 
relaxation of the acquired rights 
directive if it threatens to prevent 
tbe creation of more low-paid, ser- 
vice sector jobs. 

But the same white paper 
stressed that the burden of 
deregulation should not fell on the 
weakest sector cf the labour mar- 
ket, as would follow from a simple 
loosening of the directive. The 
uncomfortable logic for Europe's 
social thinkers may be, therefore, 
that the directive should be 
scrapped altogether. 


A fter a hectic car chase 
through the outskirts of 
Turin, police arrested a 
man suspected of armed 
robbery. An identity 
check revealed he was registered as 
an invalid and drawing a pension. 

This incident 10 days ago illus- 
trates one of the worst areas of 
abuse in Italy’s bloated state pen- 
sions system. Almost one in three of 
the 21m pensions paid out annually 
goes to invalids, a proportion with- 
out equal in Europe. Everyone 
knows many such “invalids" are 
bogus. In southern Italy local politi- 
cians recognise invalidity pensions 
as the simplest way of providing 
long-term unemployment benefit 
As the Italian government wres- 
tles with a reform of the pensions 
system, it and the other interested 
parties now agree that fiddles like 
this should end. The trouble is that 
they agree on very little else. 

Curbing Italy's generous and 
incredibly complex state pensions 
system has become a crucial test of 
the Berlusconi government’s politi- 
cal and frnat>ri»i credibility. 

Cuts in pension hpppfits are sup- 
posed to be tbe centrepiece of the 
1995 budget, now in the final stages 
of preparation. They are the bench- 
mark by which sceptical financial 
markets will judge the rightwing 
coalition’s ability to tackle Italy's 
debt-ridden public finances. 

At the heart of the problem Is the 
growing gap between pension con- 
tributions pensions payments 
which in Italy's “pay as you go" 
system is met by the government 
Pensions absorb over 40 per cent of 
the state budget; this year the gap 
between contributions and the 
amount needed for pension pay- 
ments is L84,000bn - equivalent to 
half the total budget deficit 
Effective reform of the pensions 
system would stand a strong chance 
of halting the inexorable increase in 
the budget deficit Without it on 
current trends the deficit will reach 
close to L185,000bn in 1995, equiva- 
lent to more than 12 per cent of 
gross domestic product That would 
spell a further rise in Italy's public 
sector debt - already at the danger- 
ous level of 125 per cent of GDP. 

Such reform, however, looks like 
befog difficult to achieve. Mr Silvio 
Berlusconi, prime minister, feces 
intense opposition from trade 
unions, which are anxious to defend 
existing pmiam benefits and are 
threatening a general strike over 
the issue. He has made dear he 
does not wish to antagonise them, 
and on Monday for the second time 
in a week postponed a “definitive” 
negotiating session. This is now due 
to take place tomorrow. 

What is more, the government is 
weak and is itself divided over pen- 
sions reform. 

The treasury under Mr Lamberto 
Dini talks tough, well aware that 
unless the forthcoming budget 


Pensions: a tough 
Italian job 

Berlusconi needs to reform the system in the teeth of 
trade union opposition, says Robert Graham 


Italy’s pensions: the high cost of a safe retirement 




Indexation 


Italy • 

Germany 

Fma 

UK 


■ 

' " es®5 

85/80 

■ jLestS years 
withgradualrises 

Working fife 

Best 10 years 

Working We 


' S’ 

TO 

V*oJ 

pz\z L 

•. “i. ,T" ,:A r ■' 


worfchglte 

n • *0 ‘ ‘ " ‘ 

40 

37.5 

SO 

y tr w.\ : 

- ’ ' 

50% 

20% 

. Prices 

National 

National 

National 


avenge 

avenge 

average 


earnings 

earnings 

earnings 


i-tkV'T '■*. i. _ , ‘ ■ • 



Private sector 


’salaried workers 

Pubfie sector 


Total 


1 995 124,636 


2005 


1464)13 


— Titty- jlfrutiJI. ‘ -»* 

vutpen*>cer • .. .. 

Peorffcn 

Worifani* 

Difference 

Pension 

Worfcera' 

Deference 


. payments contributions 


payments contributions 


75,074 -49£62 

56,377 

35961 

-2M16 

181.013 

111.035 

-69,978 


&J5Z f 

' 37,781 

-29,860 

198,655 

119,911 

-78,944 

88,274 -58,739 

74,078 

38,687 

-34,391 

219,091 

13S.995 

-S3£96 


,i «y»i 

! . fun 

-41,109 

252,588 

130.962 

-121,606 


shows tangible progress on the pen- 
sions issue, the consequences will 
be Immediately felt in the exchange 
rate of the lira and the yield on 
Italian government bonds. The 
labour ministry, on the other hand 
champions the interests of the 

unions , in the process undermining 
the treasury. 

The explanation for Italy's grow- 
ing pensions gap is not that individ- 
ual pensions are generous - the 
average pension is around Lim a 
month. Rather the system is poorly 
structured and administered and 
pays too many unnecessary pen- 
sions. 

Compared with other European 
countries (see chart) the retirement 
age is low, and pensions tend to be 
higher as a proportion of final sal- 
ary. There is little or no incentive at 
present for the growth of a private 
p ensions industry. 

As important Is the complex 
nature of the pension system. The 
treasury says 17 different systems 
are applied to salaried workers, 
three more for the self-employed 
and 11 for the professions. Each cat- 


egory enjoys a different set of privi- 
leges. Some, such as agricultural 
workers, pay in minimal contribu- 
tions. Journalists, doctors and even 
Italy’s 34)00 customs agents pay into 
separate state-run schemes. 

The privileges for public sector 
employees are especially extrava- 
gant Women can retire after a mere 
15 years work on 80 per cent of final 
salary. Men can get away with 20 
years’ work. Others like teachers 
can retire, take another job. and 
take their pension only on full 
retirement The pension they then 
draw will still reflect the automatic 
seniority pay increases due to 
teachers every two years. 

The government of Mr Giuliano 
Amato made an attempt at pension 
reform in 1992. It froze indexation of 
pensions to inflation and provided 
for a gradual increase in the retire- 
ment age from 60 to 65 for men and 
55 to 60 for women, to be complete 
by 2002. 

However, this has proved less 
than adequate in the face of the 
constant pressure on the budget 
from debt service costs. What is 


more, talk of the need for further 
cuts has triggered a flood of 
requests for early retirement from 
public sector employees: of the 
459.000 pension requests between 
January-August. 340.000 are for 
early retirement 

Pressure on Mr Berlusconi to act 
on pensions has been increased by 
his determination to avoid tax 
increases, which leaves Urn reliant 
mainly on spending cuts to bring 
the overall budget deficit to below 8 
per cent of GDP. 

The prime minister’s hands are 
tied by tax-cutting election prom- 
ises. and he is looking for extra 
budget revenues to one-off devices 
dreamed up by Mr Giulio Tremonti. 
the finannp minis ter an amnesty on 
illegal building — yielding otherwise 
lost building registration taxes - 
and a partial waiver of Italy’s 1.3m 
contested tax assessments. 

Such measures have deepened the 
scepticism among foreign observers 
about Italy's public finances. 
Remarked one market analyst “We 
are always weary of one-off mea- 
sures like these pardons which in 


the case of Italy have a poor record 
of providing the funds promised." 

The government wants to make 
three basic changes to the pensions 
system to bring Italy more into line 
with the rest of the European 
Union. It wants to: 

• simplify tbe system, end anoma- 
lies and bring contributions into 
line with payments: 

• accelerate the increase In the 
retirement age - currently 56 for 
women and 61 for men - from one 
year every two years to one year 
every 18 months, and increase the 
pension contributions period; 

• change the rate at which pension 
provisions accrue from the current 
2 per cent a year, well above the EU 
average, to 1.75 per cent a year. 

All sides - government and 
unions - agree on the need to end 
the difference between the treat- 
ment of private sector employees 
and tbe more favourable position of 
those in the public sector. There is 
also unanimity on the importance 
of shifting more or the burden on to 
the individual by fostering the 
growth of private pension funds. 

T hereafter agreement 
evaporates. The unions 

oppose the government's 
plan to raise the retire- 
ment age. They are 
against tbe idea of extending the 
contribution period, and say they 
will block the plan to alter the 
accrual rate. 

Matters have been complicated by 
the failure of a cross-party commis- 
sion set up to make recommenda- 
tions on the pension issue to reach 
a consensus. Mr Berlusconi 
approved the establishment of the 
18- person commission in early 
August hoping its academics, trade 
unionists and politicians would 
come up with a platform that could 
be sold as “neutral" to all con- 
cerned. The proposals, finalised on 
Monday, were effectively split into 
two separate reports, with agree- 
ment on only a few broad concepts. 

Last week union leaders won a 
concession from Mr Berlusconi. 
Instead of seeking a specific sum in 
benefit cuts - the treasury wants 
some L8,000bn - the prime minister 
agreed to consider overhauling the 
structure of pensions first Almost 
inevitably, that will mean a smaller 
saving in the 1995 budget 
Time is r unnin g out for agree- 
ment. The budget has to be submit- 
ted to parliament in detail before 
the end or the month. On Monday, 
Mr Berlusconi adopted a tougher 
tone: “The existing pensions system 
cannot work and if we go on like 
this the state will not be able to pay 
pensions in the future." But the 
prime minister’s previous behav- 
iour suggests that, faced with the 
choice of mollifying the unions or 
appeasing the financial markets, he 
will back away from a domestic 
confrontation. 


Blueprint for a European government 



PERSONAL 
View 


A recent report on 
European integra- 
tion from the Ger- 
man Christian Dem- 
ocrats recom- 
mended that “the 
Commission . . . take 
on the features of a 
European govern- 
ment". Such a pros- 
pect will cause anxiety among mem- 
bers of the European Union wishing 
to see it develop a decentralised 
structure. So what approach should 
they take to this CDU suggestion? 

One answer would be to do noth- 
ing and hope the recommendation 
fades away. However, in view of 
suggestions elsewhere in Europe, 
including the European parlia- 
ment’s view that the Commission’s 
powers be increased, that would be 
unwise. The alternative would be to 
accept that the functioning of the 
ElTs key institutions needs to be 
reviewed. As part of such a review, 
the Commission’s role would need a 
thorough examination, and the 1996 
intergovernmental conference pro- 
vides the opportunity. 

There are two views of the future 
role of the Commission. One is that 


it should increasingly take on the 
character of the “government" of 
Europe. The other is that it should 
become a more effective manager of 
the Union's programmes. The two 
views conflict They reflect different 
assessments of where the weak- 
nesses lie in the Union's present 
institutional arrangements, as well 
as fundamental differences about 
where institutional responsibilities 
for core functions in the Union 
should lie. 

The role of a modern government 
is to determine the direction of pub- 
lic policy and, where legislation is 
necessary, to initiate, prepare and 
attempt to carry through that legis- 
lation. There are two bodies that 
can potentially perform this role in 
the European Union. One is the 
Commission. The other is the Coun- 
cil of Ministers, acting in tbe light 
of more general guidelines set by 
heads of government 

Tbe role of manager of public pro- 
grammes is carried out in modem 
government either by specialised 
agencies or within the departments 
of the civil service. The view that 
the Commission sho uld develop as 
“manager" envisages it as an 


agency of government (Council of 
Ministers) and in the role of civil 
service. This does not necessarily 
mean that the Commission would 
become directly responsible for the 
execution of policy in all areas. 
Much of the responsibility must 
continue to rest with member 
states. However, the Commission 
would need to develop its role as 
“honest broker”, mediating policy 

The concept of a 
multi-track, 
multi-speed Europe is 
one of managed 
differences 

differences between member states. 

There is a reasoned case for not 
developing the Commission as 
Europe’s government Any demo- 
cratic government would require 
electoral legitimacy. The Commis- 
sion could not continue as an 
appointed body. It would have to be 
elected either by the European par- 
liament or by direct popular vote in 
the Union (most plausibly, through 


an election to select its head). In the 
first case, parliament would gain a 
level of control over the govern- 
ment unmatched by any other dem- 
ocratic representative assembly. In 
the second case, to vest such pow- 
ers in a single person would seem a 
colossal mistake in the light of 
Europe's history. Either “solution" 
would be enormously central- 
ising. 

The case against the Commission 
developing as the government of 
Europe cannot simply rest on a neg- 
ative agenda. The capacity of the 
Council of Ministers to set policy 
and to run business in a more 
orderly way will need to improve. 
This will call for changes in voting, 
in the presidency arrangements and 
in the Council secretariat 

Developing the Council of Minis- 
ters as the government of Europe 
also raises questions about demo- 
cratic legitimation. The Council 
cannot be dismissed by the directly 
elected European parliament Thus 
there would develop a separation of 
powers more akin to the American 
system than the "fusion" of powers 
often held to be characteristic of 
parliamentary democracies. 


National parliaments would have a 
role in the legitimation of policies 
carried into the Council by their 
own ministers. This in turn means 
that the relationship between 
national parliaments and the 
European parliament would have 
to be much more carefully struc- 
tured. 

If some member states wish to 
run ahead of the rest and Imple- 
ment their own view of the institu- 
tional development of Europe, as 
suggested by the CDU document, 
they should be aware that such 
action is likely to divide Europe 
again. The concept of a multi-track, 
multi-speed Europe is one of man- 
aged differences. To assign respon- 
sibility for core functions in a way 
which also affects key institutional 
relationships could, however, lead 
to unmanageable divergence. 
Nobody, least of all the German 
Christian Democrats, really wishes 
to see this happen. 

Frank Vibert 

The author is deputy director of the 
European Policy Forum 


Observer 


Danger man’s 
meaty memo 

■ What precisely is Gtmther 
Burghardfs game? Karlim- this 
year, the boss of the new Brussels 
directorate of external political 
affairs was patting himself on the 
hank, telling the European 
Commission’s internal magazine 
what a significant contribution his 
DG1A, as it is called, had made to a 
common European foreign policy. 

The impression was of a clued-up 
operation, dispatching secret 
telegrams hither and thither and 
generally functioning like any 
national foreign ministry. So has 
DG1A had its feet up this summer? 

The question arises because of 
the content of a memo circulating 
at the highest level of the 
Commission presenting a rather 
sorrier state of affairs. It whinges 
about an “almost total lack of 
strategic planning, a repeated 
disregard for agreed EU rules, 
coupled with regrettable ups and 
downs in the performance of the 
Council Presidency system". 

It lays Into France for acting 
unila te rally in Rwanda, Britain and 
Italy for getting into a huddle on 
eastern Europe, and Greece for 
slapping a trade embargo on 
Macedonia. Tbe draft concludes: 
“The very notion of a common 
foreign and security policy sounds 
increasingly hollow." 

Could it be that the author bates 
the whole idea of closer 


cooperation? Actually no, since the 
memo is penned by none other than 
G. BurghardL In which case it looks 
suspiciously like a ploy to bolster 
the Commission’s foreign policy 
role ahead of the 1996 review of 
Maastricht 

There is fighting talk of more 
funding for EU budgets and even of 
introducing an element of majority 
voting on foreign policy matters. 

All anathomg to the French and the 
British. No, DG1A has not had its 
feet up all summer. 


Egged on 

■ As if in rebuttal of Observer’s 
jibe yesterday - relating to a £4.6m 
reduction in parliamentary costs, 
thanks to lowered “activities" - 
word reaches us of the peripatetic 
Tim Eggar, who has just spent his 
third consecutive night on an 
aeroplane. 

Sunday evening saw him whizz 
back from Chile, part of a business 
delegation. On Monday he joined a 
night flight to Baku, attended the 
signing of British Petroleum's 
Azerbaijan oil deal, and flew back 
last night Presumably a 
well-earned rest tomorrow then? 
“He has a full diary, " says his 
office. Well he is minister for 
energy. 


Homely homily 

■ For once, British Telecom, which 
has just tom up a £1,000 bill 



turns into a cannabis plant’ 

incurred by a toddler “phoning” his 
great grandparents in the West 
Indies, can teach other companies a 
thing or two about customer 
relations. The House of Fraser 
group, for instance, has been 
having a rather unseemly wrangle 
with a pensioner. 

Ten years ago. Walter Mealey 
sent £1,006 to one of its stores for 
some furniture, which he then 
decided against buying. 

He left the money at the store 
reasoning that, if he could find 
nothing else to spend it on. House 
of Fraser would eventually pay him 
a reasonable rate of interest. 

Most unwise. If he had put it into 
almost any building society, his 


original sum would by now be 
worth more than £2,000, thanks to 
fairly high interest yields during 
the 1980s. 

After lengthy correspondence, the 
store has now sent him a cheque for 
£1,250 - the original sum plus £244 
interest, which the group calls a 
“gesture of goodwill”. 

Obviously the annual percentage 
rate on goodwill doesn't match that 
charged on most store cards. 


Down and out 

■ Traditions die hard at the 
116-year-old Chartered Institute of 
Bankers where, after a quarter of a 
century as a humble scribe, the new 
secretary-general Gavin Shreeve is 
getting used to tea and biscuits 
served daily in his heavy 
wood-panelled office. 

Actually, far from relishing the 
cosy ways, Shreeve appears 
impatient to shake things up at 
what is the main professional body 
for British bankers. 

For starters, the lease on the 
offices at that grand City address 
Number Ten Lombard Street 
expires next year and staff will 
have to get used to a new abode - 
or rather two. 

The CIB already has an office in 
Canterbury and the plan is to move 
most of the rest of tbe staff down 
there, keeping in London only a few 
employees and the institute's rather 
splendid library. Inquiries are being 
made around the Threadneedle 
Street area - which tbe CIB 


old-timers seem to regard as more 
than a bit of a let-down. 

Come on chaps, if it’s good 
enough for the Bank of England . . . 


Hit for six 

■ Smiles all round in Cape Town 
yesterday as John Major put the 
seal on South Africa’s return to the 
fold, making the first prime 
ministerial visit since Harold 
Macmillan stopped off to deliver his 
“winds of change" speech in 1960. 

From the sublime to tbe 
ridiculous. Major tried a joke or 
two. claiming that Norma throws 
bread rolls at him if he drones on 
too long. 

Zulu leader Chief Buthelezi 
managed a better, if somewhat 
more obscure jest, telling reporters 
that he had always considered Lady 
Thatcher to be a man - a Zulu 
compliment, apparently. 

It was left to Nelson Mandela to 
lend a proper tone to proceedings. 
Rather than kow-towing to the 
parade of UK business types jostling 
round Major, the great man peered 
over their shoulders and was heard 
to say: “Yes, but where is Sir Colin 
Cowdrey?” 


Two plus two 

■ Back to bankers, and a question 
as to how many varieties of the 
species there are? Why, three of 
course. Those who can count and 
those who can’t 





14 


★ 



TRAFALGAR HOUSE 

COKTRSCIHMt^H 


081 6892266 


WORLDWIDE EXPERTISE AMD RESOURCES 


FINANCIAL TIMES 

Wednesday September 21 1994 




cpi I AND LEASE BACK 


CO 


NQKTi * "I* «I ULkw'.n 


Inkatha could lose control of Natal in feud 

King dismisses Buthelezi 
as Zulu prime minister 


By Marie Suzman in Cape Town 

The feud between two of the 
leaders of South Africa's 9m 
Zulus came to a head yesterday 
when King Goodwill Zwelithini 
dismissed Chief Mangosuthu 
Buthelezi as his prime minis ter. 

The confrontation between the 
two men could lead to a change 
in the political control or Natal's 
provincial parliament, currently 
held by the chiefs Inkatha Free- 
dom party, and help reshape the 
political future of South Africa as 
a whole. 

The sacking could undermine 
Chief Buthelezi 's position as a 
minister in the country's coali- 
tion government if he were to 
bee a challenge from within the 
ranks of his party. 

In an announcement released 
at Nongoma in KwaZulu/Natal 
province by the royal council, a 
group of advisers to the monarch, 
the king said he was dismissing 
Chief Buthelezi from his post as 
traditional prime minister to the 
royal house and would have no 
further contact with him. 

Michelin in 
profit again 

Continued from Page 1 

was restrained by the relative 
strength of sales of original 
equipment tyres, sold directly to 
carmakers, rather than higher- 
margin replacement tyres which 
are sold to individuals. 

In the US. the company expects 
the combined operations of 
Michelin and Uniroyal Goodrich, 
acquired in 1990, to break even 
this year. After tough negotia- 
tions with the United Rubber 
Workers' Union. Michelin said it 
had implemented more efficient 
rotating shifts. 

Volume growth of 13 per cent 
in Europe, which increased mar- 
ket share, partly reflected a new 
strategy of offering a more diver- 
sified tyre range. 

Michelin has also seen strong 
demand for "green" tyres, which 
reduce fuel consumption through 
lowering resistance with the 
road. 

Michelin described the tyres as 
the most important technological 
innovation since its development 
of the radial tyre. It aims to pro- 
duce about 14m green tyres this 
year, compared with about 2m in 
1993. 

Michelin forecast continued 
progress in Lhe second half this 
year and said the European eco- 
nomic recovery should be con- 
firmed by a more marked 
improvement in the market for 
replacement tyres. 

A FFrt.5bn exceptional charge 
relating to restructuring was the 
main factor in the large first-half 
loss in 1993. But even stripping 
out exceptional charges. Michelin 
achieved a net profit or FFr732m 
against a loss of FFr827m in the 
first half of 1993. 


The move represents the biggest 
political upheaval since President 
Nelson Mandela took office 
following South Africa's first 
all-race elections in 
April 

The statement also said the 
king was cancelling this year’s 
Shaka Day celebrations, an 
ann ual festival to celebrate the 
Zulu kingdom's 19th century 
founder, which had been due to 
take place next Saturday. He 
instead called on the Zulu people 
to observe a four-day period of 
“prayer, unity, reconciliation and 
peace". 

Both men will be vying for sup- 
port of the conservative, tradi- 
tional rural vote that in April 
helped give Chief Buthelezi's 
inkatha Freedom party a narrow 
victory in KwaZulu/Natal over 
Mr Mandela’s African National 
Congress. 

Should the long win what is 
likely to be a bitter and possibly 
violent contest control of the 
province could pass to the ANC, 
with whom the king has estab- 
lished close links. Victory for 


Chief Buthelezi could reinforce 
Inkatha's hold over the region's 
assembly and keep open the pos- 
sibility that he might press for 
greater powers for what would 
become a virtually autonomous 
NataL 

Mr Mandela, speaking during a 
press conference in Cape Town 
yesterday with Mr John Major, 
the visiting Bri tish prime minis- 
ter, played down the apparent 
rift. He said relations between 
the King, Chief Buthelezi and 
himself were "very good” and 
expressed optimism that the 
problem could be speedily 
resolved. 

Chief Buthelezi said he had 
received no formal communica- 
tion from the king. Mr Ziba 
Jiyane, Inkatha secretary gen- 
eral said the party would press 
ahead with next weekend's cele- 
brations without the king’s par- 
ticipation. 

"No force on earth would stop 
the Zulus commemorating Shaka 
Day," Mr Jiyane said. 


Major in Cape Town, Page 4 


France 
appeals for 
delay on 
freeing of 
air routes 

By John Ridding in Paris 

The French government 
yesterday reused the prospect of a 
new clash with the European 
Commission over aviation policy, 
announcing that it was appealing 
to the European Court of Justice 
in an attempt to delay the liberal- 
isation of two of its most profit- 
able domestic air routes. 

A statement issued by the 
transport ministry said that 
immediate competition on the 
routes from Orly airport near 
Paris to Toulouse and Marseilles 
would “damage the balance of 
the country's internal air 
routes". 

It called far a suspension of an 
April ruling by the Commission, 
which ordered France to open the 
routes by October 28, until the 
European Court had made its 
decision. 

The appeal is the latest step in 
a protracted battle to liberalise 
French domestic air routes. 

It follows a bitter struggle ear- 
lier this year over access to Orly 
airport for British carriers open 
ating from London. 

The French government 
opposed the opening of the Lon- 
don-Orly routes, bat ultimately 
yielded to pressure from Brussels 
and Britain to allow Air UK, Brit- 
ish Airways and TAT, its French 
affiliate, to fly to Orly. 

That agreement and commit- 
ments to facilitate international 
traffic to Orly helped clear the 
way for a FFr20bn ($3.79bn) 
capital injection for Air France, 
the lossmaking state-owned 
carrier. 

A delay in the liberalisation of 
the Toulouse and Marseilles 
routes would come as a blow to 
TAT, which is 49 per cent owned 
by British Airways. 

TAT officials were not avail- 
able for comment yesterday, but 
the airline has said it wants to 
start services from Orly to Toul- 
ouse and Marseilles as quickly as 
possible. 

The decision by the Commis- 
sion to order the opening of the 
routes followed a complaint filed 
by TAT. 

Mr Bernard Bosson, the trans- 
port minister, said that France 
was not against the principle of 
opening the routes in question 
but disagreed about the timing. 

The French government has 
said it will open the Orly-Marseil- 
les route in April 1995 and the 
Orly -Toulouse route in April 
1996. 

It has said, however, that it 
would limit the liberalisation of 
each of the routes to one new 
carrier. 

The routes are currently oper- 
ated by Air Inter, the domestic 
affiliate of Air France. 

The airlines have so far 
resisted the liberalisation of prof- 
itable domestic routes, claiming 
that those routes offset the 
unprofitable domestic routes they 
are also required to operate by 
the French government. 


Paris and Bonn call 
for Brussels plan 
on EU expansion 


By David Buchan in Paris and 
Lionel Barber fai Brussels 

France and Germany agreed 
yesterday to ask the European 
Commission to produce a consul- 
tation paper next spring setting 
out a plan for enlarging the Euro- 
pean Union to eastern Europe. 

The idea is to emulate Lord 
Cockfield’s celebrated 1985 docu- 
ment which set out a list of mea- 
sures for the European Commu- 
nity to adopt in order to complete 
the single market by 1992, a Brus- 
sels official said yesterday. 

EU officials hope the detailed 
pre-accession strategy will give 
the former communist countries 
of central and eastern Europe 
fresh incentives to consolidate 
economic reform, while persuad- 
ing them that their aspirations 
for EU membership are taken 
seriously. 

The Franco-German call was 
made at the end of a two-day 
meeting in Paris of both coun- 
tries' foreign ministers and 
ambassadors to the six EU candi- 
date countries - Poland. Hun- 
gary, the Czech Republic, Slo- 
vakia, Bulgaria a nd Ro mania - 
and Latvia, Lithuania and 
Estonia. The aim of the confer- 
ence was to pool Information on 
eastern Europe. 

Mr Klaus Kinkel German for- 
eign minister and president of 
the EU's Council of Ministers, 
said the document “should map 
out the road ahead" for east 
Europe's eventual integration. 


Among other elements, it should 
cover the difficulties of adapting 
its economic, banking, legal and 
transport systems to EU norms. 

One likely approach is for the 
Commission to draw up a list of 
between 100 and 150 measures for 
the east Europeans to adopt In 
order to make their legislation 
compatible with EU standards. In 
return, the EU would phase out 
anti-dumping measures and 
thereby expand the single Euro- 
pean market eastwards. 

French foreign minister Mr 
Alain Juppd, whose country 
takes over the EU presidency 
from Germany in January, said 
the idea would be broached with 
Mr Jacques Santer, the Commis- 
sion president-elect. 

Both foreign ministers claimed 
that their governments were at 
one on enlargement to the east, 
but differences of emphasis 
emerged over how far the EU 
should try to lift eastern Europe's 
standard of living to its' own. 

Mr Kinkel said it was impor- 
tant to treat eastern Europe as a 
whole. “We cannot have wages in 
Dresden that are twice as high as 
in Budapest, which are twice as 
hig h as in Bucharest” 

However, the French side 
emphasised possible costs. Mr 
Alain Lamassoure, France’s EU 
affairs minister, said if all east 
European and Baltic countries 
were next year to enter the 
Union with unchanged form and 
structural funds rules, the EU 
budget would have to double. 



FT WEATHER GUIDE 


Europe today 

Low pressure over southern France will 
bring rain to central and southern regions. 
Intermittent rain will also linger along the 
northern coast of Spain and in the Alps. 
Thundery showers will develop in eastern 
and north-easi Spain and over the 
Baleorics. 

The Mediterranean will be mainly sunny, 
except for some eastern regions. Western 
Turkey will have thundery showers. The 
north -eastern Balkans, Ukraine, eastern 
Poland, western Russia and the Baltic 
stales win be cloudy and rainy. 

Other areas of Russia and Europe will be 
mainly dry with some sunshine. 

Five-day forecast 

Southern Scandinavia will become 
increasingly surmy.The western 
Mediterranean will be unsettled, with 
thundery showers in north-east Spain and 
south-east France. 

Heavy rain is expected tomorrow and 
Friday over the Alps. Conditions will be 
mixed in north-western Europe. 


TODAY'S TEMPERATURES 



Sttiatton at 12GMT. Temperatures maximum fOr day. Rxecasts by Meteo Consult of tna Nottterianda 





Barcelona 

thund 

16 

Cape Town 

sun 

20 Edinburgh 

fair 

16 

Madeira 

sin 

25 

Prague 

doudy 

14 


Maximum 

Beijing 

doudy 

29 

Caracas 

doudy 

3' 

Faro 

f&r 

25 

Madrid 

t air 

19 

Rangoon 

drawer 

30 

Abu Dhabi 

Celsius 

Belfast 

doudy 

16 

Cardfl 

Cloudy 

17 ftanktat 

fair 

19 

Majorca 

thund 

24 

Reyfevtc 

rain 

9 

sun 

39 

BsKjads 

fair 

20 

Casablanca 

(dr 


shower 

16 

Malta 

sin 

27 

Rio 

fair 

21 

Accra 

doudy 

31 

Berlin 

doudy 

15 

Chicago 

shower 

28 Gibraltar 

fair 

24 

Manchester 

doudy 

IB 

Rome 

Hr 

25 

Alters 

far 

29 

Bermuda 

doudy 

92 

Cologne 

fair 

19 Glasgow 

doudy 

17 

Manfla 

cloudy 

33 

S. Frsco 

fair 

25 

Amsterdam 

far 

19 

Bogota 

doudy 

19 

Dakar 

doudy 

30 Humbug 

fair 

17 

Mdboums 

drawer 

14 

Seoul 

shower 

27 

Athens 

sun 

28 

Bombay 

nun 

29 

Dallas 

sun 

3' 

Heiskiki 

doudy 

14 

Mexico City 

doudy 

19 

Skigapore 

cloudy 

28 

Atlanta 

fab 

27 

Btustnis 

tar 

18 

Delhi 

fair 

34 Horg Kong 

shower 

30 

Miami 

drawer 

32 

Stockholm 

fair 

15 

B. Anas 

far 

24 

Budapest 

doudy 

16 

Dubai 

sun 

39 Honolulu 

doudy 

32 

MRan 

shower 

10 

Strasbourg 

fair 

19 

B.ham 

doudv 

17 

C.hagen 

fair 

17 

DubSn 

cloudy 

16 Istanbul 

sun 

28 

Montreal 

fair 

20 

Sydney 

fair 

19 

Bangkok 

flftowar 

33 

Can*? 

fair 

33 

Dubrovnik 

fair 

22 Jakarta 

dowdy 

32 

Moacow 

fair 

26 

Tangier 


22 










Jersey 

shower 

IS 

Munich 

fair 

17 

Tel Aviv 

Ur 

31 




















No global airline has 

a younger fleet. 


Kuwait 
l_ Angelas 

fair 

fair 

43 

24 

Naples 

Nassau 

fair 

fair 

26 

32 

Taranto 

Vancouver 

Ur 

20 

21 










Las Palmas 

fair 

27 

Now York 

fair 

24 

Venice 

fair 

20 

(pj Lufthansa 




Lima 

Lisbon 

London 

doudy 

fair 

doudy 

19 

19 

17 

Nice 

Nicosia 

Oslo 

rain 

sun 

fair 

20 

34 

IS 

Vienna 

Warsaw 

Washington 

rain 

shower 

fair 

17 

18 
26 


✓ . ■ 








Luibbotfg 

fair 

17 

Parts 

shower 

17 

WeUfagton 

Winnipeg 

rain 

0 


Lyon 






fair 

18 


THE LEX COLUMN 

Marginal momentum 


FT-SE Index: 3073.3 1*41-31 


Eighteen months ago, margins at the 
UK's big food retailers appeared on 
the verge of collapse under a new 
wave of pricing pressure from dis- 
counters. Tesco’s interim figures show 
such fears were misplaced. It held the 
year-on-year decline in gross margins 
to 0.1 per cent in the first half, follow- 
ing a drop of 0.7 per cent in the second 
half of 1993. Like-for-like sales rose by 
4 per cent, further evidence that Tes- 
co's strategy for fending off the threat 
from the discounters has been effec- 
tive - so far. 

Tesco has responded to the chal- 
lenge by cutting prices of key prod- 
ucts, putting pressure on suppliers 
and improving operating efficiency, 
tactics also adopted by J. Sainsbury. 
These steps could not have eliminated 
the intense competitive pressures in 
the sector, but they appear to have 
shifted some of those pressures back 
on to the discounters themselves. 
Judging by Shoprite's profits warning 
this summer, problems at Lo-Cost, the 
Argyll subsidiary, and analysts' scaled 
back expectations for Kwik Save, low 
prices alone have failed to make really 
damaging inroads into the big retail- 
ers’ territory. 

That said, market conditions are far 
removed from the second half of the 
1980s when margins climbed at a com- 
fortable l per cent a year. In a low-in- 
flation environment dogged by overca- 
pacity, it will be a struggle to preserve 
margins at existing levels. The sector 
has risen against the market by 20 per 
cent in the last six months. Further 
outperformance on this scale Is 
unlikely. 

UK economy 

The immediate causes of yesterday’s 
slippage in UK gilts and 42-point foil 
in the London equity market were to 
be found abroad. The US trade deficit 
unsettled New York markets, while 
Germany worried about the Immin ent 
August money supply numbers. At 
least in gilts, though, the nervousness 
fits badly with the domestic data. Net 
new mortgage commitments at build- 
ing societies fell 7 per cent in August 
while the fall in retail deposits in the 
banking system suggests consumers 
may be squeezed by higher taxation. 
With recent growth in M4 money sup- 
ply well within the target range, there 
seems to be little pressure for a fur- 
ther rate rise. 

One danger, though, is that markets 
tend to confuse weakness in consumer 
demand and housing with weakness in 
the economy as a whole. The chancel- 


NBcftelln 

Share price relative to the CAC 40 



tor's decision to raise base rates last 
week clearly reflected a broader view 
of the economy in which growth is 
driven by other things, notably 
exports. As tong as the overall growth 
rate remains high, the output gap will 
continue to close and companies will 
try increasingly to pass on higher 
Input costs. 

The authorities may thus feel 
tempted to tighten monetary policy 
further, but while corporate borrowing 
remains low the risk is that of over- 
kill. Against that background, gilts 
look an outright bargain at yields of 
over 9 per cent, but equities will con- 
tinue to struggle. 

Michelin 

Michelin, best known for its dumpy 
Bibend um mascot, has been on a strict 
dietary regime since 1990 when it 
swallowed Uniroyal Goodrich in a 
Sl_5bn gulp. Digestion has not been 
easy. Net debt continues to lie heavily 
on the group, and has fallen only 3.8 
per cent since December 1992. Costs 
remain high, in spite of two draconian 
rationalisation, programmes. 

Yesterday the company proudly 
announced that over the last year it 
had cut salary costs by 3A percentage 
points to only 39.7 per cent of sales. A 
more apt comparison might be with 
Goodyear, where wage costs last year 
were equivalent to 24.4 per cent of 
turnover. 

Michelin expects further help from a 
market which may not be that co-oper- 
ative. In the US, where its operations 
are still not in profit, the market has 
enjoyed three years of growth and 
may soon peak. In Europe, car sales 
have risen 6 per cent so for this year. 


but growth rates may be slackening. 
The European high-ranrgin replace- 
ment tyre market, where Michelin is 
particularly strong, remains sluggish 
and there are no signs the group can 
pass on higher raw material costs. 
Profits and cash flow will undoubtedly 
continue to improve as Michelin. rides 
the cycle, but if it wants to become 
any thing more than a largo, but flabby 
tyre manufacturer, a stricter regime is 
required. 

Attwoods 

Browning- Ferris industries’ hostile 
bid for Attwoods is mean but clever. It 
is mean because the I09p pur share 
offer provides no bid premiutL while 
immediately enhancing BFI’s earnings 
per share. It is clever because it stands 
a good chance of succeeding. The key 
to the battle is that Laidlaw, 
Attwoods’ 30 per cent shareholder, has 
irrevocably pledged its stake at the 
offer price. So even if a higher bid 
materialised, the extra pennies would 
go to BFL not Laidlaw. BF1 trumpeted 
this agreement as proof that the offer 
was fair the reality is that Laidlaw so 
badly wanted out that it was prepared 
to accept BFI’5 stiff conditions. 

This puts other shareholders in a 
bind. Attwoods can hardly argue for 
an independent future given its poor 
record. But if there was an obvious 
white knight prepared to pay more, 
Laidlaw would have found it already. 
Warburg, Attwoods’ merchant bank, 
will have its work cut out to rustle up 
a better bid. But, since it is still smart- 
ing from Its high-profile failure in the 
Enterprise/Lasmo bid. the bank has 
every incentive to prove its doubters 
wrong. 

Mirror/Scottish TV 

Mirror Group’s protestation that it 
does not believe it necessary to control 
Scottish TV can probably be taken at 
face value. Not only is it unlikely that 
the Mirror would ever be allowed to 
control STV, because the two groups ! 
dominate the Scottish newspaper and i 
TV markets, but the Mirror has any- ! 
way developed a fondness for exerting 
significant influence through minority 
stakes, as shown by its stake in News- 
paper Publishing, the Independent's 
owner. The Mirror can be expected to 
press STV to provide programmes and 
expertise for its new cable TV chan- 
nel If it succeeds, its 14.9 per cent 
stake could look a cheap way of diver- 
sifying beyond the price-war ridden 
newspaper market 



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IN BRIEF 


Bertelsmann net 
profit up 15% 

Bertelsmann, the German media group, increased 
net profits by 15 per cent to DM759m ($4S9m) for the 
year to June 30. helped by rapidly expanding US 
operations. Page 16 

Iricfium raises $73%5m In equity 

Iridium, the international consortium building a 
global sa tellite system for mobile phones, bag raised 
a further 9733.5m in equity, which completes its 
equity financing. Page 16 

Swissair trims halfway deficit 

Swissair, the Swiss international airline group, Bew 
through turbulent skies in the first half of 1934, suf- 
fering a SFrt&n (937m) net loss compared with a 
SFr65m loss in the same period of last year. Page 17 

Upbeat Outlook for US biotechs 

The US b ^technology Industry continues to con- 
found the pessimists and flourish, despite the diffi- 
cult economic and political climate, according to 
the largest annual survey of biotech companies. 
Page 17 

Azuearera counter-offer backed 

The Spanish government has backed a domretir 
counter-offer for General Azuearera, Spain's second- 
largest sugar company, rejecting a Pta5,100 ($39.60) 
per share offer made by Generate Sucrifere, a subsid- 
iary of Saint-Louis, the French food and paper 
group, and the UK's Tate & Lyle. Page 17 

BNP profits rise sharply 

Banque Nations Le de Paris, a leading French hank , 
ing group, yesterday affirmed the upward trend in 
the domestic financial sector by announcing a steep 
increase in net profits to FFr914m ($l72m) for the 
first half from FFrS22m in the same period last 
year. Page 17 

Hoechst to appoint foreigner to board 

Hoechst, the German chemicals multinational, 
announced an infusion of fresh blood - and foreign 
experience - into top management Mr Ernest 
Drew, 57, chairman and chief executive of the 
group’s Hoechst Celanese US subsidiary, is to 
become the first foreign member of the main board. 
Page 28 17 

Cable ventrae formed for Australia 

A joint venture - Optus Vision - has been formed 
in Australia to develop a broadband cable network. 
The cable system aims to deliver local telephone 
calls, pay television and. by 1998. interactive ser- 
vices to 50 per cent of Australian homes. Page 18 

Hays lifted by recruitment units 

A sharp rebound in profits from personnel recruit- 
ment agencies helped Hays, the business services 
group. Increase pre-tax profits by 32 per cent, to 
E87.8m (SI 35m), in the year to June 30. Page 22 

Storm in a coffee cup - 

Guatemala’s cardamom exports, which account for 
more than two thirds of world exports of the spice, 
may be threatened by the decision to move Gua- 
temala’s embassy in Israel from Tel Aviv to Jerusa- 
lem. About 85 per cent of Guatemala’s cardamom 
exports go to Arab countries where it is mixed with 
coffee, and when other countries moved their 
embassies to Jerusalem, Arab nations severed diplo- 
matic relations and imposed economic sanctions. 
Page 24 


Companies In this 

AEG 

AT&T 

Antofagasta l-flcts 
Attwoods 2k 

Austrafo Media 
BH 

BHF-Baok 
BM Group 
BSG International 
BSM 

Bertelsmann 
Bodycote 
Brake Bros 
Bryant Group 
CS Holding 
Capita! Shop'g Cntre 
ttgdtae 
Con unei shank 
Compel Group 
EH Aqitaine 
Groups Bufl 
Hays 

Holden Automotive 
Jartfine Strategic 
Laidlaw 


Market Statistics 

$Amuaf reports saviea 26-27 

[? Benchm a rk tort bonds 2D 

i Bond futures and optfcro 20 

Bond prices and paMs 20 

^ CommwS&es prices 24 

Dividonds announced. UK 21 

BUS currency rates 32 

Eurobond prices 20 

Fixed Interest mefleas 20 

FT-A World bxficos Back Pago 

FT GoH l&ies index Bar* Page 

FMSMA nB bond SVC 20 

FT-SE Actuaries Indices 25 


Mackie International 

Matthews (Bernard) 

Mazda 

McCaw 

MfcheSn 

fc&ror Group 

Murray Johnstone 

NAB 

Nelson Hurat 
Parambe 
Pearson 
Sasol 

Scottish Television 
Secure Trust 
Sentry Farming 
Servtsalr 

Southern Newspapers 

Suzuki 

Technip 

Tosco 

Tomklnsone 

Total 

Travis Perkins 

Wang 

WassaB 

Wofstenhoime Rink 


ForsKm exchange 32 

Bits prices 20 

Ufle equity options 25 

Lmtofl share service 26-27 

London trafl opboos 25 

Managed finds sendee 28-32 

Money martlets 32 

New Ind bond issues » 

Recent issues. UK 25 

Short-tenn tat rates 32 

IS interest rases 20 

World Stock Markets 33 


Chief price changes yesterday 


FRANKFURT PM) 

Rtaaa 

Hottmam £3 + 41 

PaHs 

BMW 780 - 12 

Lawneyer 887-13 

MAN 410 - 72 

WgBttMr IMS - A5 

Porsc h e ?DS - 30 

new YORK m 
RUM 

OgU STYt * 1 

WOStuB 3tXfc ♦ Ik 

raM 

BnW? 1st SO 1 * - 

ChWn - 23 

Lotus emu 41 - Hr 

Nat Med 17*v - 

pAnsm 


722 r- 12 
757+19 


Air LHyAH 
DckRnee 

rat* 

Bongran 

EnftnO 

Saggn 

Sunco 

TOKYO fVeal 


Aqene Tod 3420 + 150 

ConsdRn 480 + 24 

Oakp tac 387 + 44 

Mut'd 753 + 28 

ttrf tain 647 + 37 

rale 

AMMO B7t 835 - 15 


New York prices at 1230pm. 


LONDON J 


ASwoods 117 + 8 

Sa»f» tFta* G» 70-5 
Matthew W 127+6 

ttanw Grata 139 + 11 

Nrtson Hurt i60 +■ 7 

Srottta IV Ml + 58 

INK* TV rsi + 37 

WWJmltti mm 508 * 38 

row-iymT IV 397 ♦ » 



Beomnre 

48 

4 

s 

Cspdnoa 

223 

- 9 

+ 

6 

Forte 

213 

6 

11 

taraon 

564 

- 19 

7 

sa 

RMC 

905 

- 22 

a; 

tarau Enow 

244 

- 2818 

38 

TfrnUnsons 

215 

- 25 

Kosaf 

288 

- 11 


FINANCIAL TIMES 


COMPANIES & MARKETS 


©THE FINANCIAL TIMES LIMITED 1994 


Wednesday September 21 1994 


Overseas Moving! 
byMichaelGerson | 

) 081-446 BOO f 


Credit Suisse group's takeover of Neue Aargauer continues industry consolidation McCaw to 
ITril/linQ 1 rPCPllPC! Fewer favoured by rising assets cut AT&T 

IIUIUIH^ 1V31/UV3 Totel numt>«r at banks and finance companies aertve in Switzerland AQrniriOC 

# • II i too earnings 

Swiss regional bank - by 10% in 

first year 


Fewer favoured by rising assets 

Total numbar of banks and finance companies active bo Switzerland 

TOO . 


By Ian Rodger In Zurich 

CS Holding, the international 
financial services group built 
around Credit Suisse, has 
launched a SFrS 05.6m ($686m) 
rescue package and agreed take- 
over bid for Neue Aargauer 
Bank, Switzerland's largest 
regional bank. 

The move follows a review of 
NAB's credit standing which 
revealed a need for extraordinary 
write-downs of about SFr200m. 

This is flu* latest and largest 
development in the consolidation 
among Switzerland’s smaller 
hanks. Many Of the these hanks. 
which specialise in mortgage 
lending and credits for small and 
medium-sized businesses, were 
badly hurt in the recession and 
property price slump of the early 
1990s, and have been unable to 
get back on their feet. 


The Spar und Lahkass e Thun, 
near Bern, collapsed in 1991, leav- 
ing deposit holders with large 
losses. The country’s leading 
banks, seeking to protect Swiss 
banking's image, put in place a 
rescue procedure which has pre- 
vented any subsequent failures. 

The. process, of mergers and 
acquisitions by the bigger h?r>ks 
has caused the number of 
regional banks to tumble to 155 
at the end of last year from 238 in 
1988. The pace appears to be 
accelerating following a tighten- 
ing of bank auditing standards. 

NAB. established in 1989 by the 
merger of two regional banks in 
the canton of Argovie, claimed 
total assets of SFr9.2tm at the 
end of 1993 supported by equity 
of SFr457.4m. 

Credit Suisse said there were 
no spectacular causes of the 
extraordinary write-down, just a 


more rigorous assessment of the 
bank’s assets by a new auditor. 
In an initial step. Credit Suisse is 
advancing a SFrZOOm convertible 
loan to NAB. Conversion of the 
loan at SFr2,000 per share and 
other options on NAB shares 
held by Credit Suisse would give 
it 34 per cent of NAB’s capital. 

Meanwhile, CS Holding is offer- 
ing three of its bearer shares and 
three of its registered shares for 
each of the remaining NAB 
shares, equivalent to SFr2,016 a 
share at Monday's closing prices. 
This values NAB at SFr705.6m. 

CS Holding said it would mafcg 
over its position in NAB to Credit 
Suisse by way of a non-cash capi- 
tal contribution. Credit Suisse 
said the acquisition of NAB 
would raise its market share in 
an important industrial region. It 
said NAB would maintain its 
identity and local character. 


US waste group strikes secret deal with Laidlaw 

BFFs hostile bid 
gives Attwoods a 
rude awakening 


i By Peggy HoUnger In London 
and B ern ar d Simon in Toronto 

Attwoods, the UK waste group, 
yesterday attacked a £3 64m 
($564m) hostile bid from Brow- 
ning-Ferns Industries of the US 
as an opportunistic attempt to 
talcp advantage of (me sharehold- 
er’s desire to sell 

The bid was sprung on the UK 
waste services company yester- 
day morning after a_ late-night 
deal between BFI. one of the big- 
gest US waste management com- 
panies, and Attwoods' largest 
shareholder. Laidlaw of Canada. 

Laidlaw, which has three direc- 
tors on Attwoods’ board, put the 
company into play by agreeing in 
secret talks to sell its 29.8 per 
cent stake to BFI for 109p a 
share. Laidlaw has also agreed 
that in the case of a higher offer 
from another bidder, it will remit 
the difference to BFL 

Mr Ken Foreman, Attwoods 
chief executive, was believed to 
be less than happy yesterday 
over LaicDaw's actions. 

The fact that the Laidlaw direc- 
tors who negotiated the deal with 
BFI had access to Attwoods' man- 
agement accounts and budgets 


could be a blow to Attwoods’ 
defence to the bid. The defence 
must also deal with a reputation 
tarnished by ill-fated acquisi- 
tions, financing difficulties and 
management problems. 

Laidlaw said it had tried to sell 
the Attwoods stake for a year. It 
is believed to have approached 
BFI some months ago. 

Mr Jim Bullock, Laidlaw chief 
executive, said the deal had been 
concluded in the interests of all 
shareholders. “If there were any 
improvement in the offer, it 
would be to the benefit of other 
shareholders, not to Laidlaw,” he 
said. “We've been quite scrupu- 
lous in making sure that all 
shareholders are treated the 
same.” 

Attwoods’ future will now 
depend on two other substantial 
investors, Templeton Invest- 
ments of the US and Fidelity, 
which together control almost 27 
per cent. Analysts yesterday 
expected the institutions to hold 
out for a higher offer. The cur- 
rent bid was “extremely low. 
very opportunistic and right at 
the bottom of the 12-month trad- 
ing range”, said Mr Robert MIQer- 
Bakewell of NatWest Securities. 


Barry Riley 



William Rnckelshaus: BFI chief 

BFI is offering lQ9p per share, 
against last night’s close of U7p. 
The offer represents $8.53 per 
American Depository Receipt, 
equivalent to five shares, and 85p 
per preference share. 

Laidlaw has agreed to sell its 
73 per cent preference holding to 
BFI if the ordinary offer goes 
unconditional. 

Laidlaw has also agreed to buy 
Attwoods’ German portable sani- 
tation business for $56 An, if BFI 
cannot find an alternative buyer. 
If BFI gets a higher price for the 
business, Attwoods’ shareholders 
will receive the difference in an 
additional payment 
Lex, Page 14; 

Disturbed night. Page 23 


New benchmark worries 
UK pension funds 


British pension 
funds are just 
beginning to face 
up to the potential 
upheaval which 
could result from 
the forthcoming 
legislation on pen- 
— ... sions. With the 

imposition for the first time of a 
statutory minimum solvency 
standard, funds could be faced 
with a new effective benchmark 
which excludes the overseas 
equities which on average com- 
prise 26 per cent of their portfo- 
lios. Moreover the benchmark 
wQl often imply a weighting of 50 
per cent or more in gilt-edged, 
a gains t only about 7 per cent at 
present 

Of course, UK pension scheme 
portfolios are not suddenly going 
to be emptied of global equities 
worth $160bn. Nor are the pen- 
sion funds going to beg the UK 
government to create more than 
$200bn of extra gilts- But oyer 
several years the asset allocation 
structure of UK pension funds is 
likely to change substantially. 

Recent investment strategy has 
been driven by peer group pres- 
sure and high historical equity 
returns, to the exclusion of liabil- 
ity-matching considerations. 
Thanks to the influence of me-too 
median fund performance bench- 
marks the typical pension fond is 
now around 80 per cent in equi- 
ties. 

In international terms tins is 
anomalous, as has been pointed 
out by the analysis Global Pen- 
sion Fund Indicators from UBS 
Asset Managem ent The strategy 
has paid off before - over the 
pact io years, the average pen- 
sion fund annual real return in 
the UK was 10B per cent the 
third highest out of 18 countries 


surveyed. But UBS warns that 
UK funds are now overexposed to 
equity risk. 

In chasing high returns. UK 
funds have largely ignored their 
increasing maturity - that is, 
they have proportionately more 
liability to pay pensions in the 
near term, for which gilts provide 
a safer match than equities. 

At a Goldman Sachs seminar 
last week in London an actuarial 
consultant. Mr Roger Unvtn of 
Watsons, pointed out that in the 
past few years the asset alloca- 
tion of UK pension plans has 

The later the 
strategy switch is 
performed, the 
worse the terms 
may be 

been converging even though 
their liability structure has been 
diverging. 

Now a reassessment looms. 
True, the actuarial profession has 
forced a compromise an the sol- 
vency test proposed last year by 
the Goode Committee. Instead of 
being entirely founded on gilts it 
will be graduated: it will be based 
on UK equity returns for liabili- 
ties related to younger employees 
and on mixed gilts and equities 
for those within 10 years of 
retirement, while only for cur- 
rent pensioners will the valua- 
tion be 100 per cent gilt-based. 

The Stamford will thus vary in 
its impact according to the matu- 
rity profiles of individual funds, 
but on average the equity con- 
tent will probably be only 40 to 60 
per cent Moreover there will be 


no accommodation of the particu- 
lar risks associated with overseas 
equities or property. 

Flexibility will not be abol- 
ished, however. A well-funded 
scheme will not be forced to 
match this new ben chmar k for 
risk. Some companies might raise 
the funding level so that they can 
pursue performance-driven 
rather than solvency-driven 
objectives. Bat the danger exists 
of a stampede by the herd from 
one benchmark to another. 

There is no early deadline. Pen- 
sion plans will have until at the 
earliest the year 2002 to meet the 
solvency test, and attempts are 
being made to delay and water 
down the proposals still further. 
On the other hand, pension 
scheme trustees may reason that 
the later the strategy switch is 
performed the worse the terms 
may be. 

According to Goldman Sachs, 
sterling bonds will be the biggest 
beneficiaries, but overseas bands 
may have a role for the diversifi- 
cation they can bring. The impli- 
cations for UK pension fund hold- 
ings of overseas equities are very 
negative, but tbe change in the 
UK equity portfolios may not be 
significant However, the distinc- 
tion between domestic and over- 
seas equities is surely becoming 
blurred. 

Already a few of the bigger 
pension plans with mature liabili- 
ties, such as the British Ball Pen- 
sion Scheme, are shifting 
resources into bond portfolios. 
Most funds are waiting for a new 
consensus to develop, but the 
logic of the new legislation is 
clear enough: if the short-term 
security of members’ benefits is 
to be improved the equity risk- 
tolerance of pension funds will be 
correspondingly reduced. 






1384 858687888990 91 3293 

sets of banks In Switzerland (SFrbn) 


1.200 



90 91 82 S3 


8 ourcs: Swiss Notional Bank 


AEG to spin off 
drive systems unit 
in French venture 


By Christopher Parkes 
kl Frankfurt 

Daimler-Benz’s shrinking AEG 
subsidiary is to spin off its drive 
systems operations into a joint 
venture with France’s C£g61ec, a 
member of the Alcatel Alsthom 
group. 

The loss-making German com- 
pany will take a 49 per cent stake 
in a business turning over 
DM1. 4bn ($91 5m) annually - 
DM600m from AEG - under man- 
agement control of CCgdlec. 

The venture will be one of the 
world's leading suppliers of proj- 
ect and drive systems with facto- 
ries in four European countries, 
the US. Australia and China. 
AEG claimed. 

This is the latest step in AEG’s 
slimming and restructuring pro- 
gramme launched last December 
with the announcement of the 
sale of one of its few profitable 
divisions - household appliances - 
to Electrolux. 

The Swedish multinational has 
since paid DMTSOm for the 80 per 
cent of the AEG operations it did 
not already own. 

Other measures include the 
establishment of a 50:50 joint ven- 
ture in robotics and computer 
controls for plant and machinery 


with the French group, Schnei- 
der. Like the C6g61ec venture, 
this deal was designed to create a 
business big enough to compete 
internationally. 

AEG Schneider Automation 
International, based in Paris with 
DMlbn turnover, is reckoned to 
be the second biggest company in 
its field in a world market worth 
DM6bn annually. Other leading 
players are Siemens and Allen 
Bradley of the US. 

Philips of the Netherlands 
bought the lighting business, 
while the collapsed Olympia 
office equipment division went to 
Hong Kong’s Elite group. 

Meanwhile, AEG has taken 
control of most of the Daimler- 
Benz group's microelectronics 
interests and absorbed the high- 
performance diesel engine 
operations of MTU. 

It is in the process of expand- 
ing its electronic mail-sorting 
equipment arm through a $260m 
agreed takeover of the Texan 
group. ElectroCom. 

Although AEG has forecast a 
deficit this year alter a DM1 .2 bn 
net loss in 1993, improving world 
demand for industrial plant and 
electrical components is expected 
to help it towards its goal of 
breaking even in 1995. 


By Tony Jackson in New York 

AT&T, the large US telephone 
group, expects its earnings to be 
diluted by 10 per cent in tbe first 
year of its ownership of McCaw 
Cellular Communications. AT&T 
said yesterday. AT&T said it 
would take 18 months to inte- 
grate McCaw fully into its 
operations as a result of regula- 
tory' requirements. The Sll.5bn 
acquisition of McCaw was for- 
mally completed on Monday. 

McCaw, the largest US opera- 
tor of mobile phones, will be 
renamed AT&T Wireless Ser- 
vices. Its operational head will 
be Mr James Barksdale. McCaw 's 
president and chief operating 
officer. Mr Craig McCaw, the 
company's 45-year old founder, 
would sit on the AT&T board, 
but play more of a consulting 
role, AT&T said. 

Mr Robert Allen, AT&T chair- 
man, said litigation by regional 
Bell telephone companies seek- 
ing to block the merger was 
largely a nuisance. “We’ve obvi- 
ously made the judgment that 
tbe remaining risks do not war- 
rant delaying any further.” 

Under US Department of Jus- 
tice terms, McCaw must offer 
access to its networks to long 
distance telephone companies 
competing with AT&T, and 
notify its customers. 

This would take a minimum of 
seven months for any one mar- 
ket, and 18 months for all the 
105 local systems which McCaw 
controls. Until then. McCaw 
could not offer its services under 
the AT&T brand name, Mr 
Barksdale said. Mr Allen said 
AT&T, which is not constrained 
by the same “equal access" pro- 
visions as McCaw. would start 
offering combined wireless and 
wired services to its customers 
immediately, starting with the 
business market 

Mr Barksdale said McCaw’s 
spending on capital investment 
and marketing would not neces- 
sarily rise as a result of tbe 
merger. In particular, AT&T had 
access to cheaper finance than 
McCaw, which had very heavy 
borrowings. There would be no 
job losses at McCaw. he said. 

The deal leaves British Tele- 
com holding 35 An AT&T shares, 
amounting to abont 2.3 per cent 
of tbe equity, in exchange for its 
stake in McCaw. “I’d be reason- 
ably sure their interest for rea- 
sons of competitive conflict, 
wonld be to dispose of those 
shares as soon as possible in an 
orderly fashion,” Mr Alien said. 


This announcement appears as a matter of record only. 


Mr Paul D. Psomiades 


Chairman and Chief Executive of the 


has acquired a 91.03 per cent, shareholding in 


Ilios Greek Insurance S.A. 


formerly owned by . 


Norwich Union Overseas Holdings B.V. 


Provincial Insurance pic 



Nikko Europe Pic 

acted as adviser to the buyer 


September. 1904 





16 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Iridium raises $733.5m in equity 


By Andrew Adonis in London 

Iridium, the international 
consortium building' a global 
satellite system for mobile 
pho nes, has raised a further 
$733. 5m in equity, which com- 
pletes its equity financing. 

This brings the amount 
raised to SV57bn and opens the 
way For debt financing for the 
S3.4bn project conceived by 
Motorola, the US-based elec- 
tronics group. 

Veba, the German energy- 
based conglomerate, heads the 
list of new investors with a 
SMOm investment as part of its 
strategy announced earlier this 
week to expand its telecommu- 
nications operations. 

Veba's commitment repre- 
sents S70ra in new investment 

Commerzbank 
to buy 20% of 
Polish bank 

By Andrew Fisher 

Commerzbank yesterday 
announced a further move into 
eastern Europe with the 
planned purchase of a 20 per 
cent stake In Bank Rozwoju 
Eksportu (Export Development 
Bank), a privately-owned Pol- 
ish bank specialising in export 
and corporate finance. 

The German bank said Its 
interest in the bank, founded 
in 1986 and now with 10 
branches, was strategic. The 
stake requires the approval of 
NBP. the Polish central bank. 
The central bank said it would : 
only consider the application 
after Bank Rozwoju Eksportu 
has held its next shareholders' 
meeting in mid-October. 

NBP is about to grant an 
application from Dresdner 
Bank of Germany and Banque 
Nationale de Paris to open a 
jointly -owned subsidiary in 
Poland. Deutsche Bank, also 
keen to open up in Poland, has 
bid for a majority stake in 
Interbank of Warsaw. 

Commerzbank already has a 
representative office in War- 
saw. Elsewhere In eastern 
Europe, it has a branch in 
Prague, Chechoslovakia, and a 
subsidiary in Budapest. Hun- 
gary. The German bank also 
said it had just opened a repre- 
sentative office in Novosibirsk. 

. giving it more outlets in for- 
mer Soviet countries than any 
other German bank. 


and an assumption of S70m of 
Motorola's existing commit- 
ment. 

Korea Mobile Telecommuni- 
cations Corporation leads a 
group of Korean companies 
investing S70m. Other new 
investors include Inepar, the 
Brazilian energy and telecoms 
group. 

More than S400m of the 
S733.5m comes from existing 
investors which Include US 
groups Lockheed and Sprint. 
Bell Canada and 18 Japanese 
companies including Sony and 
Mitsubishi. 

Iridium is one of several 
groups seeking to build satel- 
lite networks for mobile 
phones. 

The intended market is inter- 
national business travellers 


and regions without existing 
infrastructure for cellular com- 
munications. 

Last week. Inmarsat, the 
London-based international 
maritime satellite communica- 
tions organisation, launched a 
company aiming to raise Slbn 
in equity from its 75 members 
by the end of the year. 

Globalstar, another consor- 
tium in the market, is being 
developed by Loral, the US 
defence group, and Qualcomm, 
a California high-technology 
supplier. 

Globalstar has raised nearly 
S300m from investors such as 
the French telecommunica- 
tions groups Alcatel Alsthom 
and France TCtecom. 

Iridium's network will com- 
prise a constellation of 66 low- 


orbit satellites. Subscribers 
will access the network 
through dual mode handsets 
connected to earth-based 
mobile cellular networks. 

Iridium’s services will 
include voice, data, paging and 
fax. The group, with more than 
4.000 employees, is developing 
its network and negotiating 
rights of access with regula- 
tory authorities worldwide. 

Mr Robert Kinzie, chief exec- 
utive, said: “With the commit- 
ment of the US government to 
license low earth-orbit satellite 
systems by the end of January 
1995, and the associated grant 
of interim construction waiv- 
ers, Iridium's satellite personal 
communications system will be 
available worldwide by the end 
of 1998.” 


BHF-Bank simplifies structure 


By Andrew Fisher in Frankfurt 

BHF-Bank. the eighth largest 
private sector bank in Ger- 
many. plans to turn itself into 
a joint stock company and to 
shed its partnership status as 
part of its strategy to become 
one of the leading advisory and 
trading banks in Europe. 

As the bank’s shares are 
already quoted in Frankfurt - 
at yesterday’s share price of 
DM387, a rise of DM2, the mar- 
ket capitalisation was DMS.lbn 
- the legal change will have no 
consequences for its owner- 
ship. About half the share capi- 
tal is in firm hands, including 
those of Allianz, the German 
insurance group, which owns 
16 per cent. About a quarter of 
the capital is held abroad. 

The bank said the move to 
joint stock or AG (.Aktiengc- 


sellschaft) status would pro- 
vide it with a simpler internal 
structure, enabling managers 
to concentrate more effectively 
on their specialised fields. That 
would make sense to foreign 
shareholders who are some- 
times confused by the idea of a 
quoted bank run on a partner- 
ship basis. 

The change will be proposed 
to the annual meeting in May. 
BHFs operating profits rose by 
20.5 per cent last year to 
DM323m < 5205.7m), with group 
assets nearly IS per cent 
higher at DM55bn. In the first 
half of 1994, operating profits 
were flat at DMl4Bm. 

The bank’s six general part- 
ners are at present personally 
liable for the business. They 
need to keep abreast of aspects 
of the bank's activities outside 
their specialities. BHF said 


it wanted to instil the 
principle of "performance-ori- 
ented entrepreneurship" at all 
levels. 

The bank will pay more 
attention to merchant banking, 
expand its equities side and 
concentrate more on serving 
wealthy investors. In corporate 
business, BHF will position 
itself as a leading advisory 
bank for medium to large Ger- 
man companies. 

BHF said its co-operation 
with IKB Deutsche Industrie- 
kreditbank, specialising in 
long-term finance to small and 
medium-sized companies, will 
be intensified. 

To strengthen its presence in 
European mergers and acquisi- 
tions. it will co-operate more 
closely with Credit Commer- 
cial de France and Charter- 
house. the UK merchant b ank. 


Mirror buys Scottish TV stake 


By Raymond S noddy 
in London 

The Mirror Group, the UK 
publisher of the Daily Mirror, 
yesterday launched a raid on 
Scottish Television, spending 
£37.4m ($58.6m) on a I4i) per 
cent stake. 

The move is the strongest 
evidence so far of the determi- 
nation of Mr David Montgom- 
ery, the Mirror Group chief 
executive, to diversify into tele- 
vision. 

The stake, which will make 


Mirror Group the largest indi- 
vidual shareholder in STV, was 
bought through its Scottish 
subsidiary, the Scottish Daily 
Record and Sunday Mail. 

The raid does not appear to 
presage a further attack on the 
independent Scottish channel 
even if UK television owner- 
ship rules, which prevent a 
newspaper group owning more 
than 20 percent of an ITV com- 
pany, are lifted. 

Share prices of the ITV com- 
panies which have not yet 
been swallowed tty larger pred- 


ators received a boost from the 
purchase, however. 

Yorkshire-Tyne Tees rose 29p 
to 392p, neighbouring Gramp- 
ian by 29p to 354p and Ulster 
by 3?p to 720p. HTV. however, 
fell by lp to I64p. probably on 
the assumption that the 20 per 
cent stake bought by Flextech 
earlier this year will help to 
block takeover attempts. 

The Mirror Group bought 
7.2m shares at 520p. 

STV s share price ended yester- 
day at 501 p. up 58p on the day. 
Lex, Page 14 


The Zambia. Privatisation Agency is offering for sale 


NORTHERN 
BREWERIES 

(Formerly the Northern Division of 
Zambia Breweries Limited) 


ORTHERN 
Breweries is 
one of the only two 
breweries in 
Zambia producing 
a light bodied 
lager beer of 
international 
quality. 

Offers are invited 
for the acquisition 
of up to seventy 
percent (70%) of 
the shareholding 
of the company; 
thirty percent 
(30%) of the 
shareholding will 
be offered to 
Zambians 
through a public 
flotation. 

The Enterprise 

The current brewery 
capacity of 450.000 per 
annum is undergoing 
an extensive 
rehabilitation 
programme estimated 
to cost about USS‘2 
million. 

The investment will 
increase the annual 
throughput to 750,000 
hectolitres. 

The brewery complex in 


Ndola comprises a 
brewhouse, 
fermentation cellars, 
bottling hall, storage 
warehouse, 
administration and 
utilities buildings 

The Market 

The Zambian clear beer 
market of 
approximately one 
million hectolitres is 
modestly developed. 
Annual consumption 
is 10 litres per capita 
compared to over 30 in 
{neighbouring) 
Zimbabwe. 

Northern Breweries 
serves the highly 
developed Copperbelt 
and northern 
geographic areas of 
Zambia. Potential for 
export exists. 

Workforce 

Well trained and 
experienced technical 
and professional 
workforce supported by 
German technical 
personnel. The brewery 
employs over 600 
people. 



The Zambia Pheatimtian Agney i’ZPAI is as culonoBioas Agl w? of tin 
Gc**mmml of Zombie. Thtfutttitnofiht Agncra to plan, implement, and 
nnlrd the priialisaUan State owned enterprises m Zambia. 


INVEST BV ZAMBIA. Africa's model country, o ic of the first to 
experience transition to plural politics and democracy and a 
leader in the implementation of a privatisation programme which 
will establish a market economy Ud by the private sector. 
Apart from privatisation, Zambia has put in place sound policies 
which have, in a short period of time, reduced inflation and 
stabilised exchange rates. The abolition of exchange controls in 
January, 1994 made the local currency, 
the Kwacha, fully convertible. 

Bidders will be required to sign a confidentiality 
agreement and pay USS100 for receipt of a 
tender package. For further information about 
bid submission contact: 

The Director 

ZAMBIA PRIVATISATION AGENCY 
P O Box 30819, Lusaka, Zambia 
Telefax: 260-1-225270 

Telephone: 260-1-222858. 260-1-222859 




The closing date for bids is 
November 25th, 1994. 


Bull sells 
part of US 
operations 
to Wang 

By John FUdcfing fn Parts 
and Alan Cam in London 

Groups Bull, the French 
state-owned computer manu- 
facturer, yesterday announced 
It would sell part of its US and 
international services activi- 
ties to Wang of the US for 
$160m In cash, bonds and 
shares. 

The French group will take a 
S per cent stake In the US com- 
pany and a seat on Wang’s 
board. 

The US company will also 
become a distributor of Bull 
products, including Its Unix 
open systems and its Data 
Zenith Systems personal com- 
puters. 

The companies described the 
deal as a strategic alliance. Mr 
Axel le Blots, chief executive 
of Bull Information Systems, 
said the agreement would give 
Bull critical mass in servicing 
clients and provide financial 
resources for Its other US 
activities, Including ZDS 
and Its enterprise server busi- 
ness. 

Mr Joe Tucci, chief executive 
of Wang, said the accord 
would expand the company's 
customer services, solutions 
integration, and software 
activities. 

He said the effect of the vari- 
ous acquisitions would 
increase earnings and cash 
flow per share. 

Bull will sell a number of 
service activities of Bull HN, 
its US subsidiary. These 
include Bull EOfs field mainte- 
nance services, which provide 
repairs and maintenance to 
customers across the US, and 
its operations in Canada, New 
Zealand and Mexico. 

Wang will acquire Bull’s 
HFSI federal systems integra- 
tion business, which operates 
exclusively with the US gov- 
ernment 

The businesses to be trans- 
ferred to Wang have «wnn«» 
sales of about $45 Om, of which 
about $32 Om is in the US. 

Afterwords, Bull's US sales 
should fell to about FFrlJlbn 
($220m) annually, from an 
expected FFrl.5bn for 1995 
before the deal. 

Both companies are in the 
middle of strategic reorganisa- 
tions. 


Bertelsmann net profit 
surges 15% to DM759m 


gr 


By Michael Undemanr 
In GOterslQh 

Bertelsmann, the German 
media group, increased net 
profits by 15 per cent to 
DM750m (9489m) for the year 
to June 30, helped by rapidly 
expanding US operations. 

Mr Mark Wflssner, chief 
executive, said conditions bad 
become more difficult In the 
first quarter of this year as 
i t ia r gfrw tightened in the print- 
ing business, excluding news- 
papers, which generates about 
20 per cent of group profits. 

However, he said earnings 
this year would improve 
slightly, helped by an eco- 
nomic recovery in Germany. 
He forecast that turnover 
would reach DM20 .8bn. 


Turnover rose 7J2, per cent 
last year to DM18.4bn, helped 
by a strong dollar. Accou nting 
for currency movements, turn- 
over was up 5.9 per cent. 

The annual profit was struck 
after the group wrote -off 
DM435 for start-up costs for 
Vox, Premiere arid other televi- 
sion and music ventures. 
Writes-offe for Vox, the finan- 
cially troubled television sta- 
tion in which Bertelsmann 
holds a 24.9 per cent stake, 
exceeded DMlOGm. 

Mr WSssner said that book 
clubs all print wmmWh Inter- 
ests remained the most profit- 
able divisions, contributing 80 
per cent of net profits. 

Adjusting for currency move- 
ments, US turnover rose 13 per 
cent to DM&9bn and accounted 


dor a third of operating profits 
of DML49bn. 

The Bertelsmann, music 
group, based mainly in the US, 
saw ««1« rise 16 per cent to 

Foreign activities made up 
. about 67 per emit of sales and 
' the company forecast that this 
share would rise to about 75 
per cent in 2000. 

Turnover in Germany rose 
only 14 per cent due to recess- 
ionary pressures and a “stag- 
nant” advertising market. That 
is important for Gruner & 
Ja hr, the print media division. 

Bertelsmann, still family- 
owned and operating in 40 
countries, said it would be 
spending DM3.5bn in the com- 
ing year, a record investment 
budget. 


Technip investors to cut stakes 


By John Ridding 

The principal shareholders in 
Technip, the French engineer- 
ing group, are planning to 
reduce their stakes in the com- 
pany, possibly through a flota- 
tion on the Paris stock 
exchange, Technip said yester- 
day. 

Elf Aquitaine and Total, 
France's two big oil groups, 
Gaz de France, the state-owned 
utility group, and ISIS, which 
is part of the state's Institute 
Frangais de Petrole, hold the 
shares in the company. The 


largest stakes are held by Elf 
and ISIS, which each own 35.9 
per cen t of the shares. 

Technip, which has animal 
sales of FFrf.Sbn ($L5bn), is 
mainly involved in engineering 
and construction walk for the 
oil, energy and petrochemicals 
sectors. Last year it achieved 
net profits of about FFr285m, 
an increase of 25 per cent 

The company is active in all 
of the world’s main geographi- 
cal markets, and derives 92 per 
cent of its turnover from 
exports. It has a workforce of 
5,500. 


The proposed sale, which 
could take place by the end of 
the year, depending an market 
conditions, would involve a 
French and international offer- 
ing. Banque Nationale de Paris 
and Morgan Stanley have been 
appointed as advisers and lead 
managers of the issue, while 
Schelcber Prince has been 
selected as sponsoring broker. 

The sale of shares in Tech- 
nip, which has been under oath 
sLderatLan for several months, 
would assist its international 
development, according to 
industry analysts in Paris. 


Recovery in margins lifts Tesco 


By Nefl Buckley in London 

A recovery in margins and 
faster sales growth helped 
Tesco, the UK’s second-largest 
food retailer, to increase 
interim pre-tax profits by 8 per 
cent to £2502m ($392m), from a 
restated £231 .4m, but the com- 
pany remained cautious an the 
outlook for margins. 

Sir lan MacLaurin, chair- 
man, said gross profit margins, 
which fell 0.7 percentage points 
in the previous half-year amid 
intense price competition, had 
recovered to 0.1 points below 
the first half of 1993. 

The increase was due to bet- 
ter terms from suppliers and 


shifts in the product mix, 
including the introduction of 
higher-margin elotMng and lei- 
sure goods. 

However. Sir Ian warned 
that price competition would 
remain fierce in the second 
ha\f u and Tesco did not expect 
much improvement in gross 
margins compared with last 
year, ms caution led to a 3p 
fell in Tesco's shares to 248p. 

“The competition has not 
tnkan its foot off the accelera- 
tor, and it is not going to be 
taken off” Sir Ian said. 

He reiterated his view that 
last year’s mar gin decline was 
a “step change,” not the 
“downward spiral" City ana- 


lysts feared. Bat Tesco would 
respond firmly to any competi- 
tive price moves. 

UK sales increased by DL8 
per cent to £4.47bn, of which 
7.8 percentage points came 
from 12 store openings. Exist- 
ing stores contributed 4 per- 
centage points of the rise, 
made up of L5 points of infla- 
tion and 25 points of volume 
Increase- 

Sir lan said sates benefited 
from lower prices on basic 
goods - countering the threat 
from fast-expanding discount 
grocers - and from Tesco's 
wider range, new store design, 
and improved sendee. 

Lex, Page 14 



▼▼▼▼ 

▼▼▼▼▼ 

▼▼▼▼ 

▼▼v 


Jardines 


Interim Report Highlights 1994 


Jardine Strategic 

Strong Earnings Growth 


Profit after preference dividends 
Earnings per share - basic 

-fully-diluted 

Dividend per ordinary share 


US$1 61m + 33% 

US$22.41 + 34% 

US$20.40 + 28% 

US^60 + 15% 


The businesses in which we hold our strategic stakes are financially strong and operate 
throughout the expanding markets of die Asia-Pacific Region. The full year should see 
higher earnings than in 1993, and the longer perspective remains encouraging." 

Henry Keswick, Chairman 
20th September 1 994 


Consolidated Profit and Loss Account 


(unaudited) 

Six manors ended SOtti June 
1994 1993 

US$m USSm 


3Tst December 
1993 
USSm 


Turnover 

2,7292 

2,466-7 

- 5.144,5 

Operating costs 

(2^358) 

0*87.4) 

(4,037.8) 

Operating profit 

984 

79.3 

206.7 

Share of profits toss losses of associates 

Net Interest expense 

2534) 

(17-6) 

172.4 

(15.1) 

385.9 

(288) 

Profit before taxation 

3207 

236.0 

585.7 

Taxation 

(6&C) 

(47.6) 

(110.4) 

Profit after taxation 

264.7 

1890 

4658 

Outside Interests 

(844!) 

(55.8) 

(1498) 

Profit after taxation and outside Interests 

1B0JS 

133.1 

306.0 

Extraordinary Hem 

- 

68-3 

688 

Profit attributable to Sttarehotdera 

18041 

201.4 

3748 

Preference dividends 

(19.2) 

(11k) 

(31.0) 

Profit attributable to ordinary Sfiareftotdera 

1618 

1896 

3438 

Ordinary dividends 

(32*) 

(29X1) 

( 90 j 4 ) 

Retained profit for fits period 

128.7 

1606 

252.0 

use use us« 

Earnings per share 




— basic 

2241 

IfiJU- • 

38.01 

— fully -diluted 

20.40 

1&87 

3585 

Dividends per ordinary share 

440 

4 j 00 

1280 




Jardine Strategic Holdings Limited PBBW 

incorporated m Bermuda with limited liability ftgSq 

The warm ttMeru mo bo peyatua on isi Dacwnbar 1984 lo orthary StafahoUm on Iheiegmer at doait ol 
reQeaers will be closed Prcm ion to 14th October ISKMttdusn*. Too o<4na>y dbwend, dedeiacl In UntWO SlaM Df 
Siartng calculated by (utsnmce w raws pnwrfng Ion tKcSnasa days prior to the pejtnant dsta. Ordhsiy Sbarehoi 
Untied SUlea OAais while ordnary Stwnshoidcre on ttio Hcng Kong branch regbaor oil receive Hong Kong Oolora. i 
by ratifying ihe Company's regttiarsvtraraier agents by 4 00 paLfiocal lime) oiMflt October nM. OnfinaryS 
tne Camrnl Dspostoiy System n Singapore ("COPI Ml receive Hong Kong DoBsrs unless Swy Med enough CDP » 


nlfteilenlm MetheenwOroep 


® doeo or boetnew on 7th October roe*. Tne onMky there 
Smw Doivs. mi alse be mtWt in Hong Koto Cottars arid 
< SbwhcfctBM an hi brimettarui branch msMv«A racefce 
j Oolara. imtaxc they elect tor one of the ahamafee cumndm. 
mflnery SnerehoklKS anttwyahanMieni held Bwougl, 


J G-* VjSia 







FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 1994 


17 


INTERNATIONAL COMPANIES AND FINANCE 


BNP sharp profits rise 
confirms trend in sector 


By Alice Rawsthom in Paris 

Basque Nationale de Paris, a 
leading French banking group, 
yesterday affirmed the upward 
trend in the domestic finan cial 
sector by announcing a steep 
increase in net profits to 
FFr914m (8172m) for the first 
half from FFr522m in the same 
period last year. 

BNP’s 75 per cent rise in 
interim profits reflects the con- 
tinuing recovery in the indus- 
try as France's banks, which 
have had a tough tim*» over the 
past two years, benefit from 
the general easing of economic 
conditions. 

Banque Indosuez. the invest- 
ment hanking subsidiary of the 


Suez group, last week 
announced an increase in first- 
half profits and other large 
banks are expected to follow 
suit in the course of the cur- 
rent interim reporting season, 
with the notable exception of 
Credit Lyonnais, the ailing 
state-controlled bank. Analysts 

are braced for another loss 
when Credit Lyonnais's 
interim figures are published 
tomorrow. 

One of the main factors 
behind the improvement in 
BNP’s performance was a 
reduction in provisioning, 
according to Mr Michel Peber- 
eau, chairman. 

BNP, like other French 
banks, was last year forced to 


make hefty write-downs on 
poorly performing property 
investments and small com- 
pany loans. 

However, it managed to 
restrict net provisions to 
FFriLQZbn during the first half, 
22 per cent lower than in the 
1993 interim period 

• Canal-Plus, the French 
pay-TV group, yesterday dis- 
closed a 25.6 per cent fell in 
interim net profits to FFrSO&n 
for the first half of 1994 from 
FFrS76m in the same period 
last year due to losses on some 
associate companies and the 
burden Of FFr62m of financial 
casts against a FFr3lm credit 
for 1993. 


Swissair trims halfway deficit 


By Ian Rpdger n Zurich 

Swissair. the Swiss 
international airlin e group, 
flew through turbulent skies in 
the first half of 1994, suffering 
a SFr48m ($37m) net loss coxn- 
- pared with a SFr65m loss in 
* the same period of last year. 

Fare wars in many markets 
combined with the strength of 
the Swiss franc to undermine 
“better than expected” growth 
in traffic and continuing prog- 
ress in cutting costs. 

Nevertheless, the group said 
it was confident of achieving 
“a considerably better” net 
income in the full year. In 1993, 


net profit tumbled 48 per cent 
to SFr59zn and the group 
passed its dividend. 

Group revenues were down 
39 per cent to SFrSbn in the 
first half and operating profit 
reached only SFrlOm, com- 
pared with a SFrlm loss, in 
spite of a 49 per cent cut in 
operating costs. Operating rev- 
enues included SFr47m in 
gains from aircraft sales com- 
pared with SFrSSm from this 
source a year earlier. 

The group said it had suf- 
fered from the high Swiss 
franc, particularly in Europe 
where much more of its costs 
than its revenues are in its 


home currency. Overall, cur- 
rency effects knocked more 
than SFrlOOm off revenues and 
SFrSOm off operating profits. 

The Swissair airline itself 
achieved a 10.3 per cent 
advance in traffic volume, a n d 
its total load factor improved 
39 points to 869 per cent The 
airline said its strongest grow- 
ing markets were Africa and 
the Asia Pacific region. How- 
ever, revenues were down 1 per 
cent 

Among subsidiaries, the 
Balair/CTA charter airline saw 
a 23 per cent rise in demand 
but only a 7 per emit gain in 
revenues. 


First Interstate to shed jobs 


By Richard Waters 
in New York 

First Interstate, the 
California-based banking 
group, announced plans to cut 
tiie equivalent of 3.000 full-time 
jobs as part of a move to raise 
productivity levels to rival 
those of the most efficient 

super-regional hanks in the US. 

The job cuts, out of a total of 
about 26,000, will come over 
the next 18 months, the hank 
said. It has already slashed 
staff numbers by some 10.000 
since the end of the 1960s. The 
latest move, announced at an 
analysts' meeting in New York, 


echoes the growing reliance of 
other US banks on cost-cutting 

to maintain earning s growth. 

At about 66 per cent last 
year, First Interstate's effi- 
ciency ratio (the ratio of non- 
interest expenses to revenues) 
was higher than the average 
for other big US regional 
banks. However, Mr Edward 
Carson, chief executive, told 
analysts yesterday that the 
ratio had come down to 60 per 
cent by June and was well on 
its way to reaching the earher- 
announced target of “at least 
53 per cent” next year. 

The job cuts, and other 
changes to improve efficiency, 


will result in a restructuring 
charge of $139m in the current 
quarter, a further y?Bm 
over the next year. 

First Interstate has around 
40 per cent of its assets in its 
bnrrip state of California and 
the rest in other western 
states, which are among the 
fastest growing in the US. 
This, and the success with 
which it has already raised its 
profitability, has boosted the 
company’s share price at a 
time when other hank shares 
have sagged. Yesterday morn- 
ing, the bank’s shares climbed 
$l!4 to 883, before falling back 
to *81%. 


Hoechst to 
appoint first 
foreigner to 
main board 


By Christopher ParkGS 
In Frankfurt 

Hoechst, the German 
chemicals multinational, yes- 
terday announced an infusion 
of fresh blood - and foreign 
experience - into top manage- 
ment. 

Mr Ernest Drew, 57, chair- 
man and chief executive of the 
group's Hoechst Cel an esc US 
subsidiary, is to become the 
first foreign member of tbe 
main board in the compands 
history. 

Mr Horst Waesche, 54, presi- 
dent of Hoechst-Japan, will 
also join the board after 
spending virtually his entire 
career in eastern Asia. 

Mr Drew will replace Mr 
Hans Georg Janson on his 
retirement on January 10 next 
year, while Mr Waesche will 
take the seat of Mr Earl Hol- 
onbek. In the interim, chair- 
man Mr Jftrgen Dormann, in 
office since spring, will reshuf- 
fle boardroom responsibilities. 

Mr Drew, whose only previ- 
ous foreign working experi- 
ence was in Canada, said yes- 
terday he had no preferences 
and no idea what he would be 
doing apart from starting Ger- 
man lessons today. 

However, he expected 
announcements in the next 
few months which would indi- 
cate the fUtnre direction of the 
company. Mr Drew was until 
recently head of a working 
party which reported to the 
board last month after investi- 
gating possible structural 
changes in group operations. 

These seem likely to include 
a more aggres si ve approach to 
investment in the Asia Pacific 
region, where demand for 
rihemlraiiK and raw materials 
for manufacturing is growing 
at double the rate in Europe. 

Mr Waesche. who has 
worked for Hoechst in Singa- 
pore, Malaysia and Thailand, 
recently completed a restruct- 
uring of Japanese operations 
which he has run since 1987. 

The appointments appear to 
complete a top-level shake-out 
which started shortly after Mr 
Donnann’s arrival when the 
company announced that 
membership of the manage- 
ment board was to be reduced 
from 11 to nine. 


Upbeat outlook for US biotechs 


By Clive Cookson, 

Science Editor 

The US biotechnology industry 
continues to confound the pes- 
simists and flourish, despite 
the difficult economic and 
political climate, according to 
the largest annual survey of 
biotech companies. 

The Ernst & Young report 
shows the combined revenues 
of 1,311 companies up 12 per 
cent to $UL2bn for the year to 
June 30 1994. Research and 
development expenses rose by 
23 per cent to $7bn, leading to 
a total net loss for the industry 
of $4.1bn, compared with 
*3.6bn for the previous year. 

“Biotech is marching on, 
although lots of people are try- 
ing to write its obituary,” said 
Mr Kenneth Lee, Ernst & 
Young life sciences director. 


US BIOTECH INDUSTRY (Sbn) 


Year to 
June 30 
1994 


Year to Change 
June 30 (%) 

1993 


Sales 

7.7 

7.0 

10 

Revenues 

11.2 

10.0 

12 

R&D expense 

7.0 

5.7 

23 

Net loss 

4.1 

3.6 

14 

Market capitalisation 

41.0 

45.0 

-9 

Number of countries 

1,311 

1,272 

3 

Employees 

103,000 

97.000 

6 


Scum. Ernst >1 nuna 


"Even healthcare reform, 
which many believed could 

lead to the ripmisp of man y bio- 
tech companies, will actually 
provide a boost to the industry 
as the new marketplace 
embraces and reimburses inno- 
vative therapies." 

The best evidence for the 
Industry’s health is the grow- 
ing number of products under- 


going clinical trials - up from 
270 a year ago to more than 300 
now. 

The report shows that the 
two most successful compa- 
nies. Amgen and Genentech, 
are far ahead of the rest. The 
Californian pair developed 
eight of the 10 best-selling bio- 
tech drugs, and their combined 
market valuation of Sll.4bn 


accounts for mure than a quar- 
ter of the whole industry's cap- 
italisation. 

Ernst & Young's main con- 
cern is whether biotech compa- 
nies will bo able to raise 
enough new money from inves- 
tors to fund current levels of 
R&D. The average company 
b as enough cash in hand to 
remain in operation for the 
next 25 months at its current 
“burn rate"; the comparable 
figure a year ago was 34 
months. 

Although venture capitalists 
invested 9639m in biotech in 
1993-94 (compared with 8459m 
in the previous year) their 
money is moving from early- 
stage companies to later-stage 
investments. For the first time 
in the industry's history, the 
number of start-ups has 
declined. 


Azucarera counter-offer backed 


By Tom Bums in Madrid 

The Spanish government has 
backed a domestic counter-of- 
fer for General Azucarera. 
Spain's second-largest sugar 
company, rejecting a Pta 5,100 
per share offer made by Gener- 
ate Sucrtere, a subsidiary of 
Saint-Louis, the French food 
and paper group, and the UK’s 
Tate & Lyle. 

A cor, Spain's third -largest 
sugar producer, has matched 
the offer in co-operation with 
Banco Popular, the domestic 
retail bank and Acoris tradi- 
tional financial adviser, and 
Reflnera de Portugal, the Por- 
tuguese sugar cane refiner. 
Acor. which is owned on a co- 
operative basis by sugar beet 


fanners, is seeking 30 per cent 
of Azucarera, with the Popular 
group acquiring 10 per cent on 
a temporary basis and Refiners 
de Portugal looking for 7 per 
cent 

Banco Central Hispano 
(BCH) agreed in July to a 
Pta20bn ($i55m) sate of its 47 
per cent stake to Gfinfirale Suc- 
riere and Tate & Lyle, which 
already jointly control 20 per 
cent. However, the agriculture 
ministry, which has taken 
action in the past to prevent 
foreign takeovers of Spain's 
edible oils sector, delayed the 
sale to the end of September. 

BCH, which is anxious to 
maintain Azucarera’s banking 
business after the disposal of 
its share holding in the com- 


pany. said it would be seeking 
clarification directly from the 
agriculture ministry over the 
new offer for its shares. It is 
understood to be aggrieved 
that its rival Popular group is 
at tbe centre of the counter 
bid. “Our view is the disposal 
should be good for the sugar 
sector, good for Azucarera and 
good for BCH,” the bank said. 

Industry analysts said, how- 
ever, that BCH would probably 
have no option other than to 
accept Acor's offer. “BCH 
needs to sell out and raise 
liquidity, but it is clear that 
the government does not want 
part of Spain's EU sugar quota 
passing into foreign hands." 
said Mr Juan Cueto, of Iber- 
securities. Madrid. 


Three top Micron executives quit 


By Louise Kehoe 
in San Francisco 

The three top executives of 
Micron Technology, a US mem- 
ory chip manufacturer, have 
resigned abruptly for “personal 
reasons". No further explana- 
tion for the unexpected resig- 
nations was offered. 

The sudden resignation of 
Mr Joseph Parkinson, chair- 
man and chief executive and 
one of Micron’s founders, Mr 
James Garrett, president and 
chief operating officer, and Mr 
Reid La n grill, chief financial 


officer, baffled analysts. 

A possible explanation for 
the wanflgBmwit shflk fMi p is a 
rift with the company’s biggest 
shareholder. Mr John Slmplot, 
chairman of J.R.Simplot an 
agribusiness company, who 
controls 21.5 per cent of 
Micron’s shares, analysts said. 

Micron, based in Boise, 
Idaho, is locked in competition 
with much larger Korean. Jap- 
anese and US memory chip 
producers but has been per- 
forming well as demand for 
memory chips outpaces 
supplies, boosting prices. 


For the first ninn months of 
its fiscal year, ending June 2, 
Micron reported net income of 
8259m, or 82.47 a share, up 
sharply from the previous year 
when tbe first nine months net 
income was $41m, or 41 cents. 
Net sales for the first nine 
months of fiscal 1994 totalled 
81-lbn, compared with 8522m 
for the nine months ended 
June 3 1993. 

Micron is expected to release 
its fourth-quarter earnings 
statement this week, with ana- 
lysts projecting strong earn- 
ings of about 81-12 a share. 


Banco Wiese 
shares begin 
NYSE trading 

By Sally Bowen in Lima 

Shares in Banco Wiese, the 
first Peruvian company to be 
listed on the New York Stock 
Exchange, wore expected to 
open at about $15 a share 
today. 

The listing is under the .ADR 
Level 3 mechanism, and should 
allow Banco Wiese to raise 
between $40m and S50ra. This 
represents about 10 per cent of 
the bank’s total value. Three- 
quarters of the new issue has 
been offered in the US. the 
remainder in Europe and Peru. 

Banco Wiese is Peru’s sec- 
ond-largest private bank, after 
Banco de Credito but ahead of 
the state-owned Continental 
which is scheduled for privati- 
sation early next year. 

It now accounts for some 21 
per cent of all deposits in the 
Peruvian system, compared 
with 5.5 per cent in 1988. and is 
among the more liquid shares 
traded on Lima's small but 
active bourse. 

The bank's offering is being 
closely followed in Lima. Sev- 
eral other companies are con- 
templating ADR Issues in the 
near future, including Pantel, 
tbe fast-growing telecommuni- 
cations group, and CPT, lama's 
telephone company, in which 
Telefonica International 
recently acquired a controlling 
stake. 


All of these securities having been sold, this announcement appears as a matter of record only. 


New Issue 



$150,000,000 

The Basque Country 

(an Autonomous Community Within The Kingdom of Spain) 


Notes due 2004 


Merrill Lynch & Co. 

Goldman, Sachs & Co. 


Morgan Stanley & Co. 

Incorporated 


£ 200 , 000,000 

MFC Finance No. 1 PLC 

NOTICE OF RBDSHPTION 

Series -A* W V IHgrg^eBad^^wtirta NotM 

Notice is hereby given, that In accordance with Conditions Sfcl of the 
Prospectus dared 13th October 1968. the Issuer intends » 
C3.600.000 in aggregate vaJua of the Notes on the respective oaooer 
1394 interest payment dates. 

By: Qtibanfc IttA. Uaauw SwvteWl CfTIBANCO 

ScoMnbatZI. W* tawten ' 


Currency or Bond Fax - FREE 2 week trial 

also daily gold and silver faxes * Anne wtutby 

Ircre Civil in .Hyi* Ltd 'cl 071-73.1 7 5 74 

r Ills'.' Lcr.rfsn '•.VIS 7HO. UK - Fax 0? ' ^ i 

«kehonr,t> rote tp+cmlisU ter cvrr 20 years n f.-.i-w/. f.-V" 


THE STARS PROGRAMME 

STARS 1 PLC 

£475,000,000 class A Floating Rata 
Mortgage Backed Securities 2029 

Notice is fotreby given the* *6 Prewpai ouMarefeig an the subject 
K ke^Tp^ September 27, 1994 to December 28, 1994 wil 
be £253201,250.00. 

Tire Principal omounl outstanding far each notoil £8,807-00- 


September ?!, 1994, tendon 

Citibank, NA (Issuer Sennas), Agent Sank 


cmBANfO 


Traded Options Software 




Compagnie Generate des Etablissements Michelin 


Consolidated Results, 1st half 1994 


A steady improvement in lyre business during the first six months o/I994 and continuing application of the plan for cost reductions 
of FF3.5 hi Dion, translated into a net profit ofFF43 4 million for die first half-year. 

The increase ofFF1.4 billion in trading profit gives a good indication of the progress achieved to date. 

In North America, market growth was sustained, more pronounced for original equipment supplies than for 
replacemen L 

In Europe, following the market collapse in 1993, the expected recovery has been clearly apparent in the original 
equipment markets. Replacement marke ts have progressed to a lesserextentbuta new commercial strategy has enabled 
Michelin to increase sales in thar area. The results, particularly due to the launch of the “Classic", “Energy" and “Pilot" 
tyres, have confirmed that the strategy has been successful in meeting increasingly diverse customer demand. 


Financial results 

Sales turnover for the first half was up by 8.7% compared 
to the first half of 1993. This was due, mainly to increased 
sales volume. 

Trading profit was FF2,193 million, 6.6% of sales 
turnover and a marked improvement over the first six 
months of last year. 

Net financial charges, expressed at constant exchange 
parities and excluding exceptional items, were almost 
30% below those of the first half 1993. This significant 
reduction was attributable mainly to a drop in the average 
rate of interest payable, but also to a modest fall in 
financial debt. 

Funds generated from operations were FF2.3 billion. 
Consolidated Profit was FF434 million, after the 
provision of FF3I0 million to cover the costs involved 
in reducing the headcount in France. 


Consolidated profit and loss account, 
main items 


FF million 

Jan June 
1995 

Jan June 
1994 

Sales turnover 

50,617 

33.279 

Trading profit 

793 

2.193 

Net financial charges 

(1.459) 

(1.001) 

Ordinary profit (loss) 

1666) 

1,192 

Extraordinary profit (loss) 

12.55H 

l25bl 

Depredation of goodwill 

t6l) 

(541 

Tax on profit 

1187) 

(4601 

Share of profit t loss) of associates 

10 

12 

Profit (loss) 

(3.455) 

434 

of which: Croup 

<3.1871 

410 

Minority interests 

i 2 pSi 

24 


Trends and outlook 

At mid-year, implementation of the plan for cast reductions of FF3.5 billion was proceeding according to schedule. 
The positive effects of the plan,reinforced by favourable trends in tyre markets, were the principal factors underlying the 
improvement in the first half financial results. Operating costs were down, financial expenses were rcduced.and there 

was a sizeable improvement in ordinary profit. 

Progress that has been made until now is only partial and is just the beginning of the strengthening of 
Michelin's financial position.The plan for cost reductions remains a priority, in order to ensure a lasting recovery. 
The economic upturn in Europe, already evident in the original equipment tyre market, needs to be confirmed in due 
course by a more marked improvement in the replacement market. 


NOTICE TO HOUSS OP 
EUROPEAN DEPOSITARY RECOPTS 
(EDR-ttlM 

SHARP CORPORATION 

NOTICE t& HEREBY GIVEN Bn a cash 
Addend ifl be peld to sh a iahatows 
of record dots September 3a 1994. 
Funhwmoro, It tan Man doctored trial 
ha shame «■ t» traded ax -dvldend on 
ha Japanese Sack Exchanges with 
rftoct tan September 27. 199*. 

Subject to approval of he Attend. a 
further nafce wN tie pufclshed. after 
rocalpttfhadttandbylhoDepoNtary. 
■taring he amount and actual Ate ol 
payment at sutfi Addend together mh 
he procedure to be tatarnd tor 
ofatalnJnaoBvfmtf. 

CoqSStoaiwai be used tor cofeeflen 
at Ms Attend. 


CITIBANK. N A. London, 
sopunwei, 1004 OopasBvy 


m 


N&P_ 

£150.000,000 

Floating Race Notes due 1997 
In accordance with the provisions of 
the Notes, notice is hereby given 
that the Rate of Interest for the 
three month period ending 19th 
December, 1994 has been fixed at 
6.05469% per annum- The interest 
accruing for such three month 
period will be £150.95 per £10,000 
Bearer Note, and £1,509.53 per 
£100,000 Bearer Note, on 19th 
December. 1994 agamsi presentation 
of Coupon No. 9. 

Union Bank of Switzerland 
London Brandi Agent Bank 
19lh September. 19M 


Halifax Building Society 

USS 500,000,000 
Floating rate notes due 1999 

Notice is hereby given that 
the notes will bear Interest at 
5* per annum from 8 
September 1994 to 8 
December 1994. Interest 
payable on 8 December 1994 
will amount to USt 12.64 per 
USS1, 000 note. USS 1 26 39 per 
USS10.000 note and 
USSI.263.89 per USS 100,000 
note. 

Agent- Morgan Guaranty 
Trust Company 

JPMorg&n 


HMC MORTGAGE NOTES 6 PLC 
£140.000.000 

Class A 
and 

£7,000.000 

Class B 

Mortgage Backed Rooting Rate 
Notes due September 2030 
Nonce is herrny given that for the 
imoiesi Period from September 19. 
19W » December 19. t994 he 
Class A Notes and Class B Notes 
wll carry Merest rales Ol 6.11719% 
and 6.88719% reepeenwrty The 
tnieiesi payable on he relevant 
merest payment daw. December 
19. 1994 tor he Class A Kales will 
DO £1.378 34 per £90.370 nominal 
amount, and for he Class B Noras 
will CW C1.712.D9 per £100.000 
nominal a mourn. 

By: The Chase Manhattan Bank, NJL 
London, Again Bank 
September 21. 1994 




\ 




IS 


\ 


SEniChem 


Invitation to offer to purchase shares of Tecnostampaggi SpA 
(ex Faini SpA) operating in the plastic moulding sector 


EniChem SpA, headquartered in Milan (Italy). Piazza della 
RepubbOca n.16, with authorized share capital of Lit 4,488 billion 
and subscribed share capital of Lit 1,496 billion, registered with 
the Milan Court Companies' Registry no. 293559, intends to 
receive and evaluate offers on behalf of a sole party for acquisition 
of 100% of the issued share capital of Tecnostampaggi SpA 
The company, with offices and facilities at Bovezzo (Brescia * 
Italy) and operating in the sector of 'plastic injection moulding”, 
designs, manufactures and sells articles used predominantly in 
electrical household appliances and In technical applications. 
Tecnostampaggi SpA achieved sales of approximately Lit. 26 
billion in 1993. The company's workforce was 110 employees at 
31 December 1993. 

For the purpose of this transaction EniChem SpA has engaged 
the services of PASFIN Servizi Rnanzlari SpA (”PASFlN a ). to 
whom interested parties should direct all enquiries. The relevant 
persons at PASFIN can be contacted at the following address: 

PASFIN Servizi Finanzlari SpA 

Largo Richlni, € - 20122 Milan, Italy 

Tel. +39-2.58374362 

Fax +39.2.5831 4808 

Mr. E. Morpurgo 

Mr. R. Magnoni 

Mr. D. Pilchard 

The present announcement Is directed to limited liability 
companies which should register their interest in writing to 
PASFIN on or before September 30, 1994, by letter or fax, and 
applying for an information memorandum specifically prepared 
forthe sale. 

EniChem SpA reserves the right, at its sole discretion and without 
assigning any reason, to refrain from providing the information 
memorandum to any interested party. 

The information memorandum will be sent after a confidentiality 
agreement has been validly signed by an officer or legal 


representative of the company and returned to PASFIN no later 
than October 14, 1994. 

Together with the confidentiality agreement, interested parties 
must send financial statements for the last three years, a 
description of its activities and of the industrial and economic 
rationale forthe investment 

Brokers or agents of any kind must disclose the identity of the 
company they represent and also provide the aforesaid 
information. 

This represents an invitation to offer but doe* not 
represent either a pub lire offer ex art. 1336 of the Italian 
Civil Code, or a solicitation to public saving ex art. 1/18 
of Italian law no. 216/74, including nH successive 
modifications and integr ati ons thereto. Neither this 
inv ita tion, nor the receipt of any offers by EniChem SpA 
wig create, with re spe ct to EniChem SpA, any obligation 
or commitment to sell to any bidder and, with respect to 
any bidder, any right to demand any p er f o rm ance 
w ha ts o ever by EmChem SpA (including, without 
limitation, the payment of any brokerage or advisory fees 
or expenses). EniChem SpA also reserves the right to 
terminate at any time and without any reason or 
explanation whatsoever any and all discussions regarding 
the possible sale of Ibcnostampaggi SpA, with absolutely 
no liability to any third party regardless of the status or 
stage of such discussions. 

Whilst every reasonable effort has bean made to ensure that this 
announcement accurately reflects the Italian text of the 
announcement appearing on ”11 Sole 24 Ore” and other ttafian 
newspapers on September 27, 1994 in the event of any discrepancy 
the Italian text shall prevafL 

This advertisement and the sale procedure are subject to Italian 
law. In case of any controversy related to the above, the Court 
of Milan (Italy} shall have sole jurisdiction. 


EXCHANGE NOTICE 
tar 


Republica Federativa do Brasil 

USD Ptioso-bi Series MrL-1 due 2004 
USD Phase-in Series P-B-L-l due 2004 
USD Discount Y-L-1 due 2024 
USD Phase-In Series D-L-1 due 2004 
Pursuant to Section 1i( 


i of the Par Bond and Discount Bond Fiscal Agency 
Agreement Dated as of November 29. 1993 among RepubOca Federativa do Bras* 
(the ’Issuer), and The Chase Manhattan Bank (National Association), as Fiscal 
Agent. Authenticating Agent Paying Agent, Registrar. Transfer Agent. Convention 
Agent and Calculation Agent (the 'Focal A gem") and Chase Manhattan Bank 
Luxembourg S. A., as Paying Agent and Transfer Agent (the "Fiscal Agency 
Agreemann (terms not denned herein are used as in the Fiscal Agency 
Agreement), notice Hr hereby given to the Bondholders that the Issuer has 
delvsrad to the Fiscal Agent a Dafeaty Notice, which states among other things, 
that it intends to exchange on October 17. 1994 the toOowing Treatable Series ol 
Bonds lor the corresponding Resulting Series of Bonds: 


Treatable Series 
USD Phase-In Series P-A-L-l 
USD Phase-In Series P-B-L-1 
USD Discount Y-L-1 
USD Phase-In Series D-L-1 


Resulting Series 

USO Par Series Y-L-4 
USD Par Series Z-L 
USO Discount Series Z-L 
USD Discount Series Z-L 


Interest on the Treatable Series ol Bonds shad cease to accrue from the 
Interest Payment Date it the Bonds ol such Treatable Series are exchanged lor 
Bonds of the appl i cable Resulting Series pursuant to Section 11(b) and the interest 
due and payable thereunder is paid in iul on such (nearest Payment Data 
REPUBLICA FEDERATIVA DO BRASIL 
fly THE CHASE MANHATTAN BANK (Notional Association), 

Fiscal Agont 

Dated: September 21, 1994 


MAKE SURE YOU 
UNDERSTAND THE CHANGES 
AND OPPORTUNITIES IN 
EASTERN EUROPE 


Read the following publications from the Financial Times. 

East European Markets 

uadaifenc Bull et in* and The Changing Umon' 

■ 

Finance East Europe 
East European Business Law 
East European Insurance Report 
East European Energy Report 

For a Free sample copy 

Plea* coo lad; Simi Banttl. 

Financial Times Newsletters, Marketing Department. Third Floor, 
Number One Suuihwark Bridge. London SEI 9HL, England. 
Tel- 1+ 44 71 > 5P3 3705 Fax: n- 44 71 1 873 3935 

n— w ».|milr.dHiMI>|«»ai to l i fi Wn frB imfl m i Ihl | 


FINANCIAL TIMES 

X ’ -.ll J UTf 


Rremrml N». V8W& VAT Rrtftotnlhxi No CB 77S $.171 21 


■ SEI SHI-RilcUnt 


I.T.C. LIMITED 
NOTICE 

ADJUSTMENT TO EXERCISE PRICE OF WARRANTS 

Th» is lunher m not Notice dated 20th July, l<H4 advising that the issue of Boobs Shares 
by the Company Ins been approved by [he Members at In Annual Ocacral Meeting held on 
2thh inly, i'*W and din Mb October. 1994 has been fixed as the Record Dale Par this 
purpose by l he Buanl o( Directors. 

NOTICE IS HER mY GIVEN Ifaal consequent upon Ihc boons issue while the 
Warrant holder: are oil! rapincd to pay USS 15 JO per Warrant ex e rcised. Uw entitlement of 
WaimmliQUcrs for every Warrant held by l hem will be ns billows: 

a) A WarranlbuMeT excn.-niog the Warrant on or before bib October, 1994 will be entitled 
to nnc Bomu Wvrcni GDR which will be in addition m rice Warrant GDK allotted on 
payment id exercise puce of USS 1S-XL 

bl A Wamaiholdei cxcn.-eing the Warrant after 6tfa October. 1994 will be reqmrcd to pay 
USS 1 5 JO and will be entitled to two W arran t GDRs. 

This Notice is being Risen in pursuance of Clouse 5 read wjib Clause 9 of Terms and 
Cntuhtion* or Warrants' .if ibe Offering GruuLar dated IJih October. 19*0. read with the 
rev iscd Offering Ciicnlar timed 2 1st December, 1993. relating to adjustment of exetcuc 
price of Warranty 

Registered OfTWe: LT.C. LIMITED 

LTC Limited 
Virginia Hum 
37 Chra-ringhu 
Cakvna - 70mril 
INDIA 

Dated: I2d> September. 1994 


R.K. SING HI 
Amt. Secretory 


X 


Mass Transit Railway Corporation 

t A cixpuroaixi c&ubluhnl by the Mxu Transit 
Railway Cutpuniion Ordinance nt Hung Kong] 

HK$3,0O0,0QQ,000 

!■•*■ un n/unvleiu umt'uii in US. OotUirtl 

Medium Tern Note Programme 
HK$40.(NNL000 Floating Rate Notes due 1995 

Knee w hereby giivn that the HIBOR applicable to the subject nates 

for the period from September 15. 1994 to 

December 15. /<W is 4.9375 p.a.. The inclusive rate 

is S. 1075 p.a.. Coupon amount payable December 15. 1994 per 

HK5500.000 note u HKS6.466.6l. 

Morgan Guaranty Trust Company of New York Hong 
Kong 

As HK Reference Agent 

JPMorgan 


^CITY Is! 


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AB Svensk Exportkredit 

(SuyJAj. Ejp-it ClMH r Corfrnnmwi] 
flnonporoied ni TTir fjnj-J-mi .if 
Strata uidi IrmireJIwWtn) 

SKR 500,000,000 
Inverse Flouting Ran 
Notes due 1998 

For the Inrcrest Period from die 
Rrh September, 1994 to rhe 
!7tK Mutch, 1995 the Notes 
will cany 4 Rate of Interest of 
5.2490% per annum. 

The Coupon Amount per SKR 
10,000 Note will be SKR 
524.90, per SKR 100,000 Note 
will be SKR 5,249.00 parable 
on I7di March, 1995. 

Load tm the Laumboure onJ Smddmtm 
Srori Eichmittn 


QBnikcnThat 


Company , London Agent Bank 



MCKMin [- 


I InynfnmuJ j ni mgmeral in IrtLml 
under the Biublme Suorurt ,Vr. I9V7 
nidi raystit nl numbn 3B) 

First National 
BuOding Society 

£25,000,000 

Floating Rate Permanent 
Interest Bearing Shares 
(PIB5) 

Fur the Interest PenoJ Rrh 
Seprembcr, 1994 m 20th March, 
1995 the P1BS will carry an 
Interest Rare of S.9iil75% per 
annum. The Interne Amount 
per £1.000 will be £44.bl pay- 
able on the 20rh March. WW. 

Lend wi The lnirm.ni.xul Si . 1 t 
Euluninid 'hel'nitedKifwlmai J 
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FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Optus plans broadband network 




By Nikki Taft In Sydney 

Continental Cablevision. the 
US cable company, Mr Kerry 
Packer's Nine Network, Aus- 
tralia’s leading commercial TV 
company, and the smaller 
Seven Network are joining 
forces with Optus, the national 
telecommunications group, in 
a joint venture to develop a 
broadband cable network. 

The venture will spend more 
thar\ AS3bn (US$2 -2hn) during 

the next four years. 

The cable system aims to 
deliver local telephone calls, 
pay television and - by 1998 - 
interactive services to 50 per 


cent of Australian homes. The 
initial services, which will 
include pay-TV and local tele- 
phony, are expected during the 
third quarter of 1995. 

Funding requirements for 
the joint venture company, to 
be called Optus Vision, are put 
at about AJ2.5bn. Part will 
come from debt financing. Yes- 
terday, Mr Bob Mansfield, 
Optus chief executive, 
suggested that the equity 
investment by the four part- 
ners could amount to A|lbn- 
plus during Che first two years. 

Optus will have a 35 per cent 
interest in the joint venture 
company, and Continental 


Cablevision, 30 per cent Nine 
Network, which earlier this 
year agreed to subscribe 
A53l8m for a 15 per cent stake 
in Optus, will take a 20 per 
cent holding. Seven Network 
will have 15 pa- cent interest 

Seven’s involvement is con- 
troversial. Its chief sharehold- 
ers include Mr Rupert Mur- 
doch's News Corporation and 
the government-owned Telstra 
telecommunications group, 
both developing rival cable 
plans. The company said that 
its decision was In the interest 
of all its shareholders. 

Construction of the network 
Is due, and much of it will 


involve aerial, rather than 
underground, cabling. Optus 
conceded that local authorities 
were still being approached for 
permission but announced co- 
operative agreements with two 
electricity suppliers. 

Optus promises to be the 
first network to deliver phone 
calls exclusively over a fibre- 
coaxial system. The company 
competes with Telstra in the 
long-distance market, and with 
Telstra and Vodaphone in the 
cellular phone market Owned 
by several corporate and insti- 
tutional sh a reholders, it plans 
to float on the stock market 
next year. 


Ai 


Nikki Tait outlines an energetic venture racing to provide 
a pay-TV service by the beginning of 1995 

Australis pins 
high subscription 
hopes to satellite 


nyone trying to locate 
the Sydney headquar- 
ters of Australis Media 
should look out for the limos. 

Australia's would-be pay-TV 
company recently moved to a 
central docklands area, and the 
big. smart cars parked outside 
look startlingly incongruous 
alongside terraced houses and 
building sites. 

But few, if any, belong to 
Australis. Rather they are tes- 
tament to a stream of Ameri- 
can-based programming execu- 
tives passing through the 
company's doors as it tries to 
get Australia's first significant 
pay-TV service up and running 
by the beginning of 1995. 

There is no mistaking the 
energy which surrounds this 
effort Employees debate tech- 
nical questions in the lift. Mr 
Neil Gamble, chief executive, 
exudes confidence. The meet- 
ings seem incessant “It’s a day 
and night job at present” says 
Mr Gamble. “The time zones 
start in the morning with 
America and end in the even- 
ing with London." 

But the big question is 
whether a new company can 
amage the technical, financial 
and marketing s kills necessary 
to produce a saleable package 
in such a short time - and. 
simultaneously, play the com- 
plex political game which sur- 
rounds the media business in 
Australia. There are. after all, 
some formidable entrenched 
competitors, in the shape erf Mr 
Kerry Packer, owner of Austra- 
lia's biggest commercial TV 
network, and Mr Rupert Mur- 
doch, whose News Corporation 
has TV and newspaper inter- 
ests across three continents. 

Two years ago. Australis was 
no more than an idea. The 
company began as the brain- 
child of Mr Stephen Cosser, a 
former chief executive of the 
Channel 10 network, and was 
officially incorporated in April 
1993 to hold multipoint distri- 
bution systems (MDS) licences 
for the Sydney and Melbourne 
markets. 

An MDS provides local distri- 
bution of a service from a cen- 
tral satellite receiving point to 
individual customers. 

Interests now included 


within the Australis group 
launched Newsvision, a 24- 
hour news service put together 
for the hotel market, in June 
1992. Teleitalia, an Italian lan- 
guage service, followed in 1993. 
More recently. Chinese and 
Arabic services have been 
added as more generally avail- 
able programming. The sub- 
scription base for all four, how- 
ever. is small. 

Australis, having recruited 
some prominent members of 
Australia's business commu- 
nity to its board, floated on the 
stock market a year ago. But 
its profile changed dramatic- 
ally in November, when it 
acquired one of the two com- 
mercially-available satellite 
licences. These allow delivery 
of broadcast subscription ser- 
vices to most of Australia via 
an Optus satellite - a much 
bigger proposition. The 
licences bad been auctioned off 
by the federal government ear- 
lier in 1993, and the big exist- 
ing media operators had been 
outbid. 

Australis then strengthened 
its pay-TV delivery position 
by scooping up more MDS 
licences in another federal auc- 
tion, held this year. Initially at 
least, it plans to use this mix- 
ture of satellite and MDS to get 
programmes into people's 
homes, thus obviating the need 
for satellite dishes at receiving 
premises. 


B 


ut time pressures on 
Australis are now 
'mounting. Australia’s 
small population base, of about 
18m people, means that the 
country is unlikely to sustain 
many pay-TV operators. 
Within two or three years, 
alternative delivery mecha- 
nisms - notably cable - will 
probably be widely available. 

Publicly, Mr Gamble Is 


ambivalent about the threat. 
He claims, with some justifica- 
tion. that Australia’s geogra- 
phy gives satellite an inherent 
advantage. But he adds: "Nev- 
ertheless, cable will be here, 
and cable is a long-term tech- 
nology and we’re not running 
it down. We think it is an 
important technology and 
we’re going to use it - but we 
think that the window which 
[satellite 1 provides for us in the 
next couple of years is so sub- 
stantial that we can have a 
major foothold by 1997.” 

Assuming, that is. Australis 
can get an attractive program- 
ming package into the market- 
place. Setting up all the pro- 
gramming agreements, service 
facilities, financial and legal 
structures, is a Herculean task. 

The target is a “bundled” 10- 
channel package, covering 
films, sport, news and general 
enter tainment, ‘There's going 
to be some form of gold, diver 
and bronze packaging, priced 
accordingly. The most expen- 
sive will be the sports and first 
release movie channels.” says 
Mr Gamble. 

But, to date, Australis’ main 
programming announcement 
has concerned sport only. A 
joint venture has been set up 
with Liberty Sports/Prime, 
which in turn is part of the 
giant TGI cable group in the 
US. This has acquired rights to 
next February’s Australia/West 
Indies Test cricket series, the 
Rugby League World Cup in 
England later in 1995, and a 
solid spread of other events. 

Elsewhere, by contrast, pro- 
gramming details remain scant 
- although TCI, which has an 
investment in Australis and a 
senior executive on the Austra- 
lian company's board, has also 
entered a joint venture to 
develop a movie channel 

Meantime, the 10-channel 


b undling arran gement requires 
agreement between all three 
licence-holders - Australis 
(with four channels). Continen- 
tal Century (four), and the 
Australian Broadcasting Cor- 
poration (two) - and formal 
approval by Austr&ll's Trade- 
Practices Commission. 

On other fronts, there are 
similar signs tfrat Australis Is 
edging towards its goal, but 
still has a considerable dis- 
tance to cover. _ 

A customer service centre 
site has been selected in 
Adelaide, for example, bringing 
financial assistance from the 
South Australian authorities, 
but staff have yet to he 
recruited and trained. Agree- 
ment has also been reached for 
the supply of reception equip- 
ment, and 200,000 units 
ordered. 


T 


here is the question of 
money. Australis - 
whose institutional 
shareholders include the Aus- 
tralian Mutual Provident, 
Bankers Trust, J.P. Morgan, 
and C i g na, the US insurer - 
raised AS35m (US$25-7m) when 
it came to the stock market It 
secured another A$l75.5m by a 
share and debenture placing. 
But the sport venture cost has 
been put at up to ASSOm (split 
50-50 with Liberty/Prime), and 
the MDS licences cost A$66m. 
The operating loss for the. 12 
months to eud-June was more 
than A$i9m. 

Mr Gamble's aim is to attract 
lm subscribers in the first 
three years. “I have yet to find 
anyone who, once they under- 
stand what it’s all about, 
doesn't say ‘Where do I sign?"' 
he says. “So we think a million 
is reasonable. Remember, 
we’re 10 years behind the US 
schedule, we're four or five 
years behind the UK, we’re 
four years behind New Zea- 
land, and we're eight years 
behind South Africa." 

If that target is attained, 
Australis' chief executive pre- 
dicts that the company could 
be profitable by “the back of 
the third year". 

“We don’t clean out all the 
losses, but the curve changes 
in year three," he says. 


Jardine Strategic rises 33% 


By Louise Lucas 
in Hong Kong 

Jardine Strategic Holdings, the 
holding company of the Jar- 
dine Matheson group, yester- 
day reported a 33 per cent 
increase in net profits to 
US$161.3m from $121.3m last 
year. 

These are likely to be JSITs 
last set of results reported out 
of Hong Kong, as it is with- 
drawing its secondary listing 
from the colony’s exchange on 
December 3L 

The figures are after prefer- 
ence dividends, which came to 


319.2m, but exclude an extraor- 
dinary item of 368.3m accrued 
in first half 1993 from the sale 
of an investment property by 
Hongkong Land. Shipping out 
an exceptional gain from a 
property sale made by Dairy 
Farm in the first half of t h i s 
year, the year-on-year earnings 
rise shrinks to 19 per cent 
Mr Henry Keswick, chair- 
man, said: “The businesses in 
which we hold our strategic 
stakes are financially strong 
and, with their operations 
based mainly in the expanding 
markets of the Asia-Pacific 
region, the outlook is for many 


years of further development 
The full year should see higher 
earnings than in 1993, and the 
longer term perspective 
remains encouraging.” 

Gamings per share on a fully 
diluted basis rose 28 per cent to 
20.40 cents from 15.97 cents, 
while directors are recom- 
mending a dividend of 4.60 
cents, up 15 per cent from last 
year’s 4.00 cents payout 

Mr Keswick said JSH was 
read; to acquire smaller stakes 
in companies with promising 
prospects and links, whether 
geographical or business, to 
the group. 


Suzuki, Mazda to swap products 


By Kevin Done, 

Motor Industry CkHTespontJent 

Suzuki and Mazda, two 
Japanese carmakers, have 
entered negotiations to 
exchange products, a growing 
trend in the Japanese motor 
industry, where manufacturers 
are under severe pressure to 
cut the costs of new product 
development 

Suzuki is considering the 
purchase of two-litre diesel 
engines from Mazda for use in 
its Suzuki Escudo range of 
four-wheel drive sports/utility 
vehicles. At the same time, 
Suzuki may supply this vehicle 
to Mazda for sale under the 
Mazda badge. 


In earlier moves the loss- 
making Isuzu group decided to 
withdraw from car manufac- 
turing to concentrate on 
four-wheel drive sports/utility 
vehicles and trucks. 

It is now marketing a range 
of Honda cars under its own 
badge in Japan, while Honda is 
selling Isuzu sports/ utility 
vehicles under the Honda 
badge in the US and Japan. 

Suzuki announced earlier 
this month that it bad agreed 
with Fuji Heavy Industries to 
supply a four-wheel drive ver- 
sion of its Hungarian-built 
Suzuki Swift small car range 
for sale in Europe under Fuji 
Heavy Industries’ Subaru 
brand-name. 


• Meanwhile, Nissan Motor, 
Nissan Diesel and Isuzu said 
they would begin supplying 
commercial vehicles to each 
other from May next year. 
Nissan, which has suffered 
heavy losses for two years, also 
announced that it was to trans- 
fer 60 assembly-line workers to 
Nissan Diesel, its truck manu- 
facturing affiliate, for six 
months from October. 

Nissan has already seconded 
100 workers to Fuji Heavy 
Industries and 250 workers to 
Isuzu Motors. 

Nissan's domestic vehicle 
production fell by 19.9 per cent 
year-on-year in August to 
96,517, the 26th successive 
monthly decline. 


Sasol plans 

polymer 

listing 

Sasol, the South African 
synthetic fuels and 
petrochemicals group, plans to 
list Polifin, Us new polymer 
Joint venture with AECI, on 
the Johannesburg stock 
exchange some time next year, 
Reuter reports from 
Johannesburg. 

Hr Paul Kruger, Sasol 
managing director, said after 
releasing improved annual 
results that between 10 and 20 
per cent of Pollfln’s shares 
would be listed. 

He said also that Sasol 
“would be prepared to come 
down to an equal 
shareholding” with AECL 

Sasol currently owns 60 per 
cent and AECI 40 per cent of 
Polifin. 

“Things are going extremely 
well with Polifin,” said Mr 
Johannes Stegmann, Sasol 
chairman, who declined to 
give figures. 

In the year to end-June. 
Sasol saw Income before 
taxation rise by 83.2 per cent 
to R2.45bn <$660 m) from 
R1.84bn a year earlier on 
turnover 10.9 per cent ahead 
at R9.S4bn compared with 
R8JS8bn previously. 

Attributable profit advanced 
14.9 per cent tp Rl Jbn from 
R1.3 bn. 

Earnings per share were op 
by 147 per cent to 2642 cents, 
compared with 230.3 cents. 


Holden Automotive ahead at A$I62.6m 


By Our Financial Staff 

Holden Automotive, the 
Australian carmaker, saw net 
profit jump to A$162.6m 
(US$1 19.5m) in the year to 
June 30 from A$98.2m in 
1992-93. The company said the 
return on sales of 6.5 per cent 
was the highest since 1389-90. 
“A result like this doesn't 


come around every year but 
when it does, it seta a more 
secure platform for our future, 
and evens out the low spots," 
Mr Bill Hamel, rhahman and 
managing director, said. 

Holden is a subsidiary of 
United Australian Automotive 
Industries, owned equally by 
General Motors of the US and 
Toyoto Motor of Japan. 


Holden said the 1993-94 per- 
formance confirmed its confi- 
dence in Australia and in 
investments such as its 
A$l50m paint facility. It also 
prepared the group for essen- 
tial future investments. The 
company has said it needs an 
annual profit of A$l00m in 
order to maintain its competi- 
tive position. 


Revenues for the year rose to 
Af2J>lbn from AilRZbn a year 
earlier, reflecting the market 
acceptance of Commodore cars 
launched in July 1993, and a 
return of economic and con- 
sumer confidence. Vehicle 
sales grew 15.9 per cent to 
109,371 in 1993-94 in a market 
which grew 6.6 per cent to 
581.702. 








Yon want to attract a world of investors — but only of a certain stripe. 


Finding enthusiastic investors for your privatisation is important. Finding serious investors is 
imperative. For they are the ones who will form an ideal shareholder base — global, diverse, stable yet 
capable of growth. 

That’s why you selected a firm that brought you a comprehensive plan for identifying the right 
mix of investors. They began by coordinating a global syndicate which would provide commitment 
and credibility to your offering in local markets around the world. 

Each syndicate member had the responsibility to pinpoint and gather historic data on all 
potential investors. Then, working closely with you and the regional lead managers, the firm provided 
objective criteria and even-handed judgement in allocating shares. This assures the syndicate members 
of the fairness they want. Which, in mm, assures you of the strong global distribution you need. 

You’re now confident your privatisation will succeed. Because it is attracting a core group of 
investors who possess that one most important attribute. 

A genuine appetite for your shares. 




<r 


MORGAN STANLEY 


, u V i nndon Los Annin Luirmbourg Madrid Melbourne Milan Moscow New York Pails San Francisco Seoul Shanghai Singapore Taipei Tokyo Toronto Zurich 

Bombay Chicago Frankluri Hong RD0 8 e 













20 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 1994 


INTERNATIONAL CAPITAL MARKETS 


US Treasuries retreat amid concern over dollar 


By Frank McGurty In New York 
and Conner Middleman! 
in London 

US Treasury bonds retreated 
yesterday morning amid con- 
cern over the value of the dol- 
lar and an uncertain, outlook 
on monetary policy. 

By midday, the benchmark 
30-year government bond was 
3 lower at 963, with the yield 
rising to 7.794 per cent. At the 
short end. the two-year note 
was down A at 99U. to yield 
6.404 per cent. 

A combination of subtle fac- 
tors served to push the market 
lower during a session during 
which no first-tier economic 
news was released. 

Traders reported a heavy 
wave of selling by foreign 
investors concerned by the 
increasing likelihood that the 
Federal Reserve will lift 
short-term interest rates before 
November. 


Many investors are expecting 
an early move by the Fed in 
the light of Friday's strong 
industrial production and 
capacity utilisation figures. 
The risk of tighter credit condi- 
tions appears to be persuading 
many of them to shift to over- 
seas bond markets. 

GOVERNMENT 

BONDS 

Yesterday’s trade data 
reinforced the thinking behind 
this strategy. The Commerce 
Department reported that the 
July deficit in goods and ser- 
vices had widened to $Ubn, 
against expectations of S9-5bn. 

The trend raises fresh con- 
cern over the value of the dol- 
lar, especially in advance of an 
upcoming round of US-Japa- 
nese trade talks. Though the 
dollar showed only limited 
weakness yesterday, a sus- 


tained sell-off in the coming 
weeks would make US-denomi- 
nated government securities 
less attractive to foreign inves- 
tors. 

Many of them were ta k ing 
no chances yesterday. Traders 
took advantage of the rela- 
tively steady conditions pre- 
vailing sinm the week began to 
unload more of their holdings. 
As a result, the yield bid on 
the long bond crept a little 
closer to the 8.00 per cent leveL 

■ European gnuur mnnPTit bonds 
had another volatile day, w eak- 
ening in the morning and 
recouping some of their losses 
in the afternoon. 

Rumours that German 
August M3 money supply data, 
due today, would be worse 
than expected pressured prices 
across Europe. Weak US Trea- 
suries and Far-Eastern selling 
ahead of the fiscal half-year- 
end were a further dampener. 


Market sentiment remains 
gloomy, with dealers continu- 
ing to worry about rising Euro- 
pean interest rates, while most 
end-investors remain sidelined, 
running defensive positions. 

Rnnfl chart terhniralg a Tan are 

negative, pointing to continued 
bearish sentiment. 

■ The German bund market 
responded with cautious opti- 
mism to the Bundesbank's 
announcement that it would 
auction a 10-year floating-rate 
government bond next week. 

The final terms of the issue, 
whose coupon will be linked to 
the three-month Frankfurt 
Interbank Rate (Fibor), will be 
set by the German bond con- 
sortium on Tuesday, when the 
first portion of bonds will be 
placed. A second tranche will 
be auctioned the next day. 

Some observers argued that 
the move reflects a desperate 
scramble for funding alterna- 


tives by a central bank faced 
with a huge borrowing require- 
ment in the Anal quarter. 

“When governments start 
imniing floating-rate bonds, it 
looks like an act of despera- 
tion, " said Mr Nigel Richard- 
son of Yamaichi International. 

*Tf you want to be charitable, 
you can call it a flexible 
approach to debt management, 
but I fed it reflects the accep- 
tance of a vary weak market,** 
said Mr George Magnus of 
S.G. Warburg Securities. 

However, others welcomed 
the move, which they said 
would take some of the fund- 
ing burden off the long end of 
the yield curve. “They may not 
want to add to the backlog of 
10-year supply, which is posi- 
tive for the market and could 
help the [yield] curve to flat- 
ten,” said one dealer. 

Many dealers were confident 
the paper would meet strong 
demand from German money 


market funds, which became 
legal on August 1. 

■ UK gilts had another volatile 
day, falling sharply in the 

morning but recovering in the 

afternoon to dose only slightly 

weaker. 

The Bank of England 
announced it would auction 
£2bn of gflts due 2005 with a 
coupon of per cent next 
Wednesday. The stock is the 
first offering of next year's 10- 
year benchmark. The $2bn size 
was smaller than some expec- 
ted, lending some support to 
the 10-year sector in the after- 
noon. 

Much of the early pressure 
on gflts ramg from the short 
t»wri of the yield curve, amid 
fears of further monetary tight- 
ening after last week’s base 
rate increase. The September 
three-month sterling futures 
contract on Uffe fell 0.11 to 
94.04. 


Strong demand for 
new German funds 




World Bank to follow $1.5bn 
global issue with DM offering 


NEW INTERNATIONAL BOND ISSUES 


By Graham Bowfey 

The World Bank yesterday 
launched its long-awaited 
Sl^bn global offering of five- 
year fixed-rate bonds, priced to 
yield nine basis points over US 
government bonds. 

The offering, the bank's first 
in the dollar market since Sep- 
tember 1993. met firm demand, 
lead managers UBS and Leh- 
man Brothers said, with 45 per 
cent of the deal sold in the US, 
33 per cent in Europe, and 22 
per cent in Asia Pacific. 

The bank intends to follow 
up the deal with a global 
D-Mark issue later this year 
and a further dollar global 
offering in the first half of 1994. 
Officials said. 

“We are tentatively consider- 
ing a D-Mark global offering in 


WORLD BOND PRICES 


BENCHMARK GOVERNMENT BONDS 


Australia 
Mohan 
Canada ■ 

Daranarfc 

Fiance BTAN 
OAT 

Germany Bund 
Italy 

Japan No 119 

Netherlands 
Spain 
UK Gits 


the DM2bn range with a five- 
year maturity but this depends 
on market conditions and we 
are not ruling out a 10-year 
bond," a bank official said. The 
D-Mark offering would be 
launched in October at the ear- 
liest. 

INTERNATIONAL 

BONDS 

The bank estimates that it 
will raise a total of around 
SlObn in the 199495 fiscal year, 
which runs to the end of June. 
It raised $9bn in the previous 
fiscal year, $lbn below its ini- 
tial target 

Syndicate managers said the 
deal was a success. “All the 
bonds have not been sold, but 
that is the nature of the mar- 


ket at the moment,” said one 
syndicate manager. 

However, some syndicate 
managers said that many of 
the new bonds had been 
bought by investors who had 
sold pvigttng bond holdings. 

“There was tittle new money 
around.” said one dealer. 
“There were some very aggres- 
sive switch trades done by 
underwriters rather than out- 
right sales in order to get the 
new issue sold.” 

The spread held at 9 basis 
points after the syndicate h»fl 
broken. 

In the sterling sector, the 
Halifax Building Society 
launched a £250m three-year 
offering, priced to yield 30 
basis points over UK govern- 
ment bonds. 

The offering was prompted 


US DOLLARS 
WortS Bank 

HACCMT 1, Ctan AM* 
Yaauda Trust Asia P ac -fttt 
Berta la Pravtada da Cordoba 


99.471 R Sep . 1999 (L2SR +9(6X10-99} Lahman Brothers/ UBS 

(Si) Doc.1999 - - Goldman Sacha & Co. 

102.00 Sep6O04 ZOO Nomrea ft a a na t i onal 

99J0R Sep. 1996 1675R +475(5tt*>-96} YamaJcN Irffl^Europ^ 


By Amfraw Fisher in Frankfort 

German money market fluids 
could attract investment of as 
much as DMSObn by Che end of 
this year, Ear more than previ- 
ously forecast, said Mr Martin 
Kohlhaussen. chief executive 
of Commerabank. 

The funds, which invest 
exclusively in short-term 
instruments such as commer- 
cial paper, certificates of 
deposit, and short-dated bonds, 
were first allowed in Germany 
from August under the latest 
financial markets law. 

To date, around 10 banks and 
investment companies have 
announced money market 
ftrnds for German Investors. 
Other countries, such as 
France and the US. have had 
such funds for some time. 

Mr TCnhihanaspn said Com- 
merzbank's own funds - based 
in Luxembourg until it 
receives regulatory approval to 
operate them in Germany - 
had already attracted more 
than DM7.5bn. Some of this 
money had simply been trans- 
ferred from fixed-term deposit 


accounts but more than 10,000 
new clients bad also Invested 
in the fluids; Commerzbank 
said between a quarter and a 
third of the Inflows to its two 
funds could be classed as new 
money. 

The attractions of money 
market funds are immediate 
access and higher Interest 
rates. One-month deposits in 
Germany currently pay around 
3.5 per cent against yields of 
mare than 4 per cent on money 
market funds. The forecast 
made by Mr Kohlhaussen 
includes fluids based in Lux- 
embourg and Germany. 

Mr Kohlhaussen said the 
variety of money market funds 
available in Germany would 
increase in coming months. 
They would be sold by berth 
German, and foreign institu- 
tions, be aimed at private and 
corporate investors, and be in 
different currencies. . 

Officials of Coknjierabaak 
said its money market funds 
could total up to DMlStm by 
the year-end, “with Deutsche 
Bank and Dresdner Bank Hkety 
tO attract similar g iimc 


Banco Fibre 

SO 

105M 

97D4R 

Sep.1997 

1J30R 

+487(B14K-fl7) WG Bank 

YQ4 

Drtwa InJLFKfCayXc^ 

155br 

(cl) 

lOOLOO 

JBTL2005 

tnrtscL 

- Nomura tntemBttonal 

8TB3MO 

Halifax BuBdng Society 

Laeda Permanent B/St 

250 

100 

8.75 

<d) 

9904R 

toaoo 

OCL1997 
Oct. 1999 

0J2OR 

uxfisd. 

+30(81498-97) 3G Warfaefl SacaV UBS 
H8BC Maritets 

ITALIAN LIRE 

RepuUc ol Argentina 

300bn 

13.45 

99.12SR 

OCL1997 

olsor 

■»-185(8)i%-87) Cariplo 

AUSTRALIAN DOLLARS 
Austrator IntLDav^aip. 

100 

900 

10CL82S 

Nov. 1997 

lifl 

• Hambroa Bank 

SWISS FRANCS 


Japanese deal postponed 


L-Bank ISO 5.375 102^5 Now.1997 UBS 

Final tamo and non-caflable retea stated. The yield spread (over rtireant Qovrw w n t bond) rt trench b suppfod by die bad 
JH CT WT. MMbtadL ^Floating ms not a fSaml-tsinual coupon ft feted moffw price; tees an shown at the re-offer JevaL b) 
Hou s ehold AITHty CrecSt Cart Maatar Trust. E xp e cted matimty: 15/12/97. Tupacted average He 3 yra. Monthly coupons. «1) Mead 
later at 33-37 over 3 yr Treasuries b) Anwtfcns altar 3 yrs at rate hiked to Libor Jndn. bl) 3-mtti Ubor +J6W. max 109t. 4 tkMb 
on a/l/DO at par. cl) 5K to 671/00 and 5VW4 thereafter, d) 3-mth Ubor -+£%. s) Short 1st coupon. 


by investor demand for short- 
er-dated sterling bonds due to 
current a t tr a ctive yields and a 
lack of comparable recent ster- 
ling issues, joint lead managpr 
S. G. Warburg said. 


The bonds were sold mainly 
to UK and continental Euro- 
pean investors, the lead man- 
ager said. 

Dealers said pricing on the 
deal was tight, but S. G. War- 


burg argued that bonds with a 
similar rating were trading at 
a yield spread of 22 to 24 basis 
points. The bonds mninfaiiTigri 
their spread after they had bro- 
ken syndicate. 


By EmBco Terazono in Tokyo 

Nippon Shinpan, a leading 
Japanese consumer credit com- 
pany, has postponed an offer- 
ing of asset-barked securities, 
planting for mnnH| 

The deal would have been 
the first international issue by 
a Japanese company of trada- 
ble securities backed by domes- 
tic assets. The Japanese Minis- 
try of Finance recently eased 
restrictions on issuing asset- 
backed securities in overseas 

markets 

Nippon Shinpan's Y20bn to 
Y30bn eurobond, backed by 
Japanese car loan receivables, 
was due to be launched by 
Goldman Sachs. 


The company received offi- 
cial approval from the ministry 
last week, having applied a 
year ago, but has postponed 
the deal until late thin year 
due to low demand for funds 
and continuing negotiations 
over issuance fins. 

Since 

Mr Lloyd Bentsen. US treasury 
secretary, last week welcomed 
the finance ministry’s decision 
to allow Nippon Shinpan's 
issue, adding that he hoped it 
would lead to broader liberalis- 
ation of the asset backed secu- 
rities market in Japan. 

Hie most likely assets for 
securitisation are leases, car 
loans and consumer credit 
loans. 


US Treaatay ' 


ECU French Go*) 6.000 04/04 

London cKMnft -hen Tow mid-day 
t Goal toduting mHMi u l i* i y kb at 115 par 
Mere: 03. U< te 32wta. attars H decimal 

US INTEREST RATES 

Luncttfcna 

Gao marts _ 

PDmeraw 7V Tre monte _ 

Broket lorn rate 6% Tlra month. 

Fedteah Sk month _ 

faUunts st Wsrvffl0an_ - Qwyw»_ 


Coupon 

Red 

Date 

Prfco 

Day's 

change 

Yield 

m 1. 

■ 1 IMV 

ago 

Month 

ago 

9.000 

Q9AM 

33.1800 


1010 

10.00 

9.40 

7.250 

04AM 

91.1500 

+0.050 

663 

6S3 

642 

&500 

08AM 

84.4000 

-0450 

684 

680 

679 

7.000 

12AM 

866500 

-0200 

622 

9.18 

687 

B.000 

0S/B8 

101.2500 

-0230 

766 

7.45 

726 

5^00 

04AM 

82.4700 

-0.450 

821 

603 

764 

• 6.750 

07AM 

936000 

-0M10 

7.71 

762 

727 

6^00 

04AM 

813900 

+0590 HOIt 

12.00 

11.72 

4.800 

06/99 

1033870 

- 

3.91 

692 

362 

4.100 

12/03 

97.0710 

+0220 

4.55 

466 

461 

5.750 

01AM 

87.7000 

-0.190 

7.64 

7.45 

761 

6000 

OSAM 

BO. 7000 

-0.100 

1137 

1167 

11.01 

6000 

08/99 

88-30 

-9/32 

683 

860 

644 

6750 

11AM 

86-02 

-11/32 

8.02 

670 

664 

9.000 

10/08 

100-07 

-12/32 

697 

680 

866 

7.250 

08AM 

98-03 

-7/32 

7.52 

7.42 

723 

7.500 

11/24 

96-18 

-13/32 

7.80 

768 

762 

6000 

04AM 

8Z2800 

-0800 

681 

862 

643 


Italy 

■ NOTIONAL ITALIAN OOVT. BOND (BTP) FUTURES 
(LFFQ- Lira 200m IQOttS Of 100% 


FT-ACTUARIES FIXED INTEREST INDICES 

Pries Indcaa Tue Day's Mon Accniad 

UK Gats 


96 Sep is Interest 


_ f nminw aa^JLwte n nl nn . J_a_a ||U. — . .J.u _ 

— • low coupon yma — — iraaua wmw n yuan-- — 1*91 owpan yiMQ — 
Sap 20 Sap 19 Yr. apo Sop 20 Sap 19 Vr. ago Sap 20 Sap IS Vr. ago 



Open 

Settprica 

Change 

High 

Low 

EsL vol 

Open M. 

1 Up to 5 year* (24) 

11678 

-0l25 

119:21 

161 

613 

6 yra 

8185 

865 

636 

861 

862 

8.64 

8L18 

966 

864 

Dec 

9760 

8763 

+0.15 

9600 

97.18 

51089 

64483 

2 5-15 yean (21) 

13565 

-045 

13566 

168 

968 

15 yra 

689 

862 

761 

965 

697 

764 

025 

9.18 

768 

Mar 


97.23 

•0.20 



a 

840 

3 Over 15 yens (9) 

15066 

-061 

151-29 

164 

861 

20 yra 

681 

673 

762 

60S 

867 

769 

969 

9.02 

760 









4 kisdeafflatotea [8) 

17167 

-1.15 

17368 

362 

683 

kred.T 

868 

678 

7.45 








■ ITALIAN GOVT. BOND {0TF9 FUTURES OPTIONS (UFFE) LktSOOm 100013 of 10096 


5 AJ stocks (B0) 


-0.42 134.10 


Strflta 

Pries 

Dec 

Mar 

Dec 

- PUTS 

Mar 

9750 

O 33 

367 

260 

364 

9000 

266 

364 

263 

361 

9850 

1.79 

262 

2.48 

4.00 


m poyoUa by iKmektansj 


Treenvy BHs and Bant YUds 

488 Too yaw 

4.72 Tt™ jrar 

<7* Bn yaw 

5JD iD-yaw 

543 »1SW 


Eat. «cL tort. Caste 989 Put* 124a tawtaua day's span M. Cate 1063J Puts 1*574 


Spain 

■ NOTIONAL SPAUSH BOND FUTURES (MffF) 

Open Sen price Change rtgh Low Eat. vet. Open M. 
Dec 85,15 64.83 -0.17 8&20 84.65 37,140 68.761 


■ NOTIONAL UK GB.T FUTURES (UFFE)* 00,000 32nds of 100% 


6 Up to S years (2) 183.82 -020 186.41 -018 

1 Oyer 5 years (11) 17008 -0.61 17083 084 

8 All stacks (13) 17062 -0.46 171.55 055 

Debentiawe retd Loans 

9 Dabs & Loans (76} 12<28 -1.06 125.64 ZS1 

■ M a n ga goes nd a aWNw yrtda we ahaam aborts Cow Bant lore OK-7MI: 


—— inflation 5% — - 
Sap 20 Sap 19 Yr. ago 

4.10 3.90 2*1 
368 082 023 


Inflation 1096 

Sep 20 Sap 19 Yr. ago 

2.93 2.82 1.77 
3.76 3.72 304 


547 Up to 5 yra 4.10 3.90 241 2.93 242 1.77 

3.95 OverSyre 348 392 343 3.76 372 304 

444 # 

——6 year yield— ■— — — IS year yield—— 25 year yield- 

Sep 20 8ep 19 Yf. ngg Sap 20 Sep 19 Yr, ego Sep 20 Sap 19 Yr- ago 

748 1007 9.92 746 940 084 324 090 078 846 

Uedtaic M-iWIk 11* aid gw. f Rm yWd. yid Taw to dree. 


FT FIXED INTEREST INDICES GILT EDGED ACTIVITY INDICES 

Sep 20 Sep 19 Sep 18 Sep 16 Sep 14 Yr ago Hgi* LoW Sep 19 Sep 18 Sap 16 Sep 14 Sap 13 

Govt. 8eca. (UK) 8054 9022 8949 9078 9044 10148 10744 8944 GBt Edged faa r galna 1032 1037 804 837 1114 

Bred Interest 10073 10645 10740 10741 10743 122.96 13387 10073 8-day —B reg a 97.5 94.4 901 902 984 

-lar 1984. OoremHre*aea«tteehl» tare 0 tanpreaan ; re7.4nfafl/3SL tear 49118 p/l/T*. ffaad Mwta Mgh alnca owisflrtg rt 13307 gt/M>4 . lew 6053 (8/1/7* - Bata Wtt OBtonanant Beorttee 18/W 
28 and TM Inanai 1928. SE ecSrty Moaa rahiawf 1074. 


BOND FUTURES AND OPTIONS 
Franco 

■ NOTIONAL FRENCH BOND FUTURES (MAT1F) 



Open 

Settprica 

Change 

*1* 

Lore 

EaL vol 

Opart InL 

Sep 

994J0 

98-28 

-067 

9940 

98-14 

110 

18460 

Dec 

98-15 

98-03 

-068 

88-17 

97-14 

82837 

97383 

Mar 

- 

97-15 

-008 

- 

- 

O 

0 


FT/iSMA INTERNATIONAL BOND SERVICE 


LUadwattafanatl 


■ LONG GOT FUTURES OPTIONS qjFFgC50.00QB4»ha «1 QQ% 


donaf Honda far rtddi thwa is an 
bread BU Otter Cfe. 


Ldaat prfere rt 70) pm on Stedanibar 20 
teauad Bd OOar C6& YWd 



Open 

Sett price 

Change 

HI0h 

Low 

Est voL 

Open ire. 

Strata 


■ CALLS 


- PUIS 

- US. DOLLAR 8IRNBH18 




Doc 

11078 

11008 

-0.72 

110.78 

10964 

223,780 

131506 

Price 

Dae 

Mar 

Dae 

Mar 

AfatteyNrtTMany8%03 

1000 

80 

90% 

Mar 

110L10 

109.38 

-074 

110.10 

10064 

890 

4.713 

98 

2-01 

2-42 

1-69 

3-12 

Abate Partnca 7% 98 

moo 

100% 

101 

Jre 

109.42 

10868 

-0.74 

109.68 

109.42 

2 

360 

99 

1-33 

2-18 

2-27 

349 

AutifaS%ao 

-400 

ws% 

10*% 









100 

1-08 

1-65 

3-00 

4-25 

Bank of Tcfao 8% 96 

-WO 

W1% 

XB% 


Urtad Kngdcm 7 1 ! 97 _ 
VUnregtoUFin 7Q9 . 


■ LONO TBW FWEWCH BOND OPTIONS (MAT1F) 


Sinks 

Prtoo 

Oct 

— CALLS — 
Dec 

Mar 

Oct 

— PUIS — 
Dec 

Ma- 

110 

0.81 

1.70 

. 

060 

158 

re 

111 

028 

1.15 

150 

1-24 

2.07 

- 

112 

069 

0.79 

- 

166 

2.68 

- 

113 

0 03 

0.47 

- 

- 

363 

. 

114 

» 

030 

- 

- 

466 

- 


EaL «oL tart. Cdte 79.700 Puci 70.17! . Pnwteua day’s apan tec. Cota 219.180 PUB 907,771. 

Germany 

■ NOTIONAL GERMAN BUND FUTURES (UFFET DM250.00Q 100*3 of 100% 


Open Sattpnoo Change High 
86.52 8a 08 -042 6353 

87.30 87.28 -04Z 67 30 


Lew Eat vai Open i»L 
87.76 158470 144425 
87.10 24 1287 


■ BUND FUTURES OPTIONS (UFFE) DM2S0.Q00 points of 100% 


Stoke 

Pwco 

Oct 

Nov 

CALLS — 
Dec 

Mar 

Oct 

Nov 

PUTS 

Dec 

Mar 

8800 

0.42 

1.02 

1.32 

1.41 

054 

034 

154 

2.13 

6850 

0.21 

0.77 

166 

1.18 

0.63 

1.19 

1.48 

2.40 

8900 

0.09 

058 

063 

0.98 

161 

150 

1.75 

2.70 


Em. oof. tort. CBte 23617 Pu» 3WB. Pmdaua day^ upon tec, Ctia 201400 Puts 1 85666 


UK GILTS PRICES 


Em. wA urt. Crta 4209 Pula 901 & Prevtoua dayte opwi h- CWte Msm Puta are* 


Ecu 

■ K3J BOND FUTURES (MATTE) 

Open Settprtce Change High Low Esl reL Open inL 
Oec 79J0 7398 -0.48 7940 7360 1450 7438 

Mar 7848 7348 - 7338 7338 1 


M US THEASWY BOND FUTT4TES (CST) $100400 32nda Cf 10054 

Open Lrtaat Change «gh Low Eat vuL Open InL 
Sep 100-15 98-25 -0-26. 100-15 99-22 23096 72481 

D»c 99-19 98-28 -4M8 96-21 98-26 195,700 879.772 

Mar 88-28 8307 -0-24 98-28 98-04 760 10473 


Japan 

■ NOTIONAL LONG IBM JAPANESE OOVT. BOND FUTURES 

(UFFE) Yltttn IQOffta Of 1009 6 

Open Close Change High Low EsL vol Open InL 
Dec 10312 - - 10335 10307 2478 Q 

- LffTE mm a iradad on APT. AS Opwi Hanat flga. we ter prevtoua d«. 


Batokanfiizin 

BRX7% 97 — 

atari Gaa 0 21 

Canadafl 86 

Choiig Kong ftt 5>2 S8 _ 

Chtea 6*7 04 

Court Brepa8 96 

On* Foster 9>2 99 

DtnivK5)i9Q 

Eaat Apai Many 6 s ! M - 

ECSC 8^99 

EC ft’s 96 

EE7l|S6 

BB 8^* 87 

Bee da Fiances 99 

Butina 0*88 

Et-tei Bw* Joai 8 02 _ 
BtowtDnOopB^SB — 
Fedart NaO Mat 7A0 04 _ 

ft*»sl64»W 

ftrttiBpai^aS 

Fert Mere Owftrt* SB _ 
GanBacCNtiS^gB 


1000 835, 83% 310 

_ fa ftn*! .VB fiiB smss mvtc sriuons 


.ran 86% 87% 


.5500 raft raft Jf 889 

. 1000 8ft 9ft Js 896 

. 3000 ift ift ft am 

.3000 873, Bfli -ft 746 

.1250 10ft 1071, -1 7.19 


.900 raft 10ft 


• 183 Wh KB -»* m teatetiftOO 

.100 102>2 10ft 648 Kubaftoi 

.250 101% 10ft ft 848 Ortrtoftro 

ran 10ft 10ft -1, 749 Quebec HptoSOB . 

.200 104% 10ft -4 744 SPCF704 

.raj 10ft W3% -I, 843 Vtorid Bar* 5 03 _ 

S00 10ft 10ft ft 740 World 8a* 7 01 — 

.150 10ft tOft ft 743 

WOO 9ft sft ft 76B YBf STRAIGHTS 

.3000 9ft Sft ft 743 Balgten S9S 

- 200 Wft «ft 642 fflftOO— 

.ran 9ft 97 ft 741 AteatlftOB 

-300 104 104% ft 379 MwAnerOeaft 00. 


881 

Adai Oar Bank 8 IQ — 

im 

too 

100 

as> 

/reft 4% 00 

ram 

93% 

06% 

18B 

Court Bicpa 4% 06 250 

89*2 

89% 

879 

Dmaric4%88 

ran 

85% 

85% 

881 

S6% 0* 

300 

WB 

HJB 

743 

Bac da Franca 7% OB _ 

,100 

108 

108 

769 

ftfand 7% 99 

300 

108% 

106% 

an 

Hyurtai Mate Hn 8% 87 

100 

W7 

W7 

088 





688 

Kobe 8% 01 

2*0 

103% 

103% 


_VHd.. 

tax Had Price E .or- 


~ IW_ 

Mgh Low 


— Weld _ -1994- 

tef Rad PrteaE +<*- tgyi is* 


Weld — 1BB4_ 

Maaea Q) tOrtree *w- lire 


SMrtT (LIIH re te Rn TWn) 

Iren OK 1994# 848 556 I00>2 ft 1<B|J 

13K19K 11 76 543 IIB ft 107A 

(adi 3pc fiaa 1B90-0S _. 105 5.90 98,', HA 

loupcises 9JB 384 IQ2Q ft 107R 

TR« 1241X1985# 1Z.04 724 103U ft 113% 

145*1898 1198 7.50 lOSJ, ft 1|7£ 

1S440C1988CT-. — 1172 77B 1114 -A 1213 

Btil(14K199W 1225 748 IOWj ft 11713 

OanmhniqpclHB — 368 31* 103,’, -J, 112£ 

Tibbs QtrTW 1997*3^. 724 329 ft loft 

Trees 13Uoc 19B7& 1202 331 113’. ft 121 II 

Ea#10»2P6lB87__ KUO U4 I04«2 ft lift 

TnaillipclBSm 370 151 100,’, ft IIO,’. 

Em* 15« 1967 1284 1701 ICQd ft 131 JJ 

9llpe 1999 8.49 BJ4 1020 -U 11433 

TnaarWeiOWW — . 758 flTu ft 10ft 

Trau Stipe 1995-98$}- 7.19 372 33|1 ft HB 

ItecHtt-l 1113 392 >150 ft 131 & 

Tm15»iM-88JT 1297 3 77 122, Vd -» l«A 

£**12*1938 1088 842 lift -U 125jl 

TrraS'jK 932 390 10111 ft lift 


Raio AEm Teen 

Etch I2<aec 1999^. — . tan Mfllllftd -U 13ft 

Tran IIP]* 1S» 9JS 3S5 105A ft 121 A 

rwGKinSS 878 383 88 f| IDIjJ 

CBMMtei HP** 1999- 978 800 10412 ft 121U 

TrrasFCg ftps law - - MJi 10ft 

apt anew 30i 3« an ft lift 

Tins 13* 2000 11.14 318 1160 -0 1380 

1 QIC 2001 3GB 319 I03la ft I22,V 

7* ran** — — — 74S 4o7 8B,t ft 1057. 

7* 2001* 743 308 Sft ft 10ft 

B1iM 2002 949 924 lOSfl -U ijjA 

toe 2003J* 3S9 313 Hi, |l^ 

1 CM 2003 9SS 320 104B ft 127A 


mn ii >1*2001-4 

100's Rwdtog3>30e 1909-4— 
1® Cnmer*n9*jpcS004_. 

Tre»»4tfe20045* 

SK Cams'] pc 2005 

Sr ■nw*IS»iM2003-5„ 

infi 73gie2in8** 

HBk fete 2003-85*. 

,03 A Trere 114^*2000-7 

9BH Tire* 8*ipc 2007 ** 

110A 134PC 2004-8 

10ft ItCB feK 2008** 

10ft 

1180 

1020 

83|| - — - . . 

HBH 

1227, nOtetocWOB 

lift n*n 6 1/4*3010 

ioiU cenvepGLiani**-— 

Tr«te we J012B 

Tna Vue 2006-12**— 

T«a toe 20i3*t 

7*q* 2012-15** — _ 

T«toS4i* 2D17« 

lltfl Eirt 12* 2013-17 

9 

N 



mjj Btoireisiapett 

Bsy Cca 31 a* 'fli ul 

10213 Tims 3* *96 Ml 

82) Genre 2ij* 

I04»9 Trees*]*—— 


14Q108JJd 
301 70 

ai6ic&« 

UD U% 

9I3102W 
944 11BU 
aw Sft 
912 823 

943 11 
8JH 96U 
8.44I25A* 

aseiooAti 


389 397 

749 378 
984 990 

333 389 

770 984 
388 384 

982 382 
982 981 
949 90S 


ft 123H 
->• Sft 
ft 12ft 
-h I05*a 
ft I2S>3 
ft 143,'. 

ft nas 

ft 

-A i*A 

-a 11ft 
-a isi& 

ft 1Z4U 


ft lift 
ft Sft 
ft I26fi 
ft 127*. 

-a ST* 

ft 11 7Q 
ft 114^ 
ft 1284 
ft 158*2 


ft SSL 
ft Sft 
ft 71 

4ft 

ft S'] 
ft Sft 


NW (87* 208 424 19U ft ZXft 197U 

4JecVtt*_£135^ 19 1 341 106BH ft 113A IDS,’, 

2>rtcin (IBJ) 348 332 I84N ft 170% iSj 

2*2* 113 (704 198 3JM 15BU ft 17ft 150,1 

4^aeU4**-^i85fl 340 9H107>2ti ft lift raft 

Spew (83S 346 382 IBft ft 184U USA 

(78J) 3.71 344 ISO/, ft IBM 14ft 

l 2t*11 (746) 174 194 IS/, JJ 17ft 15ft 

2*S>CT3 1899 177 IBB I27,V ft 14ft jjft 

2>2*riB 340 347 1», ft 157* 15ft 

2*7*20 (8119 IBS 34BI2ftte -It 152JJ 12ft 

2fc*W** W.7) 342 346 107ft ft 12B/, ,0ft 

_4ltfc~30tt — (1*1) 188 4j)l 10ft — *. 1 2ft iSJ 

Pnapartya reel redempaqr rata on projected MteBen of fl) 10* 
red 0 5«. (I* Floras In pn n in Bie a e u Am RR bare for 
tedrtig da 8 montfta prior to leu| «id tare been arrets d to 
rrtect rateahB ol RPI to 100 In Jaruay 1887. Oamnten factor 
194S. HPI far Jarewy 1994; J4l4 wti fa August 1884: 144.7. 

Other Fixed Interest 


— WO- .— 1994 _ 

Hare tet Had mre£*Br- Mga |m 


total Oar 11 >i 3010 

ASan Derift* 200B_ 

Blam 111*2012 

toted ton ft* to — 


l3*W-2 

HyitoOueltecl See 2911. 

Iwh 13*2* 2006 

Urepodi^shrt. — 

LCC3*-20ML 

Mredarer Ufa* 2007. 
Neiwr.toeV 

Hutto tooto ft* 3Ei. 

4>«iao84« 

wrer*MH i8*m ant 


973 933 

95S 932 

947 am 
308 
981 
1228 

1988 1921 
1047 

ass 

338 

1913 970 

444 830 

- *S 

- <30 
(ITS 


1424 114ft 
18ft 107* 
142 IIS 

=ss a 

At lift 106 
_ 4ft 3ft 

— 4ft 2ft 

— 138*4 112 

— 78 68*2 

IBM 12ft 

— i 145** 12ft 

— 18ft 134* 


GM*£ 8% 88 

200 

M Eh J*wifin 7% 87 - 

200 

law Anar Ore 7% 86 


Japan Day A 8% 01 


Ktoari Bee Par 1008 _ 

360 

Korea Sac Parer 8% 03 . 

1350 

LTCBFta8B7 

2*0 



Otorio 7% G3 

3000 

Oriw Kertcta* 8*2 01 

300 

Wro-Canada 7% BE 


Rrtnri5%8} 


Ou9beeHytto8%sa 

160 

Ouabac FVov 9 88 

300 

sasraas - 
<M¥gl»as 

200 

Spate 8% 98- 

1500 

9rtaEhNSW6%96 

300 

SaredanS*- fiB .. . 


9irettiEram8%BB_ 

TOO 

Tdoo Sec Prew 6% (B 

1000 

Tekyj Matropcfa 8% 88 - 

200 

Toyota Motor 5% B8 

1500 

Unted Wngdorn 7% 02 _ 

3000 

WcridBM8%B9 

1900 

WarfdBrtkBVW 

1500 

OanSCHE MARK STWKH7S 

AuSBtaS%24 

2000 

Credt Fonder 7% 03 — 

2000 


2000 

Septa Fteance8% 03 

1500 

Dares* Be Rn 7% 03 

9flfYi 

S3 6% 00 

2900 

ES B% 00 

1500 

FMta7%00 

3000 

fcdy7%98 

5000 

U® Baden-Wuertf8%08 

— 2350 


1500 

rrtartn RU 0* 

1500 

9»K)W1897 .2500 


an to* raft 


7i« UyftOT. 


200 101 101*1 -*B 740 Japan Ore 9(599 _ 
an 10ft 102 971 Japan Cto Bk 8*2 (71 . 


380 10ft 10ft 


906 SNCFftOO. 


. 400 

. ion eft eft 862 

.450 raft 1071a ft 303 

.160 98 86 ft 558 


- 75003 KJ2*» 103 ft <40 

. 100000 lift lift ft 444 

-. 60000 106*1 raft ft 321 

- 80000 113*2 lift ft 448 

. 300000 8ft 32*2 ft 480 

.100000 103*9 10ft ft 430 

. 120000 111 lift ft <82 

-WOOD 104% 10ft ft 933 

. 160000 10ft 10ft ft 344 

_ 30000 lift 111 ft <47 

.125000 10ft 10ft ft <88 

. 180000 10l*z 101% <13 

. 250000 104 104*b ft 487 


104 ft 7.75 QartiiancaLurftWUV 1000 10ft raft 


Oft ft 922 Wold Bwh 8 96 LA. 
UV ft 740 ABNAfiaoftOOR. 


98 8ft ft 748 8Bra*a96CS 

ft 103 985 Bee da Renee 9% 98 CS _ 

88 8ft ft 037 Gwi Bee Cfartf 1096 CS. 

ft 10ft ft 687 ISMf kit Hn 10 01 CS 

88 Sft ft 907 Ncpan 73 Td ift B9 CS . 

ft 103 ft 687 OntofaB03CS 


QurtEuopeBOi Gw . 
Oat8Lycmre996Eai. 
80 ft 837 BB 10 57 Ecu 


90 ft 789 tortiS98Bu. 


. 3000 100 101 848 

.1000 100*2 101*2 781 

.moo 

. 1505 

-500 10ft 104 ft 772 

- 1® 105 10ft ft 827 

.500 10ft 10ft 782 

_130 10ft 106% ft &2S 

— 275 lift raft ft 891 

-300 102% 10ft ft 889 

-400 10ft 10ft ft 928 

-200 104% 10ft ft BOO 

. 1600 92(4 92*2 ft 957 

-500 10ft 10ft ft 90S 

-ISO 10ft 10ft ft BOB 

-200 10ft 104% ft 918 

.1250 KB** 102*1 781 

.1100 10ft 10* ft 689 

-125 K>ft KB 802 

. 1125 104 10ft ft 908 

-500 10ft 10ft ft 958 

WOO 107% 10ft ft 987 

.1000 102 10ft 7X3 

.2750 10ft 102 ft 974 


Mteey Nriltaeaiy 8 03 E 

Matte Idea 1ft 97 £ 

Btodilandft 23£ 

Downs* ft 88 £ 

BS 1087 E 

Hdtelft 97£ 

Honan lift 97 £ 

HSBC Hddtegs 1188 02 £ 

My 1ft 14 £ 

Japwi Dre Bk7 00 E 

Land Sacs 9*2 07 £ 

CrtareiftOIE 

Raaegenft 03E 

Sawnltent ift 99 £ 

Tokyo BacPOrer 11 DIE — 
MbtoftHafrt09SN3 — 

TCNZFhft 02 NTS 

CMILncdBOl RRr 

Bac da France ft 22 HV 
SNCFft97FR 

RjOMMB RUE NOTEB 

«jbeytaB7ta»y-ia6 — 

Stoco Rama 0 98 

Bdgton&grCH 

BRX-00298 

Btwwfa 910 98 £ 

Cwwdaft 99 

CCCEOOBGco 

OdKLyonrti^OO ... 

Damkft 96 

Okrefaw Ranee i 98 DM ^ 

Ffan>ddSwaH>97 

Friend 0 97 

Intend 0 SB 

My *4® 

UOBadariMjatfiRftSB — 

Lfayds Bo* Ptxp S 0.10 

Mftre&as 

NwZrtkKJft 98 

Onteto098 

Ra*o» 

Sedate Qanarta 0 86 

Steartank 8^-006 96 DM . 

Sate a Wcart 00599 

Swdai09B 

GwdatftOI 

Untod Mnodora ft 96 


.iaoo aft 
_ioo ioft 

_ 150 84% 

-800 9ft 
-687 10ft 
-100 10ft 
- 600 102% 
_ 153 106% 
-400 raft 
-200 Oft 
_ 200 Sft 
_ WO 105% 
-2S0 94% 

-150 «7 

-ISO 106 
- 100 82% 
— 76 94% 

.7000 aft 

, 3000 97% 


Offer Qy Yield 
Bft ft 981 

ioft ft am 

86% -1% HUS 
Bft ft aiB 

raft ft 888 
103% ft 979 
103% ft 134 
107% ft 1040 
104% ft 1009 
80% ft 8.18 

96% i% BHT 

raft ft 882 

94% ft 391 
107% ft 889 
106% ft 872 
83% ft 985 
95% -1% 1032 
88% ft 9W 
88% ft 888 


ID* 

9M% 

744 

Bd 

Otter 

Cjcpp 

893* 

9942 

<9875 

0867 

10003 

<7812 

toara 

10023 

5.1250 

99.74 

9887 

<7300 

BUS 

10003 

54125 

99.14 

9821 

<6250 

6607 

9820 

53220 

9721 

8020 

53135 

8857 

8889 

aoaa 

dare 

worn 

^naan 

10000 

16017 

<9125 

MBS 

moo* 

55750 

BOB* 

sore 

48800 

EMM 

HD.12 

10019 

gamai 

88.43 

9882 

45025 

saw 

8*20 

54125 

9842 

9828 

52500 

9957 

■88 

48125 

9840 

■47 

46378 

8838 

9856 

51250 

995g 

99.79 

55750 

86M 

8869 

<9500 

8981 

■Bt 

51125 

BOSS 

no n*i 

58000 

9087 

9078 

<8290 

9029 

S064 

45000 


9000 100 103% ft 783 NBW 


901 IMBdnvtonftOlEcu 2750 101% 102 ft 974 

748 ADC 10 WAS 100 101% 101% ft 984 

740 CornnBk AafeJa13%99AS _ WO 114% 1M% “ ft 888 

780 58 7% 99 AS 350 98% 85% ft 9LW 


r2an02DAS 1000 

1*08 AS 125 


1500 37% S7% ft 888 Stele » NSW S02A3 

UDO 68 86% ft 313 SDlAUtGlrtFfa802AS- 

4000 95% 88 TVS Urtner AEktia 12 88 AS . 


1000 7*2 7% ft 1040 

125 88 88*2 ft 1884 

800 92% 82% ft 1048 

150 91% 92% ft 1Q85 

150 108% 107% ft 988 


100 94% 

i cunEy i 


98% 932 

aredKoanncMi 


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CQNVBITBLE BONDS 


aowrt ^T w a 8% 05 — 

QubbCvMOSB- 

Gdd Kdgoala 7% 00 _ 

Horen 9*2 06 E 

(torn Amgfci 239 01 . 

tfaateyPrd6 02 

UtiSba6%02£ 

Uteno7%05E 

Mad Bate 2% 03 

Wm* In Fh 6*2 67 

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0gdai602 

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SurtBma 8a*3% 04 _ 
S*Atoe8 7%0B£ 

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* No Mamrton reatehla ■ 
S tow one madrt nrtre i 


Com. 

hared Price BM Ofcr Pure 

— 400 92% 96% 88*2 

-.250 88 10ft 101% 12240 

— 85 1A5M 113% 114% 49120 


.500 

23875 

WB 

107 

+1208 

raw 


74% 

75 


.400 

1&1 

70 

75 

mss 

-84 

6J2 

98 

99 

*980 

-.80 

584 

81% 

81% 


300 

flWOS 

85% 

37% 

+1582 

100 

are 

103 

Wfti 

*72 

250 

<63 

115% 

1»% 

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— .85 3307 87% 86% 

— 300598087 88% 90% 

— 800 38089 77% 78 

— 185 39 96% 97% 

— aiO 251 116% 118% 

— 300 82% 98% 99% 

tiretoo idfafartoa 


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mai > 4 


FINANCIAJL TIMES 


WEDNESDAY SEPTEMBER 21 1994 


COMPANY NEWS: UK 


P<Ntp 




. -- r T* c ^ 




Personnel recruitment in the UK and Australia give profit boost 

Hays expands to £87.8m 


By Andrew Bofcjer 

A sharp rebound m profits 
from personnel recruitment 
agencies helped Hays, the busi- 
ness services group, increase 
pre-tax profits by 32 per cent, 
from £66.6m to £87.8m, in the 
year to June 30. 

Operating profits from the 
personnel division, which 
mainly supplies accountancy 
staff, jumped from £6.7m to 
£16.4m as continuing economic 
recovery in the UK and Austra- 
lia brought increasing demand 
for staff, said Mr Ronnie Frost, 

executive chairman. 

Hays' biggest business sec- 
tor, distribution, increased 
operating profits by 29 per cent 
to £49. lm, helped by a strong 
performance on Continental 
Europe. 

The group said that Fril, the 
French distribution company it 
bought in 1392. increased prof- 
its substantially in spite of the 
background of the continuing 
recession” in France. It had also 
won a number of new con- 
tracts with food retailers and 
manufacturers. 

Mordhorst, the German dis- 
tributor acquired last year, 
exceeded expectations in 'Very 
competitive” trading condi- 
tions. Group operating profits 
from Continental Europe more 

Recovery 
leaves BSG 
at £ 8 . 28 m 
midway 

By Paul Cheeserfght, 

Mdands Correspondent 

BSG International, the West 
Midlands group with interests 
in motor and aviation compo- 
nents, childcare products and 
vehicle distribution, staged a 
1994 first half recover; after a 
worrying 1993 second half 
when trading conditions dete- 
riorated sharply. 

Pre-tax profits in the six 
months to Jnne 30 were 
£&28m. compared with £&53m 
and £8. 95m. excluding excep- 
tional items, for the whole of 
last year. 

Mr Astley Whittall, soon to 
retire as chairman, was “confi- 
dent that the second half will 
show further evidence of the 
group’s recovery". 

BSG is maintaining Its 
interim dividend at 0.7p, being 
paid on earnings per share 
down from 2.07p to 1.97p. 
Turnover rose from £29l.8m to 
£324. 8m with operating profits 
static at £U.lra. 

Daring the current half, Bri- 
tax plans to consolidate its 
childeare product manufacture 
at Andover at a cost of 217 
redundancies and exceptional 
charges of £2m. 

Elsewhere in Britax, motor 
component manufacture for 
European markets Is recover- 
ing although pressure on mar- 
gins is severe, while in the US 
and Australia, the problem is 
finding capacity to meet 
demand. Losses have been 
reduced in the aircraft interior 
business and profits should 
return next year. 

Bristol Street pushed up new 
and used car sales by 36 and 
15 per cent respectively. It 
completed the acquisition of 
Jessups, another distribntion 
business, on July 1, but the 
impact on profits is likely to 
be neutral this year. 

The shares gained 2p to 
dose at 67p. 



Lytfc ton dor User 

Ronnie Frost: celebrating better than expected results 


than doubled, from £8.3m to 
£l7.4m. 

In the UK both the dedicated 
distribution and specialist dis- 
tribution divisions increased 
their profits. Network distribu- 
tion - the multi-user arms 
which serves manufacturers - 
blade especially strong prog- 
ress. New contracts with a 
total annual sales value of 
£20m had been won. 


The bulk products division of 
chemical distribution saw a 
decline in profits as the world- 
wide pressure on caustic soda 
prices continued throughout 
the year. Both the packaged 
products and s pecialis t chemi- 
cals divisions increased profits 
substantially. The group’s com- 
mercial businesses increased 
operating profits by 13 per cent 
to £27.3m. 


Earnings per share rose by 
28 per cent to 14.7p (lL5p). A 
final dividend of 4.15p gives a 
total for the year of 6Jp (5-3p), 
an increase of 15 per cent 

• COMMENT 

These better than expected 
results were an impressive way 
to mark what is nearly the 
fifth anniversary of Hays’ flota- 
tion - a period that has seen 
the group's market value 
nearly treble, in spite of a 
recession which damaged the 
reputation of many other busi- 
ness services and logistics com- 
panies. The bounce in profits 
from personnel caught the eye, 
but the strong performance by 
the core distribution activities 
was less predictable. Although 
spending £100m on acquisi- 
tions »Tiri capital expenditure 
has pushed up gearing from 13 
to 44 per cent, strong cash gen- 
eration means the group still 
has scope to make further 
acquisitions, particularly in , 
Europe. Forecast profits of ! 
£105m put the shares, up 6p | 
yesterday to 287p. on a pro- 
spective multiple of 16.4 - a 15 
per cent premium to the mar- 
ket That does not -wm unrea- 
sonable for shares that have 
outperformed the FT-A All 
Share Index by 91 per cent 
since flotation. 


Servisair 
forecasts 
31% increase 
to £4.2m 


BSM turns in £2.2m and 
pays 2.15p maiden interim 


By David Blacfcwed 

BSM. the UK driving 
instruction company which 
was floated last October, yes- 
terday announced a maiden 
interim dividend of 2.15p, com- 
pared with a pro forma LSSp. 

Pre-tax profits for the six 
months to July 1 were £2 .23m, 
compared with a previous loss 
of £144,000 after payment of 
£2 -21m of interest on debt 
incurred in its management 
buy-out. Earnings per share 
were 5.9p, compared with a 
6.3p loss. 

Operating profits on continu- 
ing operations were up 6 per 
cent from £2.23m to £237m. 

Total turnover increased 
from f i i-ft m to £12. 7m. The lat- 


est figure mclmteri V.1 12m from 
discontinued operations, com- 
pared with £724,000 previously. 
In July. BSM closed its MCR 
accident repair centre at Leam- 
ington Spa with a loss of 
£168,000. 

Mr Paul Massey, chief execu- 
tive, said that while the core 
market of taaehmg learner 
drivers had been “less than 
easy,” the group had finished 
the half with a higher number 
of instructors and pupils. 
“Overall, the company is in a 
very healthy position.” 

In the past 12 months the 
number of people applying for 
a provisional driving licence 
fell by 1.6 per cent, while BSM 
increased its business by L7 
per cent. 


Bernard Matthews 
rises 80% to £8.36m 


By Peter Pearse 

Shares in Bernard Matthews, 
the poultry and meat producer, 
bucked the market's downward 
trend yesterday by rising 6p to 
I27p, in response to an 80 per 
cent jump in pre-tax profits 
'from £4_64m to £8-36m for the 
28 weeks to July 27. 

Mr Bernard Matthews, chair- 
man, said both profits and 
turnover had benefited from 
organic growth and acquisi- 
tions. Operating profits swelled 
to £9.25m (£5. 09m), with acqui- 
sitions adding £2 .82m (nil) to 
continuing operations, which 
rose 26 per cent to £6.43m. 

Group turnover rose to 
£137. lm (£88.9m), which 
included £33m from acquisi- 
tions. 

In the past year, Matthews 
bought Turners Turkeys from 
Unigate for about £12m at the 
end of 1993 and acquired 
Advanced Foods, the state- 
owned New Zealand Iamb busi- 
ness for an undisclosed sum in 


April Mr Matthews said the 
acquisitions represented a 
change of company policy, 
after years of organic growth. 

Mr Matthews aid that whole 
turkeys now accounted for less 
than 10 per cent of the group’s 
business, with Christmas tur- 
keys less than 6 per cent, 
though he stressed that that 
side of the business had not 
shrunk, merely that the contri- 
bution from value-added prod- 
ucts had grown. 

Sales of both branded cooked 
meats and fresh meat products 
continued to expand though 
the group was suffering losses 
in France and Germany - mar- 
kets it recently entered with 
four products in each. A £1.2m 
advertising campaig n in Ger- 
many was currently running 
on TV to Introduce consumers 
to the company as well as to 
increase volume sales of the 
products. 

Earnings rose to 454p (2£p) 
and the interim dividend is 
lifted 20 per cent to L32p (Lip). 


TWa twice MWw<>JBicony^»Mai»iUiBw»WMwiMnBoHhBW—QWlSBdiE«elMnB0rf »«tW fc diariBdDm and Bw HapiM eal 

(Maid CHUM (-London Slock Bcnange"). « doee not coraUUe an oflar or mvkadon to any parson to msei *>■ »r or purtnase any 
wcuMtao. 

Appscalkw has boon mod* lor me pert o( paanttm » trade in ttoUntand iSsttrties of tha iMon 

indemenoaned seartes. » t* arapnawsad tot no appkesdon ms bam made tor these wcurttas to be attMted to *8*9- t b expected 

Bint doaSngu wfl commence on 26Bi September. 199«. 


MACKIE 


(R egi stered in England and Wates 


KIP PIC 

nSfl No. 2936688) 


Placing by 

English Trust Company Limited 

of 

5,866,000 Orcfinary Shares of lOp each 
at 180p per Ordinary Share 
payable in foil upon application 


AuiMnted 
Cl .250,000 


Shan Capital FoBowtng the mring 
Onfinaiy Shares of lOp each 


issued and fu6y paid 
£961.600 


ThanflwQiiftMYShflre»OM0peach.Mihleha»me»i1HeaaMhaPlae»B.teMranliparfpa w lria liw pectew^»fl«^re 

Ontearv Shares of MocMe Intemafonnl ptwp Ptf jnctettig ms rtfrl » recokm a » 

dodanad. mode or paid on tho Ordtnay SfM of lOp each OF tha Compa ny tted de hitanatorel Owiy 

engaged In ttettestgrvmanulaaureanrt supply of taodtomacWneiy and abooe8lgna and mantrtBeaeeewaior treatment pian*- 


Copes d the USM Parandare of ihe Company which hove ap pmre^ J SK SSSS ^ nnd 

u^dSeos^MiatorFMM are awaiahte during u3Melbiirtie»howBtSa tisdBy8^ ^y^toteyBWi^^<0i^lOBW 

ktfuOM&Kl September. >994 (tar co»ectfon only) from the Company Announcements Office, m o London 

Bartholomew Lane. London 6C2N 1HP and duty rtefnel bualnw* houra up to and Inducing 


Copd Court Enhance, c 
SVt October. 1994, bora: 


Medde International Group PLC 
oo Hammond Suddeida 
Moor House 
118 London Wa* 
London EC2Y SET 


English Trust Company Limned T# £ST 

tea Chaileritojse Square 

EcSwx UtndonKeMSIH 

tea ■***«*- a * Engran in* Cere*, teM . sster si Tte Gscteres tehsreks«rtyu«i 

2iaStetens».l9M 


The group, which now 
claims to have 15 Vi per cent 
market share, has also pushed 
through a 2Vi per cent increase 
in prices. 

It has also identified four 
ways of increasing its cus- 
tomer base. Next month it will 
launch a nati onal scheme for 
introducing school-pupils to 
drivin g; it is continuing discus- 
sions with insurance compa- 
nies with a view to reduced 
premiums for newly qualified 
drivers who undergo further 
training; it has started a 
scheme for t eaching disabled 
people to drive; and it is 
continuing to expand its 
Qualified Driver T raining divi- 
sion. aimed at company car , 
drivers. I 


Mackie heads for USM 
with £17.3m valuation 


By David Wighton 

Mackie International, the west 
Belfast-based textile machin- 
ery manufacturer, is joining 
the USM later this month after 
a placing valuing the company 
at £17 An. 

The £9.6m raised will trans- 
form Mackie’s balance sheet 
which has been weighed down 
with debt and scarred by years 
of losses. 

The proceeds will pay off 
loans from Northern Bank and 
Overseas Private Investment 
Corporation, a US Government 
agency, which are writing off 
£7 An. Ihe result will be to 
turn Mackie’s negative net 
worth of £852,000 at June 30 
into shareholders’ funds of 
£l6An. 

The flotation is possible 
because of the dramatic trad- 
ing recovery since Mr Pat Dou- 
gan was brought in as chief 
executive in October 1991. 
Turnover, which collapsed 
from £30m to £6m in the two 


CREDIT LYONNAIS 
USD 500,000,000.- VRN 
Undated 

Bondholders are hereby 
informed that the rale for 
the Coupon N°13 has been 
fixed at 64625 %, 
fix' die period starting on 
19th September 1994 
until 18m December 1994 
inclusive, (representing 
a period of 91 days). 

The coupon will 
be payable on 
19th December 1 994 at a 
price of USD 15345 per 
USD 10.000 Note. 

The Fiscal and 
Principal Paying Agent 

^CREDIT LYONNAIS 


GixoCxeditBank 

Aktiangasellschaft 

derSpaxfcasssn 

( fenneri y) 

nt rrrra ntralw imri Hank 
$ur jaraM i W m 

S pffi hflBBwrt 

AkdangesaOscbaft 
JTBIih Vto lgOOtLOOOJOO 
Floating R«* Notes Are 1995 
For tba six months 
19th September 1994 
to 20th Marc* 1995 
to accordance vrab the 
pnnjsiocs of tba Nous, notice 
is hereby given that the raw at 

the interest payable on the 
Interest Payment Qate 
20th March 1995 against 
Coupon No. 13 will be 
yen 2 .ira. 0 ai par 
Yen 100,000,000 Note. 

Th„ TnrtntrM Hank of Japan. 
Limited 

Agent Bash 


years to 1991 reached £13.2m 
in 1993 and £9.38m in the six 
months to June. After a profit 
of £950,000 in the first half 
Mackie is forecasting at least 
£I-9m for the full year. 

On a pro forma basis and 
assuming a full tax charge 
earnings per share would be 
132p giving a notional multi- 
ple of 13.6 at the 180p placing 
price. The notional yield is 4*2 
per cent 

Founded in-the 1840s Mackie 
is a world leader in the manu- 
facture of machinery for flax, 
jute, hemp and sisal fibre pro- 
ducers. To help counteract the 
cyclical nature of the core 
business. Hr Dougan set up a 
water treatment plant division 
last year which has won a 
£25m order from Argentina. 

Mr Dougan’s stake will be 
dilated to 20 per cent, bat 
none of the existing investors 
are selling shares in Che plac- 
ing. It Is sponsored by English 
Trust with stockbrokers 
Teather & Greenwood. 

Losses deepen 
to £0.4m at 
Sentry Farming 

Losses at USM-quoted Sentry 
Farming Group increased from 
£309,000 to £406400 in the first 
half of 1994, on a higher turn- 
over Of 0-41 m , a gains t £9 Mm. 

The company pointed out 
however, that its seasonal busi- 
ness meant that losses would > 
normally be incurred in the 
build up towards harvest 

Mr Nigel Brown, chairman, 
said weather over the harvest 
period had been relatively co- 
operative. “We are not in for a 
year of bumper yields but they 
should be close to those antici- 
pated." 

No account was again taken 
in the interim figures of 
income due under the Arable 
Aid Payments Scheme, for 
which claims had been pres- 
ented but would not be recov- 
erable until later in 1994. 
Losses per share were 6.54p 
(7.65p). 

Ip premium on 
Compel shares 

Shares in Compel Gfroup, the 
computer systems and services 
company, ended their first day 
of trading at 126p, a modest lp 
premium to their issue price, 
having opened at 130p. The pla- 
cing with institutional inves- 
tors, valued the group at just 
over £19m. 


Travis Perkins confirms 
recovery with 83% leap 


By Simon Davies 

Pre-tax profits at Servisair, 
Europ e’s largest independent 
ground handling company, are 
forecast to Increase by 31 per 
cent to £4 -2m in 1994, the 
company revealed in its 
pathfinder prospectus. 

Profits growth will be aided 
by the March 1994 acquisition 
of Ogden Aviation Services, 
although this will result in 
£l.4m of reorganisation costs, 
taken as an exceptional item. 
The management is confident 
that substantial cost benefits 
will follow next year. 

The company is expected to 
raise £9.5m from the sale of 
new shares from the placing 
and intermediaries offer, while 
its parent, Secannn, will sell 
60 per cent of its stake. The 
company will be valued at 
close to £60m. 

Servisair has been 
benefiting from an expected 6 
per cent increase in passenger 
throu gh put in the UK thte 
year as it operates In an the 
country’s main airports, with 
the exception of Heathrow. 

Servisair accounted for 
around 37 per cent of 
passenger traffic within its 
network of 22 UK airports, and 
is confident of increasing its 
presence as airlines pass on 
peripheral services. 

Profit margins on aircraft 
handling are extremely low. 
Servisair achieved operating 
profit margins of around 4 per 
cent in 1993, making it 
unattractive for operators 
larking critical BUB. 

In addition, British Airports 
Authority has started to 
devolve some of its monopoly 
operations, such as baggage 

handling , and a limited 
nmwhrr nf hntopanduni 

companies are competing for 
the contracts. 

Servisair also plans to 
compete for contracts in 
Europe. In Spain, the 
government hm mmiwiffari to 
opening up 16 airports to 
competition, and other 
countries are likely to follow. 

The prospectus Is expected 
to be published on October 5 
and dealings dimld co mm ence 
on October 18. The sponsor is 
Barclays de Zoete Wedd. 


By Christopher Price 

Travis Perkins yesterday 
confirmed the recovers' in the 
building materials market, 
with an 83 per cent advance in 
pre-Lix profits from £94lm to 
£17.06m for the first half of 
1994. 

The figure included £1.77m 
from property sales and a 
three-month contribution from 
AAH builders merchants - 
which TTavis paid £41 ,8m for in 
March - worth £L61m at the 
operating level. AAH also 
added just over £23m to total 
turnover, which increased 29 
per cent to £2 15.6m (£i664m). 

Ear nings per share j um ped 
89 per cent to 112p (54p). The 
interim dividend was raised 12 
per cent to 2.8p (24p). 

Mr Tony Travis, chairman 
said that the AAH deal had 
moved the company from sev- 
enth to joint-second place 
among UK builders materials 
groups, which had enabled it 
to benefit from economies of 
scale. 


Net operating margins at the 
new subsidiary had been dou- 
bled, while for the group as a 
whole they rase from 5.4 per 
cent to 7 per cent. 

Price rises in the materials 
business had been successfully 
passed on to customers, with 
Mr Travis putting inflation in 
the industry' at about 7 per 
cent 

Although the housing mar- 
ket was showing only moder- 
ate signs of recovery, sales to 
the repair and maintenance 
side of the business - about 70 
per cent of Travis’s turnover - 
had improved markedly. Lou- 
don and the south-east were 
proving stronger than the 
group's other operating cen- 
tres. 

Mr Travis said that the com- 
pany's aim was to increase its 
present UK market share of 
some 65 per cent to 9 per cent. 
“A small amount of this will be 
ach i eved through orga n ic 
growth, but most of it realisti- 
cally will be through acquisi- 
tions," although he added that 


the company was currently 
interested only in "bedding 
down" AAH. rather than make 
fresh purchases. 

• COMMENT 

Travis' solid record of control- 
ling costs and focusing on the 
bottom line has worked Its way 
through to AAH's margins. 
The main part of the business 
has reported margins at the 
top end of the industry range. 
The company is better geo- 
graphically spread than before 
and also has the benefit of 
being well placed in the recov- 
ery cycle. Full-year profit fore- 
casts were being ratcheted up 
an average 15 per cent to about 
£33m on yesterday’s perfor- 
mance. giving prospective 
earnings per share of above 21 
times and a prospective p/e of 
13 times. This is slightly 
below the sector average and 
compares well with competi- 
tors Wolseley (currently on 
about 15 times) and Meyer 
International (about 13.5 
times). 


Bryant jumps 99% after 
completions surge in north 


By Caroline Southey 

A surge in completions in the 
north of En gland caused a 99 
per cent rise in pre-tax profits 
at Bryant Group, the Midlands- 
based housebuilder. 

to the year to May 31 pretax 
profits rose from £18 .3m to 
£36.5m on turnover up from 
£310m to £392m. Operating 
profits rose from £22.6m to 
£37.7!m. 

Mr Andrew MacKenzie, chief 
executive, said the develop- 
ment of a ranHi-ragi nnai struc- 
ture had strengthened the 
homes division and put it to a 
position to benefit from a 
steady improvement to the UK 
economy. 

“We will see volume 
increases on the back of our 
regional expansion,” he said. 

The homes division contrib- 
uted 78 per cent of turnover 
and 90 per cent of operating 
profit It had been helped to a 
strong start in 1994 by fixed 
rate mortgages. Mr MacKenzie 
said. 


The division recorded a 15 
per cent increase in financial 
completions to a record 3.255. 
The main "growth in Homes 
has come from Northern," Mr 
Mackenzie said. There were 400 
completions from Yorkshire 
and the North West 
Selling prices rose from 
£83,000 to £95,000 
Sales since May were 30 per 
cent higher than the same 
period last year and provided 
the position Bryant needed to 
achieve its target of 15 per cent 
growth for 1995. 

The luxury homes division 
Bryant Country Homes, with 
average selling prices of 
£300,000, saw its first 15 com- 
pletions. Mr MacKenzie said 
initial setting up costs had led 
to small deficits for Country 
Homes and Scotland. 

The land market bad become 
increasingly competitive and 
was likely to remain difficult, 
he said. 

“The planning system, par- 
ticularly in the south east, is 
consistently foiling to provide 


an adequate supply for market 
needs." 

Bryant Increased its directly 
held land bank by 1,000 lots to 
9400. 

Gearing stood at 14 per cent 
compared with a cash positive 
position last year. 

Earnings per share rose from 
4.9p to 8£p. A final dividend of 
3.6p (3.4p) has been recom- 
mended. 

• COMMENT 

These results exceeded even 
the top end of expectations, 
and with them Bryant brings a 
sense of security to a sector 
that has had its fair share of 
scares. The company has set 
about increasing its product 
mix, which will lift mar gins, 
and extending its geographical 
base, which will generate vol- 
ume growth. With all this in 
place, the Vt per cent interest 
rate rise has foiled to dent the 
optimism surrounding the 
company. The shares look 
cheap with a profits forecast of 
£50m and a p/e of 109. 


Strong emerging markets 
business lifts Nelson Hurst 


By Christopher Price 

A strong showing from its 
emerging market operations 
boosted half-year pre-tax prof- 
its at Nelson Hurst, the insur- 
ance broker which came to the 
market late last year, by 68 per 
cent from £2.61m to £4^8m. 

Turnover for the six months 
to June 30 increased by 17 per 
cent to £21-5m (£18.4m), with 
the best performance - a 25 per 
cent increase - coming from 
the group’s middle and far 
eastern division. Total revenue 
was ahead at £2L9m (£19 An). 

Mr David Woodward, chair- 
man and chief executive, said: 
“we have a presence in all the 
big Asian business centres and 

Tomkinsons 
shares dive 10% 
after warning 

Shares in Tomkinsons, the 
carpet manufacturer, dived 
more than 10 per cent from 
24 Op to 21 5p yesterday, after 
the company said second half 
results would be below market 
expectations, with trading 
running at a similar level to 
the first six months. 

The company said trading 
conditions in the home fnr- 
wtehiiigg sector had continued 
to be very difficult and 
demand for carpets had been 
very depressed during . the 
summer. 

Recently however, there 
had been some signs of a 
modest strengthening of 
demand. 

Pre-tax profits fell from 
£430,000 to £332,000 to the six 
months to April 2, bat the 
interim dividend was held at 
3.5p. 

Wolstenholme 
Rink up 47% 

Wolstenholme Rink, the 
manufacturer and supplier of 
printing materials, saw pre- 
tax profits rise 47 per cent 
from £2J2m to sn-Ofim in the 
six months to June 30. The 
result came on the back of 
turnover up 23 per cent from 
£26£m to £32.7m. 

Earnings per share were up 
51 per cent to 25.3p (16Rp). 
The interim dividend is 7.8p 
(6.8P). 

The share price closed 38p 
np at 808p. 


have developed good relation- 
ships with prominent local bro- 
kers." 

The group's link with Hope- 
well, the Hong Kong insurance 
group, was beg innin g to show 
good returns and the recently 
opened Philippines office had 
good potential, he said. Offices 
in Shanghai and Vietnam are 
planned for early next year. 

Turnover at the financial 
and reinsurance operations 
grew 15 per cent to £8.69m 
(£7.57m), with a particularly 
strong showing from the North 
American casualty insurance 
business. 

London Overseas operations, 
which includes reinsurance of 
large construction projects 


such as power stations, saw 
turnover grow 15 per cent to 
£7m <£6.1m). However, aviation 
and marine insurance were dif- 
ficult markets. 

The UK-based retail business 
was boosted by the joint ven- 
ture with Price Forbes Group, 
one of South Africa's leading 
insurance groups. Turnover 
advanced 20 per cent to £1.94m. 

Mr Woodward was confident 
on second half trading. “We 
are seeing continued revenue 
growth, both from our existing 
business and from new ven- 
tures. 1 am quite bullish over 
our prospects." 

Earnings per share advanced 
from 5.1p to 6.4p. There is an 
interim dividend of 2J2p. 


DIVIDENDS ANNOUNCED. ; , ^ 


Antofagasta int l.45f Dec 7 1.2* - 4.2 

Bodycols int 2.15 Sept 30 2 - 5-25 

Brake Bros int 2.3 Dec 30 2 - 6^2 

Bryant fin 3.6 Nov 28 3.4 5 4.8 

BSG int 0.7f Dec 30 0.7 - 

BSM Int 2.15 Oct 31 

Hoys fin 4.15t Nov 30 3.6 0.1 5.3 

Nelson Hurst int 2.2 Oct 27 - 

Secure Trust int 5t Nov 11 4.5 - 15 

Southern News fin 10 Nov 10 B.8 13.5 11.8 

Tosco int 2.7 Nov 29 2.45 - 7.75 

Travis Perkins int 2.8 Nov 1 2.5 - 8 

Wassail int I.ISf Nov 11 1 - 3.4 

VThokne Rink int 7.8 Nov 10 6.8 - 18 

Dividends shown pence per share net except where otherwise stated. fOn 
increased capital. §USM stock. * Adjusted for sub-dhrtskxv. 



Distributed from our Print Centres In Tokyo- New York, 
Frankfurt, Roubalx and London, tills survey will form a 
unique source of reference and will be seen by senior 
managers who have responsMfty for making purchasing ' 
decisions In all Industrial sectors worldwide. For a full 
editoria l synopsis and details of available advertisement 
positions, please contact: 

Anthony Hayes 

Tat 021 464 0922 Fax: 021 485 0869 
Hn an clai Times, tonga Honan. Georga Road. E tffl tota n . Bk mhgi w n BIS 1PB 


FT Surveys 




22 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 1994 


COMPANY NEWS: UK 


Placing to fund 45% stake in world’s third largest copper deposit 

Antofagasta to raise £11. 5m 


By Simon Dawes 

Antofagasta Holdings, tbe UK 
listed C hilean mining, rail and 
banking group, is buying a fur- 
ther 45 per cent of the Los 
Pelambres mine, which con- 
trols the world's third largest 
copper deposit 

The deal - which will cost 
$29.6m (£l&9m) - will give the 
group a 65 per cent stake in the 
mine. The remainder is owned 
by Midland Bank and Lucky- 
Goldstar, of South Korea. 

It is being part funded by an 
£11 -5m placement; the balance 
will be satisfied in cash. 

The pricing was agreed at 
the time of a debt-for-equity 


swap by Midland in 1989. and 
is extraordinarily favourable to 
Antofagasta. 

A report by RTZ valued Los 
Pelambres' proven and proba- 
ble reserves at Si 58m. suggest- 
ing a $71m valuation for the 45 
per cent stake. 

The company is placing 
3.74m new shares to institu- 
tions at 308p a share, compared 
with yesterday’s closing price 
Of 323p. 

Los Pelambres, which is in 
the Andes some 200 kilometres 
north of Santiago, is estimated 
to have more than lbn tonnes 
of copper-bearing material, and 
some gold and silver deposits. 

Current production is around 


5,200 tonnes per day. but the 
company has recently com- 
pleted a feasibility study which 
suggests that open pit mining 
could increase production to 
60,000 tonnes. 

Mr Christopher Jowett, 
finance director, said Los 
Pelambres would invest up to 
$I20m in developing the min- 
ing operations over the next 6 
years, in order to achieve these 
higher production targets. 

Antofagasta also announced 
that pre-tax profits for the six 
months to June 30 fell from 
£11.6m to ElO.lm. 

This reflected a fell in the 
copper price from a 1993 aver- 
age of 92.4c per lb to a 1994 


average of 90.6c. 

Profits from mining fell from 
f9 1m to g1-2m- 
The railway operations con- 
tributed £1.6m, down from 
£1.8m, as a result of its sensi- 
tivity to the mining industry. 
Associates contributed £6 9m 
(£7.7m). 

For every lc increase in the 
copper price, Antofagasta’s 
earnings should rise $700,000, 
and the current mice of U5p 
suggests a stronger perfor- 
mance In the second halt 
The company increased its 
interim dividend from lJ2p to 
1.45p. Earnings per share 
before exceptional^ were JL4p 
<69p). 


Merger helps lift Secure Trust 6% to £3.9m 


By Aflson Smith 

Secure Trust, the financial services group, 
reported a 69 per cent rise in first half 
pre-tax profits from £3. 71m to £3 -94m. 

Net interest income rose from £2.im to 
£297 Ul Fees and commission rose from 
£7.17m to £7 56m. 

Mr Henry Angest, chairman, said that 
the group had benefited from merging the 
Peoples Bank and Secure Homes into the 


Secure Trust Bank. 

This enabled it to offer a wider range of 
services to the existing customer base. The 
acquisition of Aitken Hume Bank, now 
renamed Arim thno t T-afftam. made it pos- 
sible to offer new ranges of services. 

Mr Stephen Lockley. finance director, 
said acquisitions and establishing Arbuth- 
not Commercial finance, a factoring oper- 
ation. accounted for the rue in administra- 
tive expenses from £5.08m to S5.62m. 


Most of the p rofit growth had come from 
Secure Trust Bank, he said, and from the 
Household Cash Management business 
where consumer lending had increased. 

The group’s insurance broking business 
was slightly down on the first half of last 
year. 

The interim dividend was raised from 
45p to 5p. 

framing s per shar e rose 75 per cent to 
I85p (175p). 


BM makes 

Canadian 

disposal 

BM Group, the engineering 
concern, took a further step in 
the disposal of its Blackwood 
Hodge interests with the sale 
of Blackwood Hodge (Canada) 
in a deal worth £45m. It conld 
raise a further £2m to £3m 
from the sale of assets faring 
retained. 

The company Is being sold, 
for a nominal «nn to a consor- 
tium including local manage- 
ment and Mr Howard Sutton, 
who resigned as chief execu- 
tive last year after announcing 
higher than expected restruct- 
uring costs. The consortium 
also includes Mr Ronald Stras- 
ser a former non-executive 
director of BM. 

The deal includes the repay- 
ment of intercompany loans of 
pi 9m in addi tion BM will be 
relieved of bank b or row in gs, 
stock finance and finance 
leases amounting to £3J3m. 

As a result of earlier provi- 
sions and taking into account 
the C anadian company’s trad- 
ing losses, BM said the sale 
would have a positive impact 
on net assets. BHC lost £6.2m 
(£4.lm) before tax and excep- 
tional on turnover of £49.6m 
(£65 9m) for the 1993-94 year. 


Pearson shares fall 19p 
as publishing restructured 


By Raymond Snoddy 

Pearson yesterday announced 
a restructuring of its publish- 
ing interests to reflect its new 
strategy of concentrating on 
information, education and 
enter tainment. 

Under the reorganisation 
which is due to be completed 
by the end of this year publish- 
ing will be grouped by (heme. 

As a result there will be 
redundancies at Longman’s 
offices in Harlow, Essex 
because of the consolidation of 
some head office functions. 
Pearson did not say how many 
jobs would go although it is 
believed to be about 100. 

Following a briefing on the 
reorganisation, for analysts the 
shares fell I9p to dose at 564p. 

The reorganisation means; 

# Information - the business 
and professional publishing 
arms of the Financial Times 
Group and Longman Group 
will be combined to form Pear- 
son Professional, a subsidiary 
with projected revenues of 
about £l50m a year. The busi- 
nesses that will be brought 
together indude FT Newslet- 
ters and FT Conferences. Fed- 







..S 


INFORMATION FROM THE BANK OF ENGLAND 



ISSUE OF £2,000,000,000 


8V 2 % TREASURY STOCK 2005 

INTEREST PAYABLE HALF-YEARLY ON 7 JUNE AND 7 DECEMBER 
FOR AUCTION ON A BID PRICE BASIS ON 28 SEPTEMBER 1994 


PAYABLE IN FULL WITH APPLICATION 


With a competitive bid 
With a non-competUve bid 


Price bid 

£100 per £1 X nomma) of Stock 


within Part U of the Pint 
non hai beat made to the 
to the Official List on 29 


This Stock will on lane, be an Investment j 
: Schedule la the Trustee Investments Act 1961 
: London Stock Exchange for the Slock to be i 
September 1994. 

1. THE GOVERNOR AND COMPANY OF THE BANK OF ENGLAND 
invite bub for the above Stock. 

2. The principal at and Interest on the Suck win be a charge on (he National 
arts Fand, with recourse to the ComoUdaied Fund of the Unbed Kingdom. 

3. The Stock win be repaid at par oo 7 December 2005. 

I 4. The Stock will be regutoedai. the Bank of England or* the Bank of Ireland. 

Hast, and will be transferable. In multiples of one penny, by instrument in 
! writing la accordance with the Stock Transfer Arx 1963. Stock registered at the 
; of England held for the account of members of the Central Glhs Office 
i (CGO) Service will also be transferable, in multiples of one penny, by e»wnp« 
in accordance with the Stock Transfer Act 1982 and the relevant 
mtn legislation. Transfers win be free of stamp duty, 
i 5. Interest wiO be payable half-yearly an 7 June and 7 December. Income tax 
will be d e d u c te d front payments of more than £5 per annum. Interest wananis 
will be transmitted by post. Interest win accrue from Thursday, 29 September 
1994 and ibe first interest payment will be made on 7 Jane 1995 at the rate of 
| £5X453 per £100 nominal of Stock. 

I 6. The Stock may be held on the National Savings Suck Register. 

! 7. The Stock and the interest payable thereon will be exempt from all United 
Kingdom taxation, present or Autre, so long as h is shown tint the Stock la in 
j the beneficial o w ners h ip of persons who are neither domiciled nor ordinarily 
g resident tn (he United Kindlon of Greet Brhmn and Northern Ireland, 
i 8, Farther, the interest payable on the Suck will be exempt from United 
Kingdom Income tax, present or future, so long as it is shown that the Stock Is 
j fa the beneficial o w ner sh ip of persons who are not ordinarily resident in the 
J United Kingdom of Grew Britain and Northern Ireland. 

• r * 9. For the purposes of the preceding paragraphs, persons are not ordinarily 
ft*' i-i-. j resident in the United Kingdom If they are regarded as not ordinarily resident for 
the purposes of United Kingdom income tax. 

10. Applications for exemption front United Kingdom income tax should be 

made fa such form as may be required by the GommissiODen of Inland Revenue. 

.;',d The appropriate forms may be obtained from the Inspector of Foreign Dividends. 

Inland Revenue, Lynwood Road, Thames Din on, Surrey, KT7 OOP. 
sfes&d 1 1. These exe m pt i ons will not entitle a person to claim repayment or tax 

"KSva d ed uc t e d from Interest unless the dam to such repayment is made within the 

dme limit provided for rocb claims under income tax law; under ibe provisions 
of the Taxes M anagement Ad 1970, Section 43 (J), oosucta claim will beoutside 

£«g£-i this time limit If U is made within six years from the date on which (he interesr 

li payable, in addition, these exemptions will not apply so as to exdude the 

interest from any co m puta ti on for taxation purposes of ibe profits of any trade or 
Sfjg&r’# btttaeu carried cm in die United Kingdom. Moreover, the allowance of the 
JjiVfl exemptions is subject to the provisions of any law. present or future, of ibe United 

Kingdom directed to preventing avoidance of taxation by persons domiciled. 

resident or ordinarily resident tn the United Kingdom, and. In particular, the 

£*3 interest win not be exempt from Income tax where, undo- any m provision, it 

fells to be treated for (be purpose of the Income Tax Acts as Income of any person 

resident or ordinarily resident in the United Kingdom. 

Method of Application 

12. Bids may be made on ekhcr a competitive or 3 noa-compeddvr basis, ns set 

1 ^ out below, and must be submitted on the application form published with the 

jjl'.'f prospectus. E a ch application form must comprise either one competitive bid or 

one non-competitive bid. Gilt-edged mailed makers may make competitive bids 

by telephone to the Bank of England not later than 10.00 am on Wednesday. 28 
Jp i September 1994. 

13. Application forms must be sent to the Bank of England, New Issues, PO 
re&’.j Box 4 44, G loucest er. GH INP to arrive Dot later than 10.00 AM ON 

WEDNESDAY, 28 SEPTEMBER 1994: or lodged by hand at the Central fittn 

- J Office, Bank of England. Bank Buildings, 19 Old Jewry. London sot later than 

1000 AM ON WEDNESDAY, 28 SEPTEMBER 1994; or lodged by hand at 

V-i any of the Branches or Agencies of the Bank of England not later than 3JOFM 

?: vl ON TUESDAY. 27 SEPTEMBER 1994. Bids will not be revocable between 

1D -°° a® oa Wednesday. 28 September 1994 and 1000 am on Monday, 3 

“fa October 1994. 

14. COMPETITIVE BIDS 

Each competitive fad must be for one amount and at one price expressed as 

a multiple of l/32ad of£l and moat be for a ounlraum of £300.000 nominal 

of Stock and for a miitetpin of Stock at follows: - 

Amount of Stock applied for Multiple 

Unless the applicant is a member of the CGO Service, a separate cheque 
representing PAYMENT IN FULL AT THE PRICE BID must 

n e rx unp any each competitive bid. Cheques must be drawn on n branch or 

office, situated within the Town Clearing area, of a settlement member of 

CHAPS and Town Clearing Company limited. 

Oil) The Bank of F ng l a nd reserves the right to reject any competitive bid or part 
!•¥;• . ofatty competitive bid. Competitive bids will be ranked In descending order 

of price and Stock will be sold to applicants whoso competitive fads are at 

or above the lowest price 8 which the Bank of England decides ihai any 

competitive bid should be accepted (the lowest accepted price). 

APPLICANTS WHOSE COMPETITIVE BIDS ARE ACCEPTED 

WILL PURCHASE STOCK AT THE PUCES WHICH THEY BID; 

competitive fads which are accepted and which are made at prices above 

the lowest accepted price will be satisfied In frill; competitive bids which 

are accepted and which are made at (he lowest acc e pted price may be 

satisfied In fun Or in part only. 

NON-COMPETITIVE BIDS 

A non-competitive bid must be for not leu than £lj000 nominal and not 

more than £5003)00 nominal of Steek, and must be fora multiple of £1,000 

nominal of Stock. 

Only one non-compedtive Md may be submitted for the benefit of any one 

person, and each non-competitive application form may comprise only one 

□on -competitive bid. Multiple applications or suspected multiple 


.jffis" 

tfclvj 

m 



applications are liable to be rejected. 

(Ib) Unless the appUcaa Is a member of the CGO Service, a separate cheque 
representing PAYMENT AT THE RATE OF £180 FOR EVERY £1M 
NOMINAL OF STOCK APPLIED FOR most accompany each 
nan-competitive bid; cheques must be drawn on a bank in. and be payable 
fa. the United Kingdom, the Channel Wnii nriti y T^i^ yin 
(lv) The Bank of England reserves the right to rejea any non-com p e titi ve fad. 
Non-competitive bids which are acc ept e d will be a cce pted I n fid I AT A 
PR ICE (t he nop-cotap edtivE Bde pri ce) EQUAL TO THE AVERAGE 
OF THE PR ICES AT WHICH COMPETITIVE BIDS HAVE BEEN 
ACCEPTED, the average being weighted by r efer en c e to the amount 
accepted at each price and ROUNDED DOWN TO THE NEAREST 
MULTIPLE OF 102NDOFXL 

(v) If the Don-compcdtiYe sale price Is less than £100 per £100 nominal of 
Stock, the balance of riiearnonni paid wiD be refunded by cheque dtapatched 
by post A the risk of tire applicant. 

(vi) If the non-competitive sale price is greater than £100 per £100 nominal of 
Stock, applicants whose non-competitive bids are accepted may be icqulred 
to make a father payment equal to the non-com p e titi ve tale price leu £100 
fin every £100 n o m i n al of Stock abocsed to them. An applicant from 
whom a farther payment is required wiD be notified by letter by the Bank 
of England of the amount of Stock allocated to Mm and of the further 
payment due, but such notification wfll confer no right on the applicant to 

Imufer th> Hamit rf.tinrif «n iHiwml Tri* il»tpin-l i nf «1Wi^„ l ^« 

to applicate from whom a further payment Is required will be delayed nntil 
such fin diet payment has been made. 

16. The Bank of England may acD leas than the ftill amount of the Stodtoa offer 
at the atctiOL 

17. The Slock will be initially issued at a price such that il wiD not be a deep 
discount security for the purposes of Schedule 4 to the Income md Gx’potafion 
Taxes Aa 1988. Anther issues of the Stock may be a a deep rflscouat (broadly, 
a discount exceeding Vs46 per annum) and fa certain cimira w nw ^ itiu could 

result In all of the Stock being treated thereafter as a deep dlaronut security. 

However, it Is the intention of Her M^eaty's Treasury that further issues of tire 
Stock will be conducted so as to prevent any of such Stock being treated as a 

deep discount security for United Kingdom tax purposes. Provided the Stock is 

neither a deep discount security, nor treated as a deep discount security, any 

discount to the nominal value re which the Stock is issued will not represent 

taxable income far the purpo se s of the relevant provisions. 

18. Letters of allotment la respect of the Suck sold, being the only form fa 

which tire Stock (ocher than amounts held fa the CGO Service for the account of 

members) may be transferred prior to registration, wiD be despatched by pas « 

the risk of the applicant, bat the despatch of any letter of aOotmeat, and the refund 

of any excess a m o oni paid, may at the discretion of the Bank of England be 

withheld until the applicant’s cheque has been paid. In the event of 

withholding, the applicant wiD be notified by letter by the Bank of England of 

the acceptance of his application and of the amount of Stock allocated to Mm, 

subject in each case to the payment ofhis cheque, but such notification will confer 

do right on the applicant to transfer the Stock so allocated. 

19. No sale will be made ofa less amount than £tjD0O nominal of Stock. If an 

application is satisfied in part only, the excess amount paid wfll, when refimded, 

be remioed fay cheque de sp atc hed by post at the risk of the applicant; if an 
application is rejected the amount paid on application wfll be returned likewise. 

Non-pay meu on presouatian of a cheque in respect of any Stock sold will render 

such Stock liable to forfeiture, interest re a rate equal to the London Inter-Bonk 

Offered Rale for seven day deposits in stating ("LIBOR") plus 1% per annum 

may, however, be charged on the amount payable in respect of any Stock for 

wtdefa payment is acc ep t e d after the due date. Such rate wfll be determined by 

the Bank of Englaad by refetence fo market quotrekus, on the doe (fete for arch 

payment, for LIBOR obtained from such source or so u r ces as tire Bank of 

Fn gtnnH shall consider appropriate. 

20. Letters of aflotmem may be split into denomination! of multiples of £100 

on written rcqoot to the Bank of England, New Issues. Southgate House, 

Southgale Street, Gloucester, GL1 1 UW received not latenhaa 1 3 October 1994. 

Such requests must be signed and must be accompani e d by the letters of 

allotment Letters of a ttameiu . ac c o m p an ied by a completed regi s i ngi o n form. 

may be lodged for regist r ati o n fo rt h w it h aid fa any case must be lodged for 

reglsUadou not kner than 17 October 1994; in the case of Stock held far the 

account of memben of the CGO Service registration of Stock wfll be effected 

under separate arrangements. 

21. Subject to the provisions gover ning m embership of the CGO Service, a 

member of that Service may, by cnmpkfing Section C of the medication form. 

request that any Stock sold to Mm be credited direct to Ma a c cou nt in the CGO 

on Thursday. 29 September 1994 far means of a member-to-member delivery 

Grom an account in the name of the Governor and Company of the Bank of 

England, Number 2 Account- Pfalure to accept safe delfogy far the deafltiie for 

member ho- member deliveries under the rules of the COO Service on 29 

September 1994 ahall fix tire prapoacsofthis prospectus constitute dcfanlt indue 

payment of the amount payable in respect of the relevant Stock. A member of 

the OCX) Service may also. subject to the provision governing membership of 

that Service, surrender a letter of aUoonem to the CGO far cancellation and far 

tire Stock comprised therein to be oeditediothe member's amount. The member 

who is shown by tbe accounts of the CGO as being entitled to any Stock remit. 

to the exefarion of all posies previously entitled to such Stock and any person 

claiming any etmtiemem thereto, both be mated as entitled to such Stock as if 

that member were the holder of a letter of allotment and be liable for the payman 

of any amount due in respect of such Stock. 

22 . Application forms and copier of this pros p e c tus may be obtained by post 
from the Bank of England, New Issues, Southgate House. Soudigate Street. 

Gloucester. GL1 1UW; el the Cental Gila Office. Bank of England. 1 

Buildings, Knees Street, London, EC2R 8EU or at any of the Oraches « 
Agencies of tbe Bank of England; at the Bank of Ireland, Moyne Buildings, 1st 
Floor. 20 CallmJfr Street, Belfast, BT1 3 BN; or at any office of the I 
Stock Exchange. 

Government Statement 

Aorirtion is drawn (o the statement issued by Her M^oiy’s Treasury on 29 May 

1985 wtdeh explained ihaL in the Imerea of the onleriymiidiirroffi y ^ip pfl ty^ 

neither Her Majesty's Government nor the Bank of Engfaml or thdr respective 

servants or a ge nt s undertake to discing tax Hmy derwfad on bin not yet 


announced, even where they may spedflcdly affect the terms on which, or the j 
conditions under which, this Stock is issued or sold by or on behalf of the j 

rUwrmn<^«/v-llw. W^dr; rtiM im n^pnwnh nity fru-gny 1 

omisciaa Co make soch disriaane; and rhre inch omission shall neither reader I 
■ty tnnsaction liable to be set aride nor give rise to any claim for compontartai 


BANK OF ENGLAND 
LONDON 


20 September 1994 


TO THE GOVERNOR AND COMPANY OF THE BANK OF ENGLAND 

1/We apply in accordance with the terms of the pr o sp ect u s far co m petitive and ; 
ncat-compcrinve bids dOed 20 September 1994 as fofl ows;- 

Hjffigj FOR COMPETITIVE BIDS ONLY 

(ie for Stock to be purchased at the price bid) 

Nomina] amount of SVsfeTreaaniy 
Stock 2085 appBedlbr: 

Amount at Stock applied for Multiple 

£50a000-£l,00aax) £100000 

£ 1,000000 or greater £ 1 , 000,000 

Price hid per£X0t nominal of Stock, 
being a nuMple of l/32nd of £li 

Stun en closed fa), being the amount required 

: IN FULL AT THE PRICE BID far 
evo £1M NOMINAL of Stack applied fort 



FOR NON-COMPETITIVE BIDS ONLY 
(ie for Stock to be purchased at the aon-ea mperl/fve sole price i 
defined In the prospectus ) f 

Nominal amount of 8 V 4 * Treasury I _ 

Stock 2685 applied far, bring a multiple t 

of £ 1 , 000 , wait a minimum of £ 1,000 and a 1 

m a xfanmn of f500£)00 nominal of Stock: 


Sum enclosed fa), being £100 (b) fbr every £100 
NOMINAL of Stock applied for 

gjgg FOR CGO MEMBERS ONLY 

CGO PARTICIPANT NUMBER Td No_ 


Name of cojiiact - 

M THIS SECTION TO BE COMPLETED BY ALL APPLICANTS 

I/We request tint any letter of aUooneot fa respect of Stock sold 

meftis m. the address below. 

IN THE CASE OF A NON-COMPETmVB APPLICATION, I/We 

warrant that to my /bur knowledge this is the only non-competitive application 

made for my/ore benefit (or for the benefit of the persons on whose behalf! 
am/wc arc roplying). 

INTHEGASEOF AN APPLICATION BY A MEMBER OF THE CGO 

SERVICE WHO HAS COMPLETED S ECTION C, we request tint any Stock 

allocated to us be credited (Erect to oar account at tire CGO. We ncreby 

irr e vocably undertake to accept such Stock by manburHo-member delivery 

through die CGO Service from tbe Governor and Company of the Bank of 
England. N umb er 2 Account (Participant number 3183) by the «i«»ribv for 

such deliveries on 29 September 1994, and we agree that the coa&ideratios to 

be input in respect of such delivery shall be the amount payable fa us on the 

aale (rf such Stock In ac cord a nce with the terms of the progaec ti M. 











1 ■ |l| , 

| T i - v - r ,i T - 








NATIONAL SAVINGS STOCK REGISTER: if you wish the Stock 

to be registered on the NATIONAL SAYINGS STOCK REGBTER 

{for which there fa a limit of up to £25,000 nominal or Stock) please 

tick this box. 


| 


(ai 


A separate 
be made 



ie chcaue must accompany each application. Cbcqoes should 
payable to 'Bank of England" and crossed "New Issues*. In 
respect of competitive fads, cheques nun be drawn on a branch or office, 

stased within the Town Crating area, or a settlement member or ! 

CHAPS and Town Gearing Company Limited. In respect of ' 
noc -competitive bids, cheques must be drawn on n bank tn, and be 1 
payable In, the United Kingdom, (be Channel islands or the Isle of Man. 

(b) The procerfctre for eny refund, or fimher amount payable. Is set out In the 

prospectus. 

APPLICATION FORMS MUST BE SENTTOTHE BANK OF ENGLAND. 

NEW ISSUES, PO BOX 444, GLOUCESTER, GLl INP TO ARRIVE NOT 

LATER THAN 1000 AM ON WEDNESDAY, 2S SEPTEMBER 1994; OR 

LODGED BY HAND AT THE CENTRAL GILTS OFFICE, BANK OF 

ENGLAND. BANK BUILDINGS, 19 OLD JEWRY. LONDON NOT 

LATER THAN 1040 AM ON WEDNESDAY, 28 SEPTEMBER 1994; OR 

LODGED BY HAND AT ANY OF THE BRANCHES OR AGENCIES OF 

THE BANK OF ENGLAND NOT LATER THAN 3 JO PM ON TUESDAY. 

L2Z5ED3tf saias* 



Frank Barlow: driven by need 
to concentrate on key markets 

eral and Capital Publications 
and AslaPacific Business and 
Professional. 

• Education - the English 
language teaching and educa- 
tional publishing interests of 
Longman will be merged with 
Addis on-Wesley to form 
Addison-Wesley Longman with 
projected revenues of more 
than £360m. 

• Entertainment - Ladybird 
Books, fee children’s publisher 
will be added to Fengain. Pen- 
guin's worldwide business has 
projected revenues of of about 
£370m. 

Pearson Professional will be 
run by Mr Peter Warwick, at 
present Longman’s deputy 
chief executive. 


Addison-Wesley Longman 
will be headed by Mr Larry 
Jones who has recently been 
appointed chief executive of 
Addison-Wesley. Ms Paula 
Kahn, who has been chairman 
and chief executive of Long- 
man for the past five years, 
will leave the company at fee 
end of this year. 

Mr Frank Barlow, Pearson’s 
managing director said that 
although some jobs would go 
“fee changes are driven by the 
logic of our decision last year 
to concentrate, as a media 
group, on opportunities in 
information, education and 
entertainment Those are our 
key markets, and we have to 
line up our resources accord- 
ingly - . 

Pearson said that the net 
impact of the reorganisation 
on the company’s 1994 finan- 
cial results should not be mate- 
rial . 

Earlier this month. Pearson 
announced a 50 per cent rise m 
pre-tax profits to £895m for the 
six months to the end of Jhne. 
The results, and hints of diffi- 
culties in the book market led 
to a 3lp drop in the share (Rice 
to 628p. 

Mr Richard Dale, media ana- 
lyst at stockbroker Smith New 
Court said yesterday that the 
change would have little effect 
in fee short term. “Ova- the 
longer term, hopefully, it will 
engender a degree of commu- 
nal! ty.” 


All-round increase 
lifts Bodycote 10.5% 

larger components. 
EHCO-KLM, the protective 

rfnthlng anil unifor ms maker, 

made profits of £880,000 
(£629,000) on turnover of 
£13.6m (£12.7m). This repre- 
sented a sharp improvement 
on losses of £118,000 in the sec- 
ond half of 1993, which 
included closure and redun- 
dancy costs. 

Stockpack, the contract 
packaging group, was now 
reaping the rewards of the 
group's recent investment. 
High-tech machinery was lead- 
ing to smaller labour costs, 
Mrs Avery said. 

The industrial and general 
division, of which Stockpack is 
the main subsidiary, raised 
profits 9 per cent to £L2&n 
(£l.L5m) on turnover up at 
£456m (£8.77m). 

Capital expenditure for 1994 
is expected to match 1993’s 
OSm, with most going to the 
metal technology side and 
Stockpack. Gearing is “negHgi- 
bte”. The interim dividend is 
lifted 75 per cent to 2J5p (2p), 
payable from earnings per 
share of 8J28p (7.68p). 

The share price closed 6p up 
at 322p_ 


By Peter Pearse 

Increases in all divisions 
enabled Bodycote, the metal 
technology, packaging and tex- 
tiles company, to announce a 
105 per cent advance in pre-tax 
profits for the first half of 1994. 

The rise from £6.52m to 
£7 .21m was strode on turnover 
ahead almost 10 per cent at 
£41.4m (£37.7m). 

The advance was underpin- 
ned by continued progress 
from the metal technology side 
and a tumround from the sec- 
ond half of 1993 in the protec- 
tive clothing business. 

The metal technology divi- 
sion lifted profits by 8 per emit 
to £556m (£5 J5m) an turnover 
of £22.8m (£2L2m). 

Mrs Claire Avery, company 
secretary, said the rise had 
been on the back of greater 
demand from the automotive 
and aerospace industries for 
Bodycote’s “hot isostatic pro- 
cessing" ■ hipping - a process 
which removes the porosity 
from metal. 

Mrs Avery said demand was 
growing in fee UK and the US 
and that the group was devel- 
oping the process to cape with 


Weekend FT 

RESIDENTIAL PROPERTY 

Every Saturday the Weekend FT Residential 
Property section reaches an International 
market of approximately 

ONE MILLION READERS 
in 

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rent your property or land. 

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071-873-4896 
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071-873 3252 
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071-873 4935 

Fax No: 071-873-3098 

Financial Times, 

One Southwark Bridge, 

London SEl 9HL 



Hie Property Finance Sourcebook 1994 

Avoid expensive fees - go straight to the source. With this baofc yoc are 
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0 










FINANCIAL TIMES WEDNESDAY SEPTEMBER 2 1 1 994 


k 


> 


COMPANY NEWS: UK 


Newly-a cquired General Cable contributes £1.2m in just 22 days 

Wassail 21% ahead at £11.8m 


By David Wighton 

Wassail, the conglomerate that 
Dearly trebled its annual sales 
with the £177m acquisition of 
US-based General Cable in 
June, increased pre-tax profits 
by 21 per cent to £iL8m in the 
six months to June 30. 

General Cable contributed a 
profit of £l.2m in 22 days and 
Mr Chris Miller, chief execu- 
tive, predicted that it would 
enhance group earnings in its 
first year. 

Wassail has cut more than 20 
per cent of General Cable’s 300 
strong head office and 
appointed a new chief execu- 
tive in Mr Steven Rabinowftz, 
formerly with General Electric 
and Allied Signal 

General Cable’s huge copper 
stocks have already been 
reduced by 10 per cent 

Wassail believes that eventu- 
ally it will be able to hedge up 
to 70 pex cent of its copper 
exposure? but meanwhile it is 
able to pass on the rising 
price to its customers. 

It also faces rising polypro- 
pylene and aluminium costs in 
its bottle tops business where 
Mr Miller admits price 
increases are very difficult to 
pass on. But he predicted the 
effects would be outweighed by 
continued volume growth. 

The closures division 
recorded 10 per cent volume 
growth in Europe, helped by 



Ten* *narw*a 

Christopher Miller (centre) with deputy chief executives David Roper (left) and Philip Turner. 


good weather, expansion In 
eastern Europe and the success 
of Coca-Cola's new half litre 
bottle which is tafrfo g market 
share from cans. 

Closures profits rose to 
£5.43m (£4.96m) despite a 
downturn in South Africa 
reflecting the uncer tainty ‘and 
upheaval caused by the elec- 
tions. Mr Idler forecast a bet- 
ter second half in South Africa 
and added: “Business confi- 
dence is better than it has been 
for years though whether that 
translates into real orders 
remains to be seen.” 

Kxriuritag General Cable and 
exchange rate movements the 


existing businesses increased 
operating profits by 29 per cent 
to £12m with the contribution 
from DAP. the US DJY prod- 
ucts supplier, up 31 per cent to 
£4J99m. 

Turnover from the existing 
businesses rose to £l37.6m 
(£133.1m) while General Cable 
contributed £42. 6m. 

Earnings per share rose 15 
per cent to 4.7p. 

The interim dividend is up 19 
per cent to 1.15p. 

The shares fell lip to 288p. 

• COMMENT 

The slide in Wassail’s share 
price yesterday had more to do 


with its strength since the 
General Cable deal than with 
any concerns about the figures. 
Virtually all the existing busi- 
nesses are performing well and 
Mr Miller is so confident about 
General Cable that lie said the 
group could take on another 
acquisition outside the US if 
the opportunity arose. He is 
predicting margins of 4 per 
cent at General Cable in 1995 
which should power profits 
from around vapfp this year to 
perhaps £52m. That puts the 
shares on a multiple of 22, fall- 
ing to 17. Demanding certainly, 
but the Wassail team’s record 
is hard to beat 


Southern News rises to £11.4m 


By David Blackwell 

A gain of £3 .5m on the sale of a 
stake in rival Portsmouth & 
Sunderland Newspapers helped 
Southern Newspapers to lift 
annual profits by more than 
hall 

Pre-tax profits for the year 
ended July 2 rose from £7 Aim 
to £1L4. The figure included 
£789,000 (£868,000) from other 
operations, mainly related to a 
Bournemouth industrial estate, 
and exceptional costs of £1 .22m 
related to a plant closure. 

Operating profits from the 
main businesses of newspaper 
p ublishing and cont ra ct print- 
ing rose from £5 JSm to £&2fen. 
Total turnover improved from 
£7Xm to fTEJm. including £im 
from ar qirimtimin 

Mr James Sexton, chief exec- 


utive, said yesterday that he 
was pleased with the perfor- 
mance. The group remains 
ungeared, and is planning to 
fund from its own resources 
£25m of capital expenditure 
over the next two years on 
relocating its printing 
operations in Southampton 
and purchasing a new web off- 
set colour press. 

Capital expenditure for 
199394 was £6.4m (£5m), and 
tile group ended the year with 
£5Bm cash (£43m). 

The newspaper division, 
which publishes three daily 
and 30 weekly newspapers in 
southern England, reported 
advertising revalues ahead by 
9.4 per cent, with the mast sig- 
nificant- increase coming to 
employment advertising. 
National advertising taken 


through the London office rose 
by 18 per cent to £fim. 

Overall circulation levels 
were ahead by a little more 
than 2 per Cent, but the dailies 
to Bournemouth and South- 
ampton showed a small 
decline. 

Magavina printing, inrlnriinp 

Bucfamg B ft Mart, contributed 
£23m to total turnover. The 
group, which has concentrated 
all its magazine printing in 
Upton, near Poole, said vol- 
umes had increased dramatic- 
ally, but margins remained 
tight. 

Earnings per share were 
39.27p, up from a previous 
22.73p. Excluding exceptional^, 
the latest earnings figure is 
29.19p. A proposed final divi- 
dend of lOp "lafcwi the total for 
the year 13Ap (lL8p). 


[ Parambe 
tumbles 
to £17,000 

Pre-tax profits at Parambe, an 
investment company, Ml by 58 
per cent from £40,238 to £17,002 
in the six mnnt-hg to June 30. 

Turnover was down at 
£90,357 (£106,792). 

The company said that while 
some of the larger holdings to 
Its investment portfolio per- 
formed strongly, security deal- 
ing income was well down at 
£26430, against £47.240. 

Gross investment income 
edged up to £42.609 (£41489), 
and art dealing income pro- 
duced £21,618 (£18,263). 

Earnings per share however, 
fell from 0.49p to O^lp. The 
company has stopped paying 
interim dividends (0 A5p in 
1993). 


UK catering 
improvement 
helps Brake 
advance 24% 

By Richard Wottfe 

Improvement in the UK 
catering market helped to lift 
pre-tax profits at Brake Bros, 
the frozen food distributor, 
which yesterday announced a 
24 per cent rise from £7.14m to 
£8. 86m for the six months to 
June 30. 

Group turnover lifted 18 per 
cent from £l50.5m to £ 188.9m, 
Including a full six months* 
sales from Country Choice 
Foods, a frozen products sup- 
plier which was purchased in 
May 1998- Operating profit 
rose 19 per cent to £9 -26m 
(£7.78m). 

However, the group’s perfor- 
mance was held back by its 
UK (hilled food catering oper- 
ation, Larderfresh, which 
made losses of £L3m (£i.lm). 
Brake Bros sees the ve nture , 
which was launched to August 
1993, as part of its long-term 
strategic developme n t 
The cost of establishing food 
distribution activities in 
France increased, with operat- 
ing losses standing at £l.lm 
(nil). The French activities are 
not expected to make a sub- 
stantial contribution this 
year. 

Mr William Brake, chair- 
man, said: “while the costs of 
entering France are proving 
greater than expected, the 
directors are confident that 
action taken to getting into 
place a strong management 
structure, linked to the many 
improvements already intro- 
duced, will enable the board to 
achieve its goal of creating a 
business emulating that in the 
OK" 

Underlying sales at the com- 
pany's core UK frozen foods 
business grew 6 per cent, and | 
are expected to perform 
soundly for the rest of the 
year. 

Interest charges fell from 
£644,000 to £392,000, thanks to 
reduced borrowings and lower 
interest rates. 

Gearing was reduced from 
S3 per cent at December 31 to 
nil, after a net cash inflow of 
£9. 6m. 

Earnings per share lifted 11 
per cent to ll.lp (lOp) and the 
interim dividend increased by 
15 per cent to 2.3p (2p). 

The shares closed up lp at 
4l8p yesterday. 


Offer gives Attwoods 
chief a disturbed night 

Peggy Hollinger considers the Browning Ferris bid 


Attwoods 


Share price relative to the FT-SG-A AU -Share Index 

110 ... .. --- - 



1990 01 92 93 04 

Source; FT Grophrte 


Mr Ken Foreman, Attwoods 
chief executive, undoubtedly 
had a rude awakening yester- 
day morning. At some time 
about Sam he was roused from 
bed to hear that he had been 
sold out. not only by his larg- 
est shareholder bat also three 
of bis fellow directors. 

The men from Laidlaw who 
negotiated the deal to sell the 
Canadian company's 29.8 per 
cent stake, which resulted to 
yesterday’s hostile £364m cash 
bid from Browning Ferris 
Industries, have been on the 
Attwoods board since 1990. 

Relations have been strained 
for some time, however. And 
laidlaw’s comments yesterday 
left no doubt that its disap- 
pointment with the investment 
was increasing. 

Yet Mr Foreman argues the 
worst is behind Attwoods, and 
the bid substantially underval- 
ues its recovery potential. 
Investors might he forgiven for 
thinking they have heard such 
optimistic comments before, 
after thw cash calls, disposals, 
and management c han ges of 
the last four years. 

Attwoods has long had a 
credibility problem with UK 
investors. In recent years their 
interest has fallen to just 2530 
per cent of the shares. 

The company has been 
plagued by rumours of Mafia 
links, which have been denied, 
following the takeover of a US 
company in 1984. The group's 
US subsidiaries, and some for- 
mer US directors, have also at 
various times been the focus of 
government investigations for 
alleged bribery, fraud and cor- 
ruption. Finally, Attwoods has 
faced regulatory problems to 
the US which have led to a 
series of law suits. 


Mr Foreman himself sits 
uneasily with the pinstriped 
brigades in the City of London. 
A small man, permanently 
suntanned as a result of his 
preference for his Florida 
home, Mr Foreman most often 
hits the headlines as t he third 
husband of Mandy Rice- Da vies. 

It was Mr Foreman’s waste 
business, Drinkwater Sabey. 
which reversed into Attwoods 
Garages in 1982 and came to 
the market with ADT, the 
security and car auctions 
group, as a substantial share- 
holder. Laidlaw arrived in 1989, 
after a complicated asset swap 
involving ADT and Attwoods. 

Mr Foreman built the com- 
pany through a series of acqui- 
sitions. He attracted influential 
support, including Sir Denis 
Thatcher, who retired earlier 
this year after 10 years as dep- 
uty chairman. 

By 1990 finances were get- 
ting stretched. 'Within 16 


months it called on sharehold- 
ers for £162m in two rights 
issues. The second was only 
successful when Laidlaw 
agreed to underwrite a sub- 
stantial proportion of the issue. 

Since then. Laidlaw's sup- 
port has been poorly repaid. In 
1991 it wrote off half the value 
of Its $900m f£580m) invest- 
ment. Pre-tax profits have 
plunged from £28.5m in 1990 to 
last year’s loss of £62 .2m, after 
a £9im writeoff on disposals. 
Forecasts are for £20m after 
exceptional for 1994, still some 
way from the peak of £39m. 

Nevertheless Mr Foreman 
says Attwoods is now set for 
its best year for some time. 
Recovery Is beginning in the 
US and UK. while Germany 
has at least got no worse. 

Attwoods’ defence will draw 
strongly on the recovery story. 
However, a greater challenge 
will be to convince investors of 
the managpmpnt story. 


Murray Johnstone emerging trust 


Murray Johnstone is p lanning to launch a new 
investment trust concentrating on emerging 
markets. It hopes to raise about £40m for the 
trust, writes Betfaan Hutton. 

The management team for the Murray Emerg- 
ing Economies Trust will be led by Mr Rodger 
Scullion, who is already responsible for the Mur- 
ray Smaller Markets investment trust, which 
has considerable holdings to emerging mar k- 
eta. 

Murray Johnstone has a total of about £30Om 


under management to emerging markets 
through a number of retail and institutional 
fluids. 

The new trust will follow the International 
Finance Corporation's definition of emerging 
markets, which currently includes 25 countries. 
Unlike many emerging marke t fund manag ers. 

An institutional placing of shares in the trust 
will be taking place over the next few weeks, 
with a public offer for subscription scheduled 
for early November. 


ORIGINAL & PRACTICAL COURSES/SEMINARS IN 
THE FIELDS OF FINANCE & MARKETING 
(Central London) 


v Innovations in Econometrics with 
Applications in Finance 
vThe Analysis & Reporting of 
Conjoint Studies 


v Portfolio Risk Analysis 
using Spreadsheets 
v Demand Fortcasting in 
Companies 


Farther details: UmbcHrafce C oB a nft aa fa . 

Training Dept., 47 Haitfielrf Crescent, Bromley BR4 9DW 
Tel: +4481 4620093 Fax: +44 81 4620493 E-Mail (CompuServe): 100412^603 


PAN -HOLDING . 

SocMr* AmMymc - Luxembourg 

TTw BoerO of Directors mat on September 13. 1994 firmer to eotamine the 
proposal to convert the Company to a Sxod capital Investment company 
under Part II at the Luxembourg Law at March 30. 1988 on Uodertakbtgs far 
CoUectfve Investments. 

Under the proposed now structure, Pan-Hoktop SA wck*i Be abte to 
repurchase and rest* to own shares on the oasis ot the net asset value, 

aridWo nuK y. lire si ia n»wrxUdnfcto continue to bo quoteO 

on the Luxembourg Stock Exchange and Ow-the-Oountsr In Paris. 

The Board of Directors has considered the relevant doorinants. Upon 
recrivtng approval ot the pro*** hom ttw corcpetoft suthortfire. 0* Board 
wffl fix a cte» tor on Extraorcfinery General Meeting to ba twW as soon as 


As otSaptOTbwlS. 1994. the unconaot te roti net asset vrehre per share wt 
USD 64643 and the consoMatad net ss»t value. USD BB2£& 

PAN- HOLDING SA - 1. Plaoe duThfiftbe— L-2013 LUXEMBOURG 
P.0. Bra No. 406 - L-20U Luxembourg 

TEL (3SZ) 4&24.0T/02 - FAX pS2) 4&2U7 


NOTICE OF PAYMENT 
To the Holders of 

Nafin Finance Trust II 

U.S.$1 29,880,000 
Floating Rate Notes due 1999 

FW rhe Intcrcw Period June 30. 19+4 to September JO, 1994, the Total Repayment 
Atmainr ut the N«a u USD 1 2,1 50,000 ur l ZJ»1 246684* of the cunenr no Branding 
principal Miram. Principal in At M*ws <4 USDM5.48 pet USO7.2S640 *xpe*pte 
principal amount •+ Ncte» wit be payable on September 30, 1994. Alter September 30. 
1+94. inlercu .»i the pimon of the Now to repaid wtU eeate in accrue. Holden <4 Bcarer- 
N.to mu'* deliver rhe afipfupnuc mitral coupon to a Paying Agent outride C+ die 
United Screes to receive repayment on euth Now*. 

NAFIN FINANCE TRUST I! 

Q Bji Bankm Tnui Company, 
si Trocar 


L'weifc September - 1. 1994 


D 70,000,000 
YCM 

STMBNTS N.V. 

ranteed Secured 
ting Rate Notes 
due 2001 
fate 5 . 6875 % p. a- 

lofgyj 

Sept*rtwf 20 . 19 W 
Match 20 . 3995 

mount due ori 
. 1995 per 

000 U 5 D 2.85955 
lANQUE GfiNfiRALS 

iu Luxembourg 

Agent Bank 


Advance Bank Australia 
Limited 

US$250,000,000 
Floating Rate Notes 1999 

77ie notes wtU bear interest at 
5 . 4125 % per annum for the 
interest period from 2? September 
to 21 December 1994. 

Interest payable value 
21 December 1994 will amount to 
USS136.S2 per USS10.000 note. 

Agent: Morgan Guaranty 
Trust Company 

■JPMorgan 


Patrotera Argenti na 
San Jorge SA. 

Notice ot SecurRyholdefs’ 
Meeting 

nonce is tewBY given to immom 
rsecurilyhoidmrj of too USJ 45300300 n% 
Secured KegoNaM OWgsttre due IMS - 
IBM (Hie ‘Securities*) Issued by Premiere 
Avon Sai Jorge S A (too TssuaO SM a 
Securityholders' raeedng (the Heeoncf) ■* 
be held to 10® AM an October 3, IBM el the 
Buenos Akee Sheraton Hotel. Room Mode to 
Plata. San Mortto No. Q2S, 2nd Hoar, Buenoe 
Aires. Argentina. B a ryjormi la not presort, 
the Meetmg shall be adjourn ad to and be 
reawvrewd at ii;00 AM an Bjtfi day- The 
Meeeng sheS be tar the tokwtog pupates: 

1 . To consider and act upon certain 
pmpoaad ementnanto to tee Neu natal 
as at Ftoiafy 9. 1883. among BaritAmeitea 
NattonM Tiua Cramuiy (the T'ruewQ red 
the Iseuer. and tflwr parte, flhe ‘WaneiraT 

a) To enhance the leauer’i ability 
wtfer Section 906 at the Indenture tt incur 
MMMdnecs. vovlded mat Bie taueds ado 
el longearm debt a> equdy does not exceed 
0040: and 

b) To enhance the Uauare aWiiy 
under paragraph (a) ot Section SOB ot the 
briareute to eat Mwrwm m rtHten ere by 
decreeing the buret's requked conent rallo 
ton IS to IX 

2. To consider and act upon an 
amendment to me Custody and Payment 
Agreement dated ae ot January 28. 1993, 
among Bie tower. Bit Trustee, Intem ea onri 
Ftaenoi Corporate (TFC) and ha Bank el 
Iter York SA (the "Bank*), to laegtab (he 
release ot (unde deposited m me eecnmr 


3. To derignsie two SacurUyhofctefS to 
ttfi tie atom of tie Meeting. 

The Secuttyhofcfere an hereby iterated 
that »t onto to vela rime Msefina lhay irut 
(I) tt they hold Securities In nearer form, 
depose such Securities with Die issuer by 
", 199*. ait’ 


a eertffleala signed by any bust company, 
bardr or other depositary salting lorth the 
principal amount and serial numbers ot 
Securtoea heM by such Se oe Wyhn ld er and 
c on arn * m tat. esot September 29. iBPS.mo 
Saeunte so daaofttad were IMM on depoel 
by Mh dspoaHrey or (Q * toy hok! Securite 
to ma s tered hum. ftodde aritten nobce to 
8«nco Utodebn SA, « 25 rte Meyo 489. 1002 
Bunts Asm. Argerrine. Atterakxv SLEmeetO 
Adttval. by Septedtoer 29. 1994, el their 
htonbon to aaand the Uaaftg. Copies of toe 
test ot tie proposed to w en druent a and ate 
lonn cerOcate to ba load by hotora at bearer 
Securite ■« be fmushed by the Tnitoe 
to SacumhaUsm istan request. Any Seasfly- 
holder may attend the Meeting either 
ptosomByOtbypmicy. 

i Sen Jorge SA 


Practises- Pirn 7 
MBS Buenos Ate 


SGA SOCIETE 
GENERALE 
ACCEPTANCE N.V. 

FRF 300.000.000 
REVERSE FLOATING 
RATE NOTES DUE 
DECEMBER 1999 
For the period 
September 19, 1994 
to December 19, 1994 
the new rate has been 
fixed at 11,75% PA 
Next payment date: 
December 19, 1994 
Coupon nr 7 
Amount: 

FRF 2970,14 for the 
denomination of 
FRF 100 000 
FRF 29701,39 for the 
denomination of 
FRF 1 000 000 

. THE PRINCIPAL 
PAYING AGENT 
SOGENAL 
SOCIETE GENERALE 
GROUP 

15, Avenue Emile Reuter 
LUXEMBOURG 


u h m ii « w Mau> men , 


tcror 

Peat 

Para 

PM 




pa 



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mtOMKMi 

or. DM,) IB 

Ito, IBM 

MOM. To 



u „, 15% 

off electricity 

V yc-jr orga."!.-S25:S:i spends ar- j.id 
ilOCO per mentis c'n'en? or. i-VtCtrio.V. 
v.-fiy not rrg fsr a q-j'M? 

021 423 3018 

Powerline 





Sovereign (Forex] Lid. 

24hr Foreign Exdwnga 
Met^a tedng Fce^y 
fruprlltirr Prim 
Daily Fox Sarvice 
W: 071-V31 9188 
Free 071-93 17114 
42o Maca Stcxf 

EodMSWIWOtf 



It is five years since Hays floated. We continue to concentrate on adding value for our customers 
through our Distribution, Commercial, and Personnel activities. The range of our business 
services and the dedication of all employees have enabled us to grow, despite the recession. 

We have added new sendees in many areas, complemented by strategic acquisitions. We have 
successfully built a leading position in European distribution. We see 
significant opportunities to continue our growth. 

By adding value for our customers we will continue to create 
value for our shareholders. 

II yes would tie interested in a copy of the 1994 Annul Report plnse cuolad Dseid Berkley. Hoys pie, Hib lluwr. MiOinead. Guildford, Surrey GLC SHJ Trfcr*ooe (MSB 302203. 
this advertixncel tin ticen approved by Touche Bm* £i Co. who are amhoiwd in tarry no invcWmrni budne-w by the Institute of Charirn+I .Vrwimam’, m F.netand and Wake. 













24 


V 




FINANCIAL TIME S WEDNESDAY SEPTEMBER 21 1994 

COMMODITIES AND AGRICULTURE 


Dairy farmers urged to capitalise on price rises 


Broker cuts cocoa *■ 
production estimate 


By Alison Maitland 

UR dairy farmers must use the 
short-term increase in m(?k 
prices that will accompany 
market deregulation to invest 
for a secure future in an 
increasingly competitive Euro- 
pean market, according to a 
report published today. 

The report by Adas, the gov- 
ernment's farm advisory ser- 
vice, predicts a heavy concen- 
tration of ownership In the 
dairy sector in England and 
Wales by 2000. 

"We estimate that 22 per 


By Kunal Bose in Calcutta 

With the elections to be held in 
several states, Including some 
major oilseeds producing 
states, late this year the Indian 
federal government is finding 
it difficult to firm up its edible 
oils import policy. 

The government, which must 
weigh carefully the impact of 
any policy initiative on its elec- 
toral prospects, finds the agri- 
culture ministry strongly 
opposing the proposal of the 
civil supplies ministry to allow 


cent of dairy farmers, equiva- 
lent to 6.500 producers, will 
leave the industry." says the 
report. Options for Growth. 
Tim n umb er of herds is expec- 
ted to fall by 20 per cent and 
average herd size to grow by 4 
per cent 

“If you want to stay in busi- 
ness. you will have to acquire 
more quota. . . It is vital that 
businesses plan now to ensure 
they will be in a position to 
purchase or lease when quota 
prices are more favourable." 

The UK is expected to rise to 
the top of the EU price league 


the free import of all kinds of 
edible oils. At present only the 
import of palm olein is freely 
allowed. 

While it is important for the 
government to keep the I5m 
fanners engaged in the cultiva- 
tion of oilseeds happy by keep- 
ing the import of oils to the 
bare minimum, it cannot over- 
look the bet that prices are 
high in spite of a good oilseeds 
crop during 1993-94 (November 
to October). Prices may rise 
even further during the Indian 
festive season beginning Octo- 


when the market is liberalised 
in November and farmers are 
free to sell milk direct to dairy 
Companies or to Milk Marque, 
a voluntary producers' co-oper- 
ative that wifi act as a broker. 

But the Adas report says 
that competition from 
imported milk products will 
ultimately form a price ceiling 
for UK milk destined for manu- 
facture into butter, cheese or 
yoghurt 

The UK market reorganisa- 
tion is proving highly contro- 
versial, with dairy companies 
unhappy at Milk Marque's am- 


ber. 

What the government has 
done in the prevailing circum- 
stances is to postpone taking a 
decision on freeing the import 
of all edible oils to a future 
date and to allow the State 
Trading Corporation and the 
National Dairy Development 
Board to import 100,000 tonnes 
of edible oils each, excluding 
coconut oil, at a concessional 
duty of 20 per cent 

The private oil trade has, 
however, taken strong excep- 
tion to the government allow- 


trol of at least 65 per cent of 
supplies in En gined and Wales. 
The Dairy Trade Federation 
begins legal action this week to 
try to overturn government 
approval of the new arrange- 
ments. It says Milk Marque's 
planned rise In prices will 
bring a flood of imports and 
damage the UK processing 
industry. 

The Adas report advises 
farmers to maximise milk 
yields. Britain has larger dairy 
farms and herd sizes on aver- 
age than its main EU competi- 
tors, but lower production of 


ing only the state agencies to 
import oils. 

Earlier this year also, the 
traders were discriminated 
against when the government 
allowed the STC and NDDB to 
import over 200,000 tonnes of 
palm olein at a duty of 20 per 
cent, compared with the nor- 
mal rate of 65 per cent The 
import duty on palm olein may 
be reduced. 

The government is, however, 
deriving some comfort in this 
election year from the encour- 
aging prospects for oilseeds 


milk per cow than Denmark, 
the Netherlands and France. 

Production costs are among 
the lowest in the EU but not as 
low as they might be given the 
UK's economies of scale, it 
says. “The outlook for dairy 
farmers will depend on their 
ability to capitalise on the 
advantages of the UK industry 
and improve the relationship 
between output and costs.” 
Options for Growth: Available 
from Helen Woolley, ADAS 
Dairy Development, ADAS, 
Wolverhampton. TeL 0903 
754190. 


production in the 1994-95 sea- 
son. According to initial projec- 
tions, output is likely to rise to 
22.4m tonnes from 21.75m in 
1993-94. The improvement in 
production will be mainly in 
the groundnut and soyabean 
crops. 

The excellent monsoon in 
most parts of the country has 
given a boost to oilseeds pro- 
duction. The monsoon influ- 
ences the production in a big 
way as about 60 per cent of the 
land under oilseeds is unirrl- 
gated. 


Nickel 

deficit 

forecast 

The nickel market will be tn 
deficit from this year through 
to 1996 and warehouse stocks 
are set to fall accordingly, Mr 
Hugh Morgan. Managing 
Director of Australia’s West- 
ern Mining Corporation, said 
yesterday, reports Reuters. 

The outlook for nickel con- 
sumption was good, based on 
the likelihood of further stain- 
less-steel capacity coming on 
stream in the next two years, 

be said at a presentation to the 
Association of Mining Ana- 
lysts in London. 

Since 1984-85. stainless steel 
production had been rising at 
a faster rate than industrial 
production, and that was 
expected to continue, he 
added. 

This year the nickel market 
would be in deficit by 12,000 
tonnes, compared with a 1993 
surplus of 17,000 tonnes. In 
1995 the shortfall would rise 
to 31,000 tonnes and by 1996 it 
was expected to reach 56,000. 

LME warehouse stocks 
would fall over the next few 
years as well, and should be 
around 50,000 tonnes by the 
end of 1996. 


Trading house E.D. & F. Man 
has reduced its world cocoa 
production estimate for 1993-94 
by 24.000 tonnes to 2.36m as 
the prolonged effect of low 
prices further reduces yields in 
Brazil, Malaysia and Ecuador, 
reports Reuters. 

Man said It was forecasting 
Brazilian production of 265,000 
tonnes for 1993-94. compared to 
an estimated output of 291,000 
tonnes in 1992-93. The forecasts 
for Malaysian output is now 
205,000 tonnes, down from an 
estimated 224,000 tonnes in 
1992-93. Ecuador is forecast to 
produce 60,000 tonnes in 
199344. 

While crops in Brazil and 
Malaysia have fallen as sus- 
tained lower prices affect 
higher-cost producers, Indon- 
esia remains the only origin 


London COFFEE futures ended 
firmer yesterday but below 
almost nine-year highs hit 
during the day on talk of dry 
weather in Indonesia and 
underlying concern over lack 
of rain in Brazil, dealers said. 

The November position at 
the London Commodity 
Exchange closed $15 higher at 
84,055. The day’s peak of $4,130 
was the highest second posi- 
tion price since January 10, 
1986, when $4494 was reached. 

"Sporadic reports have been 
emerging of damage to the 
[Brazilian] trees," said the GNI 
trade house. "However, 
because of the dry spell it 
seems as if most trees are late 
developing flowers, and that 
they will be better placed to 
withstand dry weather for a 
few more weeks.” 

The overnight rally in GOLD 
was maintained as investment 
funds bought the metal In New 
York, triggering stop-loss buy- 
ing and pushing London’s 
afternoon fixing to an 8'A- 
month high of $39390 a troy 


where the trend is towards 
higher production, the report 
said. 

“We have raised our esti- 
mate of 1993-94 [Indonesian} 
production to 250,000. Over the 
last five years production 
growth has averaged over 20 
per cent per annum and there 
is no sign that the rate of 
growth is declining." 

Cocoa arrivals up to the end 
of September from the Ivory 
Coast, the world's leading pro- 
ducer, were estimated at 
900,000 tonnes, which included 
some 100,000 tonnes carried 
over from the 1992-93 mid-crop 
season, according to the report 

Man said it put its estimate 
for the Ivory Coast's mid-crop 
at 155,000 tonnes, giving a total 
1993-94 production of 800,000 
tonnes. 


Jumps in North American 
gold stocks started the rally £ 
late on Monday, most notice- 
ably on the Philadelphia gold 
index, which jumped about 5 
per cent, and in Toronto, 
where the gold stock sector 
increased in value by 1.55 per 
cent 


UH WUISHOUSi STOCKS 

|Aa at Monday's ckm) 
tamos 


flhrnWun 

-13.075 

(0 8303375 

A/unMim nJoy 

-30 

to 0,740 

Copper 

-775 

to 360,050 

Load 

-375 

10 308000 

Metal 

-210 

to 142,008 

ana 

-1.376 

to1.233.B7S 

TV 

-140 

to 32206 


At the London Metal 
Exchange ALUMINIUM prices 
resumed their uptrend follow- 
ing the announcement of a big 
fall in exchange warehouse 
stocks. Despite disappointment 
at International Primary Alu- 
minium Institute provisional 
figures indicating a rise in pro- 
duction in August the three 
months price closed at $1,616^0 
a tonne, up $14 on the day. 
Compiled from Renters 


Embassy move puts Guatemalan spice trade on the rack 

Edward Orlebar explains why cardamom growers are worried about losing friends in the Middle East 


T he Arab-lsraeli conflict has 
□ever been of great concern to 
the poor farmers who live in 
the department of Alta Verapaz, 
about 100 miles north of Guatemala 
City. But the welfare of about 250,000 
Keq’chi Maya Indians who produce 
more than two thirds of the world’s 
exports of cardamom is in the balance 
following President Ramiro de Leon’s 
decision to move Guatemala's 
embassy in Israel from Tel Aviv to 
Jerusalem. 

Mr De Leon said last week he was 
moving the embassy "for sentimental 
reasons” an explanation that con- 
vinced no one. 

About 85 per cent of Guatemala's 
cardamom exports go to Arab coun- 
tries, principally to Saudi Arabia 
where cardamom is mixed with coffee 


to produce gahwa, a pungent, aro- 
matic beverage traditionally drunk 
out of a brass pot with an elongated 
curved spout. The rest goes to 
Europe, in particular to Scandinavian 
countries, where cardamom is used to 
spice bread and pastries. It is also 
used in confectionery. 

In the past when other Central 
American countries have moved their 
embassies to Jerusalem, Arab nations 
severed diplomatic relations and 
imposed economic sanctions. But Mr 
dp Leon, who appears to have taken 
his decision without consulting either 
his foreign minis ter or economy min- 
ister, says he is confident that the 
mood of reconciliation in the Middle 
East wifi ensure that exports mil not 
be put at risk. 

However, Jordan's embassy in Chile 


has already criticised the measure, 
and exporters fear that other arab 
countries will follow. “If the Arab 
countries impose a boycott it will be a 
disaster for us and the thousands of 
producers,” says Mr Rodolfo Rivera, 
director of the chamber of rarrfamnm 
exporters. “The cardamom has 
nowhere else to go.” 

Cardamom producers had been 
looking forward to a record harvest of 
13,000 tonnes. Normally they would 
hope to sell to exporters for around 
250 quetzales a quintal (about $44 for 
a 1001b bag) and for agricultural 
labourers who earn less than $2 a day 
cardamom has proved an important 
source of income. 

The cardamom bean, a small ovoid 
green capsule about -2cm long, once 
picked is then sorted by colour, 


mostly by women and children. The 
bigger and greener the better, says Mr 
Rivera. 

Revenue was expected to reach 
about $50m for the cardamom season, 
which runs from October to April. 
Dried, it fetches about S5 a kilogram, 
but the market is on hold until there 
is an official response from Saudi 
Arabia. 

The spioe arrived in the impover- 
ished region of Alta Verapaz about 30 
years ago, thanks to a quirk of his- 
tory. A German immigrant, the late 
Mr Jacobs, brought the seeds over 
from India where it is indigenous. He 
had tried unsuccessfully to grow the 
plant in the Caribbean but the condi- 
tions around Coban, the departmental 
capital, an important coffee growing 
region at around 4£00ft, proved ideal. 


It grows almo st wild, needing very 
little attention or fertiliser, near the 
coffee plantations. Guatemala quickly 
became by Car the largest exporter in 
the world, accounting for about 70 per 
cent of the export market 
Exporters have accused Mr De Leon 
of bowing to pressure from the Israeli 
government to link economic aid and 
military assistance to recognition of 
Jerusalem. The charge is denied by 
both the Guatemalan army and the 
Israeli government 
Israel has enjoyed strong links with 
Guatemala since its creation in 194$. 
It was the Israelis who stepped into 
the breach to provide military equip- 
ment and intelligence training after 
the US cut off military aid to Gua- 
temala in the 1970s because of its hor- 
rific human rights record. 


COMMODITIES PRICES 


ounce. 

CROSSWORD 


Indian government dithers over edible oil imports 


MARKET REPORT 

London coffee futures up 
again, but below highs 



Mirror 
jleris 
IV stoc 


i-* 


r 


r 


BASE METALS 

LONDON METAL EXCHANGE 

(Prices bom Amalgamated Metal Tracing) 
ALUMINIUM, 99.7 PURITY (3 per tome) 


Precious Metals continued 

OOCP COM EX (100 Troy Srtroy oz.) 



Cash 

3 mths 

Close 

15923-15 

1610-7 

Previous 

15785-85 

1602-3 

High/tow 

1581.5 

162371603 

AM Official 

1562-3 

1605-6 

Kertj dose 


1820-1 

Open InL 

284.755 


Total dally lunover 

70.305 


■ ALUMNUM ALLOY (Spar tonne) 


Close 

1610-5 

1632-4 

Previous 

1805-16 

1620-30 

WgWtow 

1010 

164071630 

AM Offldd 

1010-11 

1630-1 

Kerb dose 


1635-40 

Open M. 

2^50 


Total dolly turnover 

1.O02 


■ LEAD ($ per tonne) 


Ctase 

810^-1.5 

625.5-&0 

Previous 

613.5-4.5 

627-0 

HJgh/tow 

611 

620623 

AM Official 

610.5-11.0 

625-5+LO 

Kert» dose 


626.5-27 

Open mL 

42.773 


Total daily turnover 

11.005 


■ NICKEL (5 per tonne) 


Ckwa 

6420-30 

6520-5 

Previous 

8390-5 

0495-500 

rtgh.low 

6365/6381 

6545/6460 

AM Official 

6301-5 

6480-90 

Kerb ckna 


6540-46 

Open InL 

67.923 


Total daily turnover 

25.048 


■ TIN <5 per tonne) 



Close 

5240-60 

5320-10 

Previous 

5245-50 

5325-30 

Hlgn/low 


6360/5325 

AM Official 

5201-3 

5340-5 

Kortt dose 


5325-30 

Open InL 

16.948 


Total datv turnover 

8215 


■ 39NC, special high grade |S per tonne) 

Cfose 

1003.5-4 5 

1D27-B 

Previous 

1005-6 

1026-9 

Hghflow 


1034/1027 

AM Official 

1007-8 

1030.5-1.0 

Kwh doso 


1029-30 

Qpwi Wit 

98.174 


Told dally turnover 

27,055 


■ COPPER, grade A (S per icnno) 


Closo 

7500-10 

2520-0 

Previous 

2515.5-6 J5 

2531.5-2.5 

HJanitaw 

2609 

2540/2523 

AM Official 

2514-5 

2528-8.5 

Kem close 


2531-2 

Opan InL 

215,277 


Total dafly turnover 

80.054 


■ LME AM Official E/S rata: 1.6710 

LME Closing E/5 rate: 1.5760 


S0K15748 3 moo. 1.5771 6mfcKl.S6&4 g mfe-15621 

■ KK3H GRADE COPPER (COM EX) 


fey's 


Opn 

Ctee ctaege 

Mga lew 

tat Vtd 

tad >72.40 40.05 

12250 121.50 

3JUB 380 

Od USES -at 5 

iia.es na.40 

2.082 190 

no* 11/.05 -azn 

11100 11663 

710 IB 

Dec 11720 -020 

117.50 11625 4^565 7.055 

Jn llfl.05 -6.15 

- 

562 27 

Fab 11810 -0 10 

115.70 115.70 

443 1 7 


TMd 89*74 BATS 


PRECIOUS METALS 

■ LONDON BULLION MARKET 
(Prices suppled bv N M FtathachW) 


□old (Trey ee.) 

S pries 

E equW. 

©03* 

393.60-394.00 


Opening 

3S2.0O-392.4O 


Momng fm 

392-25 

249.507 

Afternoon (lx 

333.00 

250381 

Day’s Mgh 

385.00-395.40 


Day’s Low 

391.70-392.10 


ProvOtH dose 

39000-39050 



Loco Ldn Mean Odd Lending Rates (Vs US$) 
i merer a 38 g months 4 86 

5 months 

3 months 
S9w Kx 
S pot 

3 months 

6 months 
I voar 
fluid Coins 
Krugerrand 
Mspfs Leaf 
New Sovereign 


Sett toy's Opm 

price donga Mgh Ih W M. 

top 393.6 +06 

Oct 3941 +3.6 3855 3924) 8.489 403 

Her 395J +00 

Dk 397.2 +08 399,1 3855 91,899 11553 

ftp 4005 +36 4023 3818 13.973 316 

Apr 4019 +16 405.1 4045 MU 2 23 

Total 159041 12^31 

■ PLATINUM NYMEX (50 Ttoy oz.; S/ooy oz.) 

Oct 

4217 

+70 

422JJ 

415.5 

12JE1 

910 

ton 

425.1 

+7.1 

420.0 

42DJJ 

1084 

550 

Apr 

4215 

+7h 

420.0 

427 J) 

2.464 

4 

Jtd 

432.0 

+7J) 

4330 

4315 

464 

1 

Oct 

434.7 

+7JJ 

- 

• 

2B0 

. 

Total 





24323 

7<480 

■ palladium NYMEX (too Trey s/troy oz.) 

S»P 

157.35 

+110 

15150 

154 JO 

33 

. 

Dec 

15135 

+110 

15190 

15*40 

BfiSS 

438 

Mar 

159.10 

+410 

15975 155.00 

885 

31 

Jin 

100.10 

+110 

- 


153 

. 

Total 





1792 

407 

■ SILVER COMEX 1100 Troy oz.; Cents/trey az) 

S*» 

501.2 

+M.1 

5510 

5504 

326 

22 

Oct 

562.7 

+20L3 

- 

- 

7 

- 

Nov 

5645 

+203 

- 

- 

83,461 

7J63 

Dk 

567-0 

+203 

571.0 

551 J 

50 

. 

Jen 

56915 

+204 

36&0 

5400 

1290 

166 

Kar 

575-3 

+20.4 

579.0 

501.0 

4.407 

1 

Total 




101282 

7«1 

ENERGY 






■ CRUDE 00, NYMEX <42,000 US gaOs. Sftand) 


Lakst 

Dafs 



Opea 



Price 

ctaeoa 

Mgb 

Lem 

tat 

VM 

Oct 

17.14 

■007 

17-33 

17.10 25591 

20J71 

No* 

17.23 

-014 

1747 

1720 91262 

42570 

OK 

17.41 

•013 

17.60 

17 Jo 02.404 

11574 

Jso 

1753 

-0.14 

17.71 

1750 

38J66 

453S 

Fad 

1759 

-0.14 

17.41 

1750 

21912 

1528 

■bar 

17.68 

-0.14 

17 AS 

1755 

1W13 

891 

Taw 




401577 81502 

■ CRUDE OS. IPE (SfearreQ 





laiaat 

Hay’s 



Opan 



Mica 

caanga 

ma 

law 

M 

Vol 

Mar 

f&17 

-005 

1834 

1105 

00.640 14,079 

Dk 

16J9 

■005 

16.46 

1120 

30.155 

2.955 

Jan 

10 38 

-007 

1152 

1130 

11291 

568 

Feb 

18.47 

- 

11S0 

1142 

7.042 

222 

Kar 

1141 

-004 

tfLSO 

1141 

1396 

50 

Apr 

1143 

-0.02 

1150 

1143 

1217 

12 

Total 




123587 

t IBM 

a HEATING OIL NYMEX (42JM0 US gab: c/US grihl 


Latest 

toy's 



Opan 



price 

*tai 

WA 

law 

M 

VOI 

Od 

4100 

■032 

4150 

4790 30521 

1A230 

NO* 

4110 

-0 30 

4164 

4100 21422 

5.622 

Dae 

KL35 

-a 44 

SO. 80 

5030 

41J79 

1065 

Jan 

5125 

-0.37 

51.75 

51.15 : 

21290 

3JH7 

FA 

31.75 

-037 

SLOS 

51 JO 

14.456 

1/BO 

Mar 

51.40 

-032 

51.55 

51.40 

11.435 

353 

TOW 




171282 31.320 

■ GAS O/L PE (5/tonn® 






Sad 

Daqra 



Open 



price 

dings 

Mm 

law 

tat 

WW 

Ota 

150.75 

-2.00 

1S2JW 

15000 : 

34J04 

7.316 

Hot 

153.75 

+225 

1&L50 

15100 16,971 

1,075 

Dec 

15175 

+1.75 151 75 15125 20393 

1.417 

Jan 

157.50 

+160 

15150 

157.00 ■ 

13,974 

802 

ton 

15175 

+2.00 

15100 

15150 

4.910 

150 

Mar 

15150 

+2 no 

155.00 

15100 

5J353 

406 

ToU 




104,405 12500 

■ NATURAL GAS NYWX (10.000 maiDm.; VntmBtuj 


Latest 

toy 1 * 



Open 



price i 

dtanpe 

KW» 

Low 

M 

Vtd 

oct 

1.005 

■0038 

1450 

1590 22,961 11 501 

Not, 

1.049 

-0.011 

1470 

1545 25.796 

WSJS 

Dec 

2-070 

-0005 

1085 

2.065 27.695 

3.982 

Jm 

mo 

■0 005 

HIS 

2.110 14568 

1.730 

FA 

2045 

- 

2055 

2.045 13,015 

1J22 

Mar 

1-995 +0.005 

1005 

1J95 10.C06 

158 

Total 




158,91 B 28,138 

■ UNLEADED GASOLINE 




WMEX (42.000 US gift.. MJS &BU 




1.45 12 months S.OS 

1,47 


latBsl 

mm 

Oar* 

dwoga 


Open 
law tat 

vot 

BWjy «. 

USdsoffiilv. 

Oct 

45.1 S 

-069 

4030 

44J35 soms 

12365 



Bin 

45.50 

-052 

4115 

4525 19J90 

5.165 



Dae 

52.40 

-OSS 

S3.10 

5220 10J54 

2891 



Jan 

52J0 

D.80 

5280 

5215 1216 

996 



WH 

5W5 

-0.02 

53.40 

5270 3.533 

509 

S price 
333<J90 
404^5-400.75 
90-93 

£ eqi». 
252-256 

58-61 

Mar 

Total 

54JD 

027 

S4J0 

5*.05 1.043 
80#t8 

126 

22/082 


GRAINS AND OIL SEEDS SOFTS MEAT AND LIVESTOCK 

■ WHEAT LCS (B per tamo) ■ COCOA LCE (EAntme) ■ UVE CATTLE CMS (4ft0Q0fce; cena/Ba) 



Salt 

Day's 



Opea 



Sett 

Day* 



Of* 



Sait DeY* 

Open 



price 

c&aege 

M0I 

Low 

tat 

Vd 


price i 

daap 

Hlgp 

law 

lot 

W 


pries donga Hgh law 

tat 

VM 

Sep 

1D&J0 

-0.10 

10150 

100 JO 

97 

5 

HP 

950 

-IE 

957 

945 

30 

23 

Oct 

B9.300 +0675 09.475 61775 2*377 

0.150 

tor 

mm 

-ft 70 707 so 

10090 

2.503 

97 

Bob 

937 

+13 

897 

802 Z7J8S 3.474 

Dec 

61775 +0.703 09LO5O HL175 Z05B8 

sm 

Jan 

108.15 

■ftBO 

10610 

10100 

1J79 

102 

Har 

1022 

+15 

1022 

B95 

33,474 2315 

Fell 

67.900 +0450 67J75 67.460 12J» 

1J84 

Hr 

111.15 

-055 

1T1J50 nun 

1.163 

77 

Hay 

1035 

+16 

1034 

1000 

12175 

424 

Apr 

01900 +0375 61075 68JSO 

9,120 

810 

Bar 

11115 

-055 

mjo 

113.10 

1J48 

31 

Jta 

1047 

+15 

1046 

1026 

5030 

62 

Jan 

61060 +0250 61150 01850 

2033 

67 

Jd 

11100 

-075 11100 11100 

2G8 

ID 

Sep 

1063 

+16 

1062 

1030 

1242 

143 

*ta 

65.050 +0200 61700 61525 

1.006 

39 

TOW 





7JB2 

322 

Total 





91668 IBM 

Total 


73J0B 17JB9 


■ WHEAT C8T fcOOObu mUv canta/QOto bushel) ■ COCOA CSCE (10 tonnes; Srtommo) ■ UVE HOGS CME (40,Q00bs; cents/tre) 


Sep 

382/8 

+3/2 

382/6 

37B/0 

299 

107 

Dae 

1345 

+29 

1349 

1303 41 J97 3,978 

Od 

31850 

-0350 37 JSO 31800 10J82 

1.767 

OK 

38547 

+4/2 

385/4 

380ft 47,936 

8J33 

Mm 

1395 

+30 

1388 

1353 14.158 

650 

OK 

31150 

-0200 31000 371900 11J74 

1347 

Mar 

403/2 

+4/2 

403/4 

398/2 11704 

1.667 

■ey 

1423 

+58 

1425 

1393 4.117 

122 

Fr* 

31150 

-0060 31375 31950 

3851 

B42 

MW 

388/2 

+4/6 

399Ai 

38M 

2638 

238 

Jot 

1451 

+20 

1447 

1419 2688 

. 

Apr 

39.125 +0-075 38J300 31950 

2J88 

282 

Jul 

358/4 

+2/0 

360/0 

3500 

3.718 

568 

Sap 

1473 

+28 

- 

- 1.299 

- 

Jn 

44.200 

-0023 44300 43990 

734 

45 

Sep 

362/0 

+3/0 

362/0 

360/0 

127 

2 

Dec 

1489 

+28 

• 

- 4J«J 

- 

*08 

42.950 

41060 43.100 43925 

93 

7 

TOW 





73^66 12,117 

Total 




TLfSn 4,756 

Total 



21690 

M81 


■ MAIZE car (5,000 bu min: cente/Sflb buahal) ■ COCOA PCCO) (SDRVtcnnej ■ PORK BELLES CME (DOJMQfta; ceng/gw) 


Sop 217/6 +1/4 216/2 ' 216/2 *285 1.815 

Ooc 2(7/4 +3/2 2(8/4 21M3 134^24 21537 

ttr 2Z7/4 +0/2 228/4 226/4 38.730 4.038 

«ta» 234/E +0/2 235/4 234/0 15JSB7 1.976 

Jn! 239/2 - 24(K Z38/4 11872 1,751 

5ea 242/6 +0/2 244/D 242/4 1,115 87 

Total 214,907 32JBBB 


■ BARLEY LCE (C per tonne) 


Sep 

10290 

-030 

. 

. 

31 

9 

Hat 

704.15 

-025 

1W.00 

10490 

482 

10 

JM 

10115 

-n m 

- 

- 

388 

- 

Mar 

10125 

-0.45 

- 

- 

104 

15 

Hay 

10190 

-oeo 

- 

- 

52 

31 

Total 





1J711 

10 

■ SOYABEANS CUT (5,0006u b*X csnh/GOBi DucMt) 

Sap 

550/2 

-4ffl 

5SS/0 

548/2 

1.448 

1.444 

Her 

555/2 

+1/4 

557/4 

552/D 71781 

26,752 

Jan 

565/D 

+1/B 

567/2 

581 16 17316 

Zita 

■tar 

574/8 

+1/6 

577/0 

572/D 

1943 

1,393 

May 

582/0 

+1/0 

585/0 

579/4 

1282 

332 

Jd 

500/4 

+1/4 

590/4 

586/4 

11075 

588 


Tote 126j0BB 38,198 


■ SOYABEAN OB. COT (BO.tXHIba: canta/M 


SK 

2515 

+0.10 

2102 

23.67 

1,296 

1.138 

Od 

2129 

+aio 

25.50 

25.08 

17557 

3.765 

Deo 

24.74 

+0.18 

2500 

2430 

38.038 

10043 

J m 

24J5S 

+0.18 

24.80 

24JO 

7^69 

1534 

Har 

24.32 

+0.17 

21.55 

24.05 

1109 

2,485 


24.15 

+020 

3430 

24.00 

4,735 

672 

TUN 





80jQS7 

20,179 

■ SOYABEAN 

MEAL 

C8T (100 tom; Hon) 


Sep 

1709 

+1J 

1710 

1GS.4 

1^23 

892 

Oct 

1014 

+02 

1060 

1651 

14.518 

3,280 

Dec 

1617 

- 

1018 

166.D 

41141 

1208 

Jan 

I67J) 

-07 

J 602 

167J 

1 047 

1A6* 

Har 

1710 

02 

171J 

1705 

9,908 

1JC7 

Har 

1715 

-05 

1714 

I72J5 

5,719 

538 

Total 





B7JB2 

16^68 

■ POTATOES 

LCE (C/tanne) 




KM 

150.0 

. 

. 

_ 



Mar 

105.0 

- 

- 

- 

_ 

_ 

Apr 

222.3 

+18 

221.5 

220-0 

1JB1 

62 

Mn» 

240.0 

- 

_ 

_ 



An 





_ 


Total 





U81 

62 

■ FREIGHT (BUTEX) LCE (SlOrindex paint} 


Sep 

1S88 

+15 

1598 

1505 

295 

12 

Oct 

1630 

+5 

1640 

1630 

791 

27 

Ho* 

1631 

+11 

1B3S 

1630 

133 

53 

Jm 

1594 

+11 

1800 

1S90 

617 

56 

Apr 

1598 

♦14 

1603 

1595 

388 

27 

Jd 

145S 

+5 

- 

- 

100 

10 

TOW 





1370 

175 


Beta 

Prev 





BH 

IBM 

IMS 






Minor Metals 

European free market, from Motel Bulatin, 8 
R» Bj in warehouse, unless otftorwtao stated 
Oast week's in brackets, where changed). Anti- 
mony. 99.696. 8 per mine. 5.500-5,050 (5,450- 
5.550). Bismuth: min. 99.06%. tonne Iota 3.75- 
4.00 (3.70-4.00). Cadmium: min. 90.516, 
150-165 (125-136) cents a pound. Coterie MB 
free market. 39.0%. 27-28 (24.50-25.00); 
993%. 24.50-23.50 (21.00-22.50). Mercury: 
mm. w.99», S per 78 ft flask. 110-130. 
Molybdenum: cfcummed molytxflc oxide. 3.75- 
3.85 (3.70-3JQ. Setenfum: mM *9.5%. 135- 
4.55. Tungsten ora: standard iron. 65%. S par 
tonne unit (10kg) WO v ctf. 43-53 (37-47). 
Vanadium: mftL 98%, elf, 1.40-1.50. Uranium: 
Nusmu exchange value. 7.10. 


Sap 19 Prior Pin day 

Mfr 99501 TQ3U9 


■ COFFEE LCE (S/tawo) 


Sep 

4201 

+24 

4255 

4210 

1179 

230 

Ho* 

4053 

+13 

4130 

4016 11J60 1210 

Jn 

4010 

+21 

4085 

4006 14,431 

1,104 

Mar 

3910 

+12 

3970 

3915 

7511 

380 

May 

3858 

+15 

3900 

3800 

1^89 

273 

M 

3890 

- 

5870 

3845 

1.169 

7D 

TaW 





36380 *W7 

■ COFFEE Kf CSCE (37 jOObK conta/UK) 


Sep 

224JS 

+200 22100 

224J5 

54 

49 

Ok 

22100 

+1.45 23200 Z26.10 21177 

7J13 

Har 

231 JO 

+120 71600 228.50 

7.771 

446 

Ml 

23225 

+125 

23175 

231.75 

1118 

125 

JD) 

23100 

+3XU 23125 

233JX) 

788 

16 

Sep 

23255 

+215 238JB 233.50 

370 

- 


ToM 36,748 MSB 

■ COFFEE (ICQ (US cema/pound) 


Sep 19 Price Pm. day 

Cong. <M jr 207.13 202.10 


15 dor waraoa 193.91 197.® 

■ No7 PREMIUM RAW 8UOAR LCS (banta/fta) 


Oct 

12.88 

+0.05 

_ 


1,724 

154 

Jm 

n.32 

- 

a 

- 

- 

- 

Mar 

12-80 

- 

- 


90 

. 

Total 





T/896 

154 

■ WHITE SUGAR LCE (SAonm) 



Ok 

332-00 

-0.40 33100 331 JM 

1725 

447 

Ha 

333JOO 

+OJO 

33150 

331-20 

7,947 

427 


332m 

- 

333,80 9JP-1Q 

1,147 

66 

tag 

332JDD 

-0.40 

332.00 

331-80 

787 

31 

Od 

355.50 

-040 31190 315.40 

380 

2D 

Dec 

314/« 

-a*a 

- 

- 

4 

. 

TDM 





U569 

991 

■ SUGAR *11' CSCE (1 12,000fts; cents/lbs) 


Oct 

1173 

+ao? 

12.78 

12m 

34.782 

1475 

Hbr 

12.64 

+0.05 

1159 

1151 

9174411.199 

May 

12-58 

+0.05 

I1B2 

11*7 

11B86 

1.199 

Jd 

12.47 

+1X0 

12.49 

1137 

1734 

488 

Od 

12-28 

+005 

1129 

1118 

1578 

373 

Me 

11^2 

+006 

11-82 

11.75 

807 

46 

TDM 




145^4918,74 


■ COTTON NYCE (50/BOBa; centaflbs) 


Oct 

0935 

+122 

7010 

now) 

1347 

408 

Dk 

8126 

+030 

89.44 

i 

i 

1541 

Kar 

7165 

+023 

70.7S 

7020 

11196 

780 

Me, 

71.70 

+023 

Tim 

71.46 

5.355 

248 

Jd 

7146 

+010 

7155 

7150 

1719 

324 

Od 

SABO 

+0.18 

- 

. 

430 

45 

TeM 





50,778 1485 


■ ORANGE JUICE NYC6 H5.000PK; cants/bs) 


Hot 

01.40 

+37D 

0160 

0175 

11427 

515 

Jan 

94m 

+3J5 

94m 

92.10 

1985 

280 

Star 

9100 

+3JB 

98.15 

9U» 

4,013 

197 

m 

101.10 

+166 10UX) 10060 

855 

1 

Jd 

103.10 

+115 

10145 

101-50 

407 

1 

Sen 

TDM 

106.10 

+185 

' 


30 

21113 

999 


VOLUME DATA 

Opan interact and Volume data shown for 
contracts traded on COM EX. NYMEX, CUT. 
NYCE, CME. CSCE and IPE Crude Ol are orw 
tteGTfci arrears. 


INDICES 


■ REUTERS (Bane: 16/8/31=100) 

Sep 20 Sap 19 month ago year ago 
2118.4 21122 2057.3 1595.4 

■ Cite Futrawa (Base: 1 067*1 00) 


Sep 19 Sep. 16 month «f 

229.41 239.1 B 22846 


rear egg 

21827 


Fob 

31700 

•0.860 40*00 31376 

7,372 

1.227 

Star 

39.000 

-0800 40.350 39.400 

S29 

IIS 

May 

41300 

-0725 41800 40300 

143 

13 

Jd 

41.700 

-0329 41150 *1.200 

160 

10 

AM 

41.150 

- 40800 

34 

9 

TcM 



*228 

1,374 


LONDON TRADED OPTIONS 

Strtae price S tonne —Cah— — Put* — 


■ ALUMINIUM 


(99.7%) LME 

Od 

Jan 

Oct 

Jan 

1575 - 

45 

94 

IS 

48 

1600 

29 

80 

22 

56 

1G2S _ 

18 

88 

38 

BS 

M COPPER 





(Grade A) LME 

Oct 

Jan 

Oct 

Jan 

2500 

46 

105 

28 

78 

2550 ._ 

23 

81 

S3 

103 

2800. - 

9 

61 

89 

138 

■ COFFEE LCE 

Nov 

Jon 

Nov 

Jan 

3BQ0. 

484 

S61 

31 

141 


443 

516 

40 

158 

3700 ... 

403 

487 

50 

177 

■ COCOA LCE 

Deo 

Mar 

Dec 

Mar 

973 

49 

99 

37 

52 

inon 

37 

as 

50 

83 

1050- 

21 

63 

84 

91 

■ BRENT CRUDE IPE 

Nov 

Oec 

Nov 

Doc 

1600 ... 

S3 

_ 

33 

41 

1350 ...„ 

25 

54 

• 

.. 

1700 _.. ._ ... _ 

13 

39 

93 

- 


LONDON SPOT MARKETS 

■ CRUDE OH. FOB (per borrrt/Novl 


Dubai 

Sl5.12-6.19u 

+0-225 

Brent Blend (dated) 

SI 5.78-5.60 

+034 

Brent Blend (Nov) 

S1B-1&-4L20U 

+024 

W.T.t (1pm asi) 

SI7.34-7.38u 

+052 

■ OIL PRODUCTS NWE prompt deBvwy OF (tonne) 

Premium Gascons 

S171-174 

-1 

Ga&OS 

SI 60-101 

+2 

Heavy Fuel 01 

$74-70 

+1 

Naphtha 

SI 58-159 

+2 

Jd fuel 

S170-171 

+2 

PafroMun Argta aseasamenta 



■ OTHER 




Odd (per tray oztf 

$393.00 

+3.65 

sever (par trey ct$f 

560.0c 

+1&S 

Platinum (per troy ca.) 

$41175 

+175 

PaUadkiri (per trey tn) 

SI 63.00 

+0.75 

Copper (MS pred.) 

128.0c 


Lead (US proa) 

3125c 


Tto (Kuala Lumpm) 

l3J22m 

+O.OS 

Tin {New Yorit} 

0415c 

+1J) 

Cafflo (ivs weighty!© 

115.42p 

-1.13- 

Streep Dive weight)t40 

07.3Op 

+01S- 

Rod (Bve weight)© 

74Jlp 

-1^2* 

Ion. day sugar (raw) 

S31ifl 

+12 

Lon. day sugar (wte) 

$339.3 

-0.0 

Tate a Lyta report 

£3110 

+1J) 

Batoy (Eng. teed) 

Unq. 


Matte (US N03 YMowJ 

$1310 


Wheat (US Dark North) 

El BOO 


ftJtt*r(Oct)¥ 

aioop 


RiAbar (Nov)V 

87.00p 


Rubber KLRSSNoi Oct 

327jsam 

♦1 

Coconut 09 (Phfl)S 

S8S6.0B: 

♦ 115 

PUm OU (Malay.)§ 

$8215) 

+20 

Copra (Ptifi 

$403.0 

-1J3 

SoyabetaU (US) 

El Site 


Cotton Outlook ‘A’ index 

7105c 

-116 

WOotaps (64a Supat) 

48Sp 

a 

C p« wra ude«a ahtewta Mdal p penasfl^e eentato. 


• 3 m . V uman prqaioK 8 of Futsmn. 4 eram 

•nwhw dam + 5w |U** wntght prised- * Chang* v 

wmA O Prteeo in tar wmttua my. 


No.8,564 Set by DOGBERRY 



» :: 




ti\L. 


ACROSS 

1 City flanked by surveillance 
men of a sort (7) 

5 Junction revealing Aphrod- 
ite's origins in shellfish (7) 

9 Grab right In the middle at 
hot stuff (5) 

10 Explosive sort of discovery 
about soldiers' supporter (9) 

11 Crowned bead and monarch 
in season - the last two 
turned mushy (9) 

12 To speak: not quite to utter 
(5) 

13 Dwelling on the Rime of the 
Mariner? (51 

15 Actor, say - his material 
reflected on sculptor (9) 

18 Something like 1,000 pound 
return in medfum session (9j 

19 Waste of a fight (5) 

21 Succeed in attempt to turn on 
account (5) 

23 Redeem out of pawn - point 
to horrified reaction (5,4) 

25 Crippled and suspended out- 
side - smart move! (9) 

26 Motivation for excursion (5) 

27 Had power to spin old coin 
without force (7) 

28 Incipient inversion of an ole- 
fectory experience (7) 

DOWN 

1 Region where ale is repeat- 
edly swilled (7) 

2 What could make Rex more of 
a burrower (9) 

S Trump 4 articles (5) 

4 Reliable printin' might adorn 
punk (64) 


5 15 an ice to add ! 

8 Entertain 
Part 10 and thinking big (9) 

7 Centre of male culture (5) 

S Dentist usually starts split- 
ting tooth in pieces (7) 

14 Raise awareness of 8 points 
about the Netherlands (9) 

16 Travelled up to pierce 
ungrateful daughter with 
instrument (4-5) 

17 Spread in trashy paper held 
up by seaman (9) 

18 Suppress introduction of sur- 
rogate parent (7) 

20 Stop press: ship missed open- 
ing (7) 

22 Two hold a medic by the feet 

(5) 

23 Fit to gauge depth (5} 

24 Died in market, rising to 
glory (5) 

Solution 8,563 



'sn,. 

'Si; 




" ^ <4J», 



4 














financial times 


WEDNESDAY SEPTEMBER 21 1994 



LONDON STOCK EXCHANGE 


> MAWCET REPORT 


Renewed setback as trading volume increases 


By Terry Byland, 

UK Stock Market Editor 

Tha UK stock market suffered a 
renewed setback yesterday follow- 
lag losses in bond markets In Ger- 
many and the US. Most of the dam- 
age was done in the morning when 
markets turned nervous ahead 
or the announcement, expected this 
week, of the German money supply 
data. UK shares extended their 
losses later after Wall Street, the US 
dollar and Federal bonds opened 
lower on news of an unexpected 
widening In the US trade deficit In 
July. 

The FT-SE 100 Share Index closed 
41-8 Points down at 3,037.3. Trading 
volume Increased, swollen by a sub- 
stantial sell programme from a lead- 
ing London securities house. The 
Programme, estimated at a worth of 


around £100m. took in sizeable rieafc 
in shares of such blue chips as GEC, 
Prudential Assurance, Sears, Bar- 
clays Bank and Uoyds Abbey. 

The markets focus on the heavy 
fall yesterday morning in German 
bond futures appeared to bear out 
increasing concern that continental 
European funds have been sellers of 
UK stocks. But weakness in British 
government bonds pointed to wor- 
ries over the outlook for domestic 
Interest rates and inflation. Weak- 
ness in bond markets inevitably 
reflect fears that last week's half 
point rise in UK base rates may 
soon be followed by a further rise if 
inflation fears continue to increase. 

At the same time, trading state- 
ments from leading UK companies 
have been casting doubts over con- 
fident forecasts for a strong equity 
market performance in the final 


quarter of this year. Shares in 
Tesco, the supermarket group, 
made a cautious response to an 
interim trading report which drew 
attention again to margin pressures 
in the industry. 

Stock Index futures trading 
played a less direct role in yester- 
day’s shakeout, the December con- 
tract on the FT-SE 100 Index closing 
fairly close to the cash market, after 
allowing for a large fair value pre- 
mium. The FT-SE Mid 250 Index fell 
23.5 points to 3.584.5. 

Stock Exchange statistics dis- 
closed that genuine Investment 
activity was low on Monday, when 
the market bounced from its recent 
weakness; retail business was 
worth only £9503m, one of the first 
genuine daily totals below Elba for 
many months. Seaq volume of 
602.7m shares yesterday compared 


with 469.1m on Monday, with non- 
Footsie business making up around 

60 per cent of the total. 

Until the sell programme hit the 
market trading appeared to be rela- 
tively slack. But it was difficult to 
identify the timing of the pro- 
gramme, which, in accordance with 
Exchange r uling s on large deals, did 
not appear on the trading screens 
until late in the day. 

Market strategists admitted to 
some disappointment that the UK 
stock market appeared to be prov- 
ing more vulnerable to interest rate 
concerns that expected. Some have 
argued that the pace of economic 
recovery and in corporate profits 
and dividends would enable the 
market to shrug off the rises in 
interest rates which are associated 
with this stage of the economic 
cycle. 


Analysts 1 estimates are still 
looking for a strong advance in the 
FT-SE 100 Share Index before the 
end of the year. On this basis, some 
market traders have urged clients 
to buy stocks during the present 
shakeout 

There was a muted response to 
the estimated annualised growth of 
4.7 pa cent in domestic M4 money 
supply in August UBS commented 
to clients that the trend in net lend- 
ing appeared to be broadly fiat and 
that companies had been reducing 
gearing by borrowing from equity 
and bond markets in place of bank 
borrowing. 

The market is expected to con- 
tinue focusing on the prospects for 
interest rates in the US and in Ger- 
many, where the M3 money supply 
figures could present the next chal- 
lenge to markets across Europe. 


FT-SE-A All-Share Index 

1.675 - ... 

1,650 ~ 



•M Aug VCP 

Source. FT Graphite 1994 


■ Key Indicators 



Indices and ratios 



FT-SE 100 

3037.3 

-41.8 

FT-SE Mid 250 

3584.5 

-23.5 

FT-SE-A 350 

1534.8 

-1B.5 

FT-SE-A AB-Share 1526.22 

-17.42 

FT-SE-A Art-Share yield 

3.93 

(3.89) 


Beat p ci f o rming sectors 


1 Other Ser.a Bus. ...... * 1.7 

2 Engineering, Vehicles *0.3 

3 Extractive Inds. ... *0.3 

4 Household Goods ... -0J2 

5 Electricity , -0.2 


Equity Shares Traded 

Tunover by volume (mUtari). Excluding: 
WnMnariurt business and werows turnover 
1,000 - ■ -- - - 



1994 


FT Ordinary Index 

2358.3 

-31^ 

FT-SE-A Non Fire p/e 

18.83 

(19.01) 

FT-SE 100 Fut Dec 

3048.0 

-3541 

10 yr Gift yield 

9.13 

(9.07) 

Long gllt/equtty yid ratio: 

2.31 

1222 ) 


Worst performing sectors 

1 Tobacco ..... -3.1 

2 Insurance ........ -2.4 

3 Life Assurance -2.0 

4 Bectronk: & Elec -2.0 

5 Transport ....... -1.8 




Ml 






* * 
** 



9 

S 


f 

I 



» 




Mirror 
alerts 
TV stocks 

The acquisition of a 14.9 per 
emit stake in Scottish Televi- 
sion by Mirror Group Newspa- 
pers sent a buz2 through televi- 
sion stocks as investors moved 
swiftly to show their support of 
the move. 

The stock was secured for 
the Mirror at a significant pre- 
mium to the share price - 520p 
- after a series of agency 


Stock index futures moved 
sharply lower in heavier tracflng 
volume than on Monday but 
once again there was little real 
attempt at driving the cash 


crosses. Three blocks of shares 
moved; one of 2m; one of 4.9m 
and one of 50.500. 

Scottish soared on the Mir- 
ror's move, pushing up 58 to 
501 with 14m shares changing 
hands while Mirror Group 
shares bounced 11 to l39p. 

The City wanned to the Mir- 
ror's effort to broaden its base 
amid the vicious newspaper 
price competition and the good 
premium paid for Scottish 
fuelled interest in other televi- 
sion stocks. 

BAs Chris Munroe at Hoare 
Govett said: “It Is no surprise 
that the Mirror should take 
such action. Geographically 
too it is a very good fit consid- 
ering the Mirror’s interest in 


market 

The FT-SE Deoember 
contract dosed at 3,046 for a 
near 10-point premium to the 
cash market. The fair value 


Scotland.” 

In the backwash of the Mir- 
ror move in the television sec- 
tor, Yorkshire jumped 29 to 
392p; Ulster added 37 to 720p 
and Grampian gained 29 to 
854p. 

Drugs firmer 

Talk of a merger between 
Zeneca and Wellcome kept the 
fire burning for the two stocks 
which defied the black mood of 
yesterday’s market and 
improved their prices. 

The shares of both compa- 
nies have traded actively In 
recent sessions with both being 
hpiri up as potential bid tar- 
gets. Zeneca gained B to 84Ip 


premium stands at around 17 
points. 

Trading volume rose 
substantially on Monday's 
depressed tewels, jumping to 
17,553 lots in what traders 
yesterday described as 
“steady business throughout 
the trading day”. 

Activity was said to be fairly 
evenly divided among locals - 
independent traders - and the 
big brokers with the latter 
producing most of the 
throughput when the FT-SE 
December contract hit its high 
for the day of 3,073 just before 
3:30pm. 

Opinions among traders on 
the immediate direction were 
mixed but if there was any sort 
of consensus it suggested that 
London equities could soon be 
ripe for a rebound. “We'D 
either go through 3,000 or 
bounce back above 3,100,” 
said one big trader yesterday. 

Activity in traded options 
also Improved, rising to 39,646 
contracts, against 22,605 on 
Monday. FT-SE and Euro 
FT-SE accounted for more 
than half of total activity. 

The most actively traded 
individual stock options were 
BP (2,689 lots), Hanson (1,418) 
and Shell (1,066). 


and Wellcome improved 14 to 
699p. 

The merger story excited 
market-making desks which 
continued to anticipate some 
significant move in the sector. 


Airways busy 

Shares In British Airways 
were heavily traded yesterday 
following a a profits down- 
grade from Merrill Lynch in 
the wake of mounting US-led 
price competition on trans-At- 
lantic routes. 

Turnover ran to some 4m 
trades with the shares sliding 6 
to 374p. Merrill cut its pro fi ts 
forecast quite savagely from 
£48Gm pre-tax to £400, although 


TRADING VOLUME 


■ Major Stocks Yesterday 


Vat doing Doy-a 
000 a price cftanpB 


3ft 


33S>2 

+1*2 

ASOAGraret 

6.700 

67 

AM»y Naaontft 

1200 

391 

-ID 





toed Domacqf 

868 

560 

-8 

Anafian liter 

178 

530 

-B 


228 

330 

-5 

Arayf Gfijupt 
Asso^^Rxidst 

3^00 

8,000 

27 

204 

251 

950 

-2 

-7 

S 

Aokxl Br*. Rons 

467 

275 

-2 

BAAt 

<200 

473 

-12 

BATtoaf 

3JW0 

408 

-13 

BET 

7/00 

103 

-1 

BIOC 

era 

371 

-7 

aoct 

638 

723 

-6 

BPt 

6^00 

410 

-7 

BPBtods. 

2,000 

277 

-7 

Bit 

5400 

374?2 

-6*? 

arpvPteb 

3JJ00 

254 

-a 

BTRt 

7/100 

307*2 

-a 

Bonk of Sczeantff 

1200 

196*2 

-eh 

B-ctoytf 

3.700 

578 

-14 

Basst 

583 

542 

-5 

BhM Chck>t 

3^00 

268 

-7 

Soofcar 

245 

434 

-10 

Booort 

846 

520 

-2 


342 

470 

-a 

M Ao*o*pno*t 

1.600 

471 

-a 

Brtosh Mmoyat 


373 

-7 

BrtePi Oast 

BJJXJ 

301 

-a 

Bntoh Land 

538 

371 

*3 

Bnrnti Sreott 

3300 

155 

-1*1 

Buiul 

267 

162 

-2 

Bunsh Ctovott 

48 

095 

-7 

Bulnn 

078 

59*2 

-1 

Cnt*>4 ts&e+ 

4500 

40* 

-1*2 

CadMjry Bctiwopoaet 

2.100 

msm 

+1 

CanuJont 

3^00 


-14 

Cortlon Convm.t 

000 


-21 

Coast Vtyelta 

B/MIO 

WZM 

-3 

Cnrrvn. Uaont 

9B4 

501 

-17 


555 

242 

-3 

CcvtmJtWT 

1^00 

471 

-6 


38 

458 

-3 

Da La Ru*f 

644 

82* 

-11 


511 

192 


Eflotom BOCL 

2.000 

777 

«e 

East Mfttod Soa 

359 

735 

-2 

EngCtmCteys 

ErowpOMOif 

B71 

ZOOO 

376 

309 

+3 

+1 

Bmurtf mm 

137 

273 

-fl 

FM 

2300 

in 

-1 

Ftoos 

P5QQ 

121 


FarWai & CoL LT. 
Fait 

574 

138 

-2 

3j!no 

213 

-6 

Goa Aeektoret 
GenwN Boat 

482 

7JDO 

550 

281 

-17 

-• 

Gkuot 

2.700 

567 

-5 

QynwM 

88 

331 

-a 


i«n 

403 

-6 

Grand MaLt 

2JB0 

401 

-0 

oust 

1.600 

525 

sh 

GREf 

668 

183 

s 

GKif) 1 

578 

605 

-3 

Gunraavt 

3400 

4 ffi 

-1 

HSBC pop *»rt 

1500 

709 

-6 


34 

324 

-1 

HarosviT 

6l600 

239 

-3* 

Hsntems CtodMd 

204 

163 

-2 

Hoy* 

029 

287 

-0 

HBodo-n 

1,700 

180 


M 

82 

299 


tot 

1.100 

03* 

-a 


1*10 

407 

-8 

Jotnm lesnsray 

4 

584 


KnSBisart 

1,600 

402 

♦3 


32 

602 

-2 

Lottorotarf 

1#M 

15*ft 

-h 

Lfflid SocuriOavt 

761 

590 

-6^ 


00 

7S2 


Legal & Gonarert 

620 

440 

-11 

LABMO 

1.600 

ff_onn 

MOO 

348 

547 

150 

•9 

-2 


947 

70S 

16 


548 

134 


Luces 

2,100 

187 

*4 

MEPCt 

B1I 

434 

#1 

urn 

1,800 

13S 



00 

02 7 

■« 

Marta A Spenewt 
MdondaBsct 

2.700 

404 

-4*a 

1.000 

787 

+ii 

Ltorriaon (IWmJ 

77B 

139 

-e 


573 

163 

-2 




-Si 2 

Nfedtonsl Pereert 

1200 

ajoo 


a 

Honti Wait wmt 

912 

532 

-ii 

B&amnn EWcL 

156 

764 


Nontwm Foodot 

412 

205 

-4 


374 

786 

-3 

PBaraont 

1,000 

664 

-19 

P AOf 

i An 

045 

-10 

Ptotogton 

FtowQvit 

aj no 
305 
4JS00 

"SS 

am 

-4 

-7 

RUCt 

133 



PTTZt 

i/no 

885 

+2 

R-an 

590 

232 

-I 

SSto7coUn*T+ 

1.600 

3S0 

396 

601 

-8 

-1 

Rsdnft 

70S 

460 

-7 

Rood HLt 

1,300 

730 

-15 

luiunj 

RouaraT . 

B97 

2.000 

233 

471 

-1 

-6 

Ron* Ftoyoat ^ 

Ryl Bk Sraftondt 

Royal Mtorencaf 

5JW 

B12 

2.700 

179 

406 

271 

-11 

-9 

SSIS 

3.500 

IBS 

*77 

1536 

-10 

SooMBh & Now.t 

1.100 

*90 



513 

STD 

♦1 

ScoUWi Poort 

2J00 

387*2 



aim 

111*2 

-3 

Sadgwtck 

5J3OT 




895 

423 


Gramm TVnrtft , 

aaon 

545 

-2 

EwiB T.yaaaorrt 

3.000 

708 


MWIO 

618 

540 

1.300 

538 

226 

471 

-t 

-3 

Mh & Nutawt 

SmM BeecMnrT 

2JX0 

1«0 

146 

424 

-lU 

-6 

SrrTO Boacnam Uto.t 

1.300 

384 


araatssictL 

410 

430 



369 

748 

-1 

Soitoi WMw Beet 

ifloo 

aoe 


SaueiWtatVtear 

4 

528 

-a 

8owh Wok. Bocl 

153 

768 

+2 

SOuSMnWtor 

USB 

582 


Standard a^nd-t 

1,200 

258 

-2 


412 

206 

+4 

SunAteBtoat 

812 

31S 

-6 

TM 

£000 

224 


TlGrewl 

1500 

368 

-8 

TS®t 

2,700 

216 

-a 


1000 

138 

-1 

Tata&Lyto 

170 

441 

-3 

Taytar Wtoorbnr 

788 

128 

-1 


8000 

248 


Itoma Wotart 

i.?W> 

504 

-4 

Than act 

i/xn 

088 



n_Tyvi 

223 


IfcMprHoiaa 

5.500 

88 

-h 

UdtodBoaNst 

1000 

1000 

1102 

310 

-19 

-fi 

Uta nuanuBpam 

314 




2000 

63*2 


WatburgiSGlt 

1000 

731 

-7 


2.100 

689 


WBBt Water 

455 

HI 

-IS 

Vtoa»Of 

133 

606 

-2 


300 

526 

-6 

wmanraHMUat 

638 

32b 


wsa Cannon 

2.100 

155 

*i 


ra 

143 

-a 


1000 

740 


YUchNwaBect. 





434 

SE4 

-7 

Zanacaf 

2,400 

841 

+8 


Based on trading volume to» o ndeedon ol mop 

HCUttH Brough the SEAOflyW® 
y en ra aay m O 43 0pm. Ta ttoo o> on e fftoon or 
more ore iwxM doom t itf c i oo on FT-SE 
100 tape ooraiajani 


■ FT-SE 100 INDEX FUTURES (UFFE) E 2 S par M Index point 


(APT) 


Open Sett price Change high Low Est vof Open km. 
Dae 3072-0 3046.0 -35.0 3073.0 3032.0 19146 53878 

Mar - 3070.5 -3X3 - - 0 646 

■ FT-SE asp 260 »m«nnuHES|MTO CIO pirM Index point 


Dec 


35800 


-35.0 


3301 


■ FT-3E MID 250 INDEX FUTURES [QMUQ E10 par M Index point 

Dec - 3582.0 - 

Al own kamal Qpim are lor prerfom Cay. t Bract vokme shown. 


FT-SE TOO INDEX OPTION (LffFQ (*3438} E10 per Ml Index point 


3100 3150 3200 

C P C P C P 
33 88 18*2 135 lO^IWz 
57 115 3S*g 14? 25*2 1B4 
78 134 56 162*2 42 197*2 


2850 2900 2960 3000 SOSO 

CPCPCPC.P. CP 
Oct 196 12^153*2 19% tW *2 31 82 47>2 53*a 70 

Nov 211j 25*2 175*2 36*2 T39fe 48 167%66fc 78*2. 87 
Dec 233% 33% IBSh E 180 66 % 130*2 87 163*2 107 

Ur 251 SBh 216*2 65 185 83*z 158 105% 127 124 101 148 79% 178*2 82*2 £ 10*2 

tot 279*2 07 2W»2 134 168 182 123*2 238 

CUP 4£QQ Fit* <UH5 

■ EURO 3T1VE FT-3E 100 IMPEX OPTION (LffFQ 210 per luD lodex pclm 

2875 2B2S 2975 30B5 3075 3125 3178 3225 

Oct T76 17 133 24*2 04*2 36 17 58 42*2 83*2 »*2 116 14 154 7 186*2 

NOV 188 29*a 159 42 129 57% 85 771* Ufe 101 48*2 129*2 32 162*2 19*z 200 

Dec 210 4 U 2 17412 55*2 W*72>2 113*2 93 88 life 66 144 46 175 33*2 210 

Ur 224*2 83 164*212012 114*2 167 75*2 225 

Jurf 289 105 200*2141*2 168*2184*2 114 238 

Cans 8003 Ml 3,521 * UMBriftag ton wba. Pnofiwas shown m baaed on nHanenl pica, 
t low dtofl ratoy annum. 

■ EURO STYLE FT-SE BWP 250 1 APEX OPTION IDMIX) CIO per tu« Index pOM 


3600 3660 3000 3050 3700 

Ok 178*2 80>2 161 101*2 128 125 

Mb 0 Mi.O SaWaraant ptcu end wbatras hi bum at IJQpb. 


3750 


3800 


3860 


I FI - SE Actuaries Share Indices ' : v 



The. UK Series j 



Daw’s 

Year 

Dtv, 

Earn. 

PJE 

Xd Kg. 

Tola] 


Sep 20 choott Sep 19 Sop 16 Sap 15 

ago 

yMd% 

yfeUW 

ratio 

ytd 

Return 

FT-SE 100 

3037.3 

-1.4 3073.1 3065.1 3112.7 

3001.6 

4,15 

7.07 

1072 

9903 

114023 

FT-SE MM SO 

3534.5 

* -0.7 3608.0 381B.1 3646.9 

3429.0 

308 

507 

2105 

95.61 

133336 

FT-SE MWI 250 «t Inv Treats 

3686.4 

-0.6 3806.6 381L2 364&3 

3445.5 

3.63 

6.13 

1902 

9807 

133093 

FT-SE-A 390 

1534.8 

-12 1553.1 15485 15702 

1505.4 

400 

6.74 

17.60 

48.16 

118040 

FT-SE SnwKap 

1663.97 

-03 187023 1875.10 187909 1782.79 

3.16 

406 

2609 

42.10 

1444.61 

FT-SE SmaSCap w Inv Tnreta 

1638.42 

-OJ 183031 1844JZ7 164&42 1764.77 

304 

6.17 

2401 

4X20 

142606 

FT-SE-A ALL-SHARE 

152622 

-1.1 1543.64 1539.71 1&5B.B8 14B20S 

3.98 

6.58 

1806 

48J93 

1200.0B 

■ FT-SE Actuaries All-Share 



Dtv. 

Ewn 

P/E 

Xd at*. 

TaW 



Day's 

Yaar 


Sap 20 chgs96 Sep 19 Sep 16 Sep 15 

ago 

ytaUW 

ytekf% 

ratio 

yw 

Return 


TO MINERAL EXTRACTKNpq 2699.71 

12 Extractive mdustriea(4) 4007.74 

15 08, Mewatedp) 2631.80 

IB CU Excknaflon A ProdQll *856.78 


-1.2 2732.82 2705*3 Z7455B 2231.70 
*03 309&76 393051 395038 318000 
-1.8 2674.62 2851.08 209545 216840 
-06 1 967.88 195928 1988.78 1814.40 


341 

507 

2404 5007 

1076X7 

320 

Oil 

24.19 5332 

103309 

358 

5.71 

21.79 5908 

1071.77 

2.12 

t 

t 3803 

1132.1B 


20 SEN MANUFACTURERSQM) 

21 BuftSng & Core&ucHonf3S0 

22 Bidding Masts & Merch$32) 

23 Chemteate(23J 

24 OhreraWed lnctustriUs(iq 

25 Bectronk: & Bad Eqdp(34) 

26 Engteeering(7C9 

27 e ngineering. VeWctesfi?) 

28 Printing, Paper & FckgPfl) 

29 Tenties 8 Apparalgq 


188042 

-10 191903 192505 19*6.46 167060 

401 

5.02 

24.18 

60.71 

966.40 

1076.63 

-0.7 1084.67 109019 1118^1 113010 

360 

304 

2358 

2385 

84015 

160634 

-10 1632.52 1652.49 1B82.68 179200 

408 

403 

2384 

54.12 

64909 

242038 

-07 2444.63 243705 245002 219500 

381 

400 

3000 

7503 

107301 

1812.16 

-10 1B44.78 1854.57 1871.05 193040 

505 

313 

2X41 

6046 

93080 

169040 

-2.0 193601 193024 1944.09 212020 

397 

60S 

17.94 

6708 

92803 

161700 

-08 1831.95 1829.70 1844.18 163300 

313 

402 

24.07 

4405 

1038.12 

2299.12 

403 2292^*7 2274.19 229704 1904.70 

405 

2.42 

56.81 

7207 

1114.64 

2804.48 

-1.0 283207 £85405 288200 240600 

305 

329 

22.14 

7024 

110346 

164406 

-00 16S&05 1847.30 18B5.18 187900 

409 

6.66 

1X38 

44.09 

928.18 


30 CONSUMED 00008(97) 

31 Brawertoetl7) 

32 Spirits, Wines 8 CSderaOO) 

33 Food ManufSctuiers(23) 

34 Household Gootts< 13) 

36 Hearth CaraCl) 

37 pftarmaceudcetoOZ) 

38 TobaccotU 


2704.1 1 -0.9 2729.40 272X52 2769.14 2758.40 

2197.60 -1.1 2223.06 2231 04 2260.30 206700 
2770.05 -1.1 2801.96 280X95 2849.39 280X50 

2318.86 .1.0 2342.60 2350.43 2381.03 2310.40 

2443.18 -0.2 2447.49 244109 2459.10 256300 

1669.65 -Q0 166407 166X66 1060.90 1712.10 

2982.12 -02 29BT02 2975-47 3055.4? 3025.30 

3422.75 -3.1 3531 01 34640B 3S31.B1 3970.50 


409 

7.46 

1351 

10101 

33208 

400 

7.79 

1359 

6103 

984.48 

4.00 

604 

1369 

8902 

92X59 

4.18 

7.84 

1405 

7377 

974.41 

369 

7.42 

16.13 

5379 

072.18 

301 

325 

4X21 

36.16 

95902 

4j42 

7.18 

1312 125.1 B 

954.16 

604 

1004 

10.68 217.07 

78078 


40 sewicespsn) 1011.16 

41 DtsMbutorsfill) 2521.84 

42 Leisure 8 Hotate<25) 2027.79 

43 2784-29 

44 Retailers, FoodpB) 182120 

45 Retafleis, SenBrel(45) 1513.37 

48 Support Servteafifil) 1552.43 

40 TraneporKlS) 22«.78 

51 Other Sendees & ftjejneeeW 1309.64 


-1.1 1932.4Z 183305 195604 188900 X23 B01 10.13 

-1.4 255129 256X96 256X02 2715.40 3.61 709 1603 

-1.3 2065.38 2057.58 2075.48 193220 3 M 400 2403 

-1.0 2813.06 281001 2848^8 2495^0 2AS 5.31 2135 

-1.4 1B48.73 183827 188029 180380 3^6 8^8 14J0 

-0.7 1624.71 1634.00 1661.28 1660.60 126 a 70 1656 

-0.6 1582.34 1661.27 1HC. 78 161130 2.71 6.13 10JO 

—1.8 2284.65 2263.82 2310.41 2240.60 3.7S 5.63 20.58 

*1.7 1 287 JO 1296CS 1296J56 1280.00 3J57 2.13 BtUXTT 


942.78 


rmmEsoq 

Jectricttyd 7] 
to Dtttrtoudonft 

eterommunicaWon«i4) 

VkaetflSl. 


2379.87 -0.7 2396J2 2379.84 240609 2334J0 4.42 7.90 

2619.81 -02 £524.19 2S0B.16 2S15.09 2034.10 3.84 9.78 

1998.69 -0.7 2012 JS 1077.17 1989^7 2147.90 6-00 * 

1946.62 -1.0 19662S 1964.95 200232 2094.40 4.24 8JJ8 

1837-24 -1C 18Sa57 186051 185038 IBOSJO 529 1292 


15.41 73.42 
1222 83.40 
t 66.70 
15.06 5022 


4003 937.48 
^94 87166 
S3M 1000.48 
65.05 96726 
45.77 1087.84 
3720 
3026 
57.46 

1122.56 

91065 
104721 
913.42 
830.12 
81042 


PM-**IANCIAIStB38| 


iasn 2 i - 1.0 166746 196440 168^79 1 609.56 331 6.3S 1&63 4038 1165.50 


NANClALStlW) 
erdcMlO) 
t»uiance(i7) 
fe Aasuance(6) 
lerchont Bankta(6) 
trior maMsHZO 
ropartv(411_ 


2143.11 -1.62173062161292196^3 216370 

277943 -12 2829.62 279529 2861.39 262390 

1202.76 -34 1232.86 122052 1241.54 1447.10 

2365.51 -2.0 2403.06 238335 2400.51 2570.00 

3062.64 -06 3082.64 309346 3062^8 2987.90 

1901.20 -0.S 101305 19+4LS9 1959^7 173ai0 

1449.44 -03 1464.12 1483.16 1478.B0 1569^0 


iwganigWr TRUST3n24) 


2765.67 -12 281^29 2829.P5 285336 252620 


r-SB-A ALL-SHARE(86Q 


1 52322 -1.1 1S43.B4 1638.71 165008 1492^8 


4.48 

8.80 

1316 81.14 

84905 

403 

9.B4 

11.81 11404 

83503 

338 

901 

11.65 4X55 

821.BG 

342 

7.72 

1502 6800 

89606 

337 

10.78 

1000 8405 

92X67 

381 

325 

14.46 5372 

1014.41 

4.16 

401 

2901 39.60 

827.99 

201 

103 

5123 51.20 

83008 

303 

B.5S 

1806 48.93 

120009 



900 

1000 

1100 

1200 

1300 

1400 

1300 

1X10 

HigiVctey LowAtey 


305X2 

306X1 

304X0 

30500 

30490 

30308 

303X6 

3035.1 

307X7 

3031.7 


35933 

35970 

35880 

3587.1 

3687.7 

35832 

3665.3 

3682 .6 

36037 

3582.1 

15619 

1514.1 

15139 

1538.9 

15401 

1539.8 

1534.4 

15331 

15330 

15520 

15312 


£ 100 
£ Mid 250 
e-A 350 

at FT-SE 100 tt** hlgrr. (LMWr. 0«^ aSTPm FT-SE 10D 19M High: 3fiXU(2£ ) L* 21TO8 <M* 

PT-SE Actuaries 350 Industxy basket* 

Opr" aoo 10JM 11J» 13JX) 14J0 1SJ0 l aio Oaae PtwihMM Changa 

. 1 ' ,r«4J 1022.0 10203 10138 1012.0 10133 10133 101&7 10132 10139 10234 -7S 

n&B.B 2947.8 2958J 29618 2857.4 29532 2955.0 29S33 29539 -&0 

mac * uUM 7^7 inmi 1821.4 18253 18236 13234 18233 18333 18345 1864.1 -138 

a 28650 2W7.2 283a0 2830.1 2829.1 2817.2 28130 28130 2813.7 28S4J5 -SOB 

UB> ctf constrtuems ere wa«Me ton hie Finroetri Tima* 
etdaornnk: nl aeMi -baaed 


UdUaui WomWjenw ^LTtS^T^^SssahmbiSws SerieoL Mdc hcwe re a imt 
umnd. One PMEfAT Fba»V Houm 13-17 Epwarih Street. London EC2A 4DL 

rOTCUCwUMno W nut ITJSE TOO. BM FT-SE IM S50. FT45E AetUBlH ! 


ewretotWlrie w ?^- l ™!^ )irrJT^^1 .^«nm ^lkni44l6UlwtoaUMaaaiBSiaiT»Fln»ieW11mMUTiiladilW«.4i»iyiamaenwa 

O Inremretonal Start &£*SL^L22i«IKin3oerairi!r sfflreLwdBn Stofc Btom anri FtoneW hmee untotlhe FT-SE AebiarM Stoe 

■FT-sr and sSSTm man 80 ere aaTSSTt tftto* are nagattre 

IwtCM wo udrted BV Trio WM Company. I »■ 


EQUITY FUTURES AND OPTIONS TRADING 


the Conner figure was always 
at the top end of market expec- 
tations. 

What looked to have mostly 
worried dealers was the fact 
the the profits reappraisal 
came from a US house said to 
have its ear close to the inner 
workings of the US airways 
business. 

Enterprise Oil was the best 
performer among oil shares, as 
the market welcomed news of 
a promising oil discovery in 
the Norwegian sector of the 
North Sea. Enterprise and Esso 
Norge each have a 50 per emit 
stake in the discovery. 

Oil analysts were enthusias- 
tic about the discovery, but 
said farther d rilling , to deter- 
mine the extent of the discov- 
ery, would have to be made 
before they could appraise 
their net asset values for 
Enterprise- 

Enterprise shares settled 
marginally higher at 399p on 
turnover of 2m. 

The regional electricity 
stocks staged a strong rally 
after initial weakness with 
dealers talking of further 
actual and rumoured share 
buy-backs taking place. South 
Wales announced it had 
bought in a further 500,000 
shares at 810p a share, while 
there were suggestions that 
Midlands was about to embark 
on a buy-in programme. South 
Wales shares eased 3 to 809p 
while Midlands climbed 11 to 
787p. Northern Electricity’s 
restructuring programme saw 
its stock price move up 8 to 
794p. 

BT gave ground after nega- 
tive comments from Klelnwort 


NEW HIGHS AND 
LOWS FOR 1994 

HEW MOHS (14. 

CMEMTOALS (1) WOtxunnolme RW*. 
DISTRIBUTORS (1) MMdtem. EUECTONC ■ 
ELECT BMP Ml Thorp# (F.W.). EXTRACTIVE 
FND6 (1) AngtouaH. FOOD IWNUF (3) CPL 
Arams. Manhour, IB), CMS MSTIHBUnON HI 
fTogjs. INVESTMENT COMPAMES (2) Firsi 
Pacific. MMrtkn Fct LEISURE fi. HOTELS p) 
Zottera, MESA A Grampian TVA. Yorfattre 
Tyno-Tae, IV, Do. Warraraa. SUPPORT SOWS 
[1J Serna. CANADIANS (2J. 

NEW LOWS (IBS). 

OUT# BM) OTHER FIXED WTERESr (4) 

BAMCS H) Bank tH Scottmd 9VpC W Pri., Da 
fifcpo PL NmL Austrok. Sanaanl Cnraa Tytec 
Pf. BREWERIES (2) Futo S.TA. Scotch & 
Nawcoatta. BUtUMNO A CNffTRN (11) BLDO 
MATES A MCHTB M Canton. Da Or*. Prf . 
Oraham. Hapnorth, Haywood WWama Da Cnv. 
Pit., Mortay. Moya HL, Rugby Oram. 
DKTHIBUTORS 0) Cowto. Dtptoma. 
Elacfcmrex. Incncapa Lax Savtoe, Lvho 
SH tofia n . Panetopm. OlvaiSlFgP WDLS (W 
ELECTRNC 4 ELECT COUP fj) fBCC, 
Bawttwrpa, Downing 8 IL. ENOWSnNO (1) 
Oynwod. FOOD MAKUF (a Bob Waaaanan, 
Dam HOUSEHOLD GOODS M Swddati, 
TomUnaom. Vymwa. WyaMd. INSURANCE (3) 
Heath (CLEX Marsh A IfcLannan New London 

CljptoJ. INVESTMENT TRUSTS P3 LEISURE A 
HOTELS 0 Atom Ov Pt CranGoU. UFE 
ASSURANCE ft) Tianaattorelc, fiWDM (3) Chbne 
Comma Pearson, Road toll, OL EXPLORATION 
& PROD {tj Copto Haa 00- KSHOVD 
Criovron. mra financial |4) OvHtta. 
JohnaonFry. UngASiacaon. Soon that. 
OTHER SOWS S BUMS (T) PHUgreaiL 
PHARMACEUTICALS R) Proteus km. PnTNO, 
PAPER * PACK! 0) Banraw. FatguODn HL 
PROPSTTY ffi) RETALERS, QDCRAL pi 
BettarvMra. Body Shop, CapatngM. Couwy 
Cosuoia Great UrVireraal. Ktoenere. Roaoeya 
SUPPORT SS1VS (5) Jotaison Cfeoren. MR 
Dare Urn Pagaaua RCO. EtattHoy. 1EXILES 
A APPARB. (1) Lament TOBACCO (1) BAT 
12 Upc Una Ln 2003/08. TRANSPORT H) Brit 
Airway Cm 9Npc Cnv. CSC FTehar (J). Mayne 
McM«a AHBHCAN3 «. 

Benson, the shares sliding 5V4 
to 374Vip and the partly-paids 6 
off at 254’Ap. 

Compel Group, the computer 
systems and services group, 
put on a creditable perfor- 
mance on its market debut, the 
shares, placed at 125p opened 
at I30p and eventually settled 


at I26p. 

There was no real disap- 
pointment across the market 
with Tesco's interim results 
which came out at the top end 
of analysts' forecasts; the divi- 
dend was in line with expecta- 
tions. 

There were, however, some 
reservations about gross mar- 
gins and sales, but these were 
not translated into big selling 
of Tesco shares which settled 
only 3 lower at 248p. Some 
dealers reported switching out 
of Sainsbury and into Tesco 
after the figures were released. 
Sainsbury shares dropped 9 to 
427p, albeit in thin trade of 
3.5m. 

William Morrison retreated 6 
to 139p ahead of interims 
expected tomorrow and which 
are expected to show profits up 
around 20 per cent at £45m- 
plus with the dividend 
increased by around 15 per 
cent 

T & N were resilient, closing 
unchanged at 224p ahead of a 
presentation by brokers Hen- 
derson Crosthwaite to inves- 
tors in Frankfurt. 

The company has an option 
to acquire up to 52.5 per cent of 
the Kolbenschmidt pistons 
business. The brokers said a 
rights issue to fond the pur- 
chase had been discounted by 
the market and pointed to T & 
N's “track record of effectively 
managing acquisitions.” 

The retailing sector included 
a handful of good performers 
despite the overall market 
weakness and persistent wor- 
ries about possible further 
rises in UK interest rates in 
the short and medium term. 


Storehouse advanced 4 to 
206p after Klelnwort Benson 
Securities gave the stock a 
push on the view that the 
shares were undervalued. 

Next edged up 2‘ * to 246p on 
heavy turnover of 3.2m follow- 
ing a reappraisal of tbe compa- 
ny's prospects In the wake of 
the recent interim figures. 

Williams de Broe, the stock- 
broker was one of the compa- 
ny's strongest supporters, 
labelling the shares a buy and 
insisting “the stock's discount 
rating is unjustified.” 

Sears, on the other hand, suf- 
fered from a sizeable overhang 
caused by tbe stock's inclusion 
in a big programme executed 
in mid-session, in which a 
block of 3.9m shares were 
traded at 113p. 

Reg Vardy stood out among 
motor distributors, rising 2 to 
170p on the back of a bullish 
chairman's statement pointing 
to a 10 per cent jump in 
August car sales and trading 
results well ahead of last year. 

BAA shed 12 to 473p with 
some 4m shares changing 
hands on modest profit-taking 
after the recent good run. 

Eurotunnel lost 6 to 273p, hit 
by the general market weak- 
ness and further reflection of 
Monday's announcement of the 
late start-up for the Shuttle 
service. 

Inspec Group moved through 
the market although the price 
held steady at 223p. 

MARKET REPORTERS: 

Stave Thompson, 

Jeffrey Brown, 

Christine Buckley 

■ Other statistics, Page 20 


LONDON EQUITIES 


LIFFE EQUITY OPTIONS 




— 

Ms 

— 

— 

Puts 

— 

Opfien 


Od 

to 

Apr 

Oa 

to 

N*r 

Wtan 

540 

28ft 

_ 

_ 

7ft 

_ 

_ 

rsB) 

500 

au 

- 

- 

36 

- 

- 

Arm* 

2B0 

21 ft 

28 

35 

5 

12 H 

IB 

HS3 t 

300 

B 

17 

SB 

141» 

23 

26 

ASOA 

GO 

s 

11 

12 ft 

1 » 

3 

4 

rw] 

70 

3 

Sri 

7 

5ft 

8 

9 

Brrt Akwsya 

360 

22 ft. 

32ft 4Zft 

Oft 

16 

20 ft 

PJ73 } 

390 

7 

18 

28 

23 

32 

36ft 

SaOBdto* 

420 

19 

30ft 

SB 

12 ft 

22 ft 

29 

(*424 1 

460 

4ft 

13ft 

22 

39 

47ft 

S3 

Boats 

500 

29ft 

40 ! 

Sift 

5ft 

18 

23ft 

fS20 I 

550 

5ft 

16ft 28ft 

34ft 

44 

50 

BP 

390 

27ft 

37ft 44ft 

5 

12 

17 

T40BI 

420 

8 ft : 

20K2Bft 

16 . 

26ft ■ 

31ft 

BtttbSBfil 

140 

18: 

21ft Sri 

1 ft 

5 

6 M 

(**56 t 

160 

5 

10 14ft 

OH 

13ft 

15ft 

Bess 

GOO 

48ft 1 

56ft 

m 

4W 

16' 

20 ft 

(*530 ) 

560 

13ft: 

24ft 35ft 

28 

36 

42 

UK&IIB 

390 

28ft 

38ft 

50 

9 

IBM 

26ft 

T402 ) 

420 

9ft : 

24ft 36ft 

28 

36 

42 

CtotSiMs 

460 

24 

37 

47 

8 ft 

21 

25ft 

riToi 

500 

7 

17ft 

28 

35 

Mri 

40 

ftioHii unto 

483 

19ft 

38 42ft 

11 

IBM 

30ft 

1*499 | 

543 

3H 

14ft 

21 

47ft 

50ft 

63 

10 

BOO 

90 

73 

SO 

Bft 

25 

37 

(*835 ) 

950 

19ft 

44 

57 

31 

46 i 

Gift 

ringMiar 

460 

Sift 

47 

60 

8 

17 

24 

naoi 

500 

12 

S 38ft 

27 

37. 

♦3ft 

Land Soar 

550 

S3 1 

WH 70ft 

1 ft 

B 

Bft 

1*597 ) 

600 

151 

ZSftSBH 

14ft 

25 

29 

Marta A S 

390 : 

21 ft 

30 39ft 

5ri 

12 ft 

IBft 

(*403 1 

420 

9ft ' 

15ft 

24 

21 

28 : 

UK 

NaSttnt 

460: 

32ft 

48 

55 

7ft ' 

I6ri 

26 

(*«2 ) 

500 

ii : 

20 ft 

34 

20 ft : 

34ft . 

♦7ft 

Stony 

4 a 

19ft: 

Sift 42ft 

12 

23 1 

28ft 

(*429) 

480 

4 

14ft 

29 

38 < 

Wft 

51 

She* Trans. 

700 

15ft 

32 41 ft 

19 

za : 

IBM 

) 

750 

2 ft 

13 20ft 

60 1 

32ft; 

(2ft 

ambom 

200 ' 

lift 

17ft 

22 

4ft 

a 

13 

1*205 ) 

220 

3 

7ft 12ft 

17ft 

71 24ft 




— 

Cafa 

— 



Pots 

— 

Option 


Hov 

Fob 

«*»y 

Nor 

Fab 

May 

Hanson 

220 

24 

27 

29ft 

2 ft 

5ft 

Bri 

1*239 ) 

240 

10 ri 

14ft 

18 

B 

14 

17ft 

Lasno 

104 

13 

- 

- 

9 

- 

- 

(156) 

180 

Sri 

7 

10 

27ft 

29ft 

31 

Lucas Ml 

iao 

20 ri 

24ft 

26 

5M 

9 

12 ft 

1*196 ) 

200 

9 

14ft 

IBM 

16 

19ft 

23 

P a 0 

600 

91 

77 

BSft 

6 

16ft 

ZBft 

CB45 ) 

650 

28 

48 

56ft 

26 

36ft 

51 ft 

Pfehgtm 

160 

T7M 

IBM 24ft 

5 

ft 

lift 

H8B) 

200 

Bri 

IBM 

Mft 

16 

20 ft 

23ft 

Prudential 

300 

IBM 

24 

28 

11 

16 

22 

(*308 ) 

330 

S 

11 

15 

31 

34 

40ft 

RT2 

850 

53H 

78 

87ri 

17ft 

2 SM 

44ri 

(*005 1 

BOO 

24 

49 i 

Slri 

43 

54 

69 

Rated 

460 

43ri 

54H 

63 

B 

Mft; 

28ft 

<*497 l 

500 

IB 

31K 

41ft 

26 

32 . 

I7M 

Royal brace 

260 

ZZft 

30ft 

38 

9ft 

14 

19 

rzra 1 

280 

u 

Zflri 

» 

19 

24 

30 

Tesco 

240 

16ft 

22 M 

23 

7ft 

13 

17 

(*248 1 

260 

Bft 

13 

18ft 

IBM 

24 

26 

Vtadtow 

183 

lift 

16 

- 

9 

13ft 

- 

PB3 ) 

200 

5 

8 W 

14 

20 ft 

24 

28 

imam 

300 

31 

38 43H 

3ft 

BH 

12 

ran 

325 

13M 

- 

- 

I2ft 

• - 

- 

Ogdon 


Oct 

to 

Apr 

Oct 

to 

Apr 

BAA 

450 

30 

37 47ft 

th 

lift : 

14ft 

("472 ) 

475 

t3ri 

72ft 

32 

14 

22 

26 

Thames to 

500 

18ft 

so : 

J8ft 

13 : 

S7ri 

31 

(*S03) 

560 

3ft 

13 • 

IBft 

50 

61 

63 

Optan 


ten 

Dec 

Mar 

Sap 

Dec 

Mn 

Abbey HsD 

390 

Bri : 

Mft 

32 

7ri 

17 

"zT 

P390) 

420 

ita 

lift IBft 

3?w: 

36ft 

46 

Amaral 

30 

1 W 

3ft 

4ft 

1 ft 

3ft 

4ft 

(*30) 

35 

1 

Z 

2 ri 

6 

7 

8 

Bercbya 

550 

31 SOft Gift 

1 ft 

13 

24 

rsra ) 

600 

2 ft : 

23ft 35ri: 

25K 

36 

50 

BUM CMS 

260 

12 : 

23ft 

30 

2 ft 

9ft 

16 

(*267) 

280 

2 ri 

14 20ft 

15ft ; 

21 ft 26ft 

BtKBh Gas 

300 

B 

14 

22 

5W 

16 

20 

ran ) 

330 

1 

3ft 

it : 

SOft 36ft 

41 

DMAS 

180 

14 23ft 26ft 

IK 

8 

12 

H91 ) 

an 

2 

13 16ft 

lift 

IB 22ft 


RISES AND FALLS YESTERDAY 



Rises 

FOBS 

Same 

British Funds 

- —0 

08 

2 

Other Fixed interest „. 

0 

4 

It 

Afflnoral Extraction 

- - . 53 

72 

73 

General ManufectaMora 

— .... — 86 

205 

374 





















Others . 

37 

44 

26 

Totals 

287 

1066 

1243 


Daa bused on tow componto Sated on the London Snore Sendee. 


TRADITIONAL OPTIONS 

Fvsi Dealings September 12 Expky Decembers 

Last Daallngo September 23 S e ttlement December 22 

CsflK Henhdim, Lucae MR*. Royal Bk Scot TutUW 08, Urittod Energy. Pub: Tufilow 
03 Puts 6 Cans: DtvMon Grp, United Energy, First Nat Fin, Next. 


LONDON RECENT ISSUES: EQUITIES 


Issue 

Price 

P 

Arm 

paid 

up 

MM. 

cap 

(Onj 

1694 

high Lora Stock 

Clone 

price 

P 

W- 

Net 

dtv. 

Mr. Ora 
cnv. yW 

P/E 

rat 

_ 

F0. 

195 

89 

77*3 Bate Q Shn Wrte 

77*2 


. 

- 

- 

- 

100 

F0. 

1X1 

10B 

B5 Beacon Inv TM 

95 

-1 

- 

- 

- 

re 

- 

F.P. 

152 

48 

39 Dp. Warrants 

40 


- 

- 

- 

- 

5125 

F.P. 

IB 2 

130 

125 Compel 

126 


WN4.0 

2.1 

AM 

122 


FP. 

1.30 


1 Conn Foods Wria 

1*4 


- 

- 

- 

- 

- 

F.P. 

240 


61 Emerging MMs C 

62 

+1 


- 

- 

- 

120 

F.P. 

21.1 

120 

118 Independent Parts 

118 

-2 

LN4.D 

2.1 

42 

UJ3 

- 

FP. 

- 

77 

55 JF Ft Japan Wrte 

55 


- 

- 

- 

- 

- 

FP. 

26.7 

07 

35 {Magnum Power 

64 


- 

- 

- 

- 

23 

FP. 

100 

31 

29 OrtHa 

29 


- 

- 

- 

- 

- 

F.P. 

056 

17 

5*3 Pavher Drits, 

16 


- 

- 

- 

- 

_ 

F.P. 

002 

40 

26 Petrocettic 

26 


- 

- 

re 

- 

- 

FP. 

X15 

44 

27 Suer Wits 99/04 

27 

-3 

- 

- 

- 

- 

- 

FP. 

1T6.0 

379 

375 Tempi oton E New 

375 

-1 

- 

- 

- 

- 

- 

FP. 

125 

212 

192 Do. Wrte. 2004 

206 

-t 

- 

- 

- 

- 

- 

F.P. 

224 

35 

26 Tops Eds Wrts 

28 


- 

- 

- 

- 


Ibfdgar 80 11 13% 15% 2 4M Sri 

(-88 ) 90 Sri 7ri Sri Sri 9 10ft 

IHewr 1100 a GO m 23 42 SG 

pilot) 1150 urn a 48K 56» 71 B5H 

Zeneca BOO ffiri 75 87 6ri I8ri 3ZM 

(-840 J B50 21 «SK57ri M 39» 56ri 
Option MM FM toy No* Feb Uajr 


Grand Mai 

r«oo ) 

Ladbrake 
1*157 ) 
UU1 
P310 1 
Option 


390 a 
420 11ft 

140 a 

160 Sri 
300 IBM 
330 5 


34H41H11* 
ISriZTft 28 
8 31 2)1 
IBIOftlOri 
28 a IQri 
1ZH 17 31 
Dec Itar Sep 


32 25ri 
38)4 43 
5 Bri 
14 17ri 
T5ri 24 
34 42ri 
Dec Mr 


Haora 

nzi » 

Option 


iso 4ri 
130 2 


ii M a 
7 Bri lift 


0 lift 

15M 17ri 


Ww Ffib toy N(* Feb May 


W ton 480 31ft 48 a 22 31ft «ri 

(*470 } 500 14K a 39ft 46 55U 63ft 

BAT Inds 390 33 45 SOri 9 14 24 

(*409 ) 420 1«27ri33W22» 26 39 

sir sooiBri sift a 6ri i4ri a 

1*307 ) 330 7ft 17 & 27ft 31ri 37ri 

ft* Teton 390 25 B 3E 6ri 14M 17ft 
P373 ) 390 B 14 B 22ft 31ft 34 

tefinysa 460 20ft 33ft S3 14)4 £1 £9 
f 481 ) 500 8 16ft 21ft 42ft 4Sft S3 

Eaton Bee 750 55ft 74ri 88 23ri 3645ft 
(*773 ) 600 29ft « BSft 4HW S3 71 

GoJmesa 460 1711 a 36ft 18 24H 32 
r460) 500 GUri2Bri 48 52 58 
GEC 280 13ft 18 23ft Bri IM 17 
C2B1) 300 5ft 1DW IS £2ft 26ft 2flft 


Htatawn 
1179 > 

LoKtn 
f-134 ) 

Ntf Power 
T466 j 
Scot Foaor 
nse ) 
Seats 

niz 1 

Forte 


160 21 24 ZB 
160 1ft lDft IB 
130 6ft 13ft 17 
140 2 8 12ft 

460 13ft » 41 
500 1 13 23ft 


360 2Sft 


390 

no 

120 


43 M 
a 33ft 
9 lift 
5 Bri 


1 3ft 5ft 
5 11 12ft 

2ft 7 11 
8 13 16ft 
5ft 21ft 28 
36 45 50 
1ft 10 14 
Bri 22 Bft 

2 5ft 7 
Bft 12 13ft 


200 15 21 an IK Eft 10ft 


RIGHTS OFFERS 

Issue Amcarrt Latest 
price prad Renun. 1994 

p up date High Low 


Qoshig +cr- 
prlce 
P 


476 

NS 

4/10 

59pm 

28pm 

CommareW Union 

S8pm 

360 

NS 

21/10 

48pm 

13pm 

EMAP 

13pm 

252 

NJ 

11/11 

3Hpm 

IBprn 

Wafr 

IBpm 


FINANCIAL TIMES EQUITY INDICES 

Sep 20 Sep 19 Sep 16 Sop 15 Sep 14 f r ago 


~Wgh -Low 


<*£12 J 

220 

2 

11 ISM 

9ft 171121ft 

Mnary Shore 

2358.3 

238X5 

2388.1 

242X2 

2397.4 

23240 

27130 

2240.6 

Tamac 

130 

11 19K 19 

1ft Tri 10ft 

Old. aw. yield 

4.38 

4.30 

400 

4.24 

429 

400 

400 

X43 

(*137) 

140 

3K 

11 14H 

5 13K 15ft 

Earn. yU. % fu9 

805 

6.13 

6.13 

X04 

XII 

4.71 

606 

302 

Tbom EH 

950 

43 

73 n 

2ft 19ft 33 

P/E ratio net 

17.67 

17.41 

17j41 

17.00 

17.47 

27.08 

3X43 

17.41 

n*/ ) 

1000 

8ri 43K57K 

20 41 57 

P£ ratio nO 

17.09 

1800 

1800 

1X28 

1X06 

25.00 

3080 

17.09 


TS8 

reifii 


an iBft a aft 
220 3ft 13 18 


1 5ft 10ft 
7 13ft »ft 


Tonttna 220 7 17 2ZW 4ri 10ft 14h 

(*223 ) 240 Iri B 13ft IB 22ft 26ft 

Welcome 650 53 77ft 97 1ft 17ft 30 

{*698 ) TOO 14 4B 67 14H 38 52 
Option OHJM*rJKij_JM_» 

Sam 550 32ft 34ft 68 13ft 25ft 37ft 

(*567 ) 600 10ft 30ft 40 43 53ft 65ft 

HSKKpdS 700 X 63ft 82 24 42ft 64 

{*709 } 750 IS a SBri 54 70h93K 

Roms 482 a - - iitti - - 

(■471 ) 475 IS - - 16ft - - 

Option Mm Fanny tot Feb May 

160 Hft 2BK 31ft 2ft Sri Bri 

1« lift 16ft a 9ft 14 17ri 

• Underlying reeurty pnoo. PremtomB ehown ore 
bread on tSosJng oflar prices. 

Sep M tnbo r 20 Tool con tra cts. 39.504 Cjfc: 
21.053 Piss 1WU 


ri78} 


FT GOLD MINES INDEX 



Sap 

IB 

%ebg 

onto 

Sap Sap Tsar 
re is ago 

Gnwtdir 
yield H 

52 week 

Urn 

Gold ten tain (38) 

22BU» 

♦1J 

217X08 216101 166402 

1JQ 

2367-40 166402 

■ Reotaal burton 






Africa fig 

333X39 

-10 

340208 340703 225X31 

4.12 

340706 2208.16 

Attoglasan 

265453 

-0.4 

266X12 269204 166046 

106 

301X89 182905 

Ntm Amarica (13 

180X78 

4-3.8 

174X57 171X37 1467.14 

0.71 

203905 145X45 


Copyright. Th* FSumtW Ttoa IM 1BB4. 

Rsatbs m eractos enow nnta of comptoas Bosn US DNte*. Bow. VthwK lOOOW W/W/K. 
P mdeoa a aot GoB ttoiw fivtox Bop Ztt 175 ; day's cfonpr -U poHs; v«ar ego; 1 TAB t PareaL 
Letaet [tocM umfluWn tor tW» wMea 


-For 1SSA. Onfinary Index atneo companion: Hgb zns.0 ZAJ2AH; low 404 2S.«r40 
FT Ordinary Shoe Index base due 177/35. 

Ordinary Share hourly changes 

Open QlOO IdflO 11^00 12J0 13J0 14J0 ISlOO 1&00 High Law 

2391.1 2375.7 23795 2367^ 23682 2367J 2357.8 2360.3 2354.4 2301^ 2354^4 
Sep 20 Sep 10 Sop 18 Sep 15 Sep 14 Yr ago 


SEAQ bargains 24,355 24^12 24.748 24^38 

Equity turnover {Orttt - B5a9 11997 11B0.B 

Equity bargobat - 26.641 27.771 27,658 

Shares baited Mt - 827.0 488.4 5213 

tExdudbig knra-mrrtiui bueneM and ovaraesf tumaver. 


24.312 26,172 

1237 5 113&S 

26.700 29515 

477,8 4715 


THE TOP 

OPTOIOtMIlES SECTION 

for senior management positions. 
For advertising information call: 
Philip Wrigley 
+44 71 407 873 3351 









































































FINANCIAL. TIMES WEDNESDAY SEPTEMBER 2 1 ! 994 


LONDON SHARE SERVICE 




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32 


CURRENCIES AND MONEY 


FINANCIAL TIMES W EDNESDAY SEPTEMBER 21 1994 

MONEY MARKET FUNDS 


MARKETS REPORT 


Yen lifted by $, D-Mark 


1 POUND SPOT FORV 

. ; ARD AGAINST 

I HE POUND 



_ □ 

Sep 20 

dcobig 

Change BldArffer 

Day 1 * Mid 

On® month 

Three menth* 

One year Bank of 

mfd-pobrt 

cxi day apreed 

high low 

Rate %PA 

Rate HPA 

Bate *PA Bng. Wax 


The yen was the beneficiary of 
weakness In both the dollar 
and the D-Mark yesterday as 
the US trade gap widened and 
jitters about forthcoming Ger- 
man money supply figures 
made the Japanese currency 
more attractive, writes Malabo 
Rich. 

Against the dollar, the Japa- 
nese currency advanced by 
about a yen to Y97.75 from 
Y98.7650. Against the D-Mark, 
it closed in London at Y63.03, 
from Y63.61. 

Sterling also had a good day, 
finishin g up against the doQar 
and the D-Mark. Against the 
dollar, the pound finis hed in 
London at 81.5764, from 81.568. 
Against the D-Mark, it closed 
in London at DM 2.4446, from 
2.4347. 

The UK currency was helped 
by overall market sentiment 
that base rates will continue to 
rise, a view which was sup- 
ported by an active short ster- 
ling Aitures market. 

The December short sterling 
futures contract fell 14 basis 
points to settle at 93.03 from 
33.17, discounting a short-term 
interest rate of 6.97, a full per- 
centage point above current 
rates. 

■The yen surged against the 
dollar following the release of 
the US trade deficit figures for 
July, rising to Y97A5 in the 
afternoon, near its mid-August 
levels and only a point off its 
post-war high of Y96.45. 

The US trade gap widened by 
21.6 per cent in July to 
$10.99bn. from a revised 
S9.fribn in June. The trade gap 
with Japan rose 2.7 per cent to 
$5.67bn. its highest since 
March. 

Expectations before the fig- 
ures were released were for an 
even higher deficit with Japan. 
But against the background of 
upcoming trade talks between 
the US and Japan, the markets 
took the news quite negatively 
and sold off the dollar. 

Mr Rob Hayward, economic 
advisor at Bank of America, 
said: "Although it was a disap- 
pointing number on the sur- 
face, 1 do not think it changes 
the US trade position. It is just 
a bit of statistical noise.” 

The dollar fought back 
against the D-Mark towards a 
floor around DM1.552 after US 
Commerce undersecretary 


D-Maric 



1 . 8 ' 


1*04 


Source: Oatastream 


■ Pound hi Now Yoifc 


Sep 20 — Uat- 

E spot 1.5740 

in* 1.5732 

a cum 1.5710 

1 yr 1.5534 


■ Pan. dnae- 
15700 
15683 
15673 
15308 


Everett Ehrlich said that in 
spite of the deterioration of the 
July trade deficit between 
Japan and the US, the trade 
situation remained “fundamen- 
tally unchanged”. The dollar 
closed in London against the 
D-Mark at DM1.5508 from 
DML5528. 

■ The D-Mark remained soft on 
the crosses throughout the day 
as markets fluttered on con- 
cerns that German M3 money 
supply data, expected this 
week, would rise above market 
expectations. 

The markets are forecasting 
a small month-on-month rise, 
bringing down the annual rate 
of growth to 8 J per cent from 
9.8 per cent in July. 

But some analysts were 
talking of double di g its, caus- 
ing traders to unwind long 
positions in the D-Mark. 
"There are rumours that the 
M3 numbers will be buoyed 
up," said Mr Anthony Norfield, 
UK Treasury economist at 
ABN-AMRO. “If that happened 
that could prompt the Bundes- 
bank to raise interest rates, 
which would case increased 
bearishness in the bond mar 
kets, which is affecting the 
D-Mark now.” 

In London, the D-Mark 
closed against the lira at L1006 
from L1010, against the Swiss 
franc at 0.829 from SFr0.830 
and against the French franc 
at FFr3.418 from FFr3.416. 

■The markets responded posi- 


tively to Mr John Major's 
speech to British businessmen 
In Saudi Arabia on Monday, 
which gave a positive spin on 
the UK economy, and boosted 
sterling against the D-Mark 
and the dollar. 

But analysts were particu- 
larly struck by activity in the 
short sterling futures market, 
which they believed impacted 
the movement of the pound. 

The September short sterling 
contract, which expires today, 
finished at 94.03, from 94.16, 
discounting interest rates at 
5.97 per cent, close to current 
cash rates. 

The December short starling 
futures contract discounted the 
three-month Interest rate a hill 
percentage point above current 
rates. 

Mr Norfield said: “There 
does not seem to be any will- 
ingness on the part of the mar- 
ket to say this has gone Car 
enough,” he said. “But I would 
say the extraordinary degree of 
tightening that the futures 
markets are forecasting in the 
next three months go beyond 
the bounds of credibility.” 

■The Swedish krona remained 
fairly steady against the 
D-Mark, closing in London at 
SKr4.818 from Skr4iH5. 

Although the Swedish trade 
deficit was worse than expec- 
ted at SKr0.4bn against a fore- 
cast of a SkrL 6 bn surplus, the 
markets did not take the news 
too negatively. 

“The trade figures have not 
had much material impact,” 
said Mr Julian Callow, econo- 
mist at Kleinwort Benson. 
“The markets are awaiting 
judgement on the new govern- 
ment.” An announcement on 
the government from prime 
minister designate Mr Ingvar 
Carlsson Is expected today. 

■The Bank of England pro- 
vided liquidity of £243m at 
established rates after revising 
its shortage forecast to £55Qm. 
It provided late assistance of 
fiMBm Overnight rates traded 
between 4% and 614. 

■ OTHBR CUHBEHCira 

Sep 20 E S 


Austria 

(Sch) 

17.2091 

+0.0860 

013 - 168 

17.2275 17.1085 

17X047 

03 

17.1929 

04 

. 

- 

114X 

BtegMn 

P Ft) 

502935 

+01648 

744- 126 

503680 500190 

603065 

-04 

602535 

OS 

400686 

06 

11BJS 

Denmark 

(OO) 

9.6143 

+0.0256 

106-180 

0.6330 BJ5630 

Ofl19 

-06 

9.6384 

-1J0 

9.6608 

-07 

118.3 

Finland 

(FM) 

7.7822 

+0.0217 

731 - 813 

7.8000 7.7300 

- 

- 

- 

- 

- 

- 

B9X 

France 

m 

8J670 

+0.0395 

526-512 

03871 03078 

8X588 

Ol 

8X632 

-Ol 

03123 

05 

1100 

Germany 

m 

2.444S 

+0.0099 

437 - 4S5 

a 4401 2.4304 

14437 

05 

£4409 

0.6 

2^115 

1.4 

12A6 

Batu 

Pb) 

371.881 

+1-295 

700 - 022 

370800 389.180 

- 

- 

- 

- 

- 

- 

- 

Ireland 

(IE) 

1j0136 

-00016 

126- 143 

1.0202 1.0114 

1X134 

Ol 

1X146 

-04 

1X192 

-06 

1045 

Italy 

A) 

2450.11 

+009 

777 - 044 

247000 2464.70 

2484.71 

-2.7 

247088 

-2X 

2831^6 

-2.9 

7A5 

Luxamtxxag 

Mil 

502936 

+01649 

744 - 125 

503660 500190 

503805 

-04 

802636 

03 

409685 

06 

1105 

Netherlands 

H 

2.7412 

+00118 

402 - 422 

2.7445 2.7234 

2-7404 

04 

2.7372 

06 

2.7047 

1J3 

1205 

Norway 

W<r) 

10.7150 

+00385 

110 - 1B9 

107260 106313 

107148 

OX 

10717 

-Ol 

107194 

OX 

85.7 

Portugal 

P4 

244512 

+0924 

378 - 048 

240268 247D98 

250242 

-8.4 

283.422 

-7JB 

- 

• 

- 

Spefci 

(Pta> 

202.419 

+0499 

311 - 627 

202.945 201.481 

202X24 

-2.4 

200554 

-2X 

200389 

-2.0 

05.0 

Sweden 

(SKt) 

11.7762 

+00804 

677 - 847 

11.8000 11.8734 

11.7982 

-IX 

11X427 

-2X 

100562 

-2.4 

res 

Swtaertand 

mn 

2.0264 

+00044 

262 - 276 

2.0280 2X181 

2-0238 

15 

2.0181 

1.6 

1X828 

2X 

1226 

UK 


- 

. 

■ 

- 

- 

- 

- 

- 

- 

- 

79.8 

Ecu 


1^002 

+00044 

794-610 

1X830 1X743 

1X805 

-03 

1X809 

-02 

1XS2 

1.4 

- 


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- 0.831809 


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2.1103 

55889 

15784 


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Brad n 

Canada (CD 

Mexico (New Paso) 

USA (D 

PeeMcAOdde Eaatf Africa 
Austria (AS) 2.1181 
Hong Kong (HKD 12.1805 
India (R«) 48.4462 

Japan (V) 164. OSS 

Malaysia (MD 40292 

New Zealand (NZS) 251 10 
PhOppines (Peso) 405123 
Saudi Anfcta (SR) 65121 
Singapore (S3) 25270 

S Africa (Oore) (HJ 55881 
S Africa (R) 6X202 

South Korea (Won) 126155 
Taiwan (TD 415418 

Thafcmd [Bt) 303298 

180ft ratm (or Sep IflL BkVoflw 
marine but no knpflad by cuiart 
Ms and On Doan Spot tables dwfesd 


40.0084 780 - 769 
*0004 396 - 433 
-0.0006 174-191 
40.0426 647 - 750 
405084 760 - 767 


405111 169 - 192 
+0.0045 770 - 839 
4026 312 - 611 
-0.776 975 - 201 
+05174 235 - 268 
+0513 093-126 
+02145 880 - 386 
+05314 105 • 138 
+05055 257 - 283 
+0.0283 857 - 905 
+0.0181 026 - 375 
+658 048-282 
+0219 322 - 513 
+0.1848 054 - 644 
to In Pont Spot cat 
rates. Swing ram crtt 
bom THE WlUfinsg 


15786 15652 
15450 12384 
2.1335 2.1121 
62812 523S6 
15782 15849 

2.1215 2.1048 
12.1960 12.0932 
495020 495950 
155560 163540 
45310 32967 
25143 35946 
405423 40.1050 
5.9167 6.6694 
2.3286 25168 


£1178 

03 

£1171 

OX 

2.1159 

Ot 

era 

16756 

06 

1.5735 

0.7 

1.6561 

IX 

02.0 

£118 

0X1 

£1194 

-02 

£1376 

-OX 

_ 

12.1786 

04 

1£17S5 

02 

12_182fl 

oo 

- 

153.718 

2X 

162X18 

03 

147X23 

4.1 

191.3 

£8149 

-IX 

£6227 

-16 

£645 

-IX 

_ 

- 

- 

• 


- 

- 

- 


62421 85947 
126324 1253.17 
415899 415419 - - - - - - 

39.3860 385680 - - - - - 

Bis show arty the test ttres dacbnrt fen. PCrewd rates am not dtecOy ranted to Ow 
a*«d b y Bn Bar* rt Enpligm. Baas amqa (888 - 10OBM. Oflar ml Md-ram In bath 


vrtuas » rounded by An F.T. 


DOLLAR SPOT .FORWARD AGAINST. THE DOLLAR. 


Sop 20 


Closing Change 
mkJ-point on day 


BW/offor 

spread 


Day's add 
Matt low 


Ona month Throe months 
Rate %PA Rate %PA 


One : 
Rata 


ear J.P Morgan 
%PA Index 


Europe 


Ausftfa 

(Sch) 

1091 70 

-00166 

145 - 195 

10X675 109015 

10X17 

AO 

10X168 

0.0 

10X42 

07 

104.1 

Beigtum 

OR) 

31X050 

-0052 

000 - 100 

32.0600 31X710 

31X122 

-OX 

31X25 

-OX 

32.06 

-OX 

105X 

Oenmaric 

(DKr) 

6X991 

-0.0161 

981 -001 

6.1302 

6.0849 

A1Q5B 

-IX 

A1298 

-1.7 

82028 

-1.7 

104.7 

Rrtiand 

(FM) 

4X369 

-00124 

322 - 416 

*X720 

4X092 

4X369 

OX 

4X439 

-OX 

4X919 

-1.1 

79.9 

Ranee 

FFtl 

5X016 

-0.003 

000 - 030 

5 -3270 

5X950 

6X04 

-ox 

5X093 

-OX 

5276 

0.3 

10A1 

Germany 

0) 

1X506 

-0.002 

606 - 510 

1X587 

1X485 

1X51 

-02 

1.551 

-0.1 

1X468 

ax 

108.6 

Oreece 

Or) 

235X00 

-0X3 

850 - 950 

236X00 235X50 

2362 

-IX 

23A82S 

-IX 

239X75 

-1.8 

68.9 

Ireland 

m 

1X555 

+0X1107 

64S - 564 

1X575 

1X394 

1X649 

OX 

1X519 

OX 

1X336 

1.4 

- 

Italy 

w 

158000 

-825 

950 - 050 

1571.00 155875 

166425 

-as 

1673X 

-as 

1825.5 

-42 

7A7 

Luxembourg 

OR) 

31X050 

-0052 

000 - 100 

32X800 31.8710 

31X122 

-ox 

31X25 

-ox 

32X6 

-OX 

105X 

Netherlands 

FO 

17390 

-00016 

357 - 382 

1.7470 

1.7364 

1.7393 

-02 

1.7393 

-Obi 

1.7342 

OX 

105X 

Norway 

(NKl) 

6.7973 

-00117 

963 - 963 

6.8322 

A7S22 

6X023 

-ox 

6.8223 

-IX 

6.8948 

-IX 

95X 

Portugal 

(&) 

157.650 

-025 

BOO - 700 

155230 157X50 

158.4 

-5.7 

182X75 

-112 

166X5 

-5.7 

962 

Spain 

(Pte) 

120410 

-0365 

370 - 450 

129X130 128X70 

128725 

-2.9 

123X45 

-2X 

13229 

-3.0 

809 

Sweden 

OKI) 

7.4706 

+00115 

868 ■ 743 

7X040 

7.4485 

7.4871 

-2.7 

7.5256 

-22 

7.7181 

-32 

809 

Switzerland 

(SR) 

1X855 

-0004 

850 - 880 

12922 

12820 

12844 

1.0 

12823 

IX 

12705 

12 

10&2 

UK 

(9 

1.5784 

+00084 

760 - 787 

1X782 

1X849 

1X7G6 

0.8 

1X735 

0.7 

1X661 

IX 

87X 

Ecu 


12313 

+00022 

308-315 

12326 

12247 

12304 

0.9 

12286 

OX 

12012 

£4 

- 


SORt 


- 1/48732 


Argentina 

Bred 

Canada 


Pawl 
M 
(CD 

(New Paso) 


Mexico 
USA 

PacMC/MkMe EastMMca 


1.0001 

05610 

15438 

54066 


- 000-001 
-O.OQ2 500 - 520 
-05076 435 - 440 
+0509 040-080 


15001 15000 
05535 05500 
15497 15430 
3.4100 3.4040 


15442 -55 
3.4075 -0.4 


15451 -0.4 
3.4083 -05 


15534 -0.7 
3.4187 -05 


84.1 


955 


Hungary 170287 - 170520 
Iran 273000 - 273B.00 
048M- 04899 
3B232X - 36295J0 
373005 - 374085 
57754 - 5J871 


Potexf 

Rmbi 

UAE 


H&OSO - 10B.J50 
174000 - 175000 
02972 - 02980 
main - reran n 
237000 - 237000 
36715 -28735 


Auetrafia 

(AS) 

1X437 

- 

432 - 441 

1X465 1X419 

1X44 

-02 

1X447 

-OX 

1X52 

-06 

872 

Hong Kong 

(HKS) 

7.7270 

- 

265 - 275 

7.7375 7.7285 

7.7268 

OX 

7.7275 

QX 

7.7425 

-02 

- 

India 

Pa) 

31.3675 

-00013 

650 - 700 

31X700 31X850 

31.4625 

-32 

31X976 

-22 

- 

- 

- 

Japan 

m 

97.7500 

-1X15 

000 - ooo 

98X500 97X500 

97X6 

22 

97.1 

£7 

94725 

3.1 

1503 

Malaysia 

(MS) 

2X535 

-00025 

530 - 640 

£5555 £5520 

2X443 

42 

2.533 

32 

£6065 

-2.1 

- 

Now Zealand 

(NZS) 

1.6663 

-00006 

556-570 

1X584 1.6556 

1X572 

-0.7 

1X691 

-07 

1X644 

-06 

- 

PhHppines 

(P«W) 

25.7000 

- 

000 - 000 

26.0000 25X000 

- 

- 

- 

- 

- 

- 

- 

Saudi Arabia 

fSffl 

3.7505 

- 

603-506 

37506 37503 

37518 

-0.4 

17566 

-06 

3.7745 

-OX 

- 

Singapore 

(SS) 

1.4762 

-00044 

757 - 767 

1.4801 1X750 

1.4749 

1.1 

1X73 

0.9 

1.4682 

07 

- 

S Africa (Cora] 

(R) 

3X460 

-0.0008 

442 - 457 

35500 2X420 

3X605 

-52 

35888 

-42 

3X666 

-3.4 

- 

3 Africa (FH) 

(R) 

4X900 

-0015 

800 - 000 

4.4050 4X780 

4.4237 

-92 

4.4825 

-04 

• 

- 

- 

South Korea 

(Won) 

800X00 

- 

800 - 800 

800.800 799X00 

803X 

-4.5 

806.8 

-32 

8252 

-31 

- 

Taiwan 

OS) 

2622S3 

• 

280 - 265 

262270 262240 

262463 

-0.9 

202863 

-09 

. 

• 

- 

Thrttand 

(Bt) 

24.9500 

-0015 

400-600 

24X700 24X300 

25X225 

-35 

2A15 

-32 

25X3 

-£7 

- 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 

Sap 20 Vr DKr Pfr 

DM 

K 

L 

H 

NKr 

E» 

Pta 

SKr 

SFr 

£ 

CS 

S 

Y 

Bra 

Beigtum 

(BFf) 

100 

18.12 

1062 

4682 

£018 

4890 

5.450 

21X2 

4941 

402.5 

2342 

4029 

1X88 

4212 

3134 

3034 

£545 

Danmark 

{OKI) 

52X1 

10 

6X93 

2X43 

1.055 

2558 

£861 

11.15 

25 A5 

21 OX 

1225 

£107 

1.040 

2203 

1X39 

1602 

1X31 

Franca 

(FFrl 

6018 

11X0 

10 

2X28 

1213 

2942 

3280 

12X3 

297.4 

2422 

1410 

£424 

1.197 

2X34 

1X88 

184.4 

1X32 

Germany 

(DM) 

2057 

3X32 

3418 

1 

0.415 

1008 

1.121 

4384 

101X 

82-78 

4818 

0X29 

0409 

0886 

0245 

8303 

0X24 

Ireland 

(K» 

49X0 

0.481 

0242 

£411 

1 

2428 

£703 

1067 

24A1 

199.8 

11X2 

1X98 

0X88 

£088 

1X64 

1520 

1282 

Italy 

(U 

2.045 

0391 

0X40 

0099 

0041 

100 

am 

0436 

1011 

8231 

0479 

0082 

0041 

0086 

0X64 

6287 

0.052 

w»u*mnixin 

(FA 

18X5 

3607 

3X49 

0882 

0X70 

897.1 

1 

3911 

9086 

73X4 

4298 

0738 

0385 

0.773 

0X79 

5622 

0487 

Norway 

(NKl) 

40X1 

0968 

7.796 

2281 

0948 

2294 

2X87 

10 

231 X 

188X 

10X9 

1X90 

0X33 

1X78 

1X70 

1432 

1.194 

Portugal 

m 

2024 

3889 

3X63 

0X84 

0406 

989X 

1.103 

4X14 

100. 

81X5 

4.740 

0X15 

0402 

Q9S3 

0X34 

82X1 

0515 

Spain 

(Pta) 

2485 

4750 

4129 

1208 

0501 

1215 

1X54 

5296 

122X 

100. 

5X20 

1X01 

0494 

1.046 

0779 

7314 

0632 

Swedon 

(SKr) 

42.69 

0161 

7.084 

2X76 

0881 

2087 

2X27 

9.100 

211X 

1712 

10 

1.720 

0849 

1.798 

1X38 

1302 

1.067 

jwuonana 

(SF-) 

2482 

4746 

4125 

1207 

0X00 

1214 

1X53 

5291 

12£7 

99X0 

5X14 

1 

0X84 

1X45 

0.778 

7308 

0832 

UK 

ra 

5029 

9.614 

0357 

£445 

1X14 

2459 

£741 

1072 

248X 

2Q£4 

11.78 

£026 

1 

£118 

1X78 

154.1 

1280 

Canada 

(CS) 

2374 

4539 

3946 

1.154 

0479 

1181 

1294 

5.081 

1172 

95X8 

5X62 

0X57 

0472 

1 

0.744 

72.78 

0804 

118 

«) 

31.91 

0100 

5.303 

1X61 

0X43 

1580 

1.739 

6X02 

157.7 

1234 

7X75 

1286 

0X35 

1X44 

1 

97.78 

0812 

Japan 

(Y) 

32X3 

6239 

0423 

1X87 

0X58 

1996 

1.779 

8X57 

161 X 

131.3 

7.644 

1X15 

0649 

1X74 

1X23 

100 

0831 

Ecu 


3929 

7.511 

6X28 

1X10 

0792 

1921 

£141 

8X75 

1941 

1531 

8203 

1X83 

0781 

1.855 

1231 

1204 

1 


(SDR rate fbr Sap IS. BO/athr apnmSt Irrtha Dater Spa tabh iftow cnfrtfi* teat tfroododtart ptoen. Fonmra rates ro nrt dtaKay quoted id Mw nwhol 
but are knpted by cutent Inaaieat was. UK. I ate n d 6 ECU w maul In (IS cratanoy. JP. Morgm rartnol Cndca Sop IB. Bose wage 1BHM00 


EMS EUROPEAN CURRENCY UNIT RATES 

Sep 20 Ecu can Rets Change % +/-from % spread Dtv. 

against Ecu on day can rate v weakest InA 


rates 


£19672 

£15110 

+0X0143 

-2X0 

5.18 

- 

402123 

334803 

+0029 

-1X0 

4X8 

13 


0795374 

-0.003206 

-1X4 

4.71 

11 

1X4964 

1X1878 

+0X0189 

-128 

4X5 

- 

363883 

356065 

+00083 

0X3 

2X6 

-X 

192X54 

19SX48 

-0108 

1.14 

1.84 

-8 

7X3679 

7X4829 

-0X1153 

1X0 

1X8 

-10 

154250 

153874 

-0212 

3X0 

OOO 

-21 

MBERS 






264X13 

292X37 

+0163 

1041 

-371 

- 

1793.19 

1934.72 

-4.78 

7X9 

-4X4 

- 

0786749 

0785700 

-0X02628 

-013 

314 

- 


□srtrfi Kronor. French Franc, Norwsgan Knmsr, ond Swedrti Kronor par 10s O rt ola n Franc, Van, Eaeudo, Lira and Asete per 100. 
■ P-MAHK PUTUHB8 (SUM) DM 125.000 par DM 


■ WAI— YBH 7IHWI flBVBuQ Yen 125 par Yen 100 


Belgium 

Ireland 

annum ty 

Renee 

Portugal 

Denmark 

Spate 


O reece 
Italy 
UK 

Ecu cartBrt rates «at by the Bacpaan Q> n m tert n n. CUrsnctea m In 
P oro iteg e ehsngaa ate ter Ecu; a poaBtes ohanaa dano te a a wartc annoy. i 
radPtmteasn raw apraadas 9m parcantepr rt Hte ese tmtmam flat ear art wirier ml fieri canted rates 
tor n abianqr. and tba mwfcron pamtaad paneanaga davWton at dw eumneyte marint rate tan la 
Ecu central trts. 

(i7flAK5 atnteg and Man Uni suapandad Horn BM Atfluannant o rt arta te d by the Ftemdalllmea. 


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c-« l ” 
4 4 


FI* 


r. | iw n+t qf I 

tn+y pxn pr.rt 8p metro a irnTrSTU 

HMthte otnnp proua rtto- dTOPg 

teria rate anro tet Omaa C8R; Oro ro 




Open 

Latest 

Change 

Htfi 

Low 

Eat vet 

Open Jnt 


Open 

Latest 

Change 

High 

Lew 

Eat vet 

Open Int 

Dec 

08455 

0.6455 

- 

08458 

08415 

38X73 

71X92 

Dec 

1.0218 

1.0290 

+00072 

1X294 

1.0202 

20.639 

43,184 

Mar 

0.6457 

06454 

-00007 

06457 

06445 

604 

4,164 

Mar 

1X298 

1X370 

+0X078 

1X370 

1X298 

73 

2291 

Jim 

* 

0.6487 

* 

- 

" 

3 

477 

Jun 

- 

1X385 

- 

“ 

- 

1 

450 

■ awns FRANC Ptmmu OMM) SR 12SXOO per SR 



■ tmun Rnun ommi cosxoo per e 




Dec 

0.7794 

07816 

+0.0022 

0.7820 

07784 

24X68 

38219 

Dec 

1X662 

1X752 

+0X078 

1X780 

1X630 

12X78 

31X39 

Mar 

0.7820 

37836 

+0.0007 

07836 

0.7810 

96 

585 

MW 

- 

1X730 

- 

1X730 

» 

44 

287 

Jun 

- 

0.7860 

- 

0.7880 

- 

8 

34 

Jun 

- 

1X650 

- 

1X650 

- 

14 

7 


MONEY RATES 

September 20 Over 

right 

One 

month 

Three 

mtha 

Six 

mtha 

One 

yw 

Lomb. 

WOT. 

Dio. 

rate 

Repo 

rata 

Belgium 

4?t 

6tt 

54 

SB 

91 

7M 

4X0 

. 

war* ago 

4» 

514 

Si 

5% 

8 i 

7.40 

4X0 

- 

Franca 

s* 

51 

544 

50 

61 

5X0 

- 

6.76 

woek ago 

51 

Si 

5% 

50 

01 

5.00 

- 

0.75 

Qormany 

4.87 

5.00 

5.05 

523 

5X3 

6.00 

4X0 

445 

week ago 

4.97 

5.00 

4XS 

5.10 

6.45 

8X0 

4X0 

4.B5 

Mend 

+1 

514 

91 

51 

714 

- 

_ 

025 

week ago 

4il 

5Mi 

91 

61 

7X4 

- 

- 

025 

Holy 

8£ 

8'u 

81 

01 

101 

- 

7X0 

8+25 

week ago 

8’A 

8Vt 

8*4 

m 

1044 

— 

7X0 

045 

Nethoriut.de 

4X4 

5.05 

5.11 

5X1 

5.75 

- 


- 

week ago 

4.84 

5.05 

5.05 

5.19 

6.55 

— 

52S 

— 

Switzerland 

33 

4 

4\4 

4i 

40 

8.825 

3.80 


weak ago 

an 

4 

41 

41 

4fl 

6625 

£60 

- 

US 

4* 

<8 

6 

six 

50 

— 

4X0 

- 

week ago 

4U 

40 

6 

51 

58. 

- 

4X0 

- 

Japan 

2'.V 

Zi 

214 

z> 

244 

- 

1.75 

ro 

weak ago 

211 

21 

2H 

2i 

20 

- 

1.75 

- 

■ S UeOfl FT London 








interbank FUng 

- 

4*1, 

514 

514 

81 

- 

— 

- 

week ago 

- 

411 

51 

5J 

8 

- 

- 

- 

US Dorter CDs 

- 

4X7 

4X0 

525 

5X6 

- 

_ 

_ 

week ego 

- 

4.87 

4X4 

5.14 

8.71 

- 

_ 

- 

SDR Linked Da 

— 

3H 

31 

3H 

4 

_ 

_ 

_ 

week ago 

- 

31V 

31 

3H 

4 

- 

- 

- 


■ THmOB MONTH BUROHURK PUTIMB (UFFQ* DMIm palnta of 100% 


■ HflUDVIUll 

C/$ OPTIONS G312&0 (cents per pound) 



1 

Strifes 

Price 

Oct 

CALLS - 

Nov 

Dec 

Oct 

PUIS — 
Nov 

Dec 

I 

1X00 

7X9 

7X1 

7X5 

. 

010 

042 

I 

1X25 

6.09 

5X1 

6.68 

006 

0X8 

087 

1 

1XB0 

£92 

3X1 

3X6 

0X9 

0X6 

1X0 

I 

1X70 

1X3 

1X7 

£54 

123 

1X6 

£82 

1 

1X00 

046 

1X0 

1X9 

2X0 

3X0 

4X8 

1 

1X25 

009 

043 

090 

4X3 

5X1 

5X7 

■ 



Open 

Sett price 

Change 

High 

Low 

EsL vol 

Open kit 

Dec 

94.07 

94X4 

■002 

04.67 

94X1 

48899 

189916 

Mar 

9423 

94.19 

-003 

9424 

94.15 

44538 

173573 

Jun 

93.79 

83.75 

-0X3 

93.79 

9£71 

27898 

105081 

Sep 

93.47 

83.40 

-0X8 

83-47 

93X8 

10359 

66767 

■ THRU MONTH nMOUULWT JUTS FUTURNS (UFFE) 1 

LHMOm points oTIOOH 


Open 

Sett price 

Change 

High 

Low 

Eat vd 

Open bit 

Dec 

9023 

80X8 

+014 

9039 

9020 

11212 

31841 

Mar 

B9.48 

B9.66 

+0X8 

S9X8 

8040 

4766 

18220 

Jtel 

89.03 

89X7 

+003 

89X6 

88X8 

1446 

15379 

Sep 

88.85 

88.76 

+0X3 

88.74 

8063 

756 

14069 

■ im 

MONTH 

■unosans 

B FRANC nrnnant 8JFFQ SFrlm points of 100M 


Opwi 

Sett price 

Change 

Hgh 

Low 

EsL vol 

Open bit 

Dec 

95X1 

95.44 

-0.08 

95X1 

95.44 

7703 

23219 

Mar 

95.10 

osxa 

-006 

96.10 

e+rw 

2930 

11924 

Jun 

94.69 

94.70 

•0X4 

94.73 

94X9 

1366 

6106 

S«P 

94A4 

94X8 

-0X8 

94^48 

94X8 

816 

0 

■ THRH MONTH SCU IVTWQ (JJFFE) Eculm points of 10094 



Open 

Sett price 

Change 

High 

Low 

EsL *0l 

Open Int 

DSC 

33.40 

93X8 

-0X1 

93.40 

naan 

1287 

7483 

Mar 

92.82 

92X0 

-002 

9£B2 

92.78 

872 

5350 

Jun 

92X8 

92.37 

-0.03 

92X8 

92X4 

329 

2498 

Sop 

82.00 

91X4 

-0X5 

92.00 

91X3 

141 

987 


ecu LMod D» mid radro l imtc Btet 3 mte £V 4 m1»r 814- 1 ymr. AJ}. S 
ndao ora oTrtred ratM tar 510m quoted <0 tea market By tow r u te ro r ro bmhi at 
dav. Tim bnta art: Qanbem Tiurt, Bmh ol Tokyo, Bnrrtcr 


Ham aedt robing 


Ud mm are mown lor am domwac Money Ron U£ S CDs aid SDR LMed Dapasta m. 

EURO CURRENCY INTEREST RATES 

Sep 20 Short 7 days One Three 

notice month 


* UFFE fcdLMP traded on APT 


■ THW MOUTH EURODOLLAR gMM) Sim points of 10095 


form 


Six 

morfflra 


One 

year 


Belgian Franc 
Donah Kruno 

O-MrtX 
Dutch GuBdar 
French Franc 


Portuguese E sc. 12>i 
Spertsn Peseta 7 '2 
5*2 
44 

% 

9 - 

SA 
13 

SRort krai ij!m m csD 


Swtsa Franc 
Gan. Dottw 
US Dctar 
Italian Lira 
Yon 

Asian S&ng 


-411 

•5J| 

-413 
-5«* 
-11?| 
•7 A 
-SV 
-3% 
.47, 

-4fl 
71a 
- 2*8 
-i! 

lor tee 


41I-4J1 
Sh -5*2 
5 -47k 
6, 1 . - 4U 
5|’.-S4 

7 14 * 7»4 

SA - SA 
Jlg-3% 

SA-4* 

413-4JJ 

819-7^ 

2/* -24 

- 1*4 

US Ortlr and 


515-5 

sA ■ *11 

S^-4B 

«-SA 

lO^-Sk 

s'j-rt 
4a 1 . - 312 
5*3-5 

44 

8<a -8l< 

213 - 213 
2h-Zh 

Yan. others: 


5^-5% 

5% -5 
5%-S 
S*i - 5% 


a-5% 
7% - 7% 
sA-sa 

6% -Sic 
6 - 8 % 


lift - 10% 107 a - lift 

8-7% 8ij - eJj 



6*5-612 

7%-7*8 

Si4-5*0 

Si-sa 

Vt-Bh 
lllfl - lift 
gifl-9 
7fi - 7,1 
4H-4U 

flU-ati 
6-5% 
ioi - 10 A 

2 H-2*g 



Open 

Latest 

Change 

»gh 

Low 

ESL vol 

open tot 

Dee 

9423 

94.10 

-007 

9423 

94.15 

140156 

541206 

Mar 

93.83 

83.70 

-007 

93X3 

93.75 

83X81 

397,728 

Jim 

93X7 

93X9 

-0X6 

93.47 

93X8 

23,376 

278X39 

■ US TRKASURY BSJ. FUTURES flttftf) Sim per 100% 



Dec 

84.74 

94.71 

■0X6 

94.74 

94.70 

844 

11.145 

Mar 

94X0 

9428 

•008 

94.30 

9428 

2 21 

5X75 

Jim 

- 

93.95 

- 

- 

9X95 

3 

1X52 


M Oonn kite eat H04 n lor praulaua day 

i(UFFg DMIm pttbrts ol 10W 


tea days' nonce. 


Strike 

Price 

Od 

Nov 

CALLS — 
Dec 

MW 

oa 

Nov 

PUTS 

Dec 

Mar 

9480 

019 

021 

024 

015 

aos 

007 

010 

048 

9476 

0X6 

0X8 

an 

0.08 

018 

019 

022 

084 

9600 

0X1 

002 

0X4 

004 

037 

038 

040 

0X6 


■ THRga MOUTH WBOR FUTtKUa (MAT1F1 Parfa InKrtank oflered rata 



Open 

Sett price 

Change 

Hgh 

Low 

Esl vai 

Open int 

Doc 

34.00 

93X6 

■0.O2 

04.02 

93X2 

45,060 

49X03 

Mar 

93X0 

93.45 

■0.03 

93X1 

93.41 

16X76 

32X83 

Jim 

93.12 

93.06 

X.04 

03.12 

93X0 

8.1K 

20171 

Sep 

92.8Z 

92.75 

-0.05 

9£B2 

92.70 

2X10 

19,121 

■ THREE MONTH HfROOOLLAR {UFFE}' Slip poblta Ol 100% 




Open 

Sett price 

Change 

H«1 

Low 

EaL vai 

Open kit 

Dec 

9422 

94.17 

-0.06 

9422 

9421 

30 

2089 

Mar 

- 

93.77 

-0.07 

. 

w 

0 

1355 

Jim 

- 

33.41 

-007 

- 

- 

0 

278 

Sep 


93.11 

■008 

- 

- 

0 

52 


EaL ML total. Crtta 08*0 PUB 20413 Prartow day** epon nt, Crtto 184271 Mb 184898 

■ mro mwsa frawc optkhis (uffd sft im paws of iow 


SMks 

Price 

Dae 

- CALLS - 
M«b 

Jun 

Dec 

— PUTS “ 
Mar 

Jun 

9S25 

024 

019 

Oil 

005 

038 

066 

9530 

009 

0.11 

0.06 

015 

055 

088 

967S 

0X3 

0J» 

0X3 

0X4 

are 

1X8 


Eat «L ttOL Calla 73 Puts a PntetoUB cfayU apm HU Crt* 1835 Pub 61a 


Pmtoua d*/'* wL, dab 6.422 Pun tows . Pro. dayta open K, CM 464848 PUB mm 


UK INTEREST RATES 


LONDON MONEY RATES 

Sep 20 Over- 7 days 


One 


night 


notice 


11*88 SIX 
months months 


One 


Mtebenk Staring 6^-4% 5V - 5 3ft - SLt 9(3-5% Bft - 7ft - 7h 
Storing CDs - - 5% - 3ft »%-«8 fll* - 6% ift - 7% 

Trnemrry B«s - - 6% - 6V 5H-5IJ 

Bank B*» - - 5*a - s 3 * - 5\ 8>4 - 6«a 

LoM tedharity dap3 4H-4H 6A-6J, 6ft-sft 5U-iaj HA -BA 7fl-7,5 

Discount Mattel dapa 6\ - 4>* 4U - 4% 


UK deering bark base tending rate 6fc par earn (ram September 12, 1994 
Up to 1 1-3 3-6 6-9 

morrifn 


9-12 


Carb of Tax dap, (CltXLOOQ) 

Ctete odn dap. under CIOOMO la 1 
Am. wider rate of dscewitSJBrttea 


31. 


ah 


1«2 4 3% 

Doportte •BdeBaan lor carti two. 

~ &Md noa Sdg. &pon Heetee. Mate qp day /teg Si, 


>884, Agnsd net tor parted Sm re IBHteOstre IBW. Mamet K* Ontaapa. Mmoa mas tor 
parted Jay 30, r _ “ _ 


Sap 1. IBM 


, 1BB4 to AUfl31, 1BB4 Scharaea IV 8 V Sb879pa. Pbanoa Houaa Bate Rate 5kgK Irani 


■ THHMMOHTW«T8»ajia8UTU»dM(UFFgESOOJOOpolntaof IQtW 



Open 

Sett price 

Change 

High 

Low 

Cat vol 

Open Int 

Sep 

94.18 

94X3 

-0,12 

94.16 

94X1 

17250 

74808 

Deo 

9017 

33X3 

-013 

93.18 

90X0 

S42B2 

154343 

Mar 

82.17 

92X5 

-an 

9£17 

92X3 

30410 

82707 

Jun 

91X7 

91/43 

-0.13 

91X7 

91.42 

17080 

6E3S0 


Haded on APT, Al Open titereet Iga. em Bor prerioue d at- 


■ 8HOHT ITHRUIIO OPnOW flJFpg E500.000 potnta of 100% 


Straw 

Price 

Sop 

- CALLS - 

Dec 

Mar 

Sap 

— PUTS ~ 
Dec 

Mar 

9400 

005 . 

0.02 

0 

0X2 

089 

1X5 

0428 

OOI 

0 

0 

023 

122 

£20 

9460 

0 

0 

0 

OAT 

1X7 

£48 


Eat. vrt. ixai, CMS 28181 Ptm 4W0*. PWAu dnyte epm re, Cals Moees Pro 31B40* 


BASE LENDING RATES 


Adam8Compcf>y — S.76 

/Ned Tfcjet Bank 626 

A»aenk — S.76 

tBHemyAnrtncher SJ5 

BarttrfBaroda BITS 

Banco BKw Vfctt^ia- 5.78 

BwfltofCypnjs — 6.73 

BanKflfMand S.7B 

Bank 01 Mb .—5-76 

Bonk of Scotland 5.76 

BatibysSask 5.76 
Brtt BkolMd East.™ &2B 
•awn Stuctey 5Co Ud 576 
CX Bate Nederland ... BJH 

CMmUiNA ATS 

CyrewUeBenk S.7S 

OtVdptwAwBartt S7S 

Cotete&Co... 5.75 

CratS Lyqrtneto 6.76 

Cyprus PQpror6*te._5.7E 


Duncan Laoris..... — ATS 
Bceter Bonk United _ ATS 
Ftnandrt&OenBate _ AS 
anobert Ftartng 6 Oo - ATS 

Gtoba* ATS 

•Oubnaea Mahon 5.75 

HfltA Bank AG . ATE 

•Hertbme Bar* &75 

Hartt)ie&QenlnvBkA7B 

«BSanaal ATS 

C-HoareSCo..- A7B 

Hantfong A Shanghai. A25 

Julian Hodge Bat* A7S 

•UtMdJ°eeph&SoneA75 
UaydaBenk A7G 

Udfhrrtj Bank Lid 6-75 

Mtsadti Bar* .675 

‘MereBenhirtg fl 

NrtWeateboter ATS 

•Bee Brothera 6-75 


‘Ftatburghe Guarantee 
Ootporakai UmBed b raa 
kztgar teihartaed aa 
a bwtei n g tnsaajaax 8 

Royal Bk of ScoOrtxf- &7S 
•Smith & woman Saa . A75 

TSB 6.7S 

•UnMBkotKroat^ &75 
Un*(yTiLi« Bank Fte™ 575 

WaatomTmet ... ATS 

VIMbawayLakfnr 6J5 
YakamraBaite A78 

• Mom bora of London 
Investment Banking 


’teeefrnHsttttk) 



071 320 82S2 

Fi- ',-:i i 


The muiihl Mol <ur rb« jcrtuur Invator 

Market-Eye 

London stock ■xchanob 



Signal 


o 130 + software applications O 
G RT DATA FROM SIC A DAY G 
O .Si2in:l SOFTWARE GUIDE G 
Coll London f -14 r (0) 71 231 3526 
for your guide and Signal price list. 


Weekly Petroleum Argus 

'Tho unique source for oil industry news, comments end 

? r!ces Petroleum Argus 

CALL NOV/ for ,-i FF!E= TRIAL fr.,s rews!c:?ST .'.-l.i - ■, , 35S; 


♦CU 



ECU Futures plo 


rUTLIRSS S. OPTIONS BROKERS 


Brtaraute 

London SWfXBHL 

Tab +71 246 0088 

Fax: +71 238 8888 

Web* SPA 




ROUND 

TRIP 


EKtCUTiCN CiiLf 


FUTURES TRADERS: 


* First, netove no connsfafflooedsaks^ 
staff No broker wil] call yon with I 

trading recomraendaifoiM. Becaa* * 
if you make your own trading I 

1 cfedateia, using a fatcwrani38i<m * 

anycontrad/anyesdiaiige 

yra do not pay for advice you f 

\U!A. — J- I 





I 


- and provide service to 

is first ctesa by any standard, 

HowdojoudoiffisaqMstiDnmB discount or Hub price, 

taw been asted many times orer the *TWwi I 

years, Wa are not surprised because I 

many of the investas trim call us are ? ^htte wfwnhge - 

PFafiSSO (or more) per trade with efceacBs tlar hrp | 

I their fuA-commiaffioii i&bins iHokor. 5l2S“ andp8S8th0 I 
! TTutycoratrtbeferettaycan™ ^atangtopm. . | 

I complete range gf quality broken® „ . .. f 

I " swriiwfeoiilySWareandtonL ■ 

Howdowdonfbthreelraportaiii indepeodeot fUtcres fraden I 

' rw i* T idATetephoM re 

icktegn | 


flddnre: 


MgareOn-l 18444 

uroanjcOUMUlin 
PkmBKflB«834S 
Wl*tfa«l: 046068338 
naanrfcflMl.mffi 
WtahafcOMMSB 

SroteF IMUbim 


Tch. aq f updonall N^erink OS4Q-1BBO 

ibfc taduttM ca dgtrt 

toaasgadrt m flu vtendlnMiwt m otr- 
nncyrtik.lliiKL«anKn.HMitea^^ FatCTI-247-0471 

P^WdMlWWrtl..—, . 

oroai.uraw-anrwK 6 arewiy.ani»nterotlwaBL | 

JUMDJ^DOCKee CONFAPT^J 



















33 


( 


financial, times 


WEDNESDAY SEPTEMBER 21 1994 * 


WORLD STOCK MARKETS 


iww w 


►/- 


H H»IH W 


>/- raw n» ym we 


EUROPE 

t5 WSTHA(Sep20/Sch) 


*ao &8 
SOD 5.2 
661 £0 
377 3J 


Md 

CrndPI 

EAGm 

ew 

uraip 

Mnw-U 

OaMv 

PtoriZm 

hdatf 


war 

wiartog 


ajnn 

904 

BIO 

U1D 

1J6S 

1J22B 

630 

10GS 

TO 

450 

20S 

1.114 

344 

BBS 

439 

3,680 


-20 WOO 1.780 15 
-s 1 -*™ 804 oa 
834 BIO 1J5 

-» «» 3900 o| 
"SMS*® t3 

-20 1.387 |,«o 0.4 
- 744 MB 

-13 1,087 
-3 1.050 
-6 498 
-3 268 

-27 1.1 BO 

*1 406 
-IB 7®l 
-6 POO 


845 1.5 
BBS 2.1 
409 12 
171 ZM 
874 

326 1.7 
546 13 
430 1JB 


— NartW 

— (total 

— omn 

— mnoH 

— PBTUR 

" Pacftny 

— PmMc 


SSP 


-« 4040 3.411 iS Z 

FfcmPA 
nw 
sue 


BnaiwiiaanooRe is® ao / rtl> 


BGTLP1 

BnqHB 

Dbilu 

Botit 

CBflCtai 

CMB 

gSSP 

COSryl 
OtlOb 
Do Cft 
BMC 
Form 

BDL 

OBUftr 

SBGp 


Bueart 

EMM 


brink 

KtnkJIF 

■Icnwr 


RanLin 

PlOna 

Pnriki 

Kata 


Sdnr 

TYcttt 

uca 

unMki 


4310 

7.710 

4050 

4JJ5S 

IBvBOO 

23,100 

38,075 

1420 

2*000 

12050 

2470 

5.480 

200 

7JX50 

1J84 

M20 

3075 

1533 

4.065 

3.950 

1.414 

83170 

9.400 

4030 

2063 

6.310 

M70 

6,190 

1/MO 

iaj® 

"SS3 

518 
4050 
4.890 
£210 
2 2*0 
19,700 ■ 
13S 
1407G 
0010 
23030 
2.990 


— *<4S0 3.705 1.7 

ZlS MSS 7 -5!9 11 

-*0 50® 4000 _ 

-40 4^80 3^00 43 

-B01BJB01BJBH £.7 

— 26^5022,748 2,7 
*6»42J7BM0OO gj 

-10 £650 £105 16 
-275 2IU00 50 - gj 10 
-15013675 11.600 SjO 
-5 2.700 2.100 36 
-10 1200 6.450 43 

— 216 154 as 

♦fio aw 6.100 l* 

-B 10 EO 1,220 2.1 
-W J.820 6.400 7-7 
-3® 3.781 3,070 4J 
-CO 1670 2080 _ 
-B0 46B0 3J20 46 
—130 4/470 3JH0 60 
-10 1 .BBO 1^20 26 

-TOlMMejMO 16 

— 6.400 njno «jj 

-2 1630 1.422 66 

— 10/400 18.000 - 
-50 10.775 9666 £6 
-10B.6B0JJD5 5.1 
-10 MB 420 14 
—BO 6200 4,640 4 A 
-TO S,ran 4 .GOO 46 
-20 2636 2,125 5J 
-10 £536 2.105 fifi 

_ 15.700 lilHJ 4.7 
+20 1.875 1-462 66 
-350 17J50 llTM 4.7 
-IMT'TWI 5.400 46 
—2526.10021200 £4 
-152690 £440 46 


StUwl 

BCftn* 

SsbSA 

SaJtoX) 

Smco 

SHbR 

E ocBon 

SanmA 

Goktt 

swza 


Timor 

tomb 

IMP 


381 

401 

£085 

530 

2.140 

322 

247.70 

a re 

2.450 

14060 


(Sep 20 /ft) 


«v 


AaFA 

6*0 


700 

9*0*11 

206 

-2 

281 

CrilA 

2G5 

-3 

333 

Cad® 

3.750 


7.0® 

MUZA 114.4® 


hubs 

Dnkca 

187.72 

—7.07 

220 

OonOsk 

024 

+4 

427 

EAalst 

1KB 

, 

MUM 

FLS B 

430 


BIB 

catan 

mo 

-6/45 

643 

ESB 

173 

-1 

270 

JptaR 

370 

-3 

425 

none 

1.070 

+2D 1+650 

NKTAS 

2® 

+6 

3SS 

taring 

505 


7BX01 

RriW 

51S 

+6 

737 

Soph® 

525 

-3 

815 

BopboB 

323 


675 


41 B 

+3 

495 

tSd® 

336 

-6 35633 

TapOn 

G20 

+5 1 £72 

unktoA 

238 

MM 

267 


585 £6 
2D4 £4 
2S1 1.1 


17B 

807 3.7 
161 3.4 
385 26 
445 26 
170 16 
330 22 
BSD 04 
252 3-4 
586 07 
408 1 6 
605 08 
425 O.B 
321 £4 
300 „. 
510 16 


RUUD (Sep 20 /Ma) 


AmrA 

CuHgr 

BffnA 

EnaR 

WNI 

KDP 

KattD 

Km B 

B 

UaOraB 


OOanpA 


100 

137 

83 
4860 

148 

1060 

5060 

531 

136 

160 

147 

237 

2S7 

540 

101 

84 
83 

52.70 
10B 
222 
17 
1320 
07 JO 


-1 154 

_ 178 
— 10® 
-60 4960 
-3 233 
+.10 17.40 
...5860 
+1 TOG 
_ 150 
-1 247 
-5 250 
_ 2S8 
-2 280 
-13 578 
_ 107 
-4 ID* 
_ in? 
+605760 
+1 120 
-1 244 
-60 31 


-TS 20 -” 


10250 16 
121 16 
80 _ 
9560 16 
148 25 
961 
45 1.9 
512 16 
100 0.7 
150 16 
147 16 
ZOO 06 
190 08 
287 06 
68 _ 
59 1.B 
54.10 16 
41 ... 
8460 06 
175 2.7 
18 ._ 
12 


128 60 __ 


FBJUCE (Sop 20 / Ft&) 


AEF 

Accor 

A«Ja 

Atari 


Crtotr 

Carina 

Oim 

cmEho 

CCF 

GrftanF 

CttyCl 

CrlacF 


22960 

632 

72! 

537 

233 

£S 

481.60 

3630 

813 

1698 

BOB 

ITS 

ITS 

2.110 

164J0 

1/415 

44560 

210 

770 


Frra 

a 

BtSan 


EfflCb 

EaoOr 

EMi 

Eiritfr 

EnRSCB 

EwWa 

Rrafl 

FafleLy 


GIWErt 


0W»* 


£s 

5600 

710 

757 

396 

012 

402 

672 

38860 

325 

980 

BOB 

737 

782 

3/450 

1«4 

577 

9.10 

125 

COG 

5500 

451 

inn 

31X50 

45760 

43760 

580 


-1.60 368 200 GD _ 
-• 766 580 36 
+12 814 855 26 
+7 913 517 46 
+.70 330 217 146 
-4 1.485 1,140 24 
-2.4028850 2 2710 
+6.60 883448.10 £1 
-110 S.7HJ £787 £0 
-fl 7B7 G61 £7 
-7 1(400 1657 44 
-71.156 B01 46 
+602285018550 56 
-2Z132B18&S0 _ 
-1126001711 36 
—60 205 13250 46 
-30 1.5701,278 36 
-£ 455 846 26 
+16050050 201 26 
-101085 780 76 
+T 658 *15 3S 
-8 48035120 ._ 
-160 737 378 1U 
-GO 5,180 5600 07 
-11 1602 702 36 
+19 830 010 — 
—4 478 361 16 
-15 977 780 26 
-8JD 748 482 3* 
-8 740 508 £2 
+460 436 3BA 56 
-060 392 306 56 
+8 1.127 784 37 
-21688 802 ._ 
-28 858 733 8. 1 
-8 830 635 1 7 
... 3.487 2,760 26 
-11 2609 1.755 3.7 
-3 734 584 £4 

+65 1870 865 76 
-1 182 IIS 7.4 

930 GW 37 
-60 6620 4.340 16 
-11 570 385 £5 

-70 2.754 1.070 0.7 
+fl 383 23668 16 
-660 645453.10 26 
-^50 49350 388 £7 
-10 800 405 £8 
-a 710 442 EJ 

_ 1fl78 6S2 7.8 
-1 110 85 4/4 


MW 400 — 57D 

Wrtc 875 +5 ran 

u«w an -is ns 

WP4> *2060 +4.10*9160 « 

Ujror 12660 +60157701(830 _ 

"S, 2-i52 -izijsa i60o o5 
HSJ? 6700 +80*780 5.480 06 
l*>0™ 372 -8 9055021060 

M&K 40*60 -170 624 40769 13 

236+160 274 207.10 1.0 
123 -160186608760 46 
026 -13 1,348 982 56 

13860 +C701HU0 130 55 
190 -8 260 17B _ 

-060 52532720 S-5 
3W60 -660 535 365 66 

150.10 -460 234 141 14 

307 -2 371 20250 76 

785 +17 630 752 1.9 

848 -7 1J05 785 __ 

to -B 1.180 am u 
S26 +s 6043SLI9 _ 

..216 _ 287 201 _ 

IgfcM +£20 157/40 1 1160 26 
-8 752 542 16 
730 — 94S SOI 16 

2,485 -65 3230 2690 £0 

564 +2 734 578 13 

V435 -301.789 1,422 17 

30260 +960 48920 337.10 £7 

542 -8 GOO 472 £6 

-1 CIO 381 7_fi 

-17 700 401 76 

+7 £470 1J99 _ 

—3 792 523 4J 

-22 2.600 1710 £3 

-1 62930410 — 

-v30 S77 244 ED 

“ tEE? -25 -Iisjoisiai £4 

— TSnm £450 -5 3.120 2JS1 1J 

180 -JO 214 1X10 e.4 

324 —560 38460 203 10 36 

13860 —32245813530 £2 

389 -1 484 333 18 

jJM «2 -9 65043.10 66 

4*1 __ BOO 438 76 

WalBO 280 -260 30? 2£1 3.2 

310.10 -2 335 MO & 

WnnAO 2GB -JO 355240.18 4.4 


- G&HAHT (Sap 20 / Dm.) 


AS 15060 -£5010860 153 16 
AGndv saa -1 e» 524 u 
«*nH) 1J15 +15 1/448 1,110 1J 

tarn £330 -30 2611 2JSO 0.6 

«l»™ 857 -360B9SJO 575 16 

H7D +9601,191 060 _ 
fiSSaP* 7K> -sixes 786 1 6 

BASF 31 £70 -£203*3X0 .’/II £6 
Bj*IMTk 496 _ 510 435 1.B 

MQ« 38460 — £50 486 348 £3 
Btm 3S7 -CJ0404.B03S160 3.1 
g?ggH MO -160S1XD38S6D 17 
7B0 -12 929 639 16 

Bmorv *14-50 — J.hO 575*1350 11 
Btaor 1/009 +1 1.105 BIB 16 

EtertKT 292 +1 34150 238 1.7 

BWttl 387 +2 520 377 3.7 

JB1BU 872 +9 961 750 16 

Oo«m 1 J65 _ 1.630 1.140 06 

CMW 875 +51630 820 16 

Burnt* 30750m -£50 30O2B2JO 36 
COfBnl 231 *.m 2BB 228 1.7 

DIM 438 +6 600 423 06 

Dakntr 7B3 -TO 904 688 1 6 

Dpuwa 4G7 -« 568 443 16 

DfBta 240 — 7 2KM21UO — 

tecWB. 70460 +1 1876005050 £9 

DWWHc 18260 -SJO 188 1S2 £5 

Doutfa 508 _ 807 

Dm»* 328 -1 337 

a*BK 393 -14G&6I 

GBC 549 -6 610 

Gmttn £77 +2 807 

GMadi 725 -4 780 

HmtoS 223 +1 245 

HaUZm 1,3 no +1016801.141 16 
WMF 582 +460 G81 964 1.7 

W0b 352 +60 *40 3*3 £8 
HOCMf 1.033 +3 1609 857 1-3 

If Chet 337.70 -160 36850 28*20 £1 
023 +41 1600 830 16 

21160 -60 253 208 ZB 

KB 279ir +2 313 2EB5D16 

kdlM 383 +£30 *33 3S3 £2 
Kri16£ 148 -1 189 1 31 — 

Knna BIB -I £44 GIB £1 
Ittiol 512 -160 558 451 26 
ram 128.50 -J0 151.50 T1S.10 _ 
KadlW 143 -1J0 179 10270 3J 

Ixhnm 687 -13 800 630 1 6 

LsHht 745 +2 850 BBO 1.0 

LMa 888 _ OBB BB0 1.8 

UnoH 380 410 329 £1 

Lutthn 18BJO -.70 21GJ0 lfiSSO 
LufTPI 18460 +1.10 207 381*873 1/4 
MAN 410 -7J0 470 S7fl 1.7 
MANPf 318 -2 387 206 £2 

Manmn 40RJ0 -8604096) 307 U 
705 _ 822 706 — 

15150 -060 28S1EBBD B6 
£720 -10 3J17 2.f ?B 04 

' ' -4 2G2 210 

+J0 330 50* 36 

705 -80 960 G99 0/4 

„ 454 -1 501 JO 410 £2 

RME 480 -1 52960 396 26 

RMEPI 3B4 +.10 424 329 13 

nmbC 1675 —15 1 J20 1,230 06 

Btmntfl 208 -1 372 ZB5 24 

RtnnPf 233J0 +3 2B7 

B • s K8- < 3iS 

867 -1 *38 

BSD — am 

294 -150 328 

Vote 52110 -e.70SBM 
VEW 383 -1 400 

r 430^ 3 ^ 

VW 449 -170 934 

VWPf 364 -6 443 

WiO aP 1619 -13 1,073 


+?- mo no w wt 


+ /- «Bh U+ 1M NE 


+ /- 


Mg*, 


lorn 7M M 


+ /- 


MbB tm« na nt 


+ /- HM» Lnw 


+ /- Mfl Im 


3,740 -35 1310 2675 _ 

1300 -£511.7109600 36 

11J50 +461UQ09J01 46 

£210 +20 2J30 1 J92 26 

— Totan 4JB5 -SO 5.195 3663 £0 
_ Tanyp 27,450 *10O3*W0WSo 1.1 

— Tosffr 17650 24/D8Z17J5D 11 

— IMcam 11.200 _ (6JOO HUSO 16 


- NETHStUUmS (Sap 20 / Fb.) 


ABMAim 57.60 
AECON 9720 
AbOU 49*1 
NOON 204 
BoMWb 34 JO 
BOpm 39.70 
CSM 6&J0 
OSM 15080 
fears 18180 
Bsnr 161 jo 
naOsR is 
RbnvORTI JQbI 
fetnom 8150 
GBfflpR 44.10 
Hennyr 135 
IWMI23S.70nd 
Haieo 300 


7190 
43J0 
HCOpR 75 
BIIMiO 83 
KLM 47 JO 

KWBT 61.10 
KPN 5190 
KFKOpR 48J0 
KsOyd 8140 


7£10 
SJO 
76.10 
11150 
33 

11080 

01.90 

800*81076001 
SMkN 4360 
UnODp 194.70 
VMJ IBS 

VhOOpfl *660 

WXDpR 12020 


-1.40 7170 65 6.0 

-4011050 6020 36 
-JO 5140 4260 _ 
-3 22918760 32 
-60 *7 JO 34 JO 17 
+ JO 62 37 JO 2.B 
-1 JO 7760 8260 „ 
-160 15BJ010GJD 16 
-1 20817173 £5 

-1JO10&J9 145 16 
-.10 25 1860 4J 

-160 01*0 0110 46 
-108588060 AS 
-.40 6860 44 £0 

-215750 (23 — 
-i jo zsaauo u 

— 33050 204 3L2 

-60 83 4150 36 

-60 9150 8150 £2 
-JO 45 7034.70 £8 

-150 94.70 73,10 OJ 
-2JO0S6P74JD 24 
-1 57J0 4060 £1 
-40 52 42.10 06 

-60 55.10 4760 _ 
- an 57 jo 43J0 12 
-£30 8130 6860 54 
16070 72 24 

-I JO 90 0175 — 
-1 JT1 0S60 0560 11 

-160 5130 40 0.9 

+ JO W J» 71 16 

— 131 112 10 

-JO im 52-30 10 
+JD 1X40 17460 £7 
—.ID 10850 81.70 1* 

-1 JO 21540 18120 46 
-JO5DJO«30 16 
-260 238 17840 36 
-160 20316*50 16 
-60 56.50 4130 £1 
+60 13360 10120 16 


HMta 330 S 4&0 310 3L3 

Jritafr 906 _. 871 782 JJ 

-1 1001050 16 
-10 991 700 16 
-16 1630 1480 £2 
-19 1437 14)53 £1 
+1 175 123 
1,525 -IS 1^36 1/09 46 
4,165 -20 5640 3.7BO _ 

PiU ID -3 D 18S12 

HOOT 1J30 -316401601 — 

HcMBr 11/350 +76 13640 11, 1JS 1* 

ftawGn 6620 -GO 7J70 5,160 06 
_ SBS& 1650 _ £3001680 24 

SMHBr 770 -SIXES 710 16 

~ EMDg 172 -£30 227 146 1J 



SndA 


876 

057 

1,040 


375 

~ SwfiUtg 1*4 JO 

— BwfUBr BOS 

” SMflsRQ 544 

— ffsW BIS 

— UnShfir 1.1B3 

— WBiRg 627 

— ZurtnB 1 J75 


-3 08* EfiS 
-3 870 642 — 
-20 1/6501.450 26 
-22 1,100 B4S £0 
-3 531 352 46 

-1 230 177 46 
*12 015 68* — 
+11 770 515 - 
-35 888 735 — 
-7 1603 1633 £7 
-3 632 610 26 
-2 1616 7 JIB 16 


E PAC1RC 

- JAPAN (Sap 2D / Yart 


MMSfll 


*7 +20 97H 830 06 

1,780 +2016381683 05 
892 +2 877 004 ... 

i.iBO — i jao 1.130 _. 
328 +0 335 250 

BOO +10 930 749 — 
£050 +10 24*0 1. 7W — 

Plan +00 £700 £150 — 
BOB +17 007 732 — 
715 +13 749 605 — 
87B *23 983 6*8 — 

710 +19 767 551 _ 
Ell +8 573 423 1 6 
436 -2 523 318 — 

1.17D +20 1.250 1/010 „ 
535 +4 9*5 408 „ 

2600 +40 £000 £220 .... 

7600 +« 7/6M SJbO 

421 +5 556 376 1J 

759 -C 369 758 ... 
867 +221650 80S - 

£690 +20 £680 £480 — 

EB1 —3 782 638 

1.140 +3)1630 7H8 - 
UWS +20 13*0 905 06 
68* +10 938 512 _ 

1680 +10 £2201680 _ 
542 +12 580 428 -. 
803 -W 900 780 1 6 
409 - 4*3 321 „ 

1720 — £030 1/420 1 J 

1680 +10 £000 1.700 — 

1630 +30 1620 1600 — 

1670 +20 U20 990 1.1 
” -10 3640 £720 



510 

9mshs 1J80 
._ Skylai £190 
.. &M0rM 765 


- SiunBU 

— Suntak 
_ SumCsm 

SucnChm 


-sess '« 

— A8NAI 1,130 

— «pSH 1720 

— uada its 

— Anon 1,660 

— MOoCn B13 

— AMtu 1420 
_A0W 472 

— AovamB 
_ Anna 


— NORWAY (Sep 2D I Kroner) 


tafliAf 
Km I 
LsB M 
NBkHltf 
NSKQM 
Orida 
RTnft 
SagUU 


155 

1260 

17460 

78 

117 

2BS 

07 

244 

188 

200 

130 

7960 

77 

73 

97 

11660 


+1 112 8960 46 
+2 175 130 06 
+.10 I860 11 JO — 
+560 160 123 1.1 
+8 114 74 — 

-60 140 100 36 
-2 338 280 16 

11560 86 36 

-2 266 206 14 
+4 208 140 06 
-5 305 200 £0 
-4 1SC50 130 36 
+60 91 74 26 

— 91 72 £6 

+1 07 72 66 

-1 1228560 16 

-2 161 114 £3 

+1 6*60 2660 — 
+J 88 SS SL7 



478 26 
280 16 
348 3/4 
469 1 6 
2G3 16 
GOO 16 
190 26 


— SPAM (Bap 20 / Pts.) 


sar 

BCntH 


CMbUI 

ClArtl 

DcDOm 

Ebrortg 

BIAm 


6600 

SJSO 

3.130 

£B2S 

4.480 

14.780 

5.190 
1XP10 

3.190 
4600 
BJ30 
1JM0 
1770 


gsDwT- 

HUCsn 


tape 


at*', 

S55miai5(JMO 


Mtmm 

PnrtV 

Piyca 

sSESre 

Santo 

swa 

TriMCA 

Trtefn 

Tudor 

UnFen 

UnFonl 

Unfit 


_ Vtoefn 


781 

616 

3780 

813 

8690 

cwin 

SS 

£020 

230 

GOB 

630 

3.196 

1,095 

1,126 

564 

1.180 

1600 

£145 

2690 


-80 8780 5/150 £1 
-90 8.700 *620 4.7 
-30 3635 2.700 5.4 
-20 £400 £415 7 A 
-10 4/470 £976 46 
-aioi7jooi4jno gj 
— 6721 *.*00 57 
-10 1.430 700207 
—30 3790 £410 £1 
+ 140 5,110 3/400 £4 
-120 11700 9/406 £3 
-45 £715 1/935 46 
+5 1.775 1710 £0 
—3 3J60 £300 34 
-120 8.100 5,160 26 
-14 1.100 755 57 
-IB 924 418140 
-20 5.140 £610 36 
-101710 805 76 
-10 7480 4 .BOO £0 
_ 7630 4600 26 
-130 8600 4730 £4 
-250 12600 9.710 16 
-40 £1701600 — 
-S3 4600 3605 36 
-16 355 102 _ 
-4 BSO 3S1 06 
-17 015 010 06 
-6 4/460 2606 36 
-25 £135 1692 37 
-61/435 950 16 
-13 739 553 06 
-15 £400 1,025 107 
-301 J~10 1.150 56 
-05 3.12D £135 27 
-10 3680 £250 16 


870 
1720 
075 
2660 
“ Choftwi 1.100 

= 3S 

"■ ctzMUi no? 

— OmKH 798 

— DcalC SOS 

— DatttoS 534 

— DaM 1650 

— Dfrih* 1J2D 

— DalKB 1730 

— D-cWP 1610 
Damn B52 
Dnhyo 007 
Dbnani 7S6 
OMpM 541 
M I4«ti 1/060 

— DalFr 1630 

— DNpTof 413 

— DjImmP 960 

— OTohFBI 737 
1610 
1.400 
1/440 

OmnJp 3600 
DMMI 054 
Ckvlfei 348 
am 1.700 


+20 1.420 1J00 _ 

-16 737 480 _ 

+2D1610 981 (U 
-.1600 978 — 

+30 1779 SOI _ 

— 16901770 — 

-4 744 G83 1.0 

+501,713 940 - 
._ 4* 534 402 1.7 — MbCOR 

3.420 +1S0B6UO3J40 _ MDBac 

4/700 +20 5,640 4670 08 — IBEsI 

+401J501 fOO — — MtrGsC 

*10 1JS0 1/040 — — MbHuy 
-it aii gso i.i — MW* 
+sa ttoo 16*0 _ — mm. 

+B 629 410 08 — HMta 

-4 513 300 1-2 — M900 
+3 679 550 — — MbPnp 

OBB H55 — UbPri 

+20 1690 ljfffl 06 _ MM 
+12 001 415 — _ IdRon 

+10 36*0 2^10 — BritBO 
-fi 1J20 042 4.4 _ MiTrS 

+19 710 436 _ _ MbWhS 
+30 1620 1639 — MbBrit 

+0O36GO26SO —386 Mini 
+20 1.410 1620 16 — IS6&S 
+24 Eli 315 — — Mffud 
—4 402 337 1 J — MIMr 
+20 967 941 — — MMnS 
+20 1.4« 1640 06 — MU 
+14 76B S71 16 — MM 
♦10 £979 26G0 — — Mffl* 

— 1730 1/000 — — HIM 

+50 2.780 £430 _ _ lOTtfi 

-40 1660 1J1D ... - MUcsh 

-0 954 B01 16 — Mttma 

+17 B90 781 — — ur 
+7 025 410 — — MzSnn 
+14 5BB 387 _ _ 

-ID 1670 1 , 470 — — 

-10 1.490 16£0 06 — 

+30 26601.700 ... 

+10 1610 1.400 — — 

+1 1,020 860 ._ ... 

+44 1J20 BOO — — 

+2* 1)10 SGI 

+ 19 570 415 _ — 

+30 1J70 983 — — 

+30 2.0?0 1600 _ _ 

+4 327 345 — — 
-281760 940 — — 

-a 006 887 06 — 
+101,120 951 — — 
+101.7101.440 ... 07 J 
+10 1/070 1630 06 — 

+50 4,050 £750 06 — 

+7 705 545 16 _ 


90Q 

64* 




307 

—3 082 885 — 

+4 732 657 _ 

+1D 792 582 0.7 
+30 1640 1/400 06 
♦O 983 480 _ 

+8 393 306 — 
+161.230 790 0.7 
+»£010£3W ™ 

+30 1.270 1620 _ 

+ 10 724 520 — 

+201700 905 — 

+B 560 335 — 

+11 B33 BOB __ 

+0 500 423 — 

+7 604 384 — 

+1 1610 798 .... 

_ 1J30 042 .... 

+20 792 487 — 

+13 774 660 „ 

+6 560 407 .... 

<4 484 SIB — 

+4 BOS 386 — 

+30 1.680 1,140 — 
+1016101.450 _ 

+4 ran 456 _ 

+10 885 072 — 

+4 400 301 — 

+30 1.420 1,100 06 
+7 890 752 06 
+12 489 378 — 

+5 453 337 _ 

+5 930 S7B — 

-1 940 770 £7 ... 

+0 440 310 786 

+10 1,400 845 — — 
+7 1,110 790 — 

+10 2J30 1/400 0.4 
+37 702 BOB _.. 

-10 1.Z10 050 — 

— £500 1,603 04 

— 624 485 OS 
-10 £700 2600 — 

+40 46*0 £020 — 
+201710 858 — 

+201,170 BBS — 

— 1.4001620 — 

+9 630 395 — 


710 
1650 
513 
550 
*77 

1750 

— surttry 4Zi 

— SUM 88 433 

.-. Sumttr 876 

— SunlM 337 

— SlIlAltll B27 

— amm am 

— SunRtv 973 

— tanltfl 1.400 
_ BmiMa 749 

— SUZBH 1J30 

— TDK 4J60 

— IkM S74 
Tatum 1650 

— TofcBo C07 

— TWttSf, 780 
r mnya 1/130 

— TtaJOCh IJ30 

— TaCal 000 

— Tritto SCO 

— t#mi m 

— TeMan 873 

— ToaGos 753 
.... IMmi 450 

— Toteftw 640 

ToriaCp 942 
Tori 739 


— Totn 

... TtefcfP 

— nank 
_ TWOt 
Tokico 

— TMjMM 

— nqama 


-2 S1Z 301 1J 

— £560 7.430 .. 
+10 1, BIO 1 J20 _ 
+10 £080 £430 — 
-201,110 776 — 
+20 £320 1.610 — 

+4 1640 040 . 

— 1290 1.1 SC .... 
+40 1700 1.120 — 

+4 63f- 479 16 
+12 BIO 411 ._ 
.*7 305 250 - 
+14 700 500 _ 
+11 *23 481 „ 
+10 1690 1.110 ^ 
+20 £020 2, ISO _ 
+8 02B 700 06 
+90 £400 B.4W — 
+* 852 GIB _ 
♦10 747 425 _ 
+10 £2801630 — 
*€ G73 432 — 
+13 507 404 — 

+28 1.100 037 

+201.6801.280 .... 
+C 475 3G0 — 
+11 4*5 28* — . 
-6 1.030 851 OJ 
+7 340 2S2 — 
+151,010 854 — 
+5 734 611 16 
+13 1,120 SIS — 
+30 1620 1690 — 
+0 016 674 — 
+30 1,520 1650 — 

— 5650 £700 _ 
+10 74B *10 _ 

— 2210 1630 1.1 
-13 722 570 — 

+5 865 STB 06 
+20 1650 1670 — 
+ 10 1640 1690 — 
+16 16+0 BSO — 
+4 60S 400 — 
+2 026 
+11 1.100 
+ 18 B&l 
+5 G55 

+0 720 
+2 era 
+28 907 


[NT £4* -02 

MOM 425 -05 

Wafruw *15 -.05 

WMna £22 -62 

Wstftto 766 -06 

WMfTr £38 _ 

Wflpoc 43? -05 

Wood* 4« -.03 

WMrtO £90 -05 


2.74 1.D ... 
460 3-28 4 1 

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8-50 BJO 16 

8 32 7 JO £5 
£85 £?1 36 
585 4.15 1/* 
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AstaA 

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Bated 147 
Dnata 22600 
Buna 8600 
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cufisp tjm 
Cmntr 16G0 
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♦100 14JD0 9.170 — 
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8200 UIUmiA 

8CB094 utaos 
3540 LoUau » 
230025 Mackm 
300® Uoridb 
272252 MBS B 
1294*0 Mecucn 
390172 Macmei 
GK15 MorinA 
20697 MsUFtf 

2511 UatTUi 
751981 WfUiT 

605® MkRVal 
148555 Mttri 
31643 MotonA 
227050 Move, 

5030 
231931 

10GO50 Nonfadg 
53350 tana A 
52210 Mrndtf 
910170 MtidaM 
110015 tauiE 
33445b NttiTw 
123490 Nova 
79® Ptowncn 
mo NudbcE 
224287 One. 

141® OattMA 
0625 PteuM 
145533 PoeoP 
803003 PWA 
400® PaomA 
110® PanCJW* 
45050 Pitaua 
94470 PetCan 
1421® PNEn 
1141990 14 Dome 
450® PowiCd 
11® PiMifn 
1®10 RayrW 
2® Beams 
4® Rum 

68637 1 Ren Eh 
74500 naota 
5951 ngd 
53050 RWAIfl 
545800 togCJs 
81 0780 RoyBkC 
1172520 RoyOok 
3847 ScmtP 
Tuesday, Sepi ember 


-%£»%»% 

300 SNC 

SO SSO 20 

BCL 7*% 

320® Snr*an 

171; +% 18 17% 


7% 

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44 SM% 43% 
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17% -% Si?% 4i r% 
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21% -%I71-. ?1% 
37% -1, TO 37% 


MONTREAL (Sep 30 ' Can S) 
4pm dose 


94730 

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194946 

1750 

HQ 

22075 

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BctMB 

BmOiP 

Camoto 

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AFRICA 

SOUTH AFMCA (Sep 20 / nandl 

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ITn 

161; 

6 % 

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14% -3; 514% 14% 
20% +% 521 20% 
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» 31 30 

9% (9% 9 

€3 -1 64 82 
420 »430 415 

42% (42% 42% 

5ft£S9E5ft 

-% 519% 19% 
09% 29% 
+1 *10 17% 
+% *17 17 
+1 *78 77 
-% S&% 8% 

-3;raia% 


A6CA 10.90 
AEG 2u 

Arird 121 
Amcori 245 
AneAm 242 50 
Ampdd 404 
/totpM 1=7 
Baum ® 
Bonn 2050 
UulM SI 
CNACd 4 
OeBCro IDbSOd 
DunOa 040 
Drwfn ea 75 
Ergo UTS 
EtondC 34 JS 
Enoen 37J5 
FNOSk £?2S 
FtoOri 75 
Gunor 14 40d 
GFSA 1® 
M=t> 
2BJO 
33 75 
450M 
99 JO 
112 
78.50 
70 
92 75 
16 SO 
NMtoor 31.50 
Pa&MI 72 
PlBinGp 5.66 
Ranam 55 
RmtoGp 25.M13! 
nmtaOi 1 BU 
RuriPi 121 
SWRm 11 50 
SnutiCG IB 
SABnw 03 
SAHnAm 54d 
SLKs 31.75 
Stovl 144 
TlgOri 42 
TndkO 40.50 
Vfteofel 474 
WAraa 71 
WDaop 217 
Hflddh SB 


+.1*10 95 6.70 4 0 
2!l 17JO 2.0 
123 93 50 26 
. . 255 115 2.0 

+450 X4SO1B2S0 16 
*10 506 .144 m 

+ 1 140 1® 08 

-SO S7 26SO . 

+ 50 31 20.75 2 0 

5b 42 0 0 
4® 3 SS 1H 
+1 JS 121 75 9750 0.4 
* an tors too £4 
+2 JS 73-25 4B 3 4 
+ 1 13 7S 7J5 36 
+ I 65 34 50 2750 .’•» 
+JS 42 Kill 
-25 23 50 21.50 U 
> 75 tel 53.75 U 
« IS 1405 7 94 1.0 
<5 130 87 50 1G 

+2 39 25ZU5 - 
+.SO 70 75 1675 60 
... 317S 1b IS 
... 495 £15 1 J 
.... 104 SS 1 4 

+2 122 7B 10 
+ SO 04 50 KUO £4 
♦£75 73.75 41 26 

1® 75 1.4 

.... 22 15.50 . 

_ 35 28 1 B 

— 91 58.50 7 J 

-JS 7J5 555 £4 
+.75 5650 37.® 5.1 
+ 50 38.75 25 74 

+ 50 2&M 17 1J 

+ 50 128 72 1.4 

-JS 13.50 8.70 — 
+.26 20 1550 21 

-3 I M il 79 19 
... 88 2X50 12 

-® 37 27 £4 

+6 164 1® £0 

_ 56 4150 1.7 

_ 4SJS 23.25 £0 
+19 498 359 2J 
+1 74® 33 4.4 

+6 222 151 2/0 

_ 00 44 JO £4 


WoraaptaOy fririaw 


NOTES ■ Pikai on Mapma qnotm M toe 
MHU odunaca at) an awoir Ml tatofl 

iitanofi 
I Ea 

i Ei* 


prices Htfatan ■# to 109*. aad Tat 
tamW ritop a Dari B i i amritod. d t 
OMMcEiitotaabiVaal 



FT FREE ANNUAL REPORTS SERVICE 
tou cu dMi M cam aiuMmto npai d a* 
unay •moteBCnto A iteapxMiiia 

Fimas nig mi 7ioi7ranHaMinishriuaa 
MtariS) rite 081 71# 302=. ■ ctaig ton ouUOc M 
OK. AN +14 01 770(0711 V fell +44 01 770X0. 

taaa *■ to m M ia tori nrito# Oto. Mta to 



Stocks 

Closing 

Change 


Stocks 

Closing 

Change 


Traded 

Prices 

on (fay 


Traded 

Prices 

on day 

Nippon Stud — 

18.0m 

385 

+7 

Toshfca . 

38m 

750 

+13 

Mitsubishi Hvy 

6.6m 

760 

+11 

Toyota Motor 

3.7m 

1,080 

+20 

Sumttoma MU Ind — 

6.5m 

337 

+7 

Hitachi ... 

3.5m 

959 

+12 

Kawasaki Steel 

5Jhti 

433 

+11 

NEC 

3.4m 

1,180 

+20 

Nissan Motor 

4JBn\ 

81 B 

+33 

Sumitomo Chem ....... 

3.1m 

558 

+13 


(LB 


£87 


INDICES 


US INDICES 



Sp 

s® 

SCP 








I3J3P9 — — — 



215 

IS 

16 

W 

Uw 

ftptafao 

Gened (29*12/77) 

Mi 

2)06536 

2090612 2347049 

1612 

1775680 

2074 

n(to*wta(Uiflq 

2045.1 

ami 

20560 

230980 

30 

1957/40 

27/6 

ft mtfi/i/aq 

10759 

10709 

10752 

113619 

3/2 

90480 

SIS 

AcBbto 

CmN Mfan(9V1M4 

39993 

40*56 

40488 

4BOK 

2/2 

39697 

2M3 

liaW hUBtfWm) 

1091 /BO 

1097/61 

109607 

1222/23 

172 

101138 

8* 

Bdgtao 

BaJO 079911 

ITO. 13 

141687 

142285 

104285 

90 

138180 

137 

and 








Bowspa (29712/831 

04 

529160 

529378 5S1KM0 

1319 

300689 

an 

KtoUs ta**0975J 

M 

425059 

423677 

423059 

19(9 

329309 

20M 

amwanof P97S) 

M 

443080 

44D690 

4BBB90 

23(3 

395909 

24® 

PoftWo® M7t*a 

M 

21(606 

2102.18 

218699 

Iff 

105617 

20(7 

□too 

PGA Gn (31/12MI 

M 

« 

4997/4 

49(7/40 

IM 

3801 JO 

4M 

Ooamorit 

CDpMUBpeeE(yifiai 

354.11 

35451 

35475 

*um 

2/2 

3B2J4 

12(9 

Med 

HEX GB»NC»12flO) 

18795 

1894/4 

19060 

197200 

4/2 

180110 

an 

Saooinaaj 

129*89 

1301.82 

130678 

19BBJ0 

2/2 

120536 

4/7 

CAC 40P1JJ2/B7) 

191 925 

192287 

1934/59 

23KS3 

2/2 

180610 

4/7 

Gomtoiy 

FAZAHttoOI/ISW} 

78978 

79615 

805 62 

89927 

18(5 

75751 

27A 

CUiggamNi/i2fi3l 

23398 

99070 

2231JS 

29550 

2/S 

ZMBL30 

27® 

DUP0n2fl7)t 

207886 

209676 

211673 

2271.11 

1» 

1K602 

20® 

Brew 

Atom SE01/12OQ 

B64JB 

06150 

851 ra 

119458 

19/1 

90687 

26(5 

Hobo Uni 

ttmg Senu(31/7*G4| 

9824.76 

9901.43 

990652 1 

1229189 

4/1 

839944 

4(5 

Mb 

BSE S®£jl979) 

448838 

456679 

481781 

482657 

12(9 

345400 

571 

Jataf* G*lM 1 M®a 

S21 J2 

52ZJK 

82583 

B1ZB9 

571 

44672 

12/7 

Manl 

GBIOwaMMtq 

188587 

1 901.35 

189418 

309£1B 

2071 

189414 

1/7 

8* 

Banca Onion bi (19721 

673.43 

67453 

67649 

817.17 

IQS 

99985 

ion 

MB Gonool (4/WtJ 

twin 

10960 

10960 

131600 

10(5 

94489 

ion 


s® 

20 


Sop 

19 


-199* 


Gap 

19 


SUP 

IS 


1994 

Hgk Low 


SKaconnftOon 
Ugh Lob 


Maries 






fcutoMihh 

393672 

.toBt Ba 

397638 

vmvi 

387X36 

4i z: 

PC 0ta 1978) 

M 

280302 

B 

3981.17 8/2 

19B703 20K 




plfl) 

14/4) 

(31/119*9 

(2/7/33 

Memod 







07.18 

6708 8738 

10501 

9643 

HH77 

5409 

CBS l»W6En(E«J 0S 

4340 

4347 

4330 

4B4B0 31/1 

40630 21® 




121/1) 

(13« 

nsfto®3» 

(1/lOffill 

CBS M Shrpri BS) 

Z7£6 

2711 

2730 

29U0 31/1 

2S70O 21® 


155653 

155633 157645 

188229 

15460! 

188229 

1232 

Knr *>°*»«* 









(2ff) 

(ZOM) 

mm 

(8/i732) 

Op.40(l/7®Q 

208733 

210507 

211107 

243954 3/2 

MSI 11/7 

unss 

17609 

17733 179.74 

22708 

17571 

25648 

1DL50 










(3ft) 

(34® 

(31/B/S3) 

(8/4/32) 

Odo SEIMK27UB3I 


105307 

105401 

121110 Sfl 

S80SI 21® 

DJ tod. Davis Mgti ®7£72 08S5J2 1 urn 3BQ0.H0 pa&WB I (Thaor*Ucat*1 







ttevM hW 38SX20 PMHJM ) Lo» 392&M PB1203 ) (Acted*) 



Mania Cento |27t®5) 

2820.19 

2S36Z1 

29*206 

331637 4/1 

250703 aa 

Standard 

and Peon 

47085 

<71.18 47401 

48200 

438J2 

48200 

440 

Fntogri 









C/2) 

t«) 

mm 

(1W32) 

81*08771 

2932.7 

2B261 

29340 

3226® 18/2 

2*1200 20® 


557 J* 

S5702 56003 

56083 

51006 

560*3 

303 










(15fl 

C1«} 

I15/B/94} 

(31092) 

GEE AB-!Tpnr6(2rtf75) 

567 08 

5G611 


9*101 4n 

52329 4/4 

FtoneH 

4502 

4542 4505 

4804 

4109 

4640 

804 

Beoft AkkB 









040 


PftMQ 

(inoftfl 

JSEG«*1(ZEW® 

2t3BJJf 

23S70 

24060 

233400 7® 

174000 14/2 

NYSE Onto- 

Z5B03 

25177 261.42 

207.71 

24X14 

207 J1 

44G 

JSE tod. (28W70) 

84390V 

8453J) 

65200 

876700 IM 

544600 19ft 




(B2) 

W 

mm 

(3SW45 







Ann IHW «i 13 

45B0B 45674 

<87-80 

42207 

46700 

2901 

kmeCBto&^fflar 

W 

B 

100080 

102301 17® 

85507 2W 




era 

ea® 

mm 

(9/12/72) 








777.91 77606 

80093 

603.79 

earn 

54*7 

MadUSE (3071 2/851 

296.72 

30043 

301 01 

36631 31/1 

2B14S E/7 




nao 

(24® 

(1BOB4J 

(31/1073 

tatUn 

14326 

1443.1 

14460 

158300 JtA 

1334711 6/7 

■ RATIOS 














Sep 16 


Sep 2 rear ago 

SMliertand 

1227.10 

123603 

122682 

142934 31/1 

116707 18/7 

Daw Jones (nd. Div. YleU 209 

£71 

£63 

2.82 

sk Gem (WB7) 

92687 

B3an 

928.07 

109329 31fl 

88610 13/7 




Sep 7 








S & P bid. Dtv. ytekt 

207 

207 

203 

2.47 

WMtftaPrfllww 

n 

B 

SKI JO 

704634 17® 

519403 19(3 

S 6 P tnd. P/E rabo 

2091 

2006 

21.11 27.84 

ThaU 






■ STANDARD AID POORS BOO MDGX FUTURES S500 tiiYMS index 

Ban(0ak SET (3QM/75) 

153005 

15403) 

15462* 

TS3J3 4/1 

119609 4/4 


Open Latest Change 

Hkdi 

Low 

EsLwL Open im. 

HMy 






Dec 

472.55 489.80 -2.76 473.10 

469.60 

56.897 

201.610 

tataUDitoUn ib»9 






Mar 

473.10 472.80 -205 473.10 

47200 

233 

6070 


2390635 

227B&0 

235868 2388309 13r| 

1290670 24ff 

Jun 

477.00 47700 -206 47700 

47700 

105 

2,051 

WORLD 






Op® interest figiM ore tor pratoo day. 





MSCtf&llni(t/l/7QS 

B3ZT 

6320 

83M 

64400 219 

59100 4/4 








CR0S&80RDB1 






■ HEW YORK ACTIVE STOCKS ■ TRAOMQ ACTMITY 


beta* looeanow 13C33 

13SS06 

135691 

194039 21/1 

130X48 21® 








Bn TOP-100 |2flW» 118611 

119201 

1184.43 

1311/01 2(2 

1KU6 21® 

tariff 

Stocks Qdk Omge • voum inanity 



xapngra pi/uws 

M 

341.12 

34490 

396.19 5ft 

29026 210 


traded price on day 



B»tas temunm 

180.65 

10170 

19022 

19008 IM 

14105 7\» 


3,768000 

nj] _A4 NOW YttK SE 27Z797 4iaBS 286490 

■ CAC-4Q STOCK MDEX RTTURES (MATTF) 


wai Mbit 

3097.700 

24ft -44 »» _ 

237.1*4 29B79G 276675 


dsati/Tiwa 
n 


2S&B6 2KL27 ZS755 *IU1 13* 
1SS1.11 1561J8 1S76J1 171273 13/B 




Open 

Sen Price Change 


Low 

Era. VOL Open on. 

1738B.74 4ft 

Sep 

1918.0 

10250 

-ao 

193Q.0 

1898.0 

37/661 

37067 

26602 4ft 

Oct 

18270 

1934.0 

-2.5 

1935.0 

19110 

3,814 

4070 

144507 4/1 

Dk 

1944.0 

19S30 

-ao 

19550 

13320 

2A&3 

15,118 


cmnun piAaii £34247 2B957 2SMBJ90 BOB SIT 107133 4fl op® nhrtar *SM® tar pMu (toy- 

EOonL(MflB) U8X8S llfiOK T1A5J7 1SM« 571 9!US 


4 « 


Coca Cria 
Tim Woraor 
Am Bonta 
Rail DPS 
Moron 
Emn 
MfifCk 


2,943^00 
£338.700 
9837 nm 
£678,100 
2J63^D0 
£687,000 
£520,100 


48ft 

37V: 

2Sft 

109 

39M 

S9H 

34ft 


+ 1 % 

+1H 

+1H 

+M 

-1ft 

-hi 

+4i 


NYSE 

bam Traded 

tfen 

Fiato 

Ltactstoded 
NMW0S 
Now Lows 


£875 

£886 

2055 

953 

722 

1041 

1014 

1.406 

605 

7D6 

740 

709 

67 

40 

69 

80 

83 

42 


, ra., 1 , Ha*, r™, r, 1023J1. Boa ntaa d dl todtai M WO oaeape AiaMta Al Otany t Conoeaon. • Cricdriea a 1£® QMT. - 

ai Sop Qbl. MB SBF250, CAC4Q, Bee 1bp-i® SEQ Own* Tomd CorpTUotoh : J f Tha DJ tod. tadn HwsMtal itoyV Mans 

tato^to tatoc s® 20 - a».is -41.40 dto®tatar.(n«fl B ™ n te*®io« 


E<dirfno bon*, t toduriiU. ptoa UKta. 

_ end tom » tha Mragai rt the Nghta rad 

da/S ted* and ton (a+tedtod bv Tritons) rapu 

dumg too tar- (Iho fipwaa n bmstoao on pram itoy^. Y H®i*« to 


towel pm» nrichW djnng tea <toy by cadi 
m touteri VBIUM m*i iha imta naa reachad 


SEE AMER CA 


rTC’v 'A'na:& n ;r: 


bonis end (sieral hinds •. 
or v.tjn vsu'd raijsr ss- 


►|'LI I S F 


'.pcis : tTc to c? a*, ycur dasr 
Le; ruise !akv :.ie we chi 


1H.4: ; — - j 

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FINANCIAL TIMES 



mmnoNAi 


Complete details below and send to: FT Cityline International, 
Number One Southwark Bridge, London SE1 9HL 

Name: 

Address: 

Postcode: Tel: 





.1 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 31 IW 


4 pm ease September £0 


NEW YORK STOCK EXCHANGE COMPOSITE PRICES 


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TM, PI 5b On Pwr. 

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AM 0.48 3.8 21 ED 13%012% 12*4 ft 

ALLatn A MB 1.1 38 124 154, IS% 15% ft 

AMP 1.» 23 25 1184 734, 734, 73% ft 

AMR « 4795 55% 54% 54% ft 


200 3S 34 7697 524, 52% 52% +1 

0.78 25 17 9517 30% 29% 29% -% 

050 13 11 117 1)15% 15 15% 

052 24 20 224, 22 22 •% 

35 54 14% 14% 14% ft 

0.44 1.8 30 171 25 24% 24% -% 

1.09 11.2 335 9% d3% 9% 

080 1 1-0 172 7% 47% 7% 

098 116 239 7% 07% 7% Ag 

1D9 12J9 940 8% 08% 8% -% 

1K1Z3 452 9 B% 8% ft 

1073 8.3 Ml 8% dB 8% +% 

0.44 3J 16 334 13% 13% 13% -% 

7 39 8% 8% 8% Ag 

000 22 13 24 27% 27 27% 

0 38 3* 2 595 10% 9% 10 ft 


73% 57% AMP 1.88 13 25 1184 73% 73% 73% -% 
72% 52% AMR 96 4795 55% 54% S4% ft 

5 3%«W 13 51 3% 1% 3% 

55% 38% ASA 200 18 34 7697 53% 53% 52% +1 

31% 25%MML 078 25 17 9517 30% 39% 29% ft 

15% 1l%MBUPr 050 13 11 117u15% 15 15% 

23% 17% ABM M 052 24 20 22% 22 22 •% 

1S% I1%Aqrtnn*i 35 54 14% 14% 14% ft 

3122%ACELJd 044 1.8 30 171 25 24% 24% -% 

12% 9% ACM Min 1.09 11.2 335 9% CB% 9% 

10% 7% ACWEMpp 080 11J> 172 7% 07% 7% 

10% 7% ACM GK So OSS 116 239 7% 07% 7% 4% 

12 8% ACM GW Se 1D9 12J9 940 8% 08% 8% *4 

11% B% ACII Mai 1JQ8 113 452 9 B% 8% ft 

9% SACMManagd 073 8.3 Mi 8% 08 B% +% 

15% B% AorerQv 0.44 3J 16 334 13% 13% 13% -% 

9% 6% Acme Beet 7 39 8% 8% 8% t% 

a% 23 AcanBa 060 02 13 24 27% 27 27% 

13% 5% Ac One 038 18 2 505 10% 9% 10 -% 

16bl1%fl£usui 119 873 15% 15% 15% ft 

18% 16% Adams Bpr 0.40 Z8 0 167 17% 17% 17% 

84 48% Ad Mem 100 00 382 81 60% 80% -% 

31% 16% AMHC 100 101 12 6697 30% 29% 29% ft 

6% 5A4M9&P 0.1B 3J) 8 13 S% 5% 5% ft 

30 15 AM tv OIO 08117 141 18% 17% 17% ft 

50% 49% Aegon ADR 1.47 116 12 48 55% 55% 55% -% 

65% 47% Aanal 0^ 80 B 5497 48 046 48 -2% 

36% 25% A*c 040 1.4 14 1839 34 33% 33% % 

23% 16% Aflmtsn 0.88 4.1 151837 22 Z1% 21% -% 

4 1% ABeen he 1 67 2% Z% 2% 

50% 3BT, AWW 0.98 2.1 30 1858 48% 47% 47% -1 

3B% 26% AkcraFft 030 1.1 16 607 28% 27% 27% -% 

23% 19% Airgtahc 45 515 36 25% 20 

16% ,4% Aktsose 1.84 109 12 95 1(16% 1B% 16% +% 

29% 21%/UrTcS 8443 3% 27% 27% ft 

18% 13%AlaskaAk 020 12 24 80S 18% 16% 16% +% 

21% 16% Albany W 035 1.9 31 156 18% 15 18 -% 

17% 13% ARW1 ( 120 13 9049 15% 14% 15% A* 

25% 19% AbCuB 028 IS 16 101 23% 23 23% -% 

22% 17% AJCUvr A 028 1J 15 70 21% 21 21% -% 

30% 25% ADtai 044 IS 23 4708 28% 27% 27% ft 

27% ?9%AlcnAI 03Q 1.1 71 5468 27 86% 28% -% 


18% 17% 17% J 4 

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65% 47% AatnaL 2.76 60 B 5*97 48 046 48 -2% 

36% 35% AKk 040 1.4 14 1839 34 33% 33% -% 

22% 16% Anmnsn 0.88 4.1 151837 22 21b 21% -% 

4 1%A«MDhc 1 67 2% 2% 2% 

50% 3B% AMPlC 198 11 36 1858 48% 47% 47% -1 

3B% 26% Aktme Frt 030 1.1 16 607 28% 27% 27% -% 

23% 19% Abgs Inc 45 515 36 25% 26 

16% ,4% AktSBSB 1.84 110 12 951(16% 1B% 16% -ft 

39% 21%/UrIcft 8443 28% 27% 27% ft 

18% 13% Alaska Air 020 12 24 605 15% 16% 16% ft 

21% 16% Albany M 035 1.9 31 156 18% 15 18 -% 

17% 13% ARxffl t 120 13 9049 15% 14% 15% ft 

25% 19% AbCuB 028 1.2 16 101 23% 23 23% -% 

22% 17% AJCltifT A 028 IJ 15 70 21% 21 21% -% 

30% 25% AUsn 044 IS 22 4708 28% 27% 27% -% 

27% 19% AIcnAI 0J0 1.1 71 5468 27 86% 26% ft 

65% 49b AKoSt 1.00 1.8 43 682 62% 82% 82% ft 

30% 23% AloShMn 0.70 Z5 4 447 28 27% 27% -% 

22% 14 AtoiAl 110 15117 533 30% 20 20 ft 

24% 17ABegn LiKJ 148 22 20 283 21% 21% 21% 4% 

28% XHepx 1.64 82 10 23S3 20% 020 20 -% 

22% 13% Men Cor - 0.16 0.8 17 180 20% 20% 20% -A 

29 20 Afcrjm 0.44 ,S 17 1195 37% 26% 27% ft 

4% % Afitn 1 37 I 3 1 

27% 17% ASM Co 164 78 22 193 21% 20% 21 -% 

10% SABraO H8 IS 134 97 a 9% 9% 

27% 31% Ala Ml 090 4.0 14 7 3% 22% 22% -% 

40% 33%A8B0 067 16 7 5601 35% 34% 34% -I 

29% 24 ABM Op 188 12 19 2178 27% 27% 27% -% 


1.00 1.6 *3 682 62% 82% 82) 


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20% 18% AaiHedQax 066 16 11 13 18% 18% 18% -% 

65% 55% Aim*™ 3.92 5.0 12 3306 58% 58 58 -% 

2% 2% Am Hotels 175 300 8 15 2% 2% 2% 

96% Bl% Afflfetl a4S 05 15 6441 91% 89% 89% -1% 

11% 7Am0pptac 1.X ill 12# 7% 7% 7% ft 

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34 19 Am Plead) 140 16 9 353 25% 24% 24% -1% 

B% 7% Am Real Ea 044 5.4 5 154 8% 7% 8% +% 

27% 21 AmSBB 148 16 7 3399 24% 34% 24% -% 

22% 18 Are Wall 5% 125 16 2 19 19 19 A, 

32% 26% AraWatr IX 40 II 244 27% 26% 20% -% 

43% 36% AfflrttH 122 4.7 14 3236 41% 41 41% -% 

43% 34% Anem Inc 128 15 5 21 37% 36% 36% -% 

16% 1|%AIW1*« 124 1SI58 191 16 15% 15% ft 

61% 5o% Amoco 220 18 15 5655 59% 58% 58% -% 

0% 5% AmpcdW 010 12 B 44 B% 8% B% -% 

4% 3% Ammlnc M2 10 IDO X 4 4 4 ft 

34% 29% AdsOuOi 1.40 4.4 10 78 32 31% 31% -% 

4% 2% Aaccmp 10 154 2% 2% 2% ft 


96% Bl%AmM a4B OS 15 6441 

11% 7Am0pptac 1.X ill 12# 

X 23% AmPrein OX 14 ill 

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8% 7% Am Real £4 144 5.4 5 154 

27% 21 ArnSur 148 12 7 3399 

22% 18 Aid War 5% 125 16 2 

32% 26% Am Wolr IX 40 II 244 

43% 36% Arum 122 47 14 3236 

43% 34% Annul Inc 123 15 5 21 

16% 11% Aimak* 024 1-5158 194 
61% 5o% Amoco 220 32 15 5655 


16% li% Aimak t 
61% 50% Amoco 
B% 6% AmpcrfW 
4% 3%Amretac 
34% 29%Aas0ulti 
4% 2% Aaccmp 
58% 42% Anufcrtox 
33% 23% Anrtog 
29% 24*3 Angeica i 
55% 47%AnBKH 
26% 25%AmPpePf 
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51% 45% Amco45P 420 17 4 46% 46 4# 

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AadmtaM IX 08 67 1690 48% 47 47 -1% 

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Angela > 194 32 24 23 26% »% 26% -% 

Anfisdi 120 10 24 4101 53% 53% 53% +% 

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Arttanyta 144 22 17 14 17% 17% 17% 

Aon Cp 128 17 8 472 34% 34 34% -% 

ArachsOp 038 1.1 M 3389 25% 25% 25lj -% 

ApaMrnF 173 &4 218 B% 05% 8% -% 

AM 38 520 22% 22% 22% 4% 


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45% 33% Arrow Bcc 1611M 3W 

7% 4%ArtraGip 2 54 M 

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31 % 22% AsW Oort 140 12 12 129 XL 

44% X% Aam 120 U 13 74) 387 

25% 16% Ada PSk F 027 12 290 184 

3% 1% Auatknr 028112 7 IX 27 

37 28% Am HI On MZ 14 22 25 337 


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9% 5% AMa Sos 
21% 16% ACrtcEw 
112% 92% ASAcii 
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11% 9% BancotodH 172 
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22% 19% Mir 1838 1.72 
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25% 20% Barts 
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29% 20% Bow* 

36% 18% BneIFnd 
34% 29% HCPiop 
90% «% BrigSt 
33% 19% armtartt 
50% 50% BrtfySq 
74% 55%BrMr 
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ISO 45440 321 X% X% 35% 

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54% 44% CPC IX 27 17 2809 51% 50% 

18% 14 CPI top OX 11 18 X 18% 18% 

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24% 18%CUe&Wta 084 14 17X14 19% 18 


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18% 15% CaEngy 16 982 17% 16% 

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25% 17% Gakior CO 040 20 56 29 20% 20% 

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fj % Caupbl Fte X 7603 H A 

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42% 22% CuU Mi 132111 8 287 25% X 
26% 15% Commute 21 2114 23% 22% 

36% 30% CwKo OSD 24 18 21 34 33% 

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66% 56% Cpn»T Z40 IS IS S 84 B3% 

26% 8% CarteWal 033 14 22 1375 14% 13% 


42% 34% CupUS 
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181; 14% Cantoc 
65% 80% Gmca 


28% 15% Canmark 
36%X%CuKo 
23 16% Canto 0 
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66% 56% QadrT 140 IS IS 
26% 8% CutafWai 033 14 22 
18% 13% CaocdaNG 086 BS 13 


21% lB%CtoCp 


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10% 7% CadiAmar 0.05 06 18 383 8 . 

6^i44,?CUrtr OX 1.1 B 5227 56% 55% 

15 10% CUCUp 33 48 1 3% 13% 

36% X% Cedar Frtr Z2S 7S 11 132 32% 32% 

13% 8% CartEn OX 89 1 1571 9% 

45% 23% Outos 0X 08 10 1936 S 34% 

30% 22% Coir Mm ZC3 S.D S IBB 23% 23 

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33% 2% Ouapama 072 ZZ 75 1258 33% 32% 


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36% X% Cedar Frtr 
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5c 




FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 1994 ★ 


NYSE COMPOSITE PRICES 


35 


NASDAQ NATIONAL MARKET 


4 pm dose September 20 


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Amur a 6S7 1% ift ia 

Amfltr 120 7 107 49% 48% 4ft 

AmftxrCoo* 3711*26 21 ZD 20 

AmTrw 13 2TB 16% 16% 16% 

Amgen Inc 2112380 58% X 56 

Amtach Cp 008 14 2237 10% 9% 10% 

ArnuHn 4 410 9% 6% 9% 

Aratatfc IB 148 17% 17 17 

AnMysta OX 12 48 18% 14% 14% 

AnangcWn 1J» 13 M 16% 15% 15% ft 

Antra* Cp 2SZZ10 48 43% 43% -1% 

Andrea An 81704 16% 1ft 1ft 

AoogwEn 030 31 B5 15% 15 13% 


-A 

ft 

ft 

ft 

-H 

ft 

ft 

ft 


AFVBIO 

AppUHtal 

AppteC 


82803 
32 8852 


5% 5% ft ft 
51 46 46 -3% 


048 3017793 35% 34% 34ft 
004 45 1924 18% 17% 17% -% 

024 44 70 20% 19% 19% ft 

019 18 604 21% 21% 21% ft 

1.16 8 20 30% 29% 29% ft 

084 21 18 21% 21% 21% ft 

040 17 463 1ft 19% 19% 

3 44 13% 13 13% ft 

34 273 36% 37 37% ft 

318 29 25% 25% 25% 

8X88 14% 13% 13K -A 
13 275 10% 10% 10% ft 

032 18 812 25 24 24% ft 

Atttttk OA8 23 2700 61% 5ft 50% -2% 

AuWnto 9 98 3 2% 2% 

Annate 092 20 81 6% 7% 7% 


Altar Dr 

Anaco 

Aigunan 

Armor At 

Arnoidh 

ASK bp 

AnscTM 

Aaaoctaani 

ASTROTh 

Alktaoun 

AS SEAT 


BEI B 


BetarKWt 

BMcrJ 

BkhoLB 

Banctac 

BnkSouftx 

BaikasCp 

Bantanth 

Bam God 

BassstF 

Bay Ha* 

Baytnnks 

BMTFta 

BE tare 

BeauiCos 

BenUany 

BoUeyWR 

BHAGrp 

nine 

a%B 

Barney w 

Biogen 

Borne! 

Block Dig 

BMC EMM 

BoaonaiS 

Bob Evans 

Boole SB 

Boland 

Boson Bk 

Boston Tc 

BadyWA 

Brcncox 

Brian S 

BSBBncp 

BTEhlpng 

Buflab 

BUktartr 

Bun Bren 

BuahaaaR 

Btaertfig 


- B - 

00627 31 5 

B 986 12 

48 h 
006 13 113 21% 
024 3 20 14% 
16 582 26 

OX 11 3141 19 

040 8 574 15% 
080 14 302 24% 
052 16 112 34 

030 15 381 28 

080 13 246 25% 
130 13 603 56 

1.1G fi 168 30% 
22 206 9% 
042 34 3181115% 

13 22S 14% 

044 13 511 36% 
01217 52 12 

102 890 5% 
016 18 104 12 

008 15 287 14% 
558872 54% 
303158 12% 
134 11 18 31 

14 8687 46% 
1J6 106342 33% 
029 18 998 21% 

16 3 031 

134117 11% 
076 6 154 38% 
573407 13% 
038 19 28 48% 
024 28 268 12% 
028 184377 9% 
078 9 93 26% 
048 4 32 2% 

28 2818 18% 
21 703 12% 
38 232)111% 
64 25 34 

8 30 32 


IQ 5 

«% 11% ft 
d& h 
20 % 20 % 

14% 14% ft 
24% 25% ft 
18% 16% ft 

14% 15% ft 
24 24 -1% 

33% 33% 

27% 27% ft 
24% 24% -ft 
57% 57% ft 
29% 29% ft 
6% 9% 

14% 15% ft 
13% 14 ft 
36 36% 

11 12 ft 
4% 5% ft 
11% 11% 

13% 13% 

51 51% -6% 
11% 11% ft 
30% 30% 

45% 45% -1 

31% 31% -2% 
21% 21% ft 
31 31+1% 

11 11% ft 
37% 38 
12% 12% 

47 47% 

12 % 12 % 

8% 9% 

26 28% 

2% 3% 

17% 17% 

11 % 12 % 

10 % 10 % 

33 34 

31% 31% 


ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 


GTCC 
cam Mad 


265 161 
6 352 
CBdSdMps 030 17 176 
CadmusConlUO 21 232 


- C - 

26% 28% 
5% 5% 
30 29% 
18 17% 
9% 8% 
9% 9 

23 
1% 
3% 
1% 


475 4734 
2-25 51605 

21 301 24% 
1 1035 1% 
1 17 3% 
3 690 2% 


Caere Cp 
Calgana 
camera 
tadsBo 
OntataL 

Cndta . _ 

Canon toe OSZI21 05 67% 87% 

Canada 3 233 u6 5% 

tatamta 053 22 15 26% 26% 2B% 

Cascade 080 22 75 25 24 24 

Casey S 006 17 907 11% 11% 11% 

Mgena 5 354 7% 7 7% 

caicp 17 60 11% 11% 11% 

Cantacw B 5836 16% 16% 16% 

CM Rd x 1.12 12 490 32% 32 32% 

CntHSpr 20 138 11% 10 10% 


28% -2% 
5% ft 
29% ft 
17% ft 
ft +% 
9% ft 
23 -1 

1A 

3% ft 

1% ft 

B7% +1% 
5% ft 


-% 

ft 

ft 

ft 

ft 

-ft 

ft 

ft 


6 56 4% 4ft 4}l +/, 


_5_ 

Chapter 1 

OX 81606 22% 21% 21% 

-% 


Qnreti 

009 11 110W 

8 8% 0% 

-% 


Chontodi 

IB 4 

13 11%. 13+1% 

■2 

OwngmuBT 

13 noo 

3% 3% 3% 

ft 

± 

QkpoSTe 

91286 

4% 4% 4% 


ft 

CMranCp 

67 7580 

73 69% 09% -4,% 


OwiFKix 

IX 12 415 

54 52% 52% 

ft 


017 32 497 33% 33% 33% ft 
2934210 29% 27% 28 -1% 

125 544 2% 2% 2% 

1 427743 26% 25% 25iJ -A 
1JB 17 28 30% 29% 30% +% 

22 688 6% eS% 6% +% 
42 1212 12% 12 A 12 A -A 


CUtoQp 
OhusLgc 
OS Tech 
CtacoSys 
OzBancp 
CkmUr 
CHIs fir 
Ctofxntni 7 245 
taacdafl ijjo 17 31 
tataEngy 130 4ii 


Godatfam 
Conner Cp 

tawed 
OoBagan 
Cota Gas 
COW Op 

Com* 

CmeatA 


29 101 
31 IOC 
109 167 
18 416 
140 00 207 
126 13 100 
060 11 171 
024161070 
009 IB 47B 
009 47B1B4 
QraiMisrfLU 11 US 
Comma 0.70 95 T10 
tamnC 16 906 
QmprLatB 3SB 177 
tareltare 55 61 
CBoBtaW 36 640 
tafap 128 33 3 

tatttni 4 193 
omen SB 1598 
CnWOma 10 109 
tareA 050 21 378 
Copybta 35 297 
tatfsCS 23 2563 
Cap W A 45 2H 
OadarBx QJB 272779 
Cray tanp 1 nw 
Crown Bes 30 404 
Cytogn 22547 


4% 4% 
29 28% 
6% 8% 
11 % 11 % 
20 1ft 
12 11 % 
14% 14% 
22 % 22 % 
22 21 
30% 29% 
2ft 24 
16% 16% 
18% 18 
33% 32% 
18% 


ft 

2BA 

ft 

11% 

20 

12 

14% 

22% 

21% 

29% 

24 

16% 

16% 

32% 

16% 


25% 23% 23% -1% 


10 % 10 % 
12% 12 
3% 3% 
48% 48% 
ft 4% 
23% 23% 
7% 7% 
20 18% 
5 4% 
53% 52% 
17% 16% 
23% 22% 

1 A iA 

5 4% 
3% 3 


10% 

12% 

3% 

«% 

4% 

23% 

7% 

19% 

4j| +i« 

53% +1% 

16% ft 

23% -% 
1% 

4% ft 
3d +1*4 


ft 

-% 

ft 

ft 

ft 

-A 

ft 


DSC Cm 
DM Gnu 
DatoSwWi 


013 


DsfiitaOpxfifi 
Dab Shops 020 
DdfcAEii 032 
MotoGa 030 
Mdxanps 044 


-D- 

2018410 31% 
31 75 80% 

11 11 2 % 

29 64 7% 

14 184 15% 

15 535 27 

IB 45 6% 
24 534 18% 
45 518 30% 
11 33 21% 


30% 30% 
79 79% 
2% 2% 
B% 7 
15% 15% 

20 2B 
8% 6% 

15% 15 

29 li 30% 

21 21 % 


ft 

ft 


-1 

ft 

+% 

ft 


Mtaap 

MQQSSn 

amply 

[tap 6ry* 

Damn 

Oh Teen 

DUMB 

DlglM 

HgMtaro 

Dig Sound 

Dtasy* 

PtamCp 

DtxtaVm 

DNAFtart 
Data Bn 
QothHta 

DracnGngy 

Drenfian 

DreyGDA 

DrogBopo 

DS Bancor 

Doton 

Dorn 

Dynttaob 


pt A 

b. I ilk 

378263 
018 18 53 
03031 406 
1.12 6 79 
030 4 2 

17 13 
060 25 320 
14 123 
8 552 
501378 
25 427 
16 53 

020 45 106 
13127 
020 25 316 
068 14 251 
0 20 
11 1440 
024 22 092 

008 40 in 

1JH 16 IB 
04212 281 
0X24 
7 51 


Mph law 
38% X 
15% 15 

35% 36% 
32% 31% 
8% B% 
21 % 21 % 
20 1B% 
15% 15% 
15% 14% 
2% 1% 
7% 7% 
35% 35 
B 8% 
2% dS% 
25% 24% 
13% 13% 
9% 9% 
10 % 10 % 
25% 25% 
5* 4% 

28% 27% 
16% 16% 
32% 
22 % 21 % 


Las Qag 

38% -% 
15 

35% -1% 
31% -% 
B% 


21% 
a 

15% 

14% 

2 

7% 

35% ft 

eu 

2*2 ft 

25% 

13% -% 

ft 

10% -% 
25% -A 
4» ft 
28% ft 
16% +% 
32% 

22 ft 


bgtoM 

EaaalCp 


EQTai 

BPasoB 


BacWB 

EsmnAas 

Emdn 

BigyVtim 

EnrirSre 

Enron tac 

ErnayOK 
Ertc&nfl 
BMd 
Evens SDi 
Exabyte 


BddaBK 

Eroadll 

Ezcarptav 


Fed Ore 
FarCp 


2 51 3% 

21731 4% 

2 in 1% 

032 221413 18% 
229 403 7% 

1 905 I, 1 } 
15 463 15% 

aoe 51 zin 50% 
2D 6523 18 

15 775 5% 
840 ul 0% 
54 7 15% 

7B <0 2% 

3 882 2% 

010 Z1 963 U5*B 
0481487028 54 

183 8% 
57 13 12% 
25 5373 Ift 
9 18 7% 
15 512 21% 
010 24 410 21 

21 48 13 


3 3% 
4% 4% 

1ft 1ft 

17% 17% 
0% 8% 
1% 1 A 
15% 1ft 
50% 50% 
17% 17% 
84% S 
ft 9% 
15% 15% 
2A 2% 
2% 2% 
ft 5% 
5ft 53% 
6 6 
12 % 12 % 
18% 19% 
7% 7% 
20% 21% 
20% 2ft 

12% 13 


- F - 


REM 

HUlTlnl 

HKy Off 

BggtoA 

Rtanrt 

RratAm 

FsScONo 

FeCoBk 

FttSsctr 

tar Tern x 

Fkt wran 

Fstfullc 

nstbrx 

Radmlas 

Run 

Row tot 

RaodLA 

RxxU 

FuarenOl 

Fonxtner 

FdOar A 

FrthFta 

FMFUx 

FMHaarel 

FiflerHB 

RdtuAix 

Finn 

RdmcdAOR 


10 32 
024 X 134 
004 631070 

18 4078 
124 15 9 72 

14 556 
024 0 228 
331730 
084 B 500 
120 11 03 
OGO 20 330 
1JD4 11 1291 
12a 10 4328 
OX 7 55 
056 7 281 
1JM 8 22 
48 225 
27 271 

19 527 
009152236 
OOB575 1656 
106 10 173 

11 370 
33 28 

1JM12 104 
QAO 8 313 
1.1811 185 
DS 19 2450 
156 10 226 
034 22 01 
17 « 


4% d4>4 
7% ft 
40% 38% 
X 29 
53% 52% 
5% 4% 
ft 9 
24% 23% 
34% 34% 
25% 25% 
23* 22% 
30% 29% 
45% 44% 
ft 9% 
25% 24% 
33% S3 
8% 8% 
22 % 21 % 
7% 6% 
5% 5% 
6 d5% 
32% 31% 
12% 11% 
3 3 

30% 29% 
16% 16% 
29% 20% 
32428% 
21 3D 
18% 17% 

ft 2 % 


4% 

6% 

39% 

29% 

53% 

ft 

9 
23% 

34% 

26% 

22% 

29% 

45 

ft 

25 
33 
8% 

22% 

6% 

5% 

5% 

32% 

11% 

3 

X% +ft 
15% 

28% +% 
X -1% 
3D -% 
17% +% 
2% +% 


OltaP 

GBKSarvx 

Butane 

Garnet Rd 

GaldCb 

Gaol Bind 

Gertyre 

GenaWb 

GartuCp 

Snake 

Ganzyina 

Qfcoon Gt 

Bddtogd. 

BtoetA 

OxbBkxn 

Good Guys 

BMddsPmp 

Gradco&ya 

Gnmlb 

tanAP 

OrnKto Pti 


G - 

17 4% 


7 15% 
12 2 % 
54 3% 
34 ft 
B5 19% 
76 5% 
9% 
24 
5 
X 


am mr 
GT1 Cop 
GDNYSvg 


ttantogA 
Mtovyvlx 
taper Gp 

noocp 


7 

007 23 
0 
11 

016143 
040 X 
7D 

310709 
4JJ0 X 685 
154 448 
682850 
040 22 1501 17% 
012 14 510B 19 

OX 15 31 14 

11 87 ft 
15 845 13 

ax x 201 22A 

312 46 3% 
020 60 24 21% 

024 10 Z7 17% 
D 814 JJ 
0 674 2% 
643 62 13 

11 344 1ft 
B 796 10 


19 

ft 


3% 4% ♦% 
15% 15% 

2% 2% 

<Q% 3% 
ft 5% 

19 - 1 % 
5% +% 
B% B% -% 
23% 23% -% 
4% 4% -% 
38% 3ft -1 
16% 17 +% 

1ft 18% 

14 14 -% 

5 ft +% 
12% 12% -1 
22 % 22 % 

3 3% +% 

20 % 20 % 

17% 17% -% 

A ii +/< 
2% 2% 

12 % 12 % +% 
1ft 1ft -1 

9% 10 


- H - 


HaeBhcre 

Hedtayn 

Haddngar 


riekriiroy 
Hot* 
Hogan S» 


taut Beni 
Hon tads 
tanked 


tadX 
Hntigni 
taco Da 
Hutotmecb 
taco-Bto 


HlSyi 

DO Comma 
IS total 

knfliuca 


u e 

086 B X 
D2D 13 386 
018 27 1047 
3D 1416 
006 3D 71 
11 803 
015 25 2543 
476 
B 306 
072 12 2567 
015 X 713 
70 686 
OX 82100 
044 17 1589 
14 858 
044443 IX 
OX 171772 
OX 8 3238 
008 1 113 
155 987 
18 62 


6% 5% 
25% 24% 
14% 14% 
32% X 
29% 2ft 
12 % 12 % 
7% 7% 
1ft 14% 
11 1ft 
14% 14% 
20% 1ft 
6% 6% 
16% 15% 
20% 20% 
25 024 
12 % 12 % 
4% 4% 
17%01B% 
X% 19% 
3% 3 

26% Z7% 
4% 4% 


ft +% 


24% -% 
14% -% 
32% 

39 -% 
12% 

7% -% 
15 +% 
10% -% 
14% -% 
18% -1% 
G% 

15% -% 

20% 

24% 

12% ft 

V. -A 

17% 

19% -% 
3% +% 
X -% 
4% -% 


knpsIBc 
Mb 
hi Has 


hfesMK 

kitegrftar 


InpH 

hH 

Hal 

MgrtS 

WerTd 

HMcaA 

kdgph 

wertert 

kbSH 


UltayOA 

MRU 

MTOM 

Bmeos 

kmegaDi 

banadx 

teYokada 


40 33 7 06% ft 

X 7561 9% B% 9 -A 

4 385 4% 4% 4% 
XX G ft 5 +% 

2 280 4% 4% 4% ft 

040 X 94 17% 17 17% ft 

024106 37 13%613% 13% +% 

15 3304 13% 12% 12% -% 

2727188 23% 22% 33 *A 

055 15 151 11% 11% »% ft 
X9153 23% 23% 28% -% 
31 38u13% 13 13 

8 173 2A 2A 2% -A 
024 1238250 67% 66 66 -1% 

8 45 2% 2 2% ft 

040 X 352S 17% 17% 17% -% 
X 3S3 9% 8 8%-% 

0» 17 31 13% 13 13 ■% 

31207 9% 8% 8% -% 
41675 4% 4% 4% 

5 212 12% 12 12% 

24 3243 13% 1ft 1ft -% 
14 74 17% 17 17 

002 17 11 2% (0% 2% 

275 19 S% 5% 5% 

005 X 378 31 X 30 ■% 
2 544 3% ft 3% -% 

16 112 18 17% 17% 

IX Xd00212%212%212% +2% 


- J- 


JUBnadt 

14 

21 12ft 12% 12% 


Jason toe 

OX 13 

289 B 8% 8% 

ft 

AG kid 

OIO 33 229 41 X% 38% 

-Z% 

Johnson n 

81 

44 24% 24% 24% 


Jones kit 

It 

235 14jJ 14% 14% 


Jons Med mio 12 

181 7% 7% 7% 

+% 

JodynCp 

IX 14 

116 30% X% X 

ft 

JSOfti 

OX 17 

63 27 26% 26% 


JnooUga 

ax is 

X 18% 18% 11% 

ft 

Jitabn 

aiB 9 246 12% 12 12% 



Dock oo E into ipa law im Ch« 

- K - 

X States 005 12 177 22% 22 22% -% 

UreanCp 044 5 211 9% 9% ft 

KedoyQD 3 741 ft S ft 

XeSySv 072S 211 31 30% 31 

Kertucfcy 011 10 10 6% ft 6% 

KOTadx 084 13 X 23% 23% 23% ft 

Ktodmer 21 106 10% 10% ift 

KLAHSO 577323 52 50 50% -1% 

Knowtodot 2 232 3% ft ft -% 

MA 0 X % % % 

Komag he 214 2227 25 23% 23% -l% 

KutduiS 10 655 16% 1ft 1ft ft 


- L - 

Latione 0.72 24 ID ift 19% 19% 

LaOORim 012 X1065 7 ft ft 

LtonRseii 44X14 39% 3B% X% 
Lancaster 048 15 isa 35% 34% 35% 
Lance Ik 096 18 514 19 16% 18% 

Launk&pn & 3X alt 22% 22% 
lonopbB 11 57 9% B% 8% 
Lasuacpe 27 277 4% 4 4% 

LamcaS 161297 lfl 19% 18% 
LawOTlPr 048 IB 171 SS% Z5% 25% 
LOOS 315 971B 22% 21% &A 

LOCO 018 1 221 5% 5 5 

Lactam 19 275 16 15% 15% 

LegeUCp 152471 25% 24% 24% 
ure Ted) x OX 17 Xui9% 18% 18% 
UUna X 79 4% 4% 4% 

LOyktoA « OJS 12 117 12% 12% 12% 
IX 540 138% IX IX 
052 15 23S 15% 15% 15% 

13 XI 31 29% X% 
024 37 4054 47 45% 45% 

040 17 17 35 34% 34% 

Laewen Gp 008 X 103 24% 24 24% 

Law Star 9 204 ft 8% ft 

LOtUSO 3223780 42 40% 40% 

UK Cp 3 2385 4% 4% 4% 

UAH Q7G 4 4 33% 33% 33% 


Lh Sr 
Uncoil T 
UndssyM 
UnewTec 


MO Cm 005 2119273 24% 
tSCsr'S 21 235 23% 

Hoc MB 0X45 1S7 1ft 

IX 14 39 33% 

1622499 u35% 
Gip 076 13 344 21 

Met Bax 13 356 ft 

MaicanCp X 438 9% 

MutaaDr 12 484 4% 

MaitalCo B 35 42 

Marques 2X1% 
Martath 19 178 9 

ManhSudiAO/U u 40 11% 

MtaSol OX 11 1509 X% 

MaSBC 9 167 8% 

Maxim ht 40 1525 63% 

Maxtor Co 0131B 5 

McbaBl R 044 12 15 16% 
McOaradc 048 15 18X 16% 
McCanC 177 5003H5V4 

MedBtacx016 18 154 14 

MBlCtwG 048 14 112 35 

034 71 137 10 

CP 018 54 734 16% 
Men&G 024X1421 1ft 
MananLB x OX 12 851 X% 
Mercuy GzCLX 8 294 28% 
Maridbn 1 36 M 3362 30% 
Merkel 102546 10% 

MettodeA 012 19 110 19% 
MFSCm 36 3300 38% 

MkftaalF OX 1914X 12% 
WchHSB 2X3X 503 75% 


MCTOHIh 

Mcreaoe 

Mlcrocom 

Mcnpalx 

MctpoBa 

IflcSt 

MdMM 

MMndc 


8 158 3% 
11 1813 14% 
E 068 B 
11 161 ft 
213X 7 

1625354 57% 
24 7196 2ft 
052 11 3747 29% 


MhtoGraki 050 22 84 26% 
ixerK aa 17 202 2«% 
Mtann 2303 24% 

MnM 21 233 16% 

MdUbTbI 52 3821 22% 

Modem Co OX 18 108 7% 
Marine Uf OS 19 274 77% 
Motex 004 781 40 

Mobx toe 004 32 508 4ft 
Mbchii 004 15 1122 77 ( 
MostoeeP 036 24 9 32% 

MrCofloo 18 197 15A 

ITTSSys 056 10 X 24% 
Mbaud 132163 30% 

Mycogen 4 225 10% 


X% X% 

X x% 

14% 15 

33 33 

33% 34% 
2ft 20% 
B ft 
8% 0 
ft 

41 41% 
01% 1% 
8% 8% 
11% 11% 
X% 20% 

ft BA 
80% 61 
4% 5 

15% 18% 

1ft 18% 

5«%S50S 

13% 14 

24% 24% 

0% 9% 
1ft 16% 
10 10 
22 % 22h 
20% 2ft 
X 3ft 
1ft 1ft 

19 19% 
34% 35 

11 % 11 % 

74% 74% 

2ti %>< 

14% 14% 
7% 7% 
5% ft 
ft 6% 

5615 86 

27% 27% 
X% 29% 
27% Z7% 
24% 24% 
23% 23% 
15% 15% 
20% 21 
7% 7% 
X% 27 
38% 39% 
42% 42% 
7% 7% 
31% 32% 
15% 15% 
24% 24% 
29% 30 
10 10 


-1% 


•% 

-% 

■A 

-% 

■ft 

-% 

*% 

.1% 


-% 

-i% 


-■7% 

ft 

+% 

■% 

-% 


ft 

-ft 

-2% 

+% 

+% 

+li 

-% 

ft 

ft 

ft 

+% 

ft 

-A 

•% 

-i% 

-% 

ft 

+A 

ft 

ft 

+% 

-A 

ft 

-i% 

ft 

•i% 

ft 

-.08 

-1% 

ft 

ft 

-1% 

ft 

ft 

+% 

+% 

-ii 

ft 


NACM 
nab (neb 
NnlCompt 
WiSui 


ICC 

NeJfcar 

NetwkGen 


taiogan 


NavCBua 
Image 
MHdgtflet 
NewprtCp 

NoUrDrt 


Hifehni 

I 

U n 
Korttn’nd 
Mitt 
Noul 
Nowtue 
NPC A 
NSC Carp 


016 11 260 27 26% 

072 11 TO 17% 10% 
0X118 457 14% 14 

OXX 10 13% 13% 
000 11 X 16% 17% 
043103 11 60% 59% 
18 739 X% 28% 
25 3980 10% 17% 
1171040 6% 6% 
7 39 5% 5 

027 X 671 u35% 35 

080 21 2 16% 18% 
171 575 13% 13% 
X 461 34% 33% 
004 21 124 u8% 7% 
21 7853 7% 6% 
056 Z7 198 60 58% 

040 35 3772 44% 42% 
14 E6 19 19 

4 X 5% 5% 
OX 12 1X4 38% 37% 
1B4B57 1911 18A 
75026252 15% 15 

41 4221 45% 43% 
38 6% 6% 
7 70 27g 2% 


26% 

16% 

14ft 

T3% 

17% 


ft 
-A 
ft 
ft 
60% +1% 


20% 

18% 


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36 


WORLD STOCK MARKETS 


FINANCIAL TIMES 


Wednesday September 21 1994 


AMERICA 

Widening trade 
deficit pushes 
Dow lower 


Wall Street 


US equity investors reacted 
badly yesterday morning to 
news of a widening US trade 
gap, writes Frank McGurty in 
Sew York. 

By I pm. the Dow Jones 
Industrial Average was 41.05 
lower at 3,595.67. its lowest 
level of the session. The sell-off 
was not confined to the blue 
chips. The Standard & Poor's 
500 was down 4.37 to 466.48, 
reflecting the broad base of the 
retreat. Declining issues on the 
Big Board swamped advances 
by a four-to-one margin. 

NYSE volume was fairly 
heavy*, with 187m shares traded 
by early afternoon. 

In the secondary markets, 
the American SE composite 
was off 1.77 to 459 j 36, while the 
Nasdaq composite was down 
7.32 at 769.40. 

The Commerce Department's 
announcement carried nega- 
tive implications in two 
respects. First, the overall 
trade deficit was reported to 
have increased to $llbn in 
July, against expectations of 
S9.5bn. Investors feared the 
yawning gap could complicate 
forthcoming US-Japanese trade 
talks, putting more pressure on 
the dollar and the bond mar- 
ket. 

Second, the July increase 
came in spite of a downturn in 
exports, which suggested the 
possibility that overseas mar- 
kets were becoming less fertile 
ground for US companies. 
Unfortunately, the bond mar- 
ket chose to ignore this aspect 
of the trade report, which may 
have buoyed sentiment among 
fixed-rate traders looking for 
any signs of economic weak- 
ness. By midday, government 
securities were showing mod- 
erate losses. 

But the depressed mood in 
both stocks and bonds proba- 
bly had less to do with trade 
than with the growing belief 
that another move to tighter 
credit conditions was immi- 
nent. Yesterday’s data served 
to draw the underlying pessi- 
mism to the surface. 


ft was certainly evident in 
the performance of the bine 
chips during the morning. As 
the afternoon began, only 
three of the 30 Dow industrials 
were showing fractional gains, 
with one issue unchanged. 

The rest were showing only 
slim losses, which brought a 
solid loss to the Dow index 
when added together. 

The most actively moving 
stocks were found elsewhere. 
In semiconductors. Micron 
Technology lost $% to $38% in 
heavy volume of 3m shares 
after Gol dman Sachs removed 
the issue From its recom- 
mended list In computers. Dig- 
ital appreciated $1 to $27% in a 
continuing reaction to an 
upgrading by Cowen& Com- 
pany. 

Shares in National Medical 
Enterprises, a leading hospital 
group, fell $1% to $17% on a 
report that it was close to 
acquiring American Medical 
and Healthtrust to create the 
second biggest US hospital 
c hain 

However. American, up $% 
to $23%, said it was also in 
talks with other possible part- 
ners. Healthtrust climbed $1% 
to $32% on the news. 

Rate-sensitive banking 
stocks were among the hardest 
hit of the session. Bankers 
Trust was down $1% to $60% 
and NationsBank fell $1% 
$49%. 

On the Nasdaq, Lotus Devel- 
opment dropped $1% to $41. 
and Chiron, the biotechnology 
concern, shed S2£ to $70%. 


Canada 


Toronto was sharply lower in 
active midday trading as a 
tumbling US bond market and 
profit-taking shook equities. 

The TSE 300 composite index 
dropped 43.98 or 1.0 per cent, to 
•1391.98 in heavy turnover of 
36J)9m shares. 

Of the 14 sub indices, only 
precious metals remained 
ahead, supported by rising 
futures prices. Real estate and 
construction fell by 22 per cent 
while rate sensitive financial 
services was 1.7 per cent lower. 


Caracas at new high 


Shares climbed on the Caracas 
stock exchange with the Mer- 
iuvest composite index closing 
at a new year high of 155.38, in 
spite of slipping back from lev- 
els reached early in the ses- 
sion, agencies report. 

The index climbed 2.9 per 
ceut. following a 2.2 per cent 
gain on Monday. 

Brokers said that the market 
was being driven by foreign 
investors, who were purchas- 
ing ADR's in New York. How- 
ever. turnover remained low 

Bullion gains 

The breakthrogh of the bullion 
price through key resistance 
levels took gold stocks and 
mining shares higher, while 
the gold index rose more than 
3 per cent or 79 to 2,435 by the 
close. 

Shrugging off a firm finan- 
cial rand, gold shares rose in 
early trade in line with the 
gold price through $392 an 
ounce, levelling off as the 
metal consolidated for a few 
hours, and then continued 
upwards as gold made a late 
break through $395 before slip- 
ping back to around $393/94 by 
the close. 


yesterday, at 218m bolivars 
($I.3m). 


Brazil 


Shares in Sao Paulo were off 
1.7 per cent in light early trade. 
The Bovespa index was down 
890 at 52,028 in low volume of 
R$S3m ($97 -3m). 

The president of the 
exchange said the stock mar- 
ket was expected to enter a vol- 
atile phase ahead of the presi- 
dential election on October 3. 


lift golds 

Traders said that they expec- 
ted gold to regroup at the new 
higher level of above $392 or 
$395. and said they did not 
expect it to advance on $400 in 
the short term. 

The overall index made 36 to 
5.801 and the industrial index 
shed 15 to 6.438. 

De Beers added R1.25 to 
R 1.06.50, and Anglos R4.50 to 
R242.50. 

Golds made large gains with 
Loraine adding R2.25 to R25.50 
. Oryx rising 50 cents to R6.10 
and Kloof R2.75 to R70. Gold 
Fields was R5 higher at 
R130. 


EUROPE 

Continent turns lower in wake of US figures 


FT-SE Actuanes Share Indices 


Sep 20 
Haul) changes 


Open 1030 1 1 .00 1200 


THE EUROPEAN SERES 
13.00 1400 . ISA) Dose 


fT-SE Eanwacfc 103 

FT-SE Emm* 200 


1 348. S3 1317.58 1345.13 1345*0 134857 134185 134457 134233 

1 396. B0 1334 SI 1391.99 1332.12 139191 1389*8 1 38580 1386.74 


Sep «» Sep 18 Sep 15 Sep 14 Sep <3 

FT-SE Bran* 100 135836 135181 136854 13S0SB 136741 

FT-SE Guratrack 200 1404 55 1*06.26 141084 1401-55 1412.44 

Bat 1000 (2VW9Q; MBMW 100 - 134M5. 200-131701 IMBr 100 - IW 5» 3)0 • 138U? T I*** 


After a generally positive 
morning session bourses 
turned negative following the 
release of disappointing US 
trade figures. 

Hie lack of an announce- 
ment on German M3 data also 
left many investors in a hold- 
ing pattern. The figures are 
due this week - possibly today. 
Analysts have been expecting 
an M3 figure of around &A per 
cent to 9.0 per cent from 9.8 per 
cent in July, but there were 
worries yesterday that the fig- 
u re co uld be worse. 

ZURICH fell in the wake of 
the US data as the weaker dol- 
lar put pressure on dollar earn- 
ers and index heavyweights. 
The SMI index finished 28.7, or 
1.1 per cent, lower at 2^S83-Q. 

Kleinwort Benson, however, 
has raised its recommendation 
on the market from under- 
weight to overweight, citing 
rising expectations of better 
earnings prospects for the 
banks and pharmaceutical 
stocks combined with a more 
defensive trend in equity 
Investment towards the end of 
the year. It argued that the 
save haven qualities and 
liquidity of the market would 
outweigh currency concerns 
through to the end of 1984. 

CS Holding fell SFrl6 to 
SFi548 after the group said it 
was making a takeover bid for 
the Swiss regional Neue Aar- 


gauer Bank, which was 
marked 5Fr40 lower to 
SFrl.970. UBS, which has a 
stake of about 12 per cent in 
Neue Aaigauer, saw its bearers 
slip SFr7 to SFrl.133. 

Nestle gave up SFrl2 to 
SFri.201 on futures related sell- 
ing. Ciba registered clipped 
SFrJ5 lower to SPrTEL 

Registered shares in Swissair 
fell SFr35 or 4.1 per cent to 
SFr8l5 after the company 
announced a bigger than 
expected first half net loss of 
SFr48m. Forecasts bad ranged 
between a loss of SFr25m and a 
profit of SFrS5uL 

FRANKFURT was pushed 
and pulled by the bond market, 
then dragged down further by 
the US data which hit Ibis trad- 
ing.The Dax index closed the 
official session off 17.8 at 
2.07196, falling to 2,059.15 in 
the afternoon session. 

Turnover was DM6bn. 

Holzmann and Hochtief still 
featured following Monday’s 
stake building by the latter 
and the publication of some 
buy recommendations. Holz- 
mann rose DM41 to DM923, 
while Hochtief gained DM4 to 
DM1,034 and RWE, the parent 
company, slipped DMl to 
DM458. In late trading Hochtief 
picked up DM2 to DMl, 035 and 
RWE weakened further to 
DM455. 

Car stocks were weaker with 


Mtehelbi 


Sure price and Index rebased 
130 



Volkswagen off DM8.7 to 
DM449. drifting to DM446£0 in 
the post, Daimler DM10 to 
DM7S3 and then to DM780,and 
BMW DM12 lower at DM780. 

PARIS recovered wen from 
the session low as the CAC-40 
index settled off 3.62 at L9 19.25, 
after seeing 1.89L 

The day’s main news was 
Michelin, up FFrL5 at FFr236, 
just below a session high of 
FFr237. as the tyre manufac- 
turer announced a healthy first 
half profit of FFr314m, which 
was slightly lower than expec- 
tations, with some analysts 
looking at a figure of FFrSOOm . 

The company said that cost 
cutting was now its top prior- 
ity, with the full effects of such 


measures likely to come 
through in 1996. 

MILAN was easier after a 
subdued session which took its 
lead from other bourses and 
the bond markets as Investors 
awaited the outcome of Mr Sil- 
vio Berlusconi’s meeting with 
unions tomorrow aimed at 
reaching accord on pension 
cuts. The Comit index fell 1.10 
to 673.43. 

Alleanza, the life insurer 
controlled by Generali, jumped 
L302 or L9 per cent to 16,582 
after reporting a 44-5 per cent 
rise in first half profit Other 
insurers were helped ahead by 
the news, Generali finishing 
L33 higher at L39.676, after a 
low of L39.300. and Fondiaria 
rising L230 to L11.715. with 
news of its return to profit 
coming after the market 
closed. 

Telecommunications issues 
were hurt by rumours that a 
large investment fund was 
pulling out of the sector. Stet 


Tell L2l to L4.630 and Telecom 
Italia was L52 lower at L4.280. 

MADRID fell as bonds 
dipped and foreign bourses reg- 
istered losses- The general 
index gave up 3.71 or 1.2 per 
cent to 296.72 in relatively high 
turnover of Pta24bn as the 
market looked ahead to today's 
one year T-bill auction at 
which yields are expected to 
rise by between five and 10 
basis points. 

Electrical shares were 
among the day’s biggest losers 
with Iberdrola down PtalO or 
1.2 per cent at Pta813 and End- 
esa falling Ptal20 or 22 per 
cent to Pta5,400. 

AMSTERDAM was driven 
lower by the effects of weak- 
ness elsewhere on the conti- 
nent. leaving the AEX index 
off 5^4 at 401.55. 

STOCKHOLM was upset by 
the same problems besetting 
the other continental markets, 
although domestic Investors 
were still taking stock of the 


weekend’s general election. 
The Affdrsvarlden general 
index fell 10.3 to 1.43&8. 

In a note on the election 
James Capel remarked that in 
the short term volatility was 
likely, but that c almer condi- 
tions were probable by the 
turn or the year. 

COPENHAGEN was easier 
ahead of today's genual elec- 
tion, the KFX index losing 0.17 
to 9&99. 

ISTANBUL rebounded 49 per 
cent after the prime minister, 
Mrs Tansu Ciller, acted to ease 
political uncertainty by calling 
a by-election, and remarked 
that privatisation remained 
high on her agenda. 

The composite index, which 
lost 3.8 per cent on Monday, 
regained U23U6 to 2W0&3S as 
Mrs Ciller shrugged off 
rumours of a possible crack in 
her three-year-old coalition 
government, adding that the 
austerity* programme would 
not be replaced by election, 
spending. • - 

WARSAW fell 3.4 per Cent 
after the government 
announced plans to press 
ahead with long heralded plans 
for a stock market transaction 
tax from the beginning of next 
year. The Wig index lost 322.4 
to 9,290.7. 


Written and etfled by John Pitt 
and Michael Morgan 


ASIA PACIFIC 

Nikkei average rises for the first time in four days 


Tokyo 

Broad based baying by public 
funds supported share prices 
and the Nikkei index gained 
1.4 per cent, rising for the first 
time in four trading days, 
writes Emiko Terazono in 
Tokyo 

The Nikkei index rose 283.16 
to 19.837.27 after a low of 
19,601.72 and a high of 
19,842.17. Public postal and 
pension hinds supported prices 
in early trading followed by 
late afternoon arbitrage buying 
which countered selling by cor- 
porate investors looking to 
boost earnings ahead or the 
interim book closing. Foreign 
investors were also seen pur- 
chasing car stocks. 

Volume totaled 342m shares 
against 257m. The Topix index 
of all first section stocks rose 
19.43 to 1,581.11 while the Nik- 
kei 300 gained 3^8 to 28856- 
Gainers led declines by 821 to 
227, with 126 issues remaining 
unchanged. 

In London, the ISE/Nikkei 50 
feU 3.47 to 1.299.U. 

In spite of the rise, traders 
said that concerns over the 
currency market still affected 
investor confidence. “A possi- 
ble breakdown in US-Japan 
trade talks and higher infla- 
tionary data out of the US 
could push the yen higher,™ 
said a Japanese brokerage. The 
Bank of Japan was seen 
heavily intervening on the 
Tokyo foreign exchange mar- 
ket yesterday. 

Telecommunication stocks, 
recently battered by heavy sell- 
ing, gained - Nippon Tele- 
graph and Telephone recovered 
Y10.000 to Y898.000 and Japan 
Telecom, a second section 
stock and the direct trigger of 
the recent decline in investor 
confidence, gained Y40.000 to 
Y4.17m. 

Banks, which had fallen 
sharply on Monday on profit- 
taking ahead of the September 
end book closing, regained 
some ground. Industrial Bank 
of Japan added Y30 to Y3.030 
and Fuji Bank Y30 to Y2.080. 

Car stocks were bought by 
overseas investors. Nissan 
Motor added Y33 to Y818 on 
buying by a Hong Kong based 
fund. Toyota Motor rose Y20 to 


Jwdhie Matheson 


Share price and index rebased 



Y 1,980 and Honda Motor added 
Y60 to Y1.670. 

Steel makers were actively 
traded. Nippon Steel the most 
active issue of the day, rose Y7 
to Y385 and Kawasaki Steel 
Yll to Y433. 

In Osaka, the OSE average 
put on 166.08 to 21J981.61 in vol- 
ume of 24K5ni shares. Gains in 
the retail and drug sectors sup- 
ported the index. 

Roundup 


The region showed a lack of 
opportunities yesterday. Seoul 
and Taiwan were closed for 
public holidays. 

HONG KONG finished 
slight ly firmer after a day of 
featureless trade as investors 
held back ahead of today’s the 
mid-autumn festival 

The Hang Seng index added 
23.32 to 9,824.75, having fallen 
below 9,000 briefly in the after- 
noon. Turnover was a thin 
HK$3.1bn against Monday’s 
HK$3.05bn. 

Continued selling of Jardfne 
Matheson pushed it down 
HK$3.00 to HKS69 while Hong- 
kong Land fell 35 cents to 
HK$19.50. 

Speculative buying was seen, 
however, in shares that might 
join the Hang Seng index next 
year when the Jardine compa- 
nies delist from the Hong Kong 
market Amoy Properties was 
up 30 cents to HE$10.75 and 
Henderson Investment 
advanced 17 .50 cents to 
HK$7.475. 

KUALA LUMPUR was sup- 
ported by speculative demand, 
fuelled by revived hopes of an 


early election and various cor- 
porate rumours, and the com- 
posite index rose 4.99 to 
1,185.65. 

MBf Capital jumped 56 cents 
to MS3.98 in very heavy vol- 
ume of 45m shares amid 
rumours that a prominent 
businessman was about to 
begin negotiations to take over 
the company. Its holding com- 
pany, MBf Holdings, rose 40 
cents to MS2.5I. 

SINGAPORE saw index- 
linked stocks put in a strong 
performance with gains in sev- 
eral key stocks sending the 
Straits Times Industrials index 
up 24.36 to a day’s high of 
2^96.21. 

Most of the other Singapore 
shares were neglected while 
trading in over the counter 
Malaysian shares took the 


larger slice of the market’s 
activity. 

close as the market entered 
deeper into a consolidation 
phase. The composite index 
lost 16.02 to 2,920.19. 

Volume surged to 3.1bn 
shares valued at 1.42bn pesos 
from 2.38 bn worth 1.28bn 
pesos. 

Heavy selling was seen in a 
number of issues as investors 
took profits: Metropolitan 
Bank & Trust lost 4.2 per cent 
to 795 pesos from 830 pesos. Oil 
refiner Petron lost 3.45 per cent 
to 21 pesos. 

PLDT dropped 1.6 per cent to 
L540 pesos, following its over- 
night decline in New York. 

SYDNEY fell back in a dull 
session, pulled down by a 
decline on the futures market 

The All Ordinaries index lost 


4.0 to 2,045.1. off its day’s high 
of 2,0583. 

The September futures con- 
tract dropped 6 to2,032. 

Tumover was A$474.3m, in 
volume of 188.7m shares. 

Gold moved against the 
timid, with the index adding 
49.1 or 22 per cent to ‘i26X9 as 
the bullion price firmed. 
Homestake Gold rose ISCents 
to A$L90 and Poseidon Gold 
rose 16 cents to A$3.66. 

News Corp fell 19 cents to 
A$S.45, with John Fairfax 
down 4 cents at AJ2.71. 

CBA fell 7 cents to AS7.30, 
with Westpac down 5 cents to 
A$4.32 and NAB falling 16 
cents to AS10.26. 

ANZ rose 1 cent to A$4.01. • 

WELLINGTON was easier, 
led by falls in Telecom and 
Carter Holt 


The NZSE-40 capital index 
closed at 2,087.32, down 1845. 
Telecom was 10 cents lower at 
NZ$5.10, Carter of 8 emits at 
NZ$345. 

Fletcher gained 2 cents to 
NZ$4.44. but volume was heavy 
at nearly 2m shares. 

BOMBAY fell sharply amid 
heavy speculative selling, as 
investors booked profits ahead 
of tomorrow’s close of the fort- 
nightly trading account. The 
BSE 30-share index fell 65.41 or 
1.4 per cent to 4.48&S8 in the 
absence of any demand from 
foreign institutional investors. 

KARACHI found institu- 
tional support and buying in 
select financials although an 
anti-government strike clouded 
sentiment. The KSE 100-share 
index rose Z53 in thin trading 
to close at 23)6-86- 



Liquid 

LilTe 


dRt£b;lND(CESH 





In futures and options, you're not solid unless you’re liquid. 


Jomiiv «™pW bv 77 k> Financial 71 man Ltd.. Goldman. Sachs 3 Co. and FtatWsat SeorWos ltd. in ccnjuncSan ntHh tfw Institute at AOumies anti the Fact tty at Actuaries 
NATIONAL AND 

REGIONAL MARKETS MONOAY SEPlfcM BER 18 1994 FWDAV SEPTEMBER 16 1994 DOLLAR MDEX 


Figures in (uremrieads 

US 

Oav'a 

Pouid 



Local 

Irvul 

Gross 

US 

Pouxl 



Local 



Year 

nuirtMT of lines 

Do 

Chnngo 

Stirling 

Yen 

DM 

Currency 

W eftg 

Dtv. 

Defer 

Stsrfng 

Yan 

DM Currency 52 week 52 wseK 


of sloe* 

Indajk 

«(■ 

Indax 

Indax 

Indox 

hdn 

on day 

Yield 

Index 

Index 

Indax 

Index 

Index 

»ah 

Low 

(appraxj 

Australia 1681 

. 17426 

-0.5 

164 78 

108.79 

140.68 

15574 

-05 

3.56 

175.13 

163.92 

109.44 

•140.00 

15056 

189.15 

141.14 

141*8 

Austria (in .. 

_. 108.98 

-1.1 

170.70 

117.98 

152.56 

152.56 

-02 

1-05 

191.17 

17092 

119.45 

152.81 

152*4 

198^ 

164.04 

172*0 

6c“jium OD 

163.31 

-1.5 

160.10 

105.70 

136 88 

133.43 

-09 

4.14 

171.94 

18033 

107.44 

137.45 

134.10 

177.04 

143.02 

15040 

Carujflj 1UM1 .. 

140X5 

0.7 

132.52 

87 56 

113.22 

137.24 

0.8 

345 

13926 

13034 

87.02 

111*2 

136.18 

145*1 

120.04 

123.7S 

Ocnmart (231 

.... 254.81 

-0.9 

2-UJ.95 

159.08 

205.70 

211.93 

-0.1 

1.40 

257.11 

24066 

16066 

205*3 

212.05 

275.79 

223*4 

23061 

Fcland l?4). . . 

. .177 11 

-1.3 

107.48 

110.57 

142.99 

18397 

-08 

0.77 

179:48 

187.99 

112.15 

143.47 

185.46 

181.70 

104*8 

107.00 

France 197 J 

169 J2 

-1.1 

180.11 

105.71 

136.68 

140 89 

-ai 

3.12 

171.14 

16018 

106.94 

138*0 

141.10 

185 37 

15034 

16070 

Oeimjny |S0! 

.... 143.37 

-1.9 

135.57 

09.51 

115.74 

115.74 

-19 

1.78 

14021 

138-85 

91 J7 

11088 

11080 

15040 

124*9 

127*5 

Hong F<mq(561 

.... 404.03 

-1.4 

382.05 

252.24 

326.18 

400.82 

-1.4 

306 

40991 

383.57 

25009 

327.00 

406*5 

508*6 

292*8 

293*2 

IrdmJ (1*1 ........... 

.213 79 

0-2 

202.16 

133.47 

172.59 

19376 

05 

329 

21329 

199.63 

13028 

17050 

192.76 

216*0 

161*4 

187.91 

tfjfv (59). 

..... 82-7 

-1 i 

7780 

5f.3S 

68.42 

96.36 

-02 

1.S1 

83.18 

77.88 

51.98 

6850 

aens 

97.78 

5700 

74.se 

Jflpjn (469i.. _ 

158.0) 

-0.0 

143.49 

38.70 

127.63 

98-70 

-09 

0.78 

159 43 

148^2 

99.62 

127.45 

99.82 

17010 

124*4 

15098 

MiLiVTJd (97) 

....589.82 

0 1 

557.74 

36023 

47ai7 

560.62 

ai 

143 

589.35 

55161 

368^7 

471.12 

579*7 

621.63 

382.03 

399.77 

Mevco (181 .. 

.. 2336.46 

0.0 

2209.34 

1458.07 

1886.18 

8679.14 

ao 

1.18 

2336.46 

218082 

145038 

1067.71 

8079.14 

2047*8 

1016.11 

1689*0 

Noffwftmd i2h 

211.9? 

-13 

200.40 

132.31 

171.09 

16836 

-09 

342 

21493 

200 as 

134.12 

171*7 

16091 

21019 

18025 

182*2 

Mew JeaUi»J 114) 

..73 67 

-0.2 

69.86 

4599 

5947 

64.01 

-ai 


73.83 

ra.io 

4013 

59.02 

64*8 

77*9 

58*2 

60.14 

tvorv- vr, 

. 195 08 

-1.5 

184.47 

121.79 

157.49 

18030 

-05 

1.83 

19300 

18502 

12073 

158*8 

181*6 

211.74 

165*2 

173.07 

S#14MK»0|44) . — 

..367.82 

-0.3 

347.81 

229.64 

296.94 

25097 

-0.5 

1.68 

369.03 

345.38 

23060 

295.00 

25020 

378*2 

285.31 


South Afnca |59) 

.... 300.24 

-1.4 

2S9S7 

191.19 

247.22 

294.84 

-1.4 

2-17 

31045 

29057 

ISO 99 

24017 

298*0 

314*4 

184*9 

199.46 

Sp.nn W2I 

... 140-09 

-1.0 

132.40 

87.46 

113.09 

136.66 

-ai 

422 

141.45 

132.39 

8039 

11307 

13088 

155.79 

126.88 

137.84 

Sweden r3fij . 

. ...226.46 

-1.3 

214.14 

141.30 

182.82 

250.07 

-09 

1.56 

229.48 

214.79 

143 40 

183.45 

252-28 

231*5 

175.83 

185.18 

SmeartanaefT) 

... .166.18 

-0.4 

157.14 

103.75 

134.15 

1J2.65 

07 

1.83 

166.77 

15009 

104^1 

133*1 

131.03 

178*6 

13099 

137*4 

UmJeri Kingdom (rtM) 

._ 196.70 

-0.7 

180.07 

122.85 

158.06 

18007 

04 

4A5 

198.06 

105.38 

123.70 

158*5 

185*9 

214*6 

181.11 

107*4 

USA 1517)-... 

192.02 

-01 

181 87 

119.88 

15501 

182.02 

-a i 

2.B2 

192.14 

179.03 

12000 

150.59 

162.14 

19004 

170 95 

187*9 

EUROPE (718) 

— 171.25 

-1.0 

16UB3 

106.91 

130.24 

151.99 

-8.1 

3.05 

172.97 

161.SQ 

10009 

138*7 

152.07 

17058 

15098 

157.13 

fvOfdc (116) 

.219.44 

-1.2 

207.50 

137.00 

177.16 

208.11 

-0.7 

1.42 

222.18 

20756 

138*3 

177*1 

209.49 

222.18 

173.19 

176.8E 

ProSC Basin (748) 

... 168.70 

-0.8 

159.53 

105.32 

136.20 

110.15 

-09 

1.10 

17009 

159.19 

106.28 

135*7 

111.14 

176*8 

134.79 

101*3 

Euia- Pacific (14661 


-as 

160 42 

105.31 

136 96 

12600 

-05 

193 

171.18 

10022 

10096 

136*4 

127*8 

175.14 

143*0 

15032 

North Aironca 1621) .......... 

...188.80 

0.0 

170.53 

117.87 

152.41 

18322 

0.0 

291 

18895 

17070 

118.01 

15090 

18026 

192.73 

175*7 

183*4 

Europ*.- Et. Uft (514) 

. 153.73 

-1 2 

145.38 

93.97 

124.10 

131-7! 

-03 

248 

15059 

145.63 

97*3 

124*8 

132.11 

15012 

134.97 

137*3 

Pacific E«- J.icon i273i - 

.270.40 

-07 

255.69 

168 01 

21829 

240.08 

-07 

2.71 

272.26 

K4.82 

170.13 

217.64 

241.77 

29021 

20042 

201*4 

rtorfrf fix. US (1647) 

....171.07 

-as 

162.33 

107.18 

133.59 

13a 78 

-as 

194 

173.14 

132-05 

10019 

138.40 

131.45 

178*5 

145.58 

159*5 

World £«. UK 11960) 

... 175 SO 

-Qj5 

165-95 

109.S6 

141.89 

14594 

-0.4 

2.08 

176.49 

16518 

110*8 

141.06 

14057 

17058 

155.98 

165*2 

World £.. So. AJ (2105) 

—176.57 

-0.6 

168.96 

110.23 

143.54 

14353 

-073 

225 

17796 

16019 

11096 

141.94 

149.03 

10003 

16654 

107.74 

■VoiU E*. JjDon (1655) 

....183.58 

-0.5 

179.20 

118.35 

153 04 

17082 

-ai 

2 BE 

190.45 

1 78-25 

110.01 

182*4 

18002 

195*0 

174.04 

175*2 

The World Index (2184) 

177.3) 

-OB 

167.73 

110.74 

143.20 

149.60 

-OJ 

2.25 

170.40 

16098 

111.48 

142*1 

18013 

1B0*0 

15085 

167.77 


TN> Fmnodl Tims Liritod Gettna Sorfo am Co. and PtaVtoKt SoewKos Lnfioc. 1997 
Urns man unnolatai lot ns anon. HU1KM& 7QIWS4 TratMCft* Own (Nrwri**. Si 404 U«; Mfonfe (Carafe}. McC«w CnBulq, (USA). 


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FINANCIAL TIMES SURVEY 


INTERNATIONAL EQUITY OFFERINGS 

Wednesday September 21 1994 


Though equity prices have weakened this year, the 
flow of global issues has held up, Tracy Corrigan 
writes. But is the heavy autumn schedule too much? 

It’s no longer a 
seller’s market 


A ctivity in the interna- 
tional equities market 
has held up surprisingly 
well this year, given the 
adverse market conditions 
which have undermined share 
offerings. 

Despite the reversal of senti- 
ment in the world's financial 
markets triggered by the rise 
in the US Federal Reserve's 
interest rate in February, inter- 
national syndicated equity 
offerings launched in the first 
half of 1994 totalled $32bn, 
according to Euromoney, com- 
pared with $38bn for the whole 
of 1993. (Figures include all 
international tranches of 
equity offerings but exclude 
funds, preference shares, con- 
vertible bonds and bonds with 
equity warrants). 

However, the raw numbers 
do not fully reflect the resdity 
of the international equities 
market this year. The fact is 
that offerings have become 
much harder to place, and a 
large number of deals have had 
to be postponed, cancelled, cut 
in size, or have their pricings 
adjusted to makA rtipw more 
attractive to investors. 

The heavy flow of new issues 
in the first half of the year, 
despite the poor performance 
of underlying stock markets, 
created severe indigestion in 
the new issues market. A lull 
in activity during-the summer 
months, and a recovery in 
some stock markets, has 
helped the new issues market 
regain some of its composure, 
but there are still concerns 
that the heavy schedule of 
offerings for the autumn will 
be hard to absorb. 

"The buyers are craning back 
and some deals are going weD, 


but there is nervousness about 
the volume that is waiting to 
come crashing down,” says Mr 
Amir Ellon, a manag in g direc- 
tor of Barclays de Zoete Wedd. 

Investors have became more 
choosy about companies anti 
pricing levels they will accept 
In the bull market of the early 
1990s. it was a seller's market 
Fund managers had only 
recently woken to the attrac- 
tions of diversifying their 
assets and were hungry for 
stocks from new markets to 
which they had little exposure. 
The partial removal of restric- 
tions on share ownership in 
emerging markets encouraged 
a feeding frenzy, often with lit- 
tle heed to the fundamentals of 
the companies involved. 

The hardening of attitudes 
this year was partly spurred by 
the poor performance of some 
deals such as ina . the Italian 
insurance company, and Aus- 
tria's Mayr-Melnhof. However, 
the change of sentiment has 
been felt across a range of mar- 
kets and sectors and cannot be 
pinned to any one deal, accord- 
ing to investment bankers. 

“Investors are stQl there for 
good specialist stories, but 
they are staying away from 
overpriced deals,” says Mr 
John St John, a director of 
Kleinwort Benson. 

Those issuers unwilling to 
cut pricings to suit investors 
have in some cases had to 
shelve offerings. Among nota- 
ble deals indefinitely post- 
poned this year were Italian 
savings bank Cariplo's 
Ll,650bn offering and a 
planned $lbn issue for Videsh 
Sanchar Nigam, the telecom- 
munications monopoly, by the 
Indian government, which 


would not cut a price thought 
too high by fund managers. 

Other ambitious offerings 
have had to be scaled back. For 
example, Liberty Life, the 
South African insurance 
group, had to cut Its planned 
S50Qm global convertible bond 
offering to $300m. partly 
because of jitters caused by the 
resignation of the finawra min- 
ister shortly after the elections. 

Smaller deals have aim suf- 
fered. For example, Ayala I .an d 
of the Philippines recently pul- 
led a planned ?100m offering of 
convertible bonds via Morgan 
Stanley. It was the company’s 
second attempt to tap the mar- 
ket. having previously foiled to 
bring an offering of global 
depositary receipts (GDRs). 

Although the nature of the 
international equities market 
is that offerings are distributed 
among a wide range of inves- 
tors, two groups of investors - 
in the OS and the UK - have 
played a pivotal role in the 
market’s development. The 
appetite of investors in the US 
market has given US houses 
with an international presence 
and domestic distribution a 
particularly strong platform 
for international equities busi- 
ness in recent years. 

H owever, as the turn in 
sentiment hit the US 
market first US inves- 
tors have proved particularly 
selective. Arguably, domestic 
US deals have suffered most. 
But there has also been a 
sharp decline in US demand for 
international offerings. For 
example, the French privatisa- 
tion issue for UAP, the insur- 
ance company, suffered from 
poor US take-up. 



The UK market has also 
been an important source of 
funds for the international 
equities market According to 
estimates by Kleinwort Ben- 
son, the broking house, about 
£9bn of the £52bn of cash flow 
generated by UK Institutions 
this year is likely to be dedi- 
cated to foreign equities - a 
decline from last year's level of 
£10bn or 20 per cent That per- 
centage, after rising steadily 
for a number of years, appears 
to have plateaued out 
There has also been a shift of 
focus from the regional to the 
sectoral, which originated 
among US institutional inves- 
tors. Historically, fund manag- 
ers made decisions on asset 
allocation on a coun try-by- 
country, or region-by-region 
basis. But as the understand- 
ing of the differences between 
regions has become more 
sophisticated - and as differ- 
ences in countries 1 practices 
have started to be ironed out - 


more fund managers have 
looked at industry sectors, 
such as telecommunications, 
on a global basis. The result is 
a keener focus on the value 
offered by particular compa- 
nies within their industry. 

This year, investment bank- 
ers have been spending a lot of 
Hit»a an the phone to finance 
directors, explaining why deals 
they have been mandated to 
arrange should be put on hold. 
However, some underwriters 
have been criticised for promis- 
ing more than they can deliver 
to win mandates. But for most 
companies the fear of a failed 
issue, or the unwillingness to 
sell assets cheaply, overrides 
the need for financing. 

The exceptions are the size- 
able number of European gov- 
ernments which need to raise 
funds through privatisations to 
finance deficits, and cannot 
afford to wait These govern- 
ments are more likely than 
companies to accept reduced 


profits from the sale of shares. 

However, the privatisation 
free-for-all has exacerbated the 
problems caused by market 
conditions. In the early years 
of privatisations, governments 
operated an unofficial queue- 
ing system, whereby they 
timed their large offerings to 
avoid a surplus of deals at any 
one time. Governments may 
react by skewing placement of 
privatisation deals towards 
their domestic markets, as is 
likely to be the case with Ren- 
ault, the French carmaker. 

For investors, the positive 
side of the situation is that 
they are more likely to find 
bargains. For example, global 
depositary receipts are now 
being offered by Indian compa- 
nies at substantial discounts. 

The lull during the summer 
has “taken the froth off the 
market,” according to one 
investment h ank er. “Those 
companies which are coming 
to the market are being much 


more pragmatic.” 

Despite this year's more diffi- 
cult market conditions, compe- 
tition for business remains 
fierce. For the year to date, 
Goldman Sachs leads Euro- 
money's league table of book- 
runners. However, the weaken- 
ing of appetite among US 
investors has led to a slight 
decline in the dominance of US 
institutions, with only four US 
houses in the top 10 for the 
year to date, compared with 
seven in 1993. 

The main gainers have been 
Paribas, which has jumped to 
second place, with only eight 
mandates, and Deutsche Bank, 
which has reached sixth place 
with only three deals. Among 
the losers, Salomon Brothers 
has dropped from seventh to 
12th place and J.P. Morgan slid 
from ninth to 19th position. 

Away fom the ebbs and flows 
in the fortunes of individual 
underwriters, it is clear that 
new business has developed In 


IN TWS SURVEY 

□ Europe 

Birds that are worth 
shooting 

□ Italy 

Strange effect of elections 

□ France 

Slowdown after hectic 
pace Page 2 

□ Germany 

Closed market opens up 

□ Scandinavia 

Raising the profile Page 4 

□ Japan 

Overseas investors wooed 

□ US 

Rise in interest rates steins 
flow Page 5 

□ Hong Kong 

The multiples take a tumble 

□ Latin America 

The grey suits you see in 
every capita] Page 6 


□ Asia-Pacific 
Authorities look for quality 

□ Eastern Europe 

From paper casinos to 
reliable yardsticks Page 8 

EttnvW pnxHCBon Qabnaf Bowman 


the international capital mar- 
kets over the past five years. 

The vogue for privatisation 
which has swept the world has 
been part of a broader opening 
up of equity capital markets. 

Fund managers and financial 
analysts are no longer stock 
pickers within a single market, 
but have to get to grips with a 
wide span of companies and 
markets. That is illustrated by 
this week's European Federa- 
tion of Financial Analysts’ 
Societies congress in Edin- 
burgh, where subjects range 
from China to South Africa. 

Companies in small ‘nr 
underdeveloped ecehomies can 
now raise funds from a poten- 
tially vast base of Investors. 
Even companies in developed 
economies find they have stri- 
king new opportunities: Ger- 
man companies, for example, 
are starting to access the inter- 
national equities market, sig- 
nalling a loosening of the ties 
with their bank shareholders. 


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Leadership in global distribution 1994 


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Mexico 

China 

Austria 

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Issued by S.G, Warburg Securities a member of the Securities and ftirurcs Authority 


X 

X 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 1994 


INTERNATIONAL EQUITY OFFE 


New issues in Europe 


The birds that are 
worth shooting 


European governments and 
companies hoping to tap the 
international equity market 
fids autumn would do well to 
take a crash course in grouse- 
shooting to come to grips with 
the current mood among 
potential buyers of their 
shares. 

Whereas last year, the bull- 
ish background of falling 
interest rates enabled inves- 
tors to make money by sob- 
scribing to issues on a fairly 
indiscriminate basis, the more 
difficult investment climate 

Investors are suffering 
from “privatisation 
malaise. These issues 
are not a one-way ticket 
to make money" 

this year and the heavy supply 
of equity Issuance which is 
likely to emerge in the coming 

hm i n th 's have made them far 
more selective. 

“The shooting season has 
started, but this time the strat- 
egy Is not to shoot Into the 
covey of grouse but to target 
one particular bird," says Mr 
Ludovico del Balzo, head of 
International equity capital 
mar kets at tehman Brothers. 

His advice to Issuers is to 
focus on tactics and strategy 
when It comes to preparing 
their offering. “Issues need to 
be well-priced and well-con- 
ceived," Mr del Balzo says. 

In general, bankers are con- 
fident that realistically-priced 
issues will meet strong 
demand from international 
investors who, they say, have 
returned from their summer 
holidays with a positive out- 
look on the markets. As a 
result, they will be looking for 
the right investment opportu- 
nities to help reduce the high 
cash portions in their portfo- 
lios winch are believed to be 
running at close to or above 
their limi ts. 

Mr Jerker Johansson, head 
of European equity capital 
markets at Morgan Stanley, 
detects a desire among Inves- 
tors to increase their exposure 
to cyclical companies which 


they believe are most likely to 
benefit from economic recov- 
ery. “Cyclical companies are a 
large component in Europe," 
be says. He adds that there is 
also a strong interest in tele- 
com stocks, providing the pric- 
ing is reasonable. 

With supply likely to out- 
weigh demand, pricing and the 
company itself are set to be 
the key issues this autumn 
and early next year, not the 
fact that a privatisation pro- 
gramme is under way. 

Ms Lorna Hamby, a Euro- 
pean fond manager at Fleming 
Investment Management, says 
that her strategy will be to 
look at each issue on its indi- 
vidual merits. 

H Jnst because it’s a privati- 
sation Issue is not a good 
enough justification for invest- 
ment," she points ont In ho* 
view, Investors are suffering 
from “privatisation malaise. 
These issues are not a one-way 
ticket to make money and, if 
says, yon look at the history of 
continental privatisation, that 
view has been vindicated." 

Another reason for what she 
describes as her “healthy scep- 
ticism" is that the forthcoming 
flood of privatisation issues 
across Europe is not accompa- 
nied by a strong equity culture 
or a strong ideological reason. 
“There is less incentive to 
make sure that the small 
investor does well... one rea- 
son is that the governments 
need money to fond their huge 
budget deficits,” she says. 

Evidence of a strong eco- 
nomic recovery in Germany 
has provided the government 
with a favourable backdrop to 
the latest stage of its privatisa- 
tion of Lufthansa, the national 
airline. Although the company 
has seen a dramatic turn- 
around in its fortunes over the 
last two years as a result of 
extensive restructuring, some 
analysts believe that Its earn- 
ings will receive a further 
boost from a buoyant domestic 
market. 

By not participating in Luft- 
hansa's capital increase which 
is currently under way, the 
government will reduce its 
stake from 51.4 per cent to 


about 41 per cent by offering 
33 m shares to investors. The 
government also hopes to sell 
a farther 2 . 1 m existing shares, 
thereby reducing its stake fur- 
ther to around 36 per cent 
The government has placed 
considerable importance on 
involving international inves- 
tors in the Lufthansa offer Lug 
so as to gab their support for 
the planned privatisation of 
Deutsche Telekom, the coun- 
try’s telephone monopoly. The 
initial privatisation should 
raise DMIObn to DM20bn, 


Governments need to fund 
their budget deficits, so 
“there is less incentive to 
make sure that the small 
investor does well” 


which could not be absorbed 
by domestic investors alone. 

Bankers have criticised Luft- 
hansa's decision to exclude US 
investors from its offering, 
since by so doing it has cot out 
the single most Important 
source of equity capital in the 
world. However, US investors 
are expected to be invited to 
next year’s sale of shares in 
Lufthansa and the Deutsche 
Telekom offering. 

The Deutsche Telekom share 
sale is unlikely to occur before 
1996 but investors wanting 
exposure to the sector will be 
able to choose from a variety 
of issues before then. The 
Greek government is seeking 
to raise $lbn from the sale of 
25 per cent of shares in OTE, 
the Greek telecoms monopoly. 
It hopes to sell 75 per emit of 
the shares abroad. The offer 
should take place before the 
mid of the year. 

The Portuguese government 
also plans to sell off 25 per 
cent of the country’s telecom 
company early next year. The 
transaction could run into sev- 
eral hundred million dollars, 
hankers say. This offering 
could well coincide with the 
next stage in the privatisation 
of Italy's telecoms holdi- 
ngcompany, Sfcet 

Antonia Sharpe 


lections do strange 
things to equity mar- 
tots, and Italy in 1991 
has proved no exception to this 
rule. 

Immediately after the victory 
of Mr Silvio Berlusconi's right- 
wing alliance in March, the 
Italian stock market surged 
ahead on the strength of bold 
rampaign promises to re-ener- 
gise the Italian economy and 
press forward with the privati- 
sation programme launched by 
previous technocratic govern- 
ments. 

The Count index of principal 
stocks rose from just under 700 
to more than 800 by the begin- 
ning of May. Bnt concern 
about the implementation of 
those promises and the coher- 
ence of the Berlusconi coali- 
tion has taken its toll cm finan- 
cial markets. By mid- 
September the Comit index 
was back below 670. 

Companies and the govern- 
ment initially hurried to take 
advantage of the favourable 
conditions to raise capital. 
Since January this year, rights 
issues and privatisations in 
Italy have raised nearly 
L25,000bn, of which nearly 
LlO.OOObn is represented by 
state sefl-ofEs. 

Unfortunately for those plan- 
ning equity offerings, there 
was a vertiginous gap between 
inspiration and execution, and 
certain companies and their 
advisers found themselves in 
the painfUl position of having 
to straddle that gap. Even as 
company executives were tir- 
ing themselves out on interna- 
tional road shows to promote 
their offers, the market was 
undermining their best 
about pricing. 

Two of the biggest 
international Issues planned 
this year - a Ll,500bn offer of 
shares and warrants by Medio- 
banca, the merchant hank , and 
the Ll,650bn share issue by 
Cariplo, Italy's biggest savings 
bank - were postponed at the 
last minute when market cond- 
itions turned against them. 

Those which went ahead 
were also punished. The 
privatisation of lna, the 
state-owned insurer, raised 
more than L4,800bn for the 
Italian Treasury in June, but 
when its shares began trading 
they rarely rose above the 
issue price of L2.40Q, and were 
less than L2.250 by 
mid-September. 

Iri, the state holding 
company, successfully sold its 
re m ai nin g 54 per cent stake in 
Banca Commerciale Italians 
(BCI) in March with a L2,900bn 
International offer, but the 




ith better data on Far East trade, 

Marco would have had 
time for polo. 

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Tha Stock Exchange budding in the ttaBan capital was originally a Roman temple 

First a surge, then the market slips back 

The strange effect of 
elections in Italy 


bank disappointed the market 
less than three months later 
when it announced plans to 
raise more than L2,300bn of 
extra capital through a 
discounted rights issue. The 
first Ll,575bn tranche of this 
issue has been successfully 
completed, judging from 
indications as this survey was 
going to press, but the shares 
were trading this month at 
around L3.600 compared with 
L5.341 before the intention to 
raise capital was revealed. 

Analysts are careful to point 
out, however, that companies 
such as Mediobanca and Cari- 
plo did not need to raise capi- 
taL Mediobanca's issue of 
shares, for example, was partly 
aimpri at diluting the 50 per 
cent holding of the bank’s tra- 
ditional shareholders to about 
40.6 per cent, thus widening 
the ownership of its shares. 


In addition, a distinction 
should be made between 
international and institutional 
demand for these issues, and 
domestic public demand. In 
recent months, there have 
been definite signs of issue 
fatigue among the Italian 
public, but international 
investors - some of whom 
wanted to boost their exposure 
to Italian equities - remain 
broadly receptive to big issues. 

r Vittorio Pignatti- 
Morano of Lehman 
Brothers in Milan - 
joint global co-ordinator of the 
BCI issue - says there is 
always the option of lowering 
the price or scaling down the 
amount of shares to entice the 
institutional investor to buy. 
“The real problem is the public 
offer for sale,” he says. “They 
either buy or they don’t buy. 


and the retail banks [which 
help market the public share 
offer] are stiQ learning." 

Mr Pignatti-Morano points 
out, for example, that when 
public demand turned out to be 
lower than expected for 
another issue coordinated by 
Lehman - the LI 30 bn 
international offer of shares in 
Ftoanza & Future, a financial 
services company - the 
company simply asked Consob, 
Italy's stock market watchdog, 
if it could restructure the deal 
so that more stores went to 
international institutions. 

However, the Berlusconi 
government is still cautious 
about forthcoming priv- 
atisations, which should 
include the sale of shares in 
Enel, the electricity generator, 
Stet, the telecommunications 
holding company; and Em,- the 
oil, gas and chemicals holding 


AMyAsfWDof 


company. Not only are these 
the largest of the state-owned 
companies being considered for 
sale, they are also among the 
most complex and politically 
the most sensitive. 

For example. recent 
ministerial statements have 
clearly pushed Enel to the 
front of the queue for 
privatisation. 

But before such a move can 
be made, Mr Vito Gnutti, the 
industry minister, and his 4 
colleagues must win political 
consensus about how to 
execute such a sale (for 
example, whether the rilffwq qt 
functions of the company 
should be split up to be sold 
separately) and what sort of 
regulatory authority should 
supervise the electricity sector. 

In the meantime, . the 
government may learn from . . 
some of the setbacks of the 
past few months. Mr Berlus- 
coni is acutely sensitive to the. 
international judgment of his. 
adminis tra tion, particularly in 
economic matters. Analysts- - 
hope and believe that he wilt - 
think twice before attempting 
to foist privatised equity on 
foreign institutions at inflated 
prices. 


Andrew Hilt 


Alice Rawsthorn analyses changing market fortunes in France 

Slowdown after hectic pace 


IN DEPTH-IN CONTEXT-INTERNATIONAL. 


There was a time when Paris 
brokers were wont to grumble 
and groan about the dearth of 
equity coming on the French 
stock market: in fact, it was 
regarded as one of the main 
reasons for the relatively 
immature state of equity 
trading in France. 

Times change. The French 
market has been positively 
saturated with new issues for 
most of this year, thanks to the 
combination of the govern- 
ment's privatisation prog- 
ramme with a series of private 
sector flotations and a stream 
of capital raising exercises 
from existing publicly-quoted 
companies. 

■This year will go down in 
French market history as by 
far and away the biggest for 
new issues of all kinds,” says 
Mr David Harrington, French 
market analyst at James Capel 
in Paris. “The market has been 
absolutely sozzled with new 
equity.” 

However, most of the new 
issues were concentrated in 
the opening months' of the 
year. The pace of activity 
declined during the seasonal 
lull of the summer holiday and 
has picked up slowly this 
autumn. There has been a 
significant reduction in the 
volume of new equity coming 
on to the market in the second 
half of 1994 compared with the 
first. Does thin mean that the 
Paris brokers will soon be 
grumbling about a shortage of 
new issues again? 

The reasons for the slow- 
down are easy to see. The 
frenetic pace of activity during 
the first half was triggered 
primarily by the extremely 
buoyant state of the stock 
market in the opening weeks 
of the year. The CAC-40 Index 
raced ahead at the beginning 
of 1994 to reach an historic 
peak of 236038 on February 2. 

The index then tell steadily 
until early June when it dipped 
below the psychologically 
important 2000. It has hovered 
around that level ever since. 
The French economy is 
certainly not to blame for the 
market’s bearish mood, fnw 
the state statistics institute, 
has since early spring been 
churning out some remarkably 
reassuring monthly statistics 
on almost every area of the 
economy, from Industrial 
production to employment 

But the brighter economic 
outlook has felled to counter 
the negative impact of the 
weak bond market. Concern 
about the volatility of the US 
economy, fears of rising 
interest rates and nervousness 
about Germany’s money sup- 
ply figures have all taken a toll 
on bands and then on equities. 

However the downward 
trend in the stock market in 
February encouraged, rather 
than discouraged, the influx of 
new equity, at least for a 


while. The big issues of the 
early months of the year - 
notably the sale of the state's 
FFr35bn stake in the Elf 
Aquitaine oil group - were 
fuelled by the rising market 
The next wave of issues, such 
as March’s FFr3.96bn offer 
from the Peugeot motor group 
and FFrlJbn Issue from the 
Axa insurance concern, were 
characterised by concern that, 
if the market was turning 
bearish, these companies 

The presidential 
elections have cast 
a cloud of uncertainty 
over currency and 
equity markets 

should raise money sooner 
rather than later. 

Some FFrlOSbn of new 
equity arrived on the French 
stock market In the first six 
months of this year. "It's a 
massive amount of new stock," 
says James Capel's Mr 
Harrington. 

“The typical value of new 
issues over the past few years 
has been FFr35bn to FFrtObn. 
You only realise how 
extraordinary the level of 
activity has been in 1994 if you 
think that more money was 
raised in the first half than in 


the whole of 199S, which was 
itself a record with FFr89 5bn.” 

The pace of new issues has 
since slowed down. The 
economic outlook Is still 
improving. Even the recent 
increase In bank base rates (at 
a time when the Bank of 
France has refused to raise 
rates to stay in line with 
Germany’s Bundesbank) did 
little to dampen spirits. Mr 
Paul O’Brien, chief French 
economist at JJP. Morgan in 
Paris, c o ncluded that recovery 
was "well-enough es tablished " 
for the base rate rise to have 
no more than a “small” 
on the economy. 

However, the forthcoming 
presidential elections, officially 
set fix 1 next spring unless the 
ill- health of the incumbent, Mr 
Francois Mitterrand, neces- 
sitates an earlier vote, have 
cast a cloud of uncertainty 
over both currency a nd equity 
markets. Socidtd Gdndrale 
recently concluded that 
political uncertainty was likely 
to counter any imminent 
improvement in the bond 
market. 

Analysts suspect that, at 
best, there will only be a 
modest rally in the French 
stock market during the 
closing months of the year. 
The consensus is that the 
CAC-40 index will be around 


2150 at the end of the year. 

The rate of new Issues is 
starting to perk up again. M6, 
the television station, is about 
to commence its flotation, a 
C hristian Dior, the fashion ■ 
house, recently launched a 
convertible issue. Moreover, 
the government is about to 
begin the next phase of its 
privatisation programme, 
w hlrh was temporarily put an 
ice after the Elf issue and the 
subsequent sate of the Union 
des Assurances de Paris (UAF) 
insurance group. 

Mr Ballad UT and his minis , 
tors spent the summer decid- 
ing whether the candidate for 
the next sate would be the Ren- 
ault motor group or the Assur- 
ances G6 morales de France 
(AGF) insurance concern. Ren- 
ault has won and the Paris 
market is now preparing for 
the flotation of a large minor- • 
ity stake by the government. 

Yet AGF is still waiting in 
the wings as a future privatisa- 
tion prospect, with a possible 
sale pencilled in for early next 
year, as are the Usinor Samhw 
steel group and Boll, the com- 
puter company. 

Unless the Paris stock mar- 
ket takes a turn for the worse, 
the flow of new equity . in 
France seems set to be fairly 
high in 1995, if not quite as 
high as in this record year. 


U I have chosen the SIPAREX Group, 

in particular for 
their capacity to help us 
in our international 
expansion 



77 


Jean-Gauds YAGUE 

President and General Manager of SPRING GROUPE 
kt Nan term (Haute-doSekte), France. 

Distribution and overhaul of computer systems. 

Turnover 1093; 192 MFF- Turnover 1902: ISO MFF. 


No other investment capital company has ever applied such c 
determined ^network* and synergy concept strategy between ih 
French and international partners, shareholders and companies 
as the SIPAREX Group. 


SIPAREX 


A SPECIFIC APPROACH TO EQUITY INVESTMENT 

Contact: Jean -Jacques CHABAN-DELMAS 
114, me la BoeHe - 75008 PARIS -Id. 49 53 94 74 - Fax 49 53 94 78 

SIPAREX, the leader among Independent French capital development companies. 






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Insight 


"Any ecpaity analyst 
can say 'lm\ " or 
'sell, but smart 
investors need more 
Reconunendations 
alone don’t spar! 
ideas. It's the 
analysis behind 
them that does/ 


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At J.R Morgan Securities Inc 
when we analyze a company, 
we go far beyond a chat 
with the CFO. We tear apart 


balance sheets. Ferret out 
hidden risks and opportu 
nities. Talk with employees, 


customers, suppliers, 


distributors. And tie the facts 


into a long-term industry 


perspective. From research 


worth reading, investors 


should get more than 


our ideas. They should 


get insights of their own 












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ft&K. 


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©1994 J-ftMofim S O*. iKarpcrsled. J.P.Mopn Scuttu he. Mtnfcer SFC 













X 


FINANCIAL. TIMES WEDNESDAY SEPTEMBER 21 1994 



INTERNATIONAL EQUITY OFFERINGS 


Antonia Sharpe says the international investor is at last being courted 


Germany starts to open up 


The latest stage in the privatisation of 
Lufthansa, the German national air line , is 
being welcomed by International bankers 
and investors as evidence that they are 
finally being allowed to participate hilly in 
one of the world's richest but hitherto 
closed markets. 

Germany's relatively small stock market 
and the intricate cross-holdings between 
the country's companies have long pre- 
vented foreigners from building up signifi- 
cant investments. As a result, the weight- 
ing of German equities in many 
international portfolios is very low rela- 
tive to the size of the German economy. 

But the ever-stronger need tor capital by 
the German corporate sector as it emerges 
from recession can no longer be met exclu- 
sively by the German state and the coun- 
try’s powerful banks. In addition, domestic 
institutional investors show no signs of 
mairifl g a radical departure from their tra- 
ditional preference to hold bonds, even in 
the wake of the poor performance of the 
German government bond market this 
year which has seen yields on 10-year 
paper rise to TA per cent, the highest level 
since September 1992. 

This scenario has prompted German 
companies and the government belatedly 
to court the international investment com- 
munity. The government is believed to be 
keen to make the sale of its shares in 
Lufthansa an international event and 
Dresdner Rank , which is co-ordinating the 
domestic and international offerings, has 
appointed a large group of international 
banks to ensure a wide placement of the 
shares. 

The government intends to reduce its 
stake in Lufthansa from 51.4 per cent to 
about 41 per cent by not participating in a 
forthcoming rights issue. The 35m shar es 
which the government will not be taking 
□p will be sold to investors in Germany 
and abroad, excluding the US. 

Some foreign bankers have criticised the 
decision to exclude US investors this time 
round, because their absence win dilute 


the international importance of the trans- 
action. 

Lufthansa has decided not to place 
shares in the US under Rule 144A of the 
US Securities Act, in order to limit the 
risk of excessive foreign ownership which 
could jeopardise its flag carrier status. US 
investors, however, are likely to be 
included when the government disposes of 
the rest of its shareholding, which is 
scheduled to take place before the end of 
1995. 

If investor demand is sufficiently buoy- 
ant, the government also intends to sell a 
further 2.1m existing shares which would 
reduce its stake in Lufthansa to 36 per 
cent. Since Dresdner will be using the 


Some foreign bankers have 
criticised the decision 
to exclude US investors, 
but Lufthansa did not 
want to jeopardise 
its flag carier status 


so-called “book-building" process, the 
scale of the demand will be far easier to 
judge. 

Bookbuilding involves collecting inves- 
tors’ bids for the shares, thus helping to 
establish the most appropriate selling 
price. By matching the demand for and the 
supply of the shares on offer, bankers 
hope to avoid excessive volatility in the 
shares when they start trading in the sec- 
ondary market. Bookbuilding also pro- 
vides greater shareholder transparency 
which Lufthansa currently lacks because 
its shares are in bearer rather than regis- 
tered form. 

The timing of the sale coincides with a 
sharp turnaround in Lufthansa’s fortunes. 
This has been reflected in a doubling in its 
share price over the past year. That has 
prompted some concern among investors 
that they will be buying the shares at the 
top of the market and at a time when 


global competition among airlines is 
becoming increasingly Cam 

The government is no doubt aware of 
these concerns but bankers believe that 
the new shares will be priced at only a 
marginal discount to tha prevailing mar- 
ket price. However, since the government 
is keen for the Lufthansa sale to be an 
international success, it may scale back 
the sale of Its existing shares in order not 
to flood the mar ket- 

Although the Lufthansa sale is only 
likely to raise just over DMlbn. it is an 
important event because it is In effect the 
dry run for the long-awaited privatisation 
of Deutsche Telekom, Germany’s telecom- 
munications company. 

Market valuations of the company range 
from DMBQbn to DMlOObn which suggest 
that the sale of the first tranche of the 
shares could yield between DM15hn and 
DM20bn. But investors are likely to have 
to wait until late 1905 or even 1996 before 
the shar es come up for sale. 

In the meantime, Germany's small , pri- 
vately-owned companies are jumping on 
the international bandwagon with enthu- 
siasm. In September, Fliemann, a fast- 
growing manufacturer and retailer of spec- 
tacles. raised just over DM200m through 
the sale of non-voting preference shares to 
domestic and international investors. 

Around one-third of the shares went to 
international investors and BZW, which 
was involved in arranging the offering 
with lead manager WestLB. reported 
heavy demand as foreigners sought tp gain 
an exposure to Germany's buoyant retail 
sector. 

Bankers believe that German companies 
have become far more comfortable with 
the concept of making their shareholder 
base more international. Indeed, some 
believe that foreigners are more likely to 
be long-term shareholders than their 
domestic counterparts who are seen to be 
more speculative. This more open attitude 
should lead to a greater volume of inter- 
national equity issuance from Germany. 


Spain and Portugal have had recent setbacks, writes Tom Bums 

Waiting for better luck 


Hesitations over public 
offerings by the governments 
of Spain and Portugal are 
understandable. When Endesa, 
Spain’s big electrical utility, 
tapped the markets in June 
anH when Cixnpor, Portugal's 
largest cement producer, fol- 
lowed suit a month later, the 
results left much to be desired. 

Both Spain an d P ortugal 
have Lacked momentum over 
recent months and certainly 
neither, though they have 
comparatively cheap markets 
in common, seems set far an 
early recovery and turn- 
around. 

“Spain has not got a stand- 
alone story,” says Ms Ansa 
MacDonald of London’s Smith 
New Court Much the same can 
be said for Portugal. 

“Potential underwriters are 
telling companies thinking 
about offerings: wait” says Mr 
Juan Cueto of Madrid brokers 
Ibersecurities. “There have 
been unhappy experiences 
recently." 

The Endesa offering, which 
was affected in subsequent 
months by the sustained vola- 
tility of the Madrid market is 
likely to delay a public offer- 
ing of Repsol, Spain's state- 
controlled oil, gas and chemi- 
cals group, until next year. 
Before the electrical utility 
came on offer, INH, the state 
energy holding company, had 
planned to reduce its 41 per 
cent stake in Repsol to around 
20 per cent 

A final decision on the Rep- 
sol timing is expected by the 
end of this month. The energy 
company is talking to the 
team that handled previous 



CREATING A 

requires judgement: the right timing, 
the right structure and the right currency. 






- ,1 

October 893 


October WOT 


March KKH j 

CIR International S.A. 




y Hanson 

Lit. 283,000,000,000 


PENNZOIL COMmNY 


1r 

2% Guaranteed Exchangeable 




Hanson America Inc. 

Notes due 1998 

Unconditionally and irrevocably guaranteed us to 
payment of principal and m uni by 


U.S.$ 500,000,000 


U.Sl $1,255415,000 

Jhm 


4#% Exchangeable Senior 


2.39% Senior Exchangeable 
Discount Notes due 2001 

CIR S-p-A.- Compagme 
Industrial! Riunite 


Exchangeable tor Common Stock of 


Exchangeable for American 
Depositary Shares Representing 

exchangeable (or ooUnvy xharca oTLit UW0 par 
value of 


Chevron Corporation 


Ordinary Shares of 





Hanson pu 

Lead Manager 


Lead Manager 


Lead Manager 

Lehman Brothers 


Lehman Brothers 


Lehman Brothers 





March 891 


April 1994 

P$A j 

PEUGEOT i 

CiTROEN s 

Peugeot S. A 


Thermo Electron 
Corporation 

FF 3,960,000,000 


U.S. $345,000,000 

2.0% Bonds due January 1, 2001 

convertible into shares of 

Peugeot SA. 


5% Senior Convertible 
Debentures due 2001 

Joint Lead Manager 

Banque Lehman Brothers S-A. 


Joint Lead Ji^nager 

Lehman Brothers 


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•Sourer Tnttnutiwul Pmancins; Review Lwocd by Ubman Brother, Intern jeon*] (Europe), a member of SFA. ©1994 Lehman Brother* Inc 


offerings — hazards, Goldman 
Sflriw and Spain's Banco Bil- 
bao Vizcaya - and the shared 
view at present is that little is 
to be gained from an M upbQT* 
move on fbe markets. 

A second privatisation phase 
of Cimpor, ranging from 20 to 
25 per cent or the company 
and aimed at foreign inves- 
tors, which had also been 
scheduled for the coming 
months. Is also likely to be 
poshed back until 1995. “We'll 
probably see the government 
going for controlled auctions 
became it won’t be able to rely 


rulings that caused the Lisbon 
government to fix the offer 
price at a cabinet meeting held 
a frill two months before the 
cement company was on the 
market Between the price fix- 
ing and the subscription 
period, the Portuguese market 
fell 15 per cent 
In this respect any legisla- 
tive change will, at the very 
least have to reduce the gov- 
ernment's role in an offer to 
that of establishing a price 
range instead of a fixed figure. 
It would also help, as one 
aggrieved underwriter in the 



The Spanish government may go for controlled auctions 
because it won’t be able to rely on the market, 
according to a London merchant banker 


on the market” said a London- 
based merchant hanke r close 
to the cement company. 

Should there be an offering, 
it can be taken for granted 
that Cimpor will seek to avoid 
the mistakes in July that led 
to a lukewarm response from 
foreign investors. Chief among 
the errors was the tenure to 
appoint a global co-ordinator 
and the absence of any mean- 
ingful book baflding. 

The lesson for the Portu- 
guese authorities was that 
going to the international 
markets without the appropri- 
ate technology is akin to 
shooting oneself in the foot 

Applying these lessons will, 
nevertheless, require legis- 
lative chang e* as well as an 
overhaul in the financial 
culture of those who take 
decisions in Portugal's public 
companies. 

Cimpor, which raised 
Es39.6bn ($241bn) in its dis- 
posal of 20 per cent of the 
state-held equity, was in par- 
ticular penalised by the legal 


Cimpor offering put it, “if it 
were publicly announced that 
there is a real interest in the 
foreign markets and in having 
foreign institutions aboard." 

The Cimpor experience will 
probably be a salutary one as 
Lisbon prepares for future pri- 
vatisations and there will 
undoubtedly be global co-ordi- 
nators in place should Portu- 
gal’s telecommunications 
group and its electricity gener- 
ating company take the plunge 
and make offerings next year. 

In Spain the problem is not 
one of expertise. Global offer- 
ings In partial privatisation 
programmes have become very 
familiar, and profitable, to the 
likes of Morgan Stanley, Gold- 
man Sachs and S.G. Warburg. 
Nor is there any difficulty 
about what is on offer; compa- 
nies such as Endesa and Rep- 
sol can, ail things being equal, 
sell themselves without diffi- 
culty. 

Nonetheless, the prospects 
are blurred by the overall mar- 
ket performance. The Rnttesn 


offering in June, which 
reduced the state equity In the 
utility by 9 per cent to 65 per 
cent, ended up raising only 
Pta I44bn <$l06m) against the 

ptaSOObn that hod been confi- 
dently expected when the dis- 
posal was planned in Febru- 
ary. . 

"We've had really bad lode 
with the markets over the past 
three months and ear sub- 
scription period closed on a 
particularly bad day for equi- 
ties,” a member of Endesa's 
treasury team said ruefully at 
the time. 

Everything that has hap- 
pened in the intervening 
months leads Repsol’s finance 
experts to fear the worst 
should they tap the markets . 
before Christmas. But Repsol 
does not need that risk factor, 
particularly as the Spanish 
treasury, though concerned 
about the government deficit, 
is not under such great pres- 
sure that It cannot afford to 
wait. 

Instead, financial analysts 
are turning their attention to 
Telefonica, Spain’s 32 per cent 
government-owned telecom- 
munications group, and in par- 4 
ticular to Tisa, the grasp’s 
profitable international sub- 
sidiary which has grown into 
the biggest foreign operator in 
the test-growing Latin Ameri- 
can market 

The parent company Is at 
present locked In negotiations 
with AT&T and GTE, which 
could lead to both US compa- 
nies becoming Tisa sharehold- 
ers as part of an ever-growing 
expansion programme in the 
Hispanic world. To judge by 
Tisa's expressed ambitions, 
once such a shareholding ven- 
ture is sealed and delivered, 
the next move will be to seek 
fresh capital an the interna- 
tional markets. 


Christopher Brown-Humes on the global impact 


Nordic profile raised 


Several big privatisations and 
corporate share issues have 
been launched in the Nordic 
region this year, many of them 
targeted not just at domestic 
investors but at the global 
investment community. The 
process has helped to raise the 
international profile of a 
number of the region’s big 
companies - some have used it 
as an opportunity to gain a 
listing overseas - and it has 
further increased the levels of 
foreign ownership in Nordic 
stocks. 

The relatively small size of 
the Nordic region's domestic 
markets is one reason why 
most of the large share 
offerings involve a sizeable 
International element A good 
example was the Danish 
government's sale of nearly 50 
per cent of Tele Danmark for 
DKrl9.5bn in April - the 
biggest share offering in the 
region this year. Of the 63m 
shares on offer, only 18 per 
cent were sold in Denmark, 
white 41 per cent were placed 
m the US and 41 per cent in 
the rest of the world. Tele 
Danmark gained a 
simultaneous listing in 
Copenhagen and New York in 
April and is now the second 
largest group on the 
Copenhagen Stock Exchange. 

Most of the region's big 
share Issues in 1994 have been 
prompted by government 
privatisation programmes, 
with Sweden, the region's 
largest economy, proving the 
most active. In June the 
Swedish government sold a 
45.8 per cent stake in 
P harma cia, one of the world’s 
top 20 pharmaceuticals 
companies with annual sales of 
SKr27bn. The Issue, directed at 
both the domestic and 
international markets, raised 
more than SKrSbn, leaving the 
state with just 14 per cent of 
the capital and U.7 per cent of 
the votes In the company. 

Pharmacia was the single 
largest sale in a privatisation 
programme which has raised 
SKr23bn (£2bn) for the Swedish 
state since it was unveiled by 
the centre-right government in 
1991. Another big disposal 
came earlier this year when 
the government raised 
SKr7.6bn from the sale of a 49 
per cent stake in AssiDoman. 
one of Europe's 10 largest 
forestry groups. The 
government also sold a 24 per 
cent holding in OK Petroleum, 
the Nordic region’s biggest oil 
refiner, to a Saudi Arabian 
buyer in March. 

Whether the Swedish privati- 
sation process goes much fur- 
ther is unclear after this 
week's general election, which 
returned the Social Democrats 
to power, but as a minority 
government. The Social Demo- 
crats have in effect ruled ont a 
privatisation of Vattenfall, the 
power group, and have been 
ambiguous about whether they 
will sell off Telia, the telecom- 
munications concern. Both 
these companies would have 
been on the centre- right gov- 


ernment’s privatisation list 
However, there Is a broad 
consensus behind plans to 
return Nordbanken to the pri- 
vate sector In a sell-off which 
will probably take place next 
year. Nordbanken collapsed 
into state arms under the 
weight of huge loan losses in 
1992 and has since been 
merged with Gota Bank, which 
was also taken over by the 
state, in preparation for the 
sale. The country's largest 
bank in terms of market share, 
Nordbanken has made a con- 
troversial return to profit after 
many of its problem loans were 


The privatisation 
programme has 
raised SKr23bn (£2bn) 
for the Swedish 
state since 1991 


siphoned off into a separate 
entity. 

In Norway, too, the process 
of returning state-owned banks 
to the private sector has 
begun. Den norske Bank and 
Christiania Bank, the two larg- 
est banks, have carried out 
NKr2bn international share 
offerings In recent months, 
reducing state ownership to 
72.5 and 69 per cent respec- 
tively. The government Intends 
to reduce the state's holding in 
both banks to 50 per cent by 
the end of 1997. 

Finland also has a privatisa- 
tion programme but has pro- 
ceeded cautiously, gradually 
widening ownership in compa- 
nies rather than moving dra- 
matically below 51 per cent 


control. This year the state 
reduced its stake in Outo- 
kumpu (mining), Valmet 
(paper machinery) and Rautar- 
uukki (steel), and it is lining 
up an initial public offering for 
Kemlra, the state-owned chem- 
icals group, for the autumn or 
early 1995. Unusually, the pro- 
ceeds from the disposals are 
not being garnered by the 
state, but an being used to 
strengthen the companies' own 
balance sheets. 

Outside the privatisation 
sphere, there have also been 
some hefty share offerings. 
Nokia, the Finnish telecommu- 
nications group, raised 
FM2£bn during the summer in 
the country’s largest-ever 
international share issue. The 
move, to support the group's 
fast-growing mobile phones 
business, was accompanied by 
a listing on the New York 
Stock Exchange. Meanwhile in 
Norway, Norsk Hydro, the 
energy and fertilisers group, 
raised NKr4.7bn through a 
rights issue. Proceeds are to be 
used to reduce debt, finance 
expansion and Invest in new 
North Sea oil and pipeline pro- 
jects. 

The autumn agenda looks 
relatively quiet, possibly 
because of uncertehities linked 
to EU refer endums in inland, 
Sweden and Norway. However, 
ISS, the Danish industrial 
cleaning group, has announced 
plans to issue 3m shares. an the 
New York Stock Exchange, 
while in Sweden, Stadshypo- 
tek, the country’s largest mort- 
gage credit institute, is to 
demutualise and issue SKiflta 
worth of new shares. 


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FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 1934 


INTERNATIONAL EQUITY 




4* 

^ __ 





e raise 


A fter feasting for more than two 
yeare on some of the lowest us 
interest rates since the 1360s. corp o- 

^r , SSf?h ha Tw liee ^ taking a *>”** 

year atm the US equity market 

The break, however, has been enforced 

upon them primarily by circumstances- 

namely, theme in US interest rates since 

USER ?“£ nnsettled the stock 
mpuet and steered many investors away 
from equities towards cash. 

Yet the decline in equity offerings has 
not been as dramatic as some investment 
bankers on wall Street may have feared 
earlier this year, when interest rates were 
first rising and equities appeared to be 
heading into a prolonged bear market 
phase. 

According to statistics supplied by Secu- 
rities Data, the New Jersey finanefr] infor. 
nation group, between the start of the 
year and September 7, just over $20bn was 
raised by companies through IPOs in the 
US market That compared with $24Jhn in 
the same period of 1593. 

There has been a bigger decline in sec- 
ondary share offerings, however. Stock 
worth almost $22bn was issued up to Sep- 
tember 7 this year, compared to almost 
$30bn over the same stretch a year ago. 
Yet the decline in IPOs and secon dar y 
offerings is not that worrying if the feet 
that 1593 was a record year for equity 
deals is taken Into consideration. 


US corporate issuers have been taking a break, reports Patrick Harverson 

Rise in interest rates stems flow 


liking the IPO and secondary issuance 
together, the volume of equity sales in the 
US declined only 22 per cent from its 
all-time peak last year, a solid perfor- 
man ce against the background of a signifi- 
cant reversal in the direction of interest 
rates and share prices. 

A lot of lie credit for restricting the 
decline in equity issues this year should 
go to foreign companies, which have con- 
tinued in large numbers to tap the US 
markets for capital in spite of the deterio- 
ration in the interest rate climate. 

In the year to September 7, foreign com- 
panies sold $&5bn of stock in the US mar- 
ket via IPOs, up from $3.4bn during the 
same period of 1993. Secondary offerings 
by foreign companies, meanwhile, have 
raised $4.7bn so far this year, compared to 
$2.8bn a year ago. 

Activity in the non-US sector of the mar- 
ket has been even more buoyant if stock 
issued in the private placement market, 
under &ule 144a of securities law - winch 
ma k es it easier for foreign companies to 
sell their stock to US investors - is con- 


sidered. According to Securities Data, $3bn 
was raised by foreign companies on the 
144a market in the first half of this year, 
up sharply from the $970m raised in the 
first six months of 1993. 

With foreign IPOs, secondary offerings 
and 144a Issues, “this Is a more non-US 
issuance oriented market th an it ever has 


hi addition, US investors are becoming 
increasingly eager to buy stock issued by 
foreign companies because they believe 
that the potential for achieving solid 
returns on their equity holdings is greater 
overseas than at home. “There is a 
perception that you have stronger 
fundamental growth rates in certain 


A lot of the credit for restricting the decline in equity 
issues this year should go to foreign companies 


been before, " says Mr Bob Nau, head of 
equity capital markets and syndication at 
Salomon Brothers. 

The strength of foreign stock offerings 
has been driven by a variety of factors, 
including Che g m wfng willingness of US 
investors to diversify into non-US assets, 
tha rush to privatise nationalised indus- 
tries in Latin America and the former 
Soviet bloc countries, and a trend toward 
more private companies from overseas 
going public. 


overseas markets,” says Mr Nau. 

Although some observers say that the 
heavy volume of non-US equity issues is 
all the more remarkable because of the 
weakness of the dollar, the currency’s tra- 
vails did not really have that great an 
impact upon, foreign issuers' plans. This is 
primarily because the dollar hac fallen 
sharply this year against the Japanese yen 
and German mark, but held up well 
against most other currencies. Foreign 
companies selling their shares in the US 


have pot emanated from Japan or Ger- 
many. but principally from Latin America, 
where local currencies are tied closely to 
the dollar. 

While the non-US sector of the equity 
market has thrived, domestic issuance has 
clearly taken a knock from rising interest 
rates and poorly performing share prices. 
Yet the feet that the past few years have 
seen such a big rush of companies to the 
equity market means that some sort of 
slowdown was inevitable. As (me invest- 
ment banker puts it: “A lot of companies 
needing equity got their plates filled in 
1992 and 1933." 

Investors have also become more 
choosy. Until this year, the big cash-rich 
Institutions such as mutual and pension 
funds were snapping up anything that 
came their way. Now the the clima te is 
less benign, investors are looking for qual- 
ity. Asked which deals are the easiest to 
sell today, Mr Nau responds: “Stocks with 
a clear cyclical participation, ie where 
investors can point to factors that indicate 
they are going to he direct participants in 


the economic recovery. Also, telecommuni- 
cations and information company stocks, 
and, now that the bond market seems to 
have stabilised, stocks with high yields, 
such as real estate stocks." 

This flight to quality is likely to be a 
feature of the new issues market for the 
rest of the year, but Wall Street is cau- 
tiously optimistic that activity will pick up 
steadily in the months to come. One possi- 
ble source of new business could be the 
booming mergers and acquisitions market: 
“For those companies using cash to make 
acquisitions, there will be companion but 
lagging equity’ deals." says Mr Nau. 

Above all, the recent rebound in share 
prices should instil confidence in those 
companies considering issuing new equity*, 
and especially those which postponed 
offerings earlier this year because of unfa- 
vourable market conditions. The market's 
rally has also attracted new money into 
mutual funds, which will have to invest it 
somewhere. 

With the Federal Reserve looking as if it 
will now put monetary policy on hold and 
bond prices stabilising, stocks recovering 
and mutual fund coffers filling, the out- 
look is brightening almost daily. And if 
foreign companies continue to raise equity 
financing the way they have done 
recently. 1994 could turn out to be a sur- 
prisingly good year for the US capital mar- 
kets. 


r? 


Joel Kibazo says UK rights issues are unlikely to match the 1993 total 

Not a year for breaking records 


A new wave of rights Issues 
seems likely if the UK equity 
market regains its strength 

tfifa autumn 

Institutions and ■ dealers 
were kept busy in the first half 
of this year as the market 
digested substantial cash calls 
from companies such as 
industrial conglomerate 
Wflfiams Holdings; Lasmo, the 
oO exploration and production 
company which later fought 
off a bid by Enterprise Oil; 
GKN, the engineering and 
industrial services group 
which won control of 
Westland in a takeover that 
was partly funded by a rights 
issue; and Eurotunnel. The 
total for the first six months 
was just over £5bn. 

However, as was the case 
with a number of new issues, 


plans for several rights issues 
are believed to have been 
aborted as the London stock 
market slipped back. 

Despite some signs of subse- 
quent market recovery, ana- 
lysts say that total funds 
raised through rights issues 
this year are unlikely to match 
last year’s record total of 
£U-5bn. Expectations for file 
end of this year hover ar o un d 
£9bn. 

Among the reasons given for 
the decline, the main one is 
the improved health of many 
companies as the UK economic 
recovery has started to take 
hold. In addition, better cash 
flow in the past two years has 
reduced pressure on compa- 
nies to seek funds from inves- 
tors to help “straighten" the 
balance sheet 


Mr Trevor Laugharne, UK 
strategist at Kleinwort Ben- 
son, says: “The 10 to 20 per 
cent improvement In cash 
flows we have semi to recent 
months, especially in the 
smaller and medium compa- 
nies, has certainly been a fac- 
tor in reducing the need for a 
rights issue.” 

This has left the way dear 
for issues made to fund an 
acquisition. But even here, 
analysts say companies have 
been slower usual in tak- 
ing this path to expansion 
because many have instead 
chosen to reduce high debt lev- 
els incurred during the reces- 
sion before considering futur e 
expansion plans. 

Another reason for the pos- 
sible reduction of Hie flow of 
Issues is “indigestion” result- 


ing from a glut which has used 
up the markets' capacity to 
underwrite further issues. 

There are fears in some 
quarters that with major flota- 
tions, such as the third and 
final payment for the sale of 
BT shares in mqnth, 

companies that wish to make 
rights issues may meet a less 
than enthusiastic response. 
New issues that were pulled at 
the height of the downturn 
cou ld al so add to the costs for 

Inn^. 

Mr Laughar ne also high- 
lights other demands on insti- 
tutions which may prevent 
them from taking on rights 
Issues from UK companies. 
These hn4wd» the favourable 
yields now on offer from bonds 
and UK gw* returns (far can 
outwei gh those that would be 


Emiko Terazono looks at problems in Japan 

Overseas investors wooed 


As Japan's large institutional 
investors show increasing 
reluctance to take on new 
equity, the country's leading 
c ompanies have stinted to look 
to overseas investors for fund- 
ing. Hence, it was no surprise 
when Japan Telecom, which 
was listed earlier this month 
along with an offering of 34,000 
shares, or 10 per cent in the 
company, wooed international 
investors by offering 5,000 
shares for the international 
market 

The issue was the first initial 
public offering ever to involve 
a separate international 
tranche. Japan Telecom offi- 
cials say they want more 
acknowledgement among inter- 
national Investors to make 
future fundraising on global 
financial markets easier. 

But some analysts fear that 
the decline in Telecom's share 
price since its listing, leaving 
investors sitting on losses, may 
hurt such prospects. Foreign 
investors have become increas- 
ingly wary of buying new Japa- 
nese equity. 

Some analysts say Japan 
Telecom'6 listing has high- 
lighted problems in Japan’s 
tricing system for public offer- 
ings. Established after the 
Recruit stocks-for-favouns scan- 
dal in the late 1960s. the cur- 
rent system attempts to pre- 
vent corruption by 
determining the offering price 
through an auction. 

The difference between the 
Japanese system and the book- 
building process used in most 
international equity issues is 
that the price is set near the 
start of the offering period 
rather than towards the end. 
The wider the gap between pri- 
cing and trading, the more the 
share price is vulnerable to 
wider market movements. 

The issue needs to be 
resolved soon, especially since 
foreign investors have become 
more important to Japanese 


companies than ever before. 
According to the Ministry of 
Finance, net purchases of Japa- 
nese stocks by overseas inves- 
tors totalled a record $46.7bn 
during the year ended March, 
an eight-fold rise over the pre- 
vious year. 

An increasingly number of 
Japanese companies have 
already taken advantage of 
demand among international 
investors. In June. Amway 
Japan, the Japanese arm of the 
US home care products group, 
offered its shares through the 
first global offering in two 
years. Other companies have 
set up internal investor refer 
tions groups in order to 
enhance their images as inves- 


their appeal to international 
investors. Small ventures in 
Japan have had a hard time 
raising funds through the 
domestic equity market due to 
stringent listing requirements. 
The Ministry of International 
Trade and Industry, which 
overlooks start-up companies, 
is now encouraging companies 
to look overseas to diversify 
their funding options. 

For Instance, Biomaterial, a 
bio-technology company based 
in western Japan, recently 
announced plans to apply for 
the US Nasdaq exchange. If it 
lists on the exchange to 1998 as 
planned, it will be the first Jap- 
anese company to bypass the 
domestic stock markets for a 


Large companies have started to list on 
overseas markets to raise their profiles 


tor-friendly organisations. 

Meanwhile. large companies 
have started to list on overseas 
markets so as to raise their 
profiles in the international 
ffp^ ricial community. Although 
such moves were common dur- 
ing tiie late 1980s when the 
Japanese stock market showed 
few signs of rising, since the 
stock market plunge in 1990, 
listings on overseas markets 
have been restrained because 
of the fell in profits among Jap- 
anese companies and the nega- 
tive image of falling stock 
prices. 

Nippon Telegraph and Tele- 
phone, the leading telecommu- 
nications operator, announced 
in July that it would list on the 
London and New York stock 
exchanges to raise its profile 
among the global financial 
community. “By listing in the 
US, where disclosure rules are 
stricter than in Japan, we hope 
to win trust from investors," 
say company officials. 

Smaller Japanese companies 
are also trying to increase 


listing on an overseas stock 
exchange. 

To list on the Japanese over- 
the-counter exchange, a com- 
pany is required to post Y10 or 
more in earnings per share 
to have net assets of Y200m or 
more, ft is a chicken-and-egg 
situation for many start-up 
companies since without 
strong earnings they cannot 
apply for a fisting, but without 
a fisting they cannot raise 
funds to expand their 
operations. 

The prospect of the equity 
offerings business in Japanese 
companies increasingly flow- 
ing outside the country is caus- 
ing anxiety among Japanese 
brokers, who fear they may 
lose business to foreign invest- 
ment houses which have stron- 
ger ties with overseas inves- 
tors. 

In Japan, the media have 
dubbed the phenomenon “part 
of the financial hollowing out 
• process”, whereby fundraising 
and secondary trading in the 
Japanese financial markets 


flow out to overseas markets 
due to Tokyo's numerous regu- 
lations, high costs and busi- 
ness practices which are not in 
fine with international stan- 
dards. 

The sentiment that the 
Tokyo stock market is not the 
place to be is shared by many 
foreign companies, which have 
withdrawn their listings from 
the Tokyo stock exchange's 
foreign division. This year. 13 
foreign companies, including 
Eastman Kodak, the US photo 
film maker, have Hplistpd from 
the TSE, reducing the number 
of companies fisted on the for- 
eign section to 96 companies, 
sharply lower than the 127 at 
the peak in 199L 

The high costs of mamtafo- 
ing a fisting and the feck at 
trading volume in the second- 
ary market have been cited by 
companies which have moved 
out Officials at foreign compa- 
nies claim the promotional 
value as well as fund procure- 
ment benefits of the 
exchange's foreign section are 
virtually non-existent 

In spite of worries over “hol- 
lowing out" aired by the local 
financial iwmin unify , including 
domestic brokers, the coun- 
try's finance ministry officials 
remain complacent over the 
threat that the Japanese finan- 
cial markets might decline into 
oblivion. They maintain that 
backed by Japan's high 
savings ratio and large current 
account surplus, the country's 
institutional investors retain 
as much financial power as 
ever. 

The reality is, however, that 
domestic institutional inves- 
tors have not recovered from 
the shock of the stock market 
plunge in the early 1990s and 
remain cautious about equity 
investments. Unless they over- 
come fears of taking risks, Jap- 
anese companies will continue 
to turn to overseas markets 
and investors for funds. 


Antonia Sharpe. on the world’s emerging markets 

The price has to be right 


The doomed $lbn offering last 
Ma y by Videsh Saitchar 
Nigam, India's international 
telecommunications carrier, 
marked a turning point in rela- 
tions between international 
investors and companies in the 
emerging markets of Latin 
America and south-east Asia. 

During 1933 and the start of 
1994. international investors 
were willing to pay demanding 
prices in order to get exposure 
to emerging markets, India m 
particular. But they drew the 
line at VSNL’s offering because 
In their view the pricing was 
excessively high. 


•fiie backdrop to the event 
was also inauspicious. Uncer- 
tainty over the direction of 
interest rates in the US and 
other leading industrialised 
nat ions caused profound vola- 
tility in financial markets and 
discouraged investors from 
malting fresh investments. 

The buyers' strike inevitably 
led to an oversupply of equity 
issuance from emerging mar- 
kets which has taken several 
months to clear. Mr Harry 
Hampson, head of the equity 
syndicate at J-P. Morgan in 
London, says sentiment has 
been much improved now that 


the market has digested the 
backlog of issues. 

“People have come back to 
their tfaiVs after the summer 
holiday with a more positive 
outlook,’* be says, noting that 
stock markets in south-east 
Asia had also strengthened 
over the summer. 

Some fairly large deals are 
expected from the region in the 
autumn, such as offering from 
telecommunications companies 
in Malaysia and Indonesia, he 
adds. 

Nevertheless, investors are 
expected to be far more selec- 
tive about offerings than in the 


past “I will be looking at each 
issue individually,” says Mr 
John Legat, senior emerging 
markets portfolio manager at 
GT Management He is more 
optimistic about prospects for 
Latin America, especially Bra- 
zil. However, he is cautious 
about Asia, which in bis view 
offers less value. "Malaysia is 
looking expensive, it's at the 
end of its interest rata cycle 
and the next move is up," he 
argues. 

Co mpanies from the more-es- 
tablished emerging markets 

Continued on next page 



Five years ago: poke turn away tats applicants in b London privatisation queue for water shares 


received from equities. 

He also believes institutions 
continue to want to spread 
their risks by investing in 
other markets. Thus, “emerg- 
ing markets will also be a 
draw on investors’ funds”. 

Other strategists point out 
that tiie qneoe of big privatisa- 
tions in the pipeline in other 


markets such as that of Luft- 
hansa in Germany or Renault 
and AGF to France may pro- 
vide stiff competition for 
investors’ funds. 

But Mr Philip Woistencroft, 
UK strategist at Smith New 
Court, remains confident 
about the UK market T think 
finance directors will take 


advantage of a strong market 
with a lot of value to urge 
their companies to go to the 
market for funds- But I don’t 
think that of itself would put 
pressure on the equity mar- 
ket* 

Another strategist simply 
explains: “Those rights issues 
tha t could have been question- 


able anyway have already 
been done. The plain fact is 
that if it is priced right then 
the market will take it.” 

Researchers at Smith New 
Court point out that compa- 
nies emerging from a reces- 
sion may see another advan- 
tage In calling on the market 
for cash. Mr Woistencroft says: 
"Companies are still more 
likely to go for a rights issue 
because corporations do not 
want to be exposed to 
short-term debt For many it is 
a sentimental thing after the 
interest rate rises of the late 
1980s.” 

Liquidity in the market 
remains the key issue, says Mr 
Woistencroft “Overseas funds 
were hugely absent from the 
UK in tiie first half of this year 
thus and could not help in pro- 
viding liquidity. Things should 
change as they return.” 

According to one analyst, 
who declined to be named: 
“Those with a good reason for 
a rights issue should have no 
problem over tiie next month, 
but many will await the mar- 
ket's reaction to the next bud- 
get before assessing if there is 
an opportunity for a rights 
issue.” 


International 
Equity 
Offerings 
1994 ^ 




"DANMARK 
Tele Danmark A/S 

8&22A77Q B Shares 
joint Global Coordinator 
DKK19.6 billion 


ApniflM 


MV. Verenigd Bezit VNU 

ZjBOOflOO Common Shares 

Joint Global CoonS nator 
NLG 608 million 


uma 

Samsung Electronics Co., Ltd 


2,173,912 FU«M4A Global 
(tapoaBarySham 


OS. $100 mUtton 


FINAXA 


3% Convertible Bonds 

due 3001 

John Lead Manager 
FF 23 Milton 


Empress National de 
EtoctricUadjSJL 

22503,183 Sham of Capital Stock 


Co-Global C o ordi na tor 
PtftS 145.8 bMlOfl 


UnfdanmarkA/S 

Unibank A/S 
6,9MJKX> Clou A Shorn 
Lead Manager 

DKK1.7 button 


GEMEX 

Grupo Em hotel lador 
de Mdxlco, SJLdeCV. 

SjBSOfiOO Global Depositary Shoiu 
ond 1^00000 Ordinary 
rWotpiHanCiiMlluMM 

Global Coordinator 

US. $140 mint on 


T»< wd u »wrP B».i irmrt ' Ou iih w 
If PH i mrtm n 
Cuwlbw 

lnomieow rt w i l) a*M 

Ibta Electric Companies 
U5£33 Globa! Depositary Statu 
Load Manager 
US. $75 million 


^-NecSoyd 

KoninkHJke NedUoyd Group N.V. 

4M%CoaurtMa Suborrfinatad 
Bonds due 2001 

Joint Lead Manager 
NLG 499 million 

_ 


PTT Exploration and Production 
Public Company Limited 

50400000 Ordinary Shetu 
International CaonSnator 
Barnes brn ton 


Jj*THE SAJOJRA BANK, UMITED 


50000000 NonctanutaHve Mandatory 
ConvectBite Prate r c nee Sharee 


international Lead Manager 
Yen 100 billion 


DennorskeBank 

WLDOOIOBMun haaMnled Shares 
Global Coordinator 

NOKIA bffllon 


«> 


Crista lerias de Chile SJL 

4420000 American Depostary Shores 

Global Coordinator 

US. $96 million 

Ho«yiw 


TT&T 


Thai Telephone & 
Telecommunication 
PuMIc Company Limited 

50000000 Ordinary Shews 


International Coordinator 

Baht Z3 blllton 


The Ministry of the Treasury 
of the Republic of Italy 

VMOOOOOOOSham 


Istituto Naztonate delle 
Assicuraztoni S-P-A. 

joint Global Coord bwlor 
Llre4 l 536 billion 


Mr mr 


CORTEFIEL 

4,90534 Shares 

Joint Global Coordinator 

PtasISSbUUon 


Skandfn 

Skandia insurance Company Ud 


International Rights Issue 
25^80503 Ordinary Shares 


Join! Lead Manager 
SEK 28 billion 


RANBAXY 

LABORATORIES LOOTED 


5,161290 Global Depositary Shares 

Lead Manager 
US. $100 million 


Pharmacia 


79,500400 A Stem 

John Global Coordinator 
SEK 9.1 billion 


Goldman 

Sadis 


Be$ng* Frankfut Hong Kong London Madrid* Milan Montreal 
Paris Sector Singapore Sydney Taipei* Tokyo Toronto 

Issued by GddmEn Sachs WemateroLatnembe* d TV® Secures and Fuiwe&AritorAy. 

•Mp rorenrafr i p j tic t 


Moscow* NewYbrit 
Vancouver Zurich 





,1 


FINANCIAL TIMES 


WEDNESDAY SEPTEMBER 


21 1994 


L atin American companies are 
continuing to raise large amounts of 
capital on international equity 
markets - despite turbulence in wurid 
markets and big blips in investor 
confidence earlier this year. 

Over the last few weeks, greater 
stability In the OS financial markets and 
positive political developments in Latin 
America - in particular in both Mexico 
and Brazil - have boosted confidence. 
There are hopes in some quarters that the 
total volume of new issues could come 
near to last year’s record $6bn and 
certainly match the $4.6bn raised in 1992. 

In addition, there are some signs that 
international interest In Latin American 
companies is widening - with sectors 
snch as retailing and electricity 
distribution attracting attention. 
Investors are also prepared to consider 
deals in coon tries such as Peru that 
would have been considered marginal 
until very recently. 

“There is just unbelievable 
competition,'' says one US banker. “There 
are 200 investment bankers in Mexico 
City today but yon will see grey suits and 
blue suits in every Latin American 
capital.” 

Even so, bankers acknowledge that the 
pace of new issuance has slowed signifi- 
cantly earlier this year, following succes- 
sive increases in short-term interest rates. 


INTERNATIONAL EQUITY OFFERINGS 6 

Richard Lapper looks at the growing international interest in Latin America 

The grey suits you see in every capital 


Investors were also troubled by signs of 
political instability, especially in Mexico, 
where a presidential candidate for the 
governing Institutional Revolutionary 
Party was assassinated in March. 

Indeed, during the second quarter, a 
number of deals were withdrawn because 
of a lack of investor interest 

For example in June, the Argentine gov- 
ernment had to drop a planned $150m IPO 
of its remaining 25 per cent stake in TGN, 
a privatised gas pipeline company, 
because of insufficient demand. 

Even so, Interest picked up dozing July 
and by the beginning of August Latin 
American companies had raised a total of 
$3»27bn in 47 separate issues, only five 
less than for tbe whole of last year, 
according to figures collated by Interna- 
tional Financing Review. 

And last year, the total figure was 
boosted by tbe lau nch o f a very large 
share offering Crum YPF, the Argentine 
oil and gas company. The Argentine gov- 
ernment sold a 45 per cent stoke In YPF 
in June 1993, raising a total of S3bn which 


included an International tranche of mme 
$2L3bn. 

Sentiment has been buoyed by signs of 
stability in the US bond market but also 
by developments on the political frost In 
Mexico - which saw some of the greatest 
activity last year with 26 new issues rais- 
ing a total of $2.7lbn - the app aren tly 
clean victory of Mr Ernesto Zedillo, the 


said to be looking at tbe international 
markets. 

fn Brazil, the continent’s largest econ- 
omy, markets have been encouraged by 
the success to date of the Real plan, an 
economic stabilisation package intro- 
duced in July, thi» lawi in the opinion 
polls built up by Mr Fernando Henrique 
Cardoso, the plan's architect and former 


Fees are under pressure, especially in deals involving 
privatisation in the bigger economies 


presidential candidate of the governing 
PM, has revived confi de nce. 

Even though the local markets had dis- 
counted a PRI victory, stock prices have 
risen, and a number of new issues - 
Including the sale of the government’s 
remaining stakes in two of the country's 
largest banks, Bancomer and Banamex - 
are again on the agenda. Grnpo Elektra, a 
retailing gro up which pulled an Interna- 
tional offering earlier this year, is also 


W hen Qingling Motors, 
a Light duty truck 
maker, was listed on 
the Hong Kong stock exchange 
last month, it set a new pricing 
low for H shares, the China 
enterprises listed in the colony. 

The HK22.07 price tag put 
the shares on a price-earnings 
ratio of nine times 1994 earn- 
ings - a Ear cry from the 17.89 
multiple commanded by Tsing- 
tao Brewery, the pioneering H 
share which came to market a 
year and a month before Qlngl- 

ing. 

Slashed p/e multiples are a 
function of three broad 
changes to and in the embry- 
onic market: a downturn in 
general market conditions 
across the globe; growing 
choice in the H share market; 
and enhanced sophistication 
among the former state owned 
enterprises themselves, which 
has led to what bankers dub 
“more realistic” pricing. 

While the move towards 
more aggressive pricing has 
prevented a mass shelving of 
listings during the lull in 
market sentiment that has 
marked trading activity since 
the beginning erf the year, it 
has not been without its 
casualties. 

The listing of putative H 
share Shanghai Hairing Ship- 
ping Company has been put on 
the back burner after directors 
and sponsors fell out over pric- 


Chinese shares in Hong Kong 

The multiples take 
a tumble 


tog: it is understood the com- 
pany, whose listing was to 
have preempted that of Qingl- 
ing, could not bring itself to 
accept a single-digit p/e. 

Peregrine Capital, the Hong 
Eong merchant bank which 
played a leading role in 15 
fund-raising transactions in 
Hong Kong and three in China 


panies has persisted during the 
downturn even though the 
responses to listings have not 
been as consistently over- 
whelming as last year. He 
attributes this to more selec- 
tive investors who are looking 
more closely at the structure of 
the company on offer and the 
merits yielded by it and the 


All the shares were fully subscribed - if 
only by a whisper - but some this year 
have performed poorly on their debut 


in the first half of the year, 
involving total funds of 
HR2&9hn, admitted at the time 
of its interim results earlier 
this month that a number of 
big mandates had been shelved 
“until market conditions 
improve”. 

However, Mr Alex Ko. a 
director of the company, 
believes interest in China corn- 


industry sector in which it 
operates. 

-P ricing is subject to market 
conditions. With a good market 
and good company you can get 
a high price. But if the market 
is down and selling on a p/e of 
10 times and you are raising 
capital at 12 or 15 times, of 
course the market will have 
less interest in the company. 


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finance minister, ahead of presidential 
elections next month. 

Among Brazilian issues expected - 
ahead of October’s elections - is Usimi- 
nas, the steel company, which is said to 
be seeking some $500m. 

Elsewhere, investors are increasingly 
positive about economic prospects In 
Peru. Several new Peruvian issues - 
including an issue for some $45m to $50m 
for Banco Wiese, the country's second 


largest hank, are expected in the autumn. 

There is also optimism about the pros- 
pects for some smaller economies. Field- 
stone Private Capital Group, for example, 
a merchant bank which specialises In 
energy-related business, is seeking to 
raise some $32m to $33m for a Bolivian 
electricity distribution company, the 
Cochabamba Light and Power Company 
(ELFEC), by selling a 70 per cent govern- 
ment shareholding to private investors in 
November. 

Some of tbe money win be raised locally 
- incidentally creating one of the La Paz 
stock exchange’s first equity issues - but 
Field stone is also applying to have the 
stock listed in London, and alms to raise 
money from both retail and institutional 
Investors through an offer for sale. 

“Until now, there has been no possi- 
bility of buying Bolivian stocks so there is 
considerable pent-up demand with large 
sums already deposited for this purpose 
tn New YoTk and. London," explains Sir 
Peter Earl, a consultant with Fijeldstooe 
in London. 


“Proper pricing of initial 
public offerings depends very 
much on several factors: pros- 
pects of the company, manage- 
ment. industry sector, general 
market conditions and senti- 
ment and even political stabil- 
ity,” be says. 

All H shares to date have 
been fully subscribed - if only 
by a whisper, as in the case erf 
Tianjin Bohal Chemical - but 
some of this year’s offerings 
have performed poorly on their 
debut. Luoyang Float Glass, 
which kicked off the 1994 batch 
of H shares on July 8, saw its 
share price slide 20 per emit to 
HKS3.65 on the first day of 
trading. 

For the companies which 
went to New York - of which 
Shandong Huaneng Power 
Company is the pioneering 
example of a Chinese company 
selected by the mainland 
authorities to opt for a single 
listing (as opposed to a dual or 
secondary listing) - perfor- 



The trading floor of the Hong Kong stock exchange 


manres have been even worse. 
Trading volumes are very thin 
- Shanghai Petrochemical, 
which is traded in both New 
York and Hong Kong, sees the 
bulk of activity in the colony. 

Mr Andrew Liu, managing 
director at Morgan Stanley 


Asia - sponsor of the impend- 
ing China Eastern Airlines 
issue on Wadi Street - says 
that while shares have been 
placed on a global basis for a 
number of issues, the trading 
patterns invariably show that 
tbe dominant activity takes 


MvMMKd 

place in Hong Kong. 

“I think that is probably the 
most significant point we have 
observed in the past year: the . 
natural trading market for all 
these China companies is going 
to be Hong Kong or China ” be 
says. 


Tbe interest is leading to increasing 
competition for Latin A merica n man- 
dates, say bankers. “The markets are riin 
growing. The hard part is whmitef the 
mandates, not getting the deal dime, sag- 
gests one New York-based Latin American 

financier. M . . 

Mr Francis Coles, head of Latin Ameri- 
can corporate finance at Baring Brothers 
in New York, says 1994 bas been mm* 
Hum 1993 but concedes that more 
recently “political factors have had a posi- 
tive influence. There are quite good condi- 
tkms for getting de als done. There is a lot 
of potential supply. I think there are some 
quite good companies out there," he adds. 

Referring to two successful recent deals, 
Mr Coles says: “The pricing wasn't over- 
aggressive. It is a dear demonstration to 
us that it is possible to do deals success- 
fully if they are in a sector where the 
investor wants to be.” 

Certainly, tbe interest is leading to 
greater competition among investment 
and merchant bankers Involved In the 
deals, with fees under pressure, especially 
in d eals involving privatisation in the big- 
ger economies. “At the end of 1992 lead 
underwriters were generally collecting a 
commission fee of between 3.75 and 5.25 
per cent," points out one New York 
banker. “But in several deals this year the 
commission has tall mi below 3 per cent of 
the amount raised,” he adds. 


This pattern has prompted 
the Chinese government to 
push fen- dual listings to twin 
New York with active “home” 
markets, where interest, news 
and analyst research helps gal- 
vanise trading momentum. 

Certain mechanical problems 

- not least the disparity 
between listing requirements 
and procedures on the two 
exchanges - mean that dual 
listings are unlikely to be 
offered to all the remaining 
New York-bound China compa- 
nies, although Morgan Stanley 
reckons those that are tided 
over until next year will have a 
stronger chance to benefit 

The Chinese government has 
been playing a pro-active role 
in the securities markets all 
round. In recent months tbe 
focus lias been on tbe domestic 
markets, which have since pro- 
vided a total turnabout In fim- 
tunes for investors who were 
previously faced with falling 
prices, tight liquidity and poor 
sentiment 

Tbe government announced 
plana to list USSlbn worth of B 
shares - stock iterigtiaFwl for 
foreigners, but which will now 
be available to mainlanders too 

- this year, in effect trebling 
the size of the market 

Louisa Lucas 


Indian equities have hit all-time highs, writes Stefan Wagstyl 


Bombay shrugs off VSNL fiasco 


The postponement of a planned USJlbn 
issue by Videsb Sanchar Nlgam (VSNL), 
the Indian state-controlled international 
telecommunications carrier, earlier this 
year cast a cloud over the country’s over- 
seas equity offerings. 

But business has recovered markedly 
since the issue was taken off the market 
in April when fond managers baulked at 
ttie pricing of the deal, the largest offer- 
ing ever made by an Indian company. 

Today, Indian groups are qumietng to 
tap the market. Buyers are more careful 
about pricing than they were before the 
VSNL debacle but still have a strong appe- 
tite for Indian equities, which have 
recently hit new all -time highs. 

The Bombay Stock Exchange’s index of 
leading shares has risen by about 35 per 
cent since early May to reach a new 
all-time peak last week of 4628. 

That compares with a record high of 
4546 set in April 1992, during a rally 
which collapsed when it emerged that the 
market was being fuelled by suspected 
illegal share-financing operations organ- 
ised by Mr Harshad Mehta, a stockbroker. 

The market is now being driven op by 
hopes of good prospects for the Indian 
economy, which is emerging from three 
years of reform and restructuring. Tbe 
most boUisrh stockbrokers believe the 
index is now in sight of 5000. The more 
cautions point out that the market has 
already risen 80 per emit since its low of 
2633 in the noddle of last year and is 
riding for a tall, with too many investors 
chasing too few stocks to nnsnstalnably 
high levels. 

According to the bolls, increases in cor- 
porate profits, which rose 75 per cent at 
tbe net level in 1993-94 and are forecast 
by stockbrokers to rise a farther 40-50 per 
emit in this year, justify current price/ 


earnings multiples for leading shares 
which trade at about 53 times their net 
earnings for 1993-94 and 35 times likely 
earnings for 1994-95. 

The hears concede the economic outlook 
is better than at any time In the past 
three years. But they believe that in their 
rush to buy, investors have pushed share 
prices tar beyond levels justified by eco- 
nomic logic. They suggest that prices are 
being pushed to unsustainable levels by 
tbe availability of low cost funds, includ- 
ing money raised from equity and bond 
issues which is being recycled into the 

The new issue flow in the domestic 
market has been slower ttmn in 
the 1993-94 financial year 

stock market. 

The flow of new issues in the domestic 
market has been somewhat slower than in 
the L993-94 financial year, which ended in 
April, when Rs322bn was raised. In the 
first four months of 1994-95, companies 
raised Bs62hn in domestic issues. How- 
ever, mi the international markets, com- 
panies are raising more than ever before, 
despite tbe VSNL fiasco. Knee April, they 
have raised about $2-5bn in equities and 
bonds, compared with $2L5bn in 1993-94. 

The finance ministry introduced con- 
trols on international Issues in May to try 
to prevent companies raising money for 
what it regards as unimportant purposes. 
Issuers most seek prior approval from the 
ministry, which attempts to ensure funds 
raised are to be applied to ecomomicaUy- 
prodnetive investments and not, for exam- 
ple, for injecting into the stock market. 
Officials operate an informal queue aw* 
give priority to favoured industries, snch 


as power and transport. 

Even though the total market capitalis- 
ation of the Bombay market Is now nearly 
$150bn, daily turnover is quite low at 
below $100m because so little stock is 
freely traded. The tauflles which control 
most listed companies typically hold 25 
per cent to 75 per cent of the issued capi- 
tal. Other long-term holders such as 
development banks are also infrequent 
sellers. Very little is left fen: foreign fond 
managers and other new Investors to boy. 

The difficulties in acquiring shares are 
accentuated by the cmnbosome trading, 
settlement and transfer procedures, which 
mean it can take six weeks for sellers to 
receive payment and three months for 
buyers to secure full ownership of their 
stock. 

Alt hough stockbrokers and bankers are 
trying to improve the process, they expect 
dramatic changes only after Bombay 
Stock Exchange and the newly-formed 
National Stock Exchange launch comput- 
erised on-screen trading and a computer- 
ised share depositary is established to 
handle share transfers smoothly. On- 
screen trading an the NSE could start this 
year for top stocks and on the Bombay 
exchange next summer, but a f®Hy- 
fledged depositary is two or three years 
away. 

These difficulties have already per- 
suaded some foreign fond managers to 
slow their purchases of Indian stock or to 
switch to the Euroequity issues of Indian' 
companies. After averaging $23 Lm a 
month in the first half of 1994, net foreign 
buying of Indian equity fefl to f89m to 
July and $S0m in August. Given that, 
many investment funds dedicated to India 
have yet to to vest, this slowdown is Htady 
to be temporary, but it shows fond man-, 
agers are paying heed to price levels. 


The price has to be right 




Continued from previous page 

will also have to be more real- 
istic about pricing because erf 
the increased competition for 
funds. Political events in the 
Middle East and South Africa 
have turned the attention of 
international investors to mar- 
kets in those regions. 

Mr Hampson says there is a 
growing interest in what he 
describes as “near-emerging 
markets", snch as Israel and 
South Africa, where Investors 
have very low portfolio weight- 
ings in relation to the devel- 
oped nature of their econo- 
mies. 

After years of obscurity, 
Israel is emerging as a serious 
candidate for International 
investment now that the Arab 
boycott has been lifted. Mr Ron 
Lubasch, the head of Lehman 
Brothers’ recently-opened Tel 
Aviv office, says investors are 
attracted by Israel's highly-de- 
veloped infrastructure and 


fast-growing economy. It is 
possible that Israel's credit rat- 
ing will be upgraded to A 
minus from triple-B plus in the 
near future, he suggests. 

Bankers expect a series of 
international equity offerings 
from Israel over the next year 
as the government seeks 

greater foreign 

participation in 

the sale of its Israel is er 
stakes in the serious d 

country's lead- jntemationi 
mg companies. 

At present, 
only 2 per cent of the Israeli 
stock market is estimated to be 
owned by foreigners, a signifi- 
cant proportion of which is 
made up of BZW Investment 
Management's Israel Fund. 

The Israeli government has 
appointed Werthelm Schroder, 
part of the UR merchant hank 
and fond management group 
Schraders, to advise it on the 
sale of shares in Israel Chemi- 
cals (ICL). The government 


Israel is emerging as a 
serious canefidate for 
international investment 


plans to sen 32 per cent of ICL, 
currently valued at around 
S850m. through an interna- 
tional public offering and 15 
per cent to a single Investor or 
group of private investors. 

Morgan Stanley has been 
selected to advise on the inter- 
national offering of shares in 

Bezek. the tele- 

communica- 
argmg as a ttons company. 
Kfidate for The govern- 
investmenf 106111 hopes to 
_ sell 25 per cent 

of Bezek, which 
would lower its stake to 51 per 
cent The sale, which is likely 
to go ahead by May next year, 
could raise between 5600m and 
3700m. 

Another candidate for priva- 
tisation Is El At the state- 
owned airline. The govern- 
ment, which intends to sell a 
per cent of the company 
through the Tel Aviv stock 
exchange and through an 
international offering, has 


appointed BZW to conduct a 
valuation of the airline. 

El Al’s privatisation is bring 
held up by three problems: 
namely, the government's 

desire to keep a golden state to 

protect state interests; the 
issue of the airline's fSSm 
annual security costs. SO per 
cent of which are currently 
met by the government and 
the fact that El A1 is m* 
allowed to fly its aeroplanes on 
the Jewish Sabbath. Neverthe- 
less, officials say these issues 
should be resolved in time feff 
El A1 to be floated by mid-1995- 

In the meantime, bankers 
Involved In these offerings are . 
busy hiring staff to provide 
much-needed research on 
Israeli equities. Although 
Israel has a sophisticated brak- 
ing community, the majority <£. 
the research is in Hebrew and . 
the stock market is stm per- 
ceived to be driven by senti- 
ment rather than by funda- 
mentals. 








FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 1994 


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FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 1994 


INTERNATIONAL EQUITY OFFERINGS 


T he most remarkable thing about 
eastern Europe’s stock markets is 
that they exist at all. What genera- 
tions of bankers and traders slowly and 
sometimes haphazardly constructed in the 
City of London and on Wall Street, east- 
ern Europeans began building from 
scratch in 1990. But, by 1993. the volume 
of trading, though not the value, on the 
Warsaw bourse was almost equal to that 
of London, and the exchanges of Warsaw, 
Prague and Budapest are now well on 
their way to becoming a standard, if mod- 
est, shopping stop for European invest- 
meat portfolios. 

The switch from five-year plans to five- 
year government bonds has not always 
been either smooth or seemly. “This is 
like Wall Street in the 1870s," says Mr 
Andrew Reicher, head of investment for 
CS First Boston in Prague. “I haven’t a 
clue and neither has anyone else They’ve 
only ever read about markets in books." 

Of the three exchanges, the Prague 
bourse is most closely linked to the 
broader economic reforms in the country. 
After their nation's “velvet revolution", 
Czech leaders decided that the only 
answer to their country's unfortunate 
inheritance of one of the most centrally 
planned economies in eastern Europe was 
a fast-paced, mass privatisation pro- 
gramme. The “velvet divorce", which lib- 
erated the Czech republic from the loss- 
making heavy industry and defence facto- 
ries in Slovakia, made tide process easier. 

As Mr Richard Wood, founder of Wood 
and Co Securities, one of the biggest 
investors in the Prague bourse, puts it 
“When it comes to privatisation and capi- 
tal markets, the Poles behave like Czechs 
and the Czechs behave like Poles." 

The Czech policy of mass privatisation, 
which transferred 943 companies to its 
citizens for negligible fees In the first 
wave of privatisation and will transfer 


Chrystia Freeland and Nicholas Denton report on eastern Europe's stock markets 


From paper casinos to reliable yardsticks 


891 more in a second wave that Is already 
under way, has made the Prague 
exchange the broadest In eastern Europe 
with over 900 shares publicly traded. 

But western investors warn that the 
Czech republic's international image as 
eastern Europe's free market zealot 
obscures a dub world still run by the old 
elites. Western observers complain that 
insider trading, abetted by the loosest reg- 
ulatory environment in eastern Europe 
and the multitude of channels outside the 
stock exchang e through which shares can 
be bought and sold, is rampant 

“Often we have no idea that large 
blocks o f shares have been traded for 
months aft erwards ," complains one west- 
ern banker based in Prague. “There Is a 
tremendous cynicism about the rule of 
law. The factory directors think they are 
very smart, but often they wind up screw- 
ing the shareholders." 

The Budapest bourse is at the other end 
of the spectrum, although It is by no 
means free of insider trading. It is 
smaller, better regulated and often 
peripheral to the economic transforma- 
tion in the country. Saddled with a gross 
foreign debt of $2,500 per bead, which, 
unlike their Polish counterparts, the Hun- 
garians chose not to negotiate away, 
Budapest has been reluctant to give its 
state enterprises to Its citizens for free. 
The Hungarian government has preferred 
to sell its patrimony to strategic foreign 
investors for real money and in the rare 
cases when state companies have been 


floated on the exchange has broken the 
east European pattern and over-valued 
rather than undervalued share prices. 

In Hungary and Poland, enthusiasm for 
the stock market has been conditioned by 
Its infancy, which was traumatic for 
investors in Hungary but wildly lucrative 
in Poland. “In Warsaw it had a snowball 
effect," says Mr Andras Stmor, managing 
director of Creditanstalt Securities In 
Budapest “But here people got the 
impression that the stock exchange is not 
where yon make money." 

As a result only 29 shares are traded cm 


speculative frenzy of 400,000 registered 
domestic investors and a lack of other 
outlets for domestic capital, last year the 
Warsaw bourse experienced a 820 per cent 
rise in real terms with the average prices- 
to-earnings ratio totting the dizzy level of 
40. Poland's strong economic growth last 
year at 4 per emit was the second highest 
in Europe, but the speculative fever soon 
outstripped real economic gams. 

“Poles are the Chinese of Eastern 
Europe, we are traders in our souls," Mr 
Krzysztof Stnpnlcki, chief representative 
of CS First Boston in Warsaw, offers as an 


The Polish entrepreneurial instinct has been sorely tested, 
with the Warsaw bourse dropping more than 50 per cent 


the Budapest exchange, with half a dozen 
more expected to be floated over the next 
few months, and average dally turnover, 
in the first four months of this year, was 
Sllihn. Uniquely, the Hungarian bourse 
is dominated by companies which were 
private from the start and, from the out- 
set, its main role has been to raise capital 
rather than to serve as an outlet for spec- 
ulative instincts repressed by four 
ifararipg of m nuntitilsm. 

The Warsaw exchange, with only 24 
shares listed and a dozen more expected 
in the next few months. Is structu rally 
similar to its puny Hungarian cousin 
rather than its swollen Czech neighbour. 

However, propelled by the national 


explanation for his compatriots* stock 
market fever. 

The Polish entrepreneurial instinct has 
been sorely tested over the past few 
months, as the Warsaw bourse has 
dropped more than SO per cent But west- 
ern institutional investors - who got out 
in time, creating an ironic situation in 
which bankers estimate that between 
$50m and $lS0m of Polish domestic capi- 
tal has down into the coffers of western 
merchant hanks - describe the foil as a 
“correction" rather than a collapse. 

Indeed, despite their recent declines, no 
one seriously doubts the staying power of 
any of the three main eastern European 
bourses. The bigger question Is what real 


rote the stock markets are playing in the 
radical economic transformations under 
way in the former Warsaw pact states. 

As an engine for economic transforma- 
tion, the exchanges have played a modest 
role. The central challenge that post-com- 
munist economies face is opening the 
economy to the entry of new, private busi- 
nesses and transferring state enterprises 
into pr i vate bands. 

Insiders suggest that, even to the Czech 
republic, where the stock market has 
played the most central role in privatisa- 
tion, it Is a facade behind which the old 
elites are manipulating the economy 
much as before. 

By contrast, Hungary, which has 
fa v our ed direct foreign investment over 
public flotations, has been at least as suc- 
cessful as its eastern European neigh- 
bours. Many Hungarians argue that a 
takeover by a strategic foreign investor, 
such as General Electric, which, after a 
shaky start is successfully transforming 
Hungary’s Tungsram factory, is the most 
effective way to push an enterprise Into 
the market economy. 

Furthermore, the bourses have also 
been slow to take on one of their central 
functions in established market econo- 
mies: offering companies a venue for rais- 
ing capital. Investors in all three capitals 
Himp iain of the “irrationality” of domes- 
tic players and describe their countries’ 
stock markets as “paper casinos.” As the 
bourses mature, that is beginning to 
change, but only gradually. 


Finally, as investment vehicles for* 
domestic savers, the eastern European' 
stock markets have been Indifferent per- 
formers. Their volatility has made them 
Immensely profitable for some western 
investors and a few sophisticated locals. 
But as the Warsaw bourse demonstrated 
earlier tw* year, the gains of a few smart 
speculators, many of them outsiders, have 
been at the expense of naive, over-zealous 
domestic investors, who would have done 
better putting their money into reliable, 
high-yielding: Treasury bills. 

Yet, while stock markets have not 
served as a magic carpet which has 
swiftly and efficiently whisked eastern 
Europe into capitalism, using exchanges 
to transform communist economics has 
had two great virtues. First it is test 
Hun gari ans can argue that strategic for- 
eign investors produce more fundamental 
manag ement changes, but it is only by 
trusting an unruly and often unfair stock 
market that the Czech republic has man- 
aged to jump from being one of the most 
state-controlled economies in eastern 
Europe to the leading market reformer. 

Perhaps more importantly, stock mar- 
kets can play a crucial political role. More 
than any nation in eastern Europe, the 
Czech republic has transformed itself 
from a country of comrades into a land of 
small shareholders. That could be the rear 
son why, while the disgruntled Poles and 
Hungarians have turned to ex-conununist 
leaders, the Czechs are still ruled by an 
aggressively right-wing government. 

Moreover, as Poland, the Czech republic 
and Hungary move from economic transi- 
tion to growth, all three countries’ 
bourses are settling down as mature, rela- 
tively stable exchanges. Like their west- 
era counterparts, they are becoming neD- v 
able yardsticks of their nations* economic 
growth and a small, but standard, de- 
ment in European investment portfolios. 


A n increasingly restric- 
tive mood has kept the 
cap on new issues in 
parts of the Asia-Pacific region, 
as stock exchange authorities 
have looked for quality, not 
quantity. However, business 
has been booming in Australia. 

“In Malaysia. Thailand and 
Indonesia, the regulations gov- 
erning new flotations have 
been tightened through 
tougher listing requirements," 
says Mr Michael Franklin at 
James CapeL “Typically, how- 
ever, support for secondary 
issues has not generally been 
required, as new issue prices 
usually have been pitched 
below market levels so that a 
good market in the shares is 
established immediately.” 

Earlier this month in Seoul, 
an advisory group to the 
finance ministry urged wide- 
ranging financial reforms, pav- 
ing the way for the country to 
modernise and internationalise 
its finance industry. 

The ‘ recommendations 


included removal of the cur- 
rent 10 per cent ceiling on for- 
eign shareholdings in 1996 or 
1997 and called on the ministry 
to allow foreigners to list 
shares and to issue depository 
receipts from next year. The 
group added that it would be 
desirable to give domestic com- 
panies more freedom in raising 
overseas funds, so that these 
could be obtained more easily, 
and proposed that South Kor- 
ean companies should be able 


Tougher listing restrictions in the Asia-Pacific region 


Authorities look for quality 


Malaysia has begun to 
reject listings in 
“wrong” industries 


to list stocks on overseas 
bourses from next year. 

Kuala Lumpur saw some 
restraints on listing require- 
ments introduced last year to 
inhibit back-door listing and 
reverse takeovers. More 
recently, the Malaysian securi- 
ties and exchange commission 


has begun to reject applica- 
tions for new listings if appli- 
cants are considered to be 
operating in the “wrong" 
industry. Far example, while a 
technology company might 
obtain listing approval quickly, 
a tovtilg company may have to 
wait 

The Bangkok authorities 
have also been making a con- 
certed effort to raise the stan- 
dard of companies listed on the 
exchange by taking a tougher 
attitude to screening new 
applicants for public offerings, 
particularly in the property 
sector where it used to be rela- 
tively easy for companies to be 
listed. 

In July, the SBC announced 
new rules governing initial 


public offerings in an attempt 
to broaden share ownership 
and end corrupt deals involv- 
ing underpriced shares in 
newly listed companies. 

Major new equity issues 
have been mostly well-received 
and oversubscribed over the 
last year with Telecom Asia 
taking Bangkok to a high for 
the year when it made its 
debut last December, and the 
shares trading at Btll6 against 
an initial offer price of BtS5. 

In Singapore, the last major 
issue, the partial privatisation 
of Singapore Telecom in Octo- 
ber last year, received official 
encouragement when local 
investors were allowed to tap 
into their Central Provident 
Fund accounts to finance appli- 


cations for the issue. However, 
the terms of the issue were not 
attractive enough to appeal to 
foreign investors who judged 
that the prospective price-earn- 
ings ration was too high. The 
flotation, which raised about 
S94.4bn, saw l.4m Singaporean 
investors acquiring shares, 
which more than tripled the 
number of shareholders hi the 
country. 

A more recent successful 
issue was that of Petron in 
Manila earlier this month.. The 
oil refiner surged 136 per cent 
above its offer price on the 
first day of trading, but the 
broad market fell as investors 
switched from other blue 
chips. 

In Taipei, which has rigid 


Hating req uirements , the chair- 
man of the SEC, Tax l.ifr -nin g 
has stressed that any increase 
in the number of listed compa- 
nies would be permitted only 
as a last resort to narrow the 
imbalance between supply and 
demand for shares 

However, Hung-Lung Yuan 
at Wardley James Capel in 
Taipei says that as a result of 
the rigid regulations, only 29 
new listings were permitted 
during the whole of 1993 and 
another eight during the first 
seven months of this year, tak- 
ing the total number of compa- 
nies listed on the exchange to 
293. 

"Although the government is 
likely to push to ex pand mar- 
ket capitalisation through new 


listings and privatisation, it 
does act as a protector to the 
retail investor by scrutinising 
the companies which seek to 
□oat their shares on the mar- 
ket," he says. 

Sydney, by contrast, has 
been enjoying a boom in new 
equity supply, as companies 
have taken advantage of rising 
markets to raise cash. Esti- 
mates from Macquarie Equi- 
ties, the stockbroking division 
of Macquarie B ank, show that 


In Sydney, companies 
have raised cash as the 
markets have risen 


equity raisings by private 
enterprise and the federal and 
state governments were at an 
all- time high of A$2&3bn in the 
year to the end of June this 
year, almost double the total of 
the previous 12 months. Of the 
1993-94 total, rights issues and 
placements, totalling A$8bn, 


and non-government floats at 
ASS.3bn, were the dominant 
source of equity raised. 

However. Macquarie fore- 
casts a 25 per cent foil in total 
equity raisings in the 12: 
months to next June, with fed- - 
eral and state government 
issues increasing to 31 per cent 
of the total from 12 per cent in 
the previous period. 

The broker adds that a sharp 
increase In the contribution 
from offshore funds marked a 
dear change of flows in 1993-94 
with a stronger funds flow 
within Australia's wholesale 
investment institutions the 
other major contributor tiffing 
demand for equities. 

Direct household investment 
has also increased, spurred by 
the increased number of gov- 
ernment privatisations, such 
as State Insurance Offices, 
Commonwealth Bank and 
Commonwealth Serum Labora- 
tories. 


Michael Morgan 













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p/ Channel Tunnel enters the 
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unify its links Page Two 


FINANCIAL TIMES SURVEY 

LOGISTICS 


Faster parcels; airfreight 
and security Page Three. 
Shops and ships Page Four 



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I 


* 


t 



OF WORLD VISION. 


Wednesday September 21 1994 


Big retailers are increasingly contracting out their 
supply operations. But most manufacturers prefer to 
move their own goods, says Charles Batchelor 

Relentless drive to 
reduce costs 


Logistics Is the currently 
fashionable term for an indus- 
try which started out as haul- 
age and warehousing, moved 
an briefly to become “distribu- 
tkm", and then settled on a 
title borrowed from the field of 
military science. 

In. pra ctice, logistics is a 
delivery truck calling every is 
to 20 minutes at Marks & Spen- 
cer's London Marble Arch 
store to top up the racks of 
clothin g . It is a Leicester ware- 
house geared up to overnight 
delivery of Land-Rover spares 
and to a two-hour turnaround 
time for emergency orders for 
tractor parts for Massey Ferg- 
uson. 

But this is only the most vis- 
ible part of the logistics indus- 
try, the contracted-out part of 
the business when manufactur- 
ers hand over their delivery 
problems to an outside profes- 
sional. 

In-house logistics stm dw ar f s 
t he c ontracted-out sector 
despite the move by a growing 
number of mul tinational com- 
panies to using outside suppli- 
ers. For many companies 
bringing in components and 
making deliveries to customers 
is stfE too crucial a part of 
their business to entrust to 
others. 

The challenge to the logistics 
professionals is to persuade 
manufacturing industry that 
this is a business which it can, 
with profit, hand over to some- 
body else. Retailers and parts 
of fire consumer sectors have 
already been convinced but 
broad swathes of industry still 
remain to be co n verted. 

“The industrial market is 
growing but it is not as 
advanced as the retail sector,” 
commented Mr Chris Masters, 
chief executive of Christian 
Salvesen. a UK logistics com- 
pany antf provider, of distribu- 
tion services for M&S. 

The logistics sector also 
faces an enormous problem in 
bridging the gap between 
industry best practice and the 
average performer. Many cam 
parties are poor at measuring 
the efficiency of their internal 
logistics operations. Yet they 
are also frequently disap- 
pointed by their experience of 
contracting them out to a third 
party, a number of recent sur- 
veys have shown. 

Less than half of large UK 
companies have a logistics 
strategy or know their logistics 
costs, according to a study car- 
ried out by Andersen Consult- 
ing and the Institute of Pur- 
chasing and Supply. 

Fbrty per cent of UK compa- 
nies which bad contracted out 
their logistics were dissatisfied 
with the way their affairs were 
handled and felt there were 
insufficient controls, a survey 
by PE Consulting and the Insti- 
tute of Logistics found. 

"Companies do not do 
enough to analyse their logis- 
tics, 1 ’ said Mr David Eckhmd, 
European commercial director 
of Caterpillar Logistics Ser- 
vices (CIS), an offshoot of the 
US manufacturer of earth-mov- 
ing equipment «*nd owner of 
the Leicester warehouse. “For 
something with so much 
importance for customer satis- 
faction that is worrying." 

Why do so many companies 
which co n tract out their logis- 
tics feel dissatisfied? They 
often foil to appreciate that 
they must still work closely 
with their logistics supplier, 
sharing management informa- 
tion and even Integrating staff; 
said Mr John Brinkhurst, CLS 
business development man- 
ager. 

The scope of the contract 
and the services to be provided 
must be defined in detail and 
performance standards should 
be set, he warns. 

Modem commercial logistics 
Is a combination of three ele- 
ments. Its traditional compo- 
nents are haulage and ware- 
housing allied to a more recent 
arrival, information technol- 
ogy. 

Computers allow a company 
to locate a product in its ware- 
house, to devise a delivery 
schedule which makes the 
most efficient use of its vehicle 
fleet, and to track a consign- 
ment on its way to its final 
destination. Managing the sup- 
ply chain can lead to cons i d er - 
able reductions in the amounts 
of stock which have to be held- 
“We have been recruiting 
large numbers of information 
systems people to develop 
bespoke systems for our cli- 
ents" said Mr Mattyn PeUew, 
marketing director for Exel 
Logistics, a UK-based com- 
pany. 

Logisties professionals 
believe that the commercial 


pressure erf increasingly com- 
petitive trripnwtiwiai markets 
is. working in their favour. 

Ea Europe, the creation of 
the single European Tnariret is 
drawing in Japanese us 
companies keen to exploit the 
reduction of trade barriers 
forcing local companies to 
rethink their strategies. Glob- 
ally, the shortening of product 
litecydes and increasing con- 
sumer pressure for quality and 
low pri ces is forcing manufac- 
turers and retailers to redouble 
their efforts to cut costs. 

Companies are being forced 
to concentrate on what they do 
best ami farm out the non-es- 
sentials to outside suppliers. 
Employing a third party logis- 
tics company removes the need 
to operate a vehicle fleet, to 
acquire and matntahi ware- 
house space, and to manage 
the intricacies of world-wide 
distribution. 

The sums which industry 
spends on logistics-related 
activities are staggering, 
tiiaugh only a small percentage 
is currently handled by outride 
suppliers. A survey by the 
Cranfield Centre for Logistics 
and Transportation estimated 
the sire of the UK market at 
Just over £100fan, the European 
market at £570bn and -the 
world market at £2^00bn. 

It arrived at these figures by 
combining the present spend of 
businesses on warehousing, 
holding stock, transport, 
adminis tration and paeinighig 


Statistics on the r™ of the 
market which might realisti- 
cally be available to the logis- 
tics professionals are not 
readily available, however. 

One of the main concerns 
facing European rampairing in 
particular is how to handle 
their distribution activities 

the- wwtiiywiL 

■ Companies are realising that 
they hnM too wimji i n ventory 
at too many locations across 
Europe and are moving from, 
say, 15 distribution points to 
just four or five regional cen- 
tres, according to Prof. James 
Cooper, director of the Cran- 
field logistics centre. 

“Yet this transition is easier 
said than done. Sales and mar- 
keting managers may be 
uncomfortable with the pros- 
pect of sourcing products from 
different countries and having 
to make delivery arrangements 
with associates who speak 
another language.” 

Companies which overcame 
these hurdles are able to mak e 
significant savings. Nike, the 
US manufacturer of trainers 
and sportswear, is replacing 
more than 20 national and 
local warehouses with a new 
European distribution centre 
in Belgium following a similar 
move to centralise its US activ- 
ities at a stogie “hub" in Mem- 
phis a few yeans ago. 

Concentrating all of a com- 
pany's delivery activities in 
one centre not only reduces 
the levels of stock which have 
to be held. It means that a 
wider range of stock is avail- 
able to customers and allows 
the distribution centre to add 
extra services. 

Electronic products such as 
computers can be customised 
at the last moment depending 
on the national market for 
which they are destined or the 
demands of the individual cus- 
tomer. Exel says its book dis- 
tribution arm selects and 
packs books for customers. 
Bands out invoices and collects 
payments for publishers. 

Suppliers to the automotive 
industry add value to the ser- 
vice they provide by collecting 
components from suppliers and 
delivering them an to the final 
assembly plant according to a 
schedule which meets the 
needs of the assembly line. 

Not satisfied with the prog- 
ress which has already been 
made to reduce stocks and 
squeeze waste out of the sup- 
ply chain, the logistics compa- 
nies and their clients are seek- 
ing even further savings. The 
most ambitions attempts are 
by some Japanese automobile 
m anufac turers to create an 
fa tgma Hnnfli stock-free deliv- 
ery chain. 

Being willing to agree , to 
deliveries of essential compo- 
nents from another country 
Straight into the assanbly line- 
wtthout the comfort of a buffer 
stock requires cool nerves. But 
this is the way that industry is 
moving, said Mr PeUew. 

On a more local basis the 
logistics industry is looking 
hard at the concept of “cross- 
docking”. This requires manu- 
facturers to supply yoghurt, 
washing powder or motor com- 
ponents to the distribution 
warehouse just in time for 


them to be combined - “con- 
solidated” - with other prod- 
ucts destined for the same cus- 
tomer and shipped out 
immediately. The aim is to 
reduce inventory at the distri- 
bution centre. 

This pushes responsibility 
for matching production runs 
to customer Hgwumd h ac k to 
the manufacturer. A surv ey by 
Food Industry News showed 
that in the food sector at least, 
manufacturers appeared confi- 
dent tbqy could handle these 
pressures without any increase 
in the of their own gfrwfcfi 

But companies cannot afford 
to relax. “There is a massive 
drive to take costs out of the 
system," said Mr Masters. “The 
whole logistics market place is 
becoming more complex and 
more demanding.” 




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appraisal ol 


he lads, a clearing of ihe mind and 


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Allied and Pickfords. the world's loading brands in 
moving services and Exel Logistics and BRS. the world's 
leading brands in distribution logistics are pre-eminent 
in their fields. 


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LG Chi Item Street. London \\ 1M 1PR 


TheC&eMMa&s 




r- — . — • 










II 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 \994 


TRANSFLEET 
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LOGISTICS 2 


Charles Batchelor investigates the attractions of the Channel tunnel 

It’s still early days 


The Channel, tunnel offers the 
prospect of much improved dis- 
tribution links between Britain 
and the Continent 

But delays to the build-up of 
full tunnel services and this 
summer’s lengthy strike of UK 
railway signalmen have done 
nothing to increase confidence 
in the Ellbn venture. 

These two events have cre- 
ated doubts about the tunnel 
and reinforced more general 
suspicions about the reliability 
of rail freight. They have set 
back hopes of a speedy shift 
from road to rail. 

In theory the opening of the 
32-mil e-Iong tunnel provides an 
unprecedented opportunity for 
Britain's railway network. The 
10,000 miles of UK track will be 
directly joined to the main! and 
European network of 150,000 
miles. 

This transforms the econom- 
ics of making rail shipments. 
With few freight journeys 
financially viable over dis- 
tances of less than 300 miles 
British Rail has in the past 
been unable to compete with 
road transport. 

Railfreight Distribution, the 
British Railways freight sub- 
sidiary responsible for con- 
tainer shipments to the Conti- 
nent. calculates that the 
opening -of the tunnel will 
increase freight volumes from 
2m tonnes a year to 6.5m 
tonnes within two years. It 
expects freight shipments to 
reach 9m tonnes by about 2000. 


Railbome freight currently 
accounts for just 7 per cent oF 
cross-Channel shipments by 
container, closed rail waggon 
or lorry. At present cargoes go 
by train ferry from Dover to 
Dunkirk or by lift-on lift-off 
container ship between Har- 
wich and Zeebrugge. 

The Channel tunnel creates 
opportunities for the develop- 
ment of intermodal services 
with consignments travelling 
much of the journey by rail, 
and road used solely for deliv- 
ery and collection from a rail 

terminal. The 

environmental 
attractions of a 
shift to rail are 
attractive to 
politicians and 
the general 
public. Tn addition to the 
long-distance freight services 
which will use the tunnel, road 
hauliers will also be able to put 
their trucks on Eurotunnel's 
freight shuttles r unnin g 
between Folkestone and C alais . 
The freight shuttles should 
provide a marginal saving on 
the ferries, though at times of 
bad weather or during the 
summer holiday peak when 
passenger cars displace lorries 
on the ferries considerable 
savings may be achieved. 

But opinions wi thin the dis- 
tribution industry about the 
railways are mixed. Rail has 
not endeared itself to hauliers 
and freight forwarders over the 
years. Sudden price increases, 


Chilled foods via the 
tunnel could get 12-48 
more hours of shelf life 


unreliable deliveries and a cav- 
alier attitude to customers 
have made potential users 
wary of raiL 

There are even doubts about 
the railways' ability to match 
the delivery times provided by 
road transport. One survey 
showed that European inter- 
modal shipments travelled at 
an average of just 23 miles an 
hour while road shipments 
moved at 43 miles an hour. 

“Significant weaknesses 
exist in the organisation and 
marketing of rail freight ser- 

vices through 

the tunnel," 
said Mr Jim 
White, director 
general of the 
British Interna- 
tional Freight 

Association. 

Mr White believes that the 
number of organisations 
involved in providing services 
and marketing the tunnel Fiac 
led to confusion among poten- 
tial users. 

The tunnel is being pro- 
moted by Eurotunnel, which 
owns and provides services 
through the tunnel: by Rail- 
freight Distribution and by 
“retailers” of cargo space like 
A Cl and CTL. 

The tight security regime 
imposed on freight users of the 
tunnel is also a concern to 
some. Groupage traffic, the 
combination of shipments from 
different customers into one 
consignment, is of particular 


concern to security officials. 
Registering shippers and 
agents on the model recently 
adopted for air freight should 
be possible, Mr White said. 

The faltering start to freight 
and passenger services 
through the tunnel has dam- 
aged the credibility of its 
operations. The well-publicised 
breakdown of a small number 
of the early freight trams in 
the tunnel - despite being 
inevitable on a new service of 
this kind - has increased con- 
cerns. 

And while the tunnel's 
operations have not been 
directly affected by the signal- 
men's strike, the dispute has 
emphasised the vulnerabflity 
of the railway to industrial 
action. 

Despite these fears, consider- 
able sums of money are being 
invested in rail freight termi- 
nals and in rolling stock to pro- 
vide through links. 

Railfr eight Distribution will 
operate a network of seven 
freight terminals including 
Loudon, Bir mingham , Man- 
chester and Glasgow while pri- 
vate investors are creating ter- 
minals in Daventry, Doncaster 
and elsewhere. 

These te rminals will act as 
collection points for containers 
and swapbodies - truck trail- 
ers without the wheels. Plans 
are also afoot to create a “pig- 
gyback" service which would 
transport complete lorry trail- 
ers. including wheels, on spe- 


Europe aims at a vast integrated network: Charles Batchelor reports 

Road-ways to the future 


For all the huge sums which 
have been invested in Europe's 
roads and railways, the conti- 
nent's transport networks 
remain fragmented. 

This, at least, is the view of 
the European Commission, 
which has been refining its 
transport policy over the past 
four years. 

It is now working on ambi- 
tious plans to upgrade the con- 
tinent’s transport infrastruc- 
ture. Its programme of 
trans-European networks 
envisages the spending of 
Ecu220bn over the next 15 
years though it is not yet clear 
where much of this money will 
come from. 

The commission's plans 
involve nothing less than the 
creation of an integrated trans- 
port system including road, 
rail, air and inland and coastal 
shipping. A parallel pro- 
gramme, costing a further 
EculSObn, is intended to 
improve telecommunications 
and energy networks. 

Even governments such as 
the British, which do not hold 
with integrated transport plan- 
ning on a national basis, are 
joining in. The spur is the pros- 
pect of community funds to 
help finance domestic pro- 
grammes. 

It remains to be seen 
whether the funds can be 
found to carry out the improve- 
ments planned. But if the com- 
mission's programme is pushed 
through it should produce con- 
siderable benefits for the distri- 
bution industry- 

The aim of the transport pro- 
gramme is to make Europe 
more competitive and provide 
the physical means for the free 
movement or goods, services 
and people promised by the 
creation of the single European 
market in 1993. 


Transport networks have in 
the past been designed largely 
to meet national needs, leaving 
gaps and bottlenecks between 
countries. 

Rail transport is made 
unnecessarily complicated by 
differing track and loading 
gauges and by incompatible 
power and si gnalling systems. 
The Eurostar trains which will 
carry passengers through the 
Channel tunnel have been 
designed to take account of 
three different electricity net- 
works and four signalling 
systems (including the one in 

the tunnel 

itself). 

Governments 
set different 
rules for com- 
bined transport 
operations 
while the inland waterway sys- 
tem lacks cohesion, fin the air, 
traffic management and con- 
trol systems are splintered and 
Europe has no fewer than 42 
air traffic control centres. 

At the same time, transport 
systems differ in quality and 
availability within the 12 Euro- 
pean Union members, accord- 
ing to Mr Jflrgen Erdmenger, a 
director of the commission’s 
transport directorate, DG7. 

Poorer countries on the 
periphery such as Greece and 
Portugal are further isolated 
by a shortage of good transport 
links. 

Closer to the geographical 
centre of Europe, transport 
routes such as the Rhine- 
Rhone corridor, rail transit 
across London and Paris, and 
air traffic paths in north-west 
Europe are congested. 

Although large sums have 
been spent on transport pro- 
jects over the years, trans- 
port's share of national bud- 
gets has been falling. 


While national transport 
budgets have fallen, EU 
spending will rise 


Transport accounted for 1.5 per 
cent of the European Union's 
combined gross domestic prod- 
uct in 1975 but is now down to 
about 08 per cent 
The picture is further com- 
plicated by the imbalance 
between the different means of 
transport The rapid growth of 
road transport, in particular, 
has led to a decline in the use 
of other networks, notably rail, 
increasing congestion and 
damage to the environment 
Freight shipments have 
increased by half over the past 
20 years and road transport 

now accounts 

for 70 per cent 
of goods trans- 
ported. Rail 
and barge traf- 
fic has declined 
in relative 



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terms. Passenger travel mean- 
while, has increased by 85 per 
cent mostly in the form of pri- 
vate car journeys, which 
account for 79 per cent of all 
travel. 

At present European 
governments spend 66 per cent 
of their transport budgets on 
roads, 23 per cent on raff, 6 per 
cent on airports and 5 per cent 
on canals and ports. 

The tnms-Eurupean network 
programme, in contrast, 
envisages spending 30 per cent 
of its money on roads, 60 per 
cent on rail and 5 per cent on 
inland waterways. 

In detail, the programme 
involves: 

• the designation of a rail 
network of 70.000 kilometres 
including 23,000 km of 
extensions and new lines for 
high-speed trains and 23,000 
kms largely devoted to freight/ 
combined transport 

• the creation of a 58,000 km 
road network including 15,000 
km of new or improved roads. 
Roads would be Of a minimum 
twin two-lane standard but 
would not have to be 
motorways. 

• improvements to 
trans-shipment terminals for 
combined road-rail transport 
and agreement on a unifo rm 
loading gauge for intermodal 
rail shipments. 

• filling in gaps in the canal 
network and improving 
seaports to increase 
waterborne traffic. 

• improvements to airports 
and their connections with 
other forms of transport The 
establishment of an integrated 
air traffic management system. 

Many of these improvements 
will have to be funded from the 
transport budgets of individual 
countries. But the European 
Commission believes 
community funds, European 


Investment Bank money and 
private sector finance can also 
be employed. 

A progress report on the 
trans-European networks 
programme is to be made to 
the European Council when it 
meets in Essen, Germany in 
December. 

The Commission's prime 
concern is links within the EU 
but it has also given thought to 
connections with the countries 
of central and eastern Europe. 
East-west transport links were 
neglected during the Cold War 
hut must now be improved. 

Several projects are 
currently under way in eastern 
Europe with the help of funds 
from the European Bank for 
Reconstruction and 
Development 

They include a new 
motorway linking Budapest in 
Hungary with Vienna, Austria 
and Bratislava in the Slovak 
Republic and the upgrading of 
nearly 600 kms of the Belarus 
section of the Berlin-Moscow 
highway. The Slovenian 
railway network is also being 
improved. 

Important though the 
physical links between the 
countries of Europe are there 
are other equally powerful 
though less visible barriers. 
The complexity of trade 
documentation puts a 
considerable cost on business. 
A development team is 
currently working on a project 
codenamed Bolero to create an 
electronic bill of lading. This 
should create a faster, more 
secure way of sending shipping 
documents. 

Projects such as these are 
drawing the countries of 
Europe closer together. At the 
same time transport demand 
from both the private and 
commercial sectors is 
increasing inexorably. 

It will not be easy to develop 
transport networks which can 
meet this demand without 
imposing considerable strains 
on the environment. 

But the European Union is 
convinced that unplanned 
growth would prove even more 
damaging. 



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Tunnel ahead: prospect at better larks between Britain and the Continent, but the first steps have boon shakey 


rial fiat-bed rail waggons. 

The Piggyback Consortium, 
grouping rail companies, local 
authorities and transport 
organisations, has calculated 
that raising bridges and tun- 
nels to take the higher waggon 
loads on a route to the north 
west of En gland and to Scot- 
land would cost just £70m. 
much less than previous esti- 
mates. 

In August the consortium 
invited rolling stock manufac- 
turers to quote for the supply 
of a fleet of flat-bed waggons. 

It is on the long distance 
routes, from the north of 
En gland an d Sco tlan d to north- 
ern Italy and Germany that big 
time savings can be made, 
according to the supporters of 
intermodal transport 

London to Milan should take 
31 hours and Glasgow to Basle 


34 hours. Birmingham to 
Vienna should be a 37 hour 
journey and Manchester to 
Mannheim 24 hours. Delivery 
and collection times, by road, 
will need to be added to these 
terminal-to-terminal times, 
however. 

If the tunnel can provide a 
regular, reliable service, guar- 
anteed delivery times could 
prove invaluable to companies 
supplying customers or field 
engineers with components 
from a central European ware- 
house. 

Companies could push back 
the cut-off point for orders for 
next-day delivery of spare 
parts from. say. 4pm to 5pm 
and still get the order there on 
time. 

Food retailers shipping chil- 
led foods through the tunnel 
by a combination of road and 


rail could gain an extra 12 to 43 
hours longer on the supermar- 
ket shelf, said Mr Pat Lee, 
development director of Win- 
canton. a food distribution spe- 
cialist. 

“The speed of movement will 
allow an honest claim that the 
fruit, say, was only picked the 
day before." he added. Intermo- 
dal transport through the tun- 
nel should avoid traffic jams, 
ferry cancellations in rough 
weather and continental bans 
on long distance lorry journeys 
at weekends and on public hol- 
idays. 

The tunnel will be judged on 
whether it can save the distri- 
bution industry and its cus- 
tomers time and money. But 
four months after its official 
opening the tunnel still has a 
long way to go to demonstrate 
that it can do either. 


4 


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P arcels service operators 
initially made their 
mark daring the 1980s 
by developing a range of “off 
the sheir express delivery 
products. 

In the UK, they introduced 
branded services providing 
delivery times ranging from 
overnight to two or three days. 

However, customers are now 
fana nding greater flexibility 
from the operators. Typical of 
this is the way Honda, the car, 
motor cycle and power equip- 
ment manufacturer, uses NFC 
express delivery company 
Lynx to distribute parts over- 
night to Its 1,200 OK dealers. 

The operation guarantees 
that 99 per cent of dealers’ 
orders placed by 3.30 pm will 
be delivered by 10 o’clock the 
next morning. It entails col- 


Customers press for faster parcels delivery, says Phillip Hastings 

Today or tomorrow, please 


lectfng parts by road from 
Honda's UK logistics centre in 
Swindon and using a combina- 
tion of road and air transport 
to bring in other parts from 
the company’s European cen- 
tre at Ghent, Belgium. 

Parts from both sources are 
then ranted through the Lynx 
UK branch depot network for 
final delivery to the dealers. 

flexibility is even more 
important on the international 
front where the asms are often 
large multinational corpora- 
tions and the service operators 


AIRFREIGHTING 


UK security 
tightened 


New UK airfreight security 
measures are proving a head- 
ache for shippers, forwarders 
and airlines, m akin g their 
operations more complex and 
potentially more expensive. 

This is happening at a Hmo 
when airfreight service opera- 
tors are handling higher cargo 
volumes as trade recovers from 
world-wide recession and when 
the industry is meeting cus- 
tomers’ demands for better 
quality services. 

Under the UK security regu- 
lations introduced in June, for- 
warders have to obtain a 
Department of Transport list- 
ing as a security-approved air 
cargo agent They also have to 
vet regular exporting custom- 
ers for classification as a 
“known shipper”. 

Shippers and forwarders who 
do not qualify on those counts 
are likely to find their cargo 
subjected to much stricter 
security checks by the airlines, 
with resulting delays. 

So far, the regulations 


want more time-definite move- 
ments. 

One of the big long-r unning 
complaints from shippers and 
their agents, the forwarders, 
against the airlines is that 
cargo is often not flown as 
booked. That occurs mainly 
because much of the world’s 
airfreight is flown in the belly- 
holds of scheduled airline pas- 
senger aircraft - a recent air 
cargo industry survey commis- 
sioned by the Reed Travel 
Group found that 82 per cent of 
airfreight is carried that way. 
Such cargo is sometimes 
offloaded from the aircraft to 
accommodate unexpectedly 
high passenger loads and 
resulting increased baggage. 
With shippers and their cus- 
tomers often running very 
tight production/delivery 
schedules, the resulting delays 
can cause serious problems. 

This has helped interna- 
tional express companies or 
integrators such as DHL, Fed- 
eral Express, United Parcel 


appear to have caused few seri- Service (UPS) and TNT 


ous problems. One difficulty, 
though, centres on the appar- 
ent requirement for shippers to 
enter separate security agree- 
ments with each forwarder 
used. 

At the time of writing, for- 
warders were seeking a meet- 
ing with the 

Department of 

Transport to Cargo rose 


Express Worldwide, some of 
which run their own aircraft 
and therefore have greater con- 
trol of the freight, to capture a 
lot of traditional airfreight traf- 
fic over the last decade: 

More recently, some of the 
leading forwarders have begin 

to think of 

developing 1 

6 per cent 

more timed efi- 


utHai uucuv ui _ “ *- 

Transport to Cargo rose 6 per cent more timedefi- 
clarify that last year, as passengers mte services of 
issue. Compa- increased by 1 per cent t ^ e “ r 


nies freighting 

goods by air 

are also still keeping a close 

watch on airline security 

screening surcharges for cargo 

not originating from "known" 

shippers. 

Some airlines have already 
introduced such charges, typi- 
cally involving a minimum fee 
of £4 plus 2p per kilo above 
that minimum level, to cover 
the cost of implementing new 
security systems and checks. 
Others, tbough, are holding 
back until they see how the 
system settles down. 

Meanwhile, the volume of 
freight is continuing to 
increase. The International 
Civil Aviation Organisation 
(ICAO) says air cargo traffic 
worldwide rose by around six 
per cent last year compared 
with a one per cent growth in 
the number of passengers. Air- 
craft manufacturer Boeing is 
predicting an average 6.5 per 
cent a year growth in world 
airfreight over the next 20 
years. 

As a result of the present 
upturn, individual airlines are 
this year hurriedly adding 
capacity on particularly busy 
cargo routes and adding new 
cargo-handling facilities. 

British Airways, for example, 
is considering further expan- 
sion of its chartered freighter 
operations. Worldwide, BA cur- 
rently operates freighter flights 
on nearly 20 sectors a week, 
despite not actually owning 
any all-cargo aircraft. Those 
services are in addition to the 
carrier's large-scale global air- 
freight operations involving 
the use of bellyhold space mi 
its passenger aircraft 

BA is also planning to start 

main construction work on a 
new £160m world cargocentre 
at London Heathrow in the 
first half of 1995. The facility 
will be designed to handle up 
to lm tonnes of cargo a year, 
twice the capacity of the carri- 
er’s existing centre. 

BA’s annual cargo revalues 
for the year ending March 31, 
1994, rose by over 16 per cent 
to £461 m and volumes were up 
by 14 per cent to 607,000 
tonnes. The improvement con- 
tinued in the current year's 
first quarter cargo revenue for 
the three months to end-June 
was up 18 per cent to £130m. 
with volumes up to 171,000 
tonnes, 20 per cent more than 
the same period last year. 

The cargo business is also 
growing fast at British Mid- 
land, the UK-based domestic 
and European regional airline, 
with volumes up 45 per cent so 
far this year. 

Nevertheless, shippers are 
still pressing for improved sen- 
rice levels. In particular, they 


zas, the Swit- 
zerland-based 
international forwarding and 
transport organisation, is cur- 
rently developing scheduled, 
door-to-door delivery services 
between Europe, the Far East 
and North America under the 
product name Staxconnect. 
Like many other leading inter- 
national airfreight/air forward- 
ing companies it is also focus- 
ing on the development of 
much more wide-ranging logis- 
tics services. 

Last year, for example. Air 
Express International bought 
an oceanfreight service busi- 
ness called Votainer and is 
now planning to develop its 
intra-European express system 
Pandalink into a global opera- 
tion. It claims its customers 
are increasingiy demanding a 
broad range of logistics ser- 
vices from one supplier and 
will take their business else- 
where if they do not get it 

Mr David Beatson, president 
and chief executive officer of 
Emery Worldwide, another 
leading international airfreight 
company, also makes the point 
that simply moving freight is 
no longer good enough to meet 
shipper dwniindfi - “Today, car- 
riers like Emery most demon- 
strate how they can adapt and 
deploy their resources to help 
customers shorten supply 
cycles and streamline distribu- 
tion networks so that costs are 
reduced and products arrive at 
the ultimate easterner faster 
and more efficiently than ever 
before." he says. 

In that context, the airfreight 
industry as a whole is stress- 
ing the further development of 
electronic data interchange 
(EDO and other computerised 
information technology 
systems. Increasingly, the 
emphasis is on systems which 
can communicate with a wide 
range of parties for functions 
such as the booking of cargo 
and consignment tracking. 

There is also an increasing 
tendency for airfreight service 
suppliers to work openly with 
other operators, sometimes 
even potential rivals, to pro- 
duce the overall solution 
demanded by their customers. 

UK-based forwarder MSAS 
Cargo International claims to 
be an example of that trend. 
Says Mr Douglas Ash. chief 
executive: "If the customer 
wants a service which we can 
provide more easily by utilis- 
ing one of the integrators, then 
we will do that. And we won’t 
hide the fact from the cus- 
tomer - we will tell them it is 
the better way to service that 
particular part of their busi- 
ness.” 

PhHIip Hastings 


tend to be large express com- 
panies, or integrators as they 
are often known. 

That point was highlighted 
at this year's World Express 
and Mail conference in London 
by Mr John Parsons, director 
of logistics for Sony UK. 

He said that whsi integra- 
tors talked about providing 
bespoke solutions, they were 
relatively successful within 
very narrow confines. “But if 
yon. as a customer, go along to 

an in tegr at or and ask for a 
really flexible s yst e m yon basi- 
cally get a situation where 

they really ask yon to shoe- 
horn yuui system into theirs 
rather than the other way 
round.” 

Mr Parsons said the chal- 
lenge for the integrators was 
to understand the trade-off 
between costs and service and 
to be able to provide a menu of 
tailored services at a cost 
which could be understood by 
the customer. 

Mr Tony Walford, European 
logistics manager for United 
Parcel Service, replied that in 
the last few years the inte- 
grated transport industry has 
become very much more flexi- 
ble in its core services. The 
difficulty, though, was to rec- 
oncile the customer require- 
ment for flexibility with the 
need to keep down costs by 


using standardised systems. 

Customers of the parcels ser- 
vice operators now increas- 
ingly regard next day delivery 
as a standard service, cer- 
tainly within the UK and 
Europe, and are no longer pre- 
pared to pay premium prices 
for it 

At the same time, tongb 
competition is continually for- 
cing down parcel service 
prices. Mr Paul Jackson, chief 

The price squeeze means 
tire cheapest operators will 
be the winners 


executive of freight and 
express industry consultants 
Triangle Management Ser- 
vices, says that parcel volumes 
are continuing to grow hot 
that average yields in the mar- 
ket are down by an average 15 
per cent over the last three 
years. In that situation, “the 
low-cost operators are going to 
be the winners,” he says. 

Another UK logistics indus- 
try consultancy, Davies & Rob- 
son, says the rates discount 
practices of many UK parcels 
carriers now “often dety com- 
mercial logic" and that this 
probably signals a further big 
shakeout in the industry. 

Mr Andrew fianaghan, man- 


aging director of Staffordshire- 
based UK domestic parcels car- 
rier ANC, says that an over- 
supply of service capacity dur- 
ing the last couple of years has 
led to a number of key opera- 
tors leaving the industry. “But 
while over-capacity still exists, 
such casualties have made 
other parcel carriers more con- 
scious of profit margins. This, 
combined with the economic 
upturn, has led to a hardening 
of prices which have in some 
cases risen during the last 
quarter.” 

Other distributors believe 
that this could be avoided If 
general economic conditions 
keep improving. ANC. for 
example, claims its parcels 
volumes are currently 15 per 
cent op on last year. 

However, other big changes 
are on the horizon - tire priva- 
tisation of two leading opera- 
tors, Paroelforoe and Red Star. 
News of the proposed privati- 
sation of Post Office parcels 
division Parcelforce has 
renewed concern among rival 
private sector operators over 
possible increased competition 
from the currently loss-mak- 
ing operation - for the year to 
March 31, Parcelforce recorded 
a loss of £19m. Private sector 
rival TNT Express (UK) claims 
that Parcelforce enjoys a num- 
ber of “unfair” operational 



Moving parts: a Honda consignment arrives at Lynx’s Nuneaton hub 


and financial advantages 
“merely because it is part of 
an organisation which has a 
monopoly in the letter deliv- 
ery market”. 

TO counter that advantage, 
TNT has renewed its earlier 
call for a duopoly licence 
which would allow a private 
company to compete with 
existing postal services. 

Meanwhile, the much-de- 
layed sale of British Rail par- 
cels division Red Star is sched- 
uled to be completed by the 
end of September. The same- 
day/nextday delivery business 
was first put up for sale last 
year but was withdrawn after 
foiling to attract any accept- 


able bids. Red Star then under- 
went a substantial restructur- 
ing before being put back on 
the market 

In the international parcels 
service market operators are 
increasingly likely to work 
together to provide the wide- 
ranging global coverage 
demanded by customers, par- 
ticularly big multinational 
organisations. 

Leading operators still like 
to talk about “one stop shop- 
ping” - providing every ser- 
vice their customers need - 
but in reality most are looking 
at alliances and partnerships 
with other companies to 
achieve that coverage. 


Internationally, for example, 
TNT Express Worldwide has a 
now well-established joint 
venture with the five post 
offices belonging to GD Net; 
DHL International has 
German airline Lufthansa and 
Japan Air Lines as major 
shareholders; and Federal 
Express works with national 
express companies as 
collection/delivery agents in 
Europe, for example, Securicor 
Omega Express in the UK. 

Similar trends are apparent 
among many European and 
domestic parcel service 
operators. Securicor Omega 
Express has an alliance/ 
partnership with German 
operator Trans-o-flex covering 
most of the European Union, 
and Mayne Nickless group 
company Parcellne is in 
partnership with several 
leading Continental parcels 
companies through an 
operation called Enrolinc. 

Parcellne has also just 
launched a new European 
overnight delivery service 
called Skyline Next Day in 
conjunction with its parent 
company’s worldwide DPE 
(Document and Parcel 
Express) network. Elaborating 
on the reasons for such moves. 
Triangle’s Mr Jackson said 
that in the UK. for example, a 
recent survey showed that 
50-60 per cent of domestic 
parcels market customers hod 
European traffic. 

So domestic operators 
needed to be able to offer 
European services - and the 
answer for many was to work 
with overseas partners. 


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The policy we have long observed in spirit 
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As sure as taking it there yourself. 



IV 


V 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 21 1994 


LOGISTICS 4 


Neil Buckley reports on the power of the supermarket chains 

Warehouse revolution 


The demands of the retail sector have 
done much to force the distribution indus- 
try to become more sophisticated, and 
those d e mands are continuing to dictate 
the pace of change in the industry in the 
1990s. 

Retailers, and especially UK food retail- 
ers, have realised that highly efficient dis- 
tribution systems are crucial to gaining a 
competitive edge, and that they were pay- 
ing too much for distribution in the past 
Distribution costs in the UK have come 
down from more than 10 per cent of sales 
to about 4 per cent over the last 10 years. 

Two important trends have dominated 
retail distribution, and facilitated that 
improvement in cost ratios: centralisa- 
tion, and contracting out of distribution 
to third parties. 

Retailers have largely abandoned deliv- 
eries by suppliers directly to stores, in 
favour of deliveries to retailers' own 
regional warehouses, where goods are 
sorted and loaded on to trucks for distri- 
bution to stores. 

The shift has been dramatic. The Insti- 
tute of Grocery Distribution found that by 
1992, on average, 83 per cent of goods 
were distributed centrally by retail multi- 
ples. 

The tendency towards centralisation 
continues, and within it other trends can 
be discerned. One is a move away from 
different warehouses for different catego- 
ries of goods, towards composite centres 
handling all categories - including ambi- 


ent, chilled and frozen goods in food 
retailing. 

Another is a move away from large net- 
works of small warehouses to smaller net- 
works of ever larger depots. 

miller Parker, the commerdal property 
agent, predicts that demand for new, 
larger warehouse facilities will increase. 
It says the average size of retailers' ware- 
houses is 304,000 square feet - twice that 
of manufacturers'. 

The possibility of reducing costs 
through economies of scale is also 
prompting smaller companies to look at 
sharing distribution facilities, staff and 
transport fleets. 

This is linked to the second important 
tendency, contracting ont distribution. 

Sainsbury and Tesco, the US's largest 
food retailers, now contract over half 
their distribution, and Asda, the fourtb- 
largest, more than 70 per cent. 

Contracting ont offers a number of 
advantages. It means contractors, rather 
than retailers themselves, shoulder much 
of the considerable investment burden. It 
also gives retailers access to specialist 
knowledge and expertise, in a Geld where 
technological advances continue apace, 
permitting - indeed necessitating - con- 
stant changes in operating methods. 

Hie conventional wisdom has been that 
few companies would want to contract ont 
afl their distribution. Few have so far 
done so, a notable exception being Laura 
Ashley, the UK-based fashion and fabrics 


group which has brought in Federal 
Express Business Logistics on a 10-year 
contract. 

Host retailers were thought likely to 
want to retain control of at least some of 
their distribution, and to he able to com- 
pare costs between in-house and contrac- 
tors’ operations. 

Bnt Hr Robert Blyth, sailor consultant 
with Kurt Salmon Associates, the man- 
agement consultants specialising in the 
soft goods industries, says retailers are 
growing more comfortable with the idea 
of contracting out. He suggests three key 
elements to success in third-party distri- 
bution partnerships: 

• Retailers must retain internal, highly- 
competent personnel to direct their sup- 
ply chain strategy, even if operations are 
largely contracted ont 

• The third party must have highly pro- 
fessional people and adequate systems. 

• The correct balance between keeping 
costs down and achieving high standards 
of service must be kept Retailers ore real- 
ising that the costs of daily deliveries 
from regional warehouses may be high, 
but may be more than outweighed by the 
benefits of achieving lower levels of goods 
ont of stock, and hence lower markdowns. 

Hr Blyth suggests that to derive the 
maximum benefits from such relation- 
ships requires a change in attitudes: 

“The third party contractor must he 
seen as an important service supplier, and 
treated that way. Close relationships 



Tosco uses a Radio Frequency Data Communications system in its warehouses 


between all three parties are the key." 

Only through developing closer rela- 
tionships can ways be found to lessen 
stockholding, and so reduce costs, at all 
points at the supply chain. This is the 
essence of efficient customer response, 
and quick response, the buzzwords of 
retail logistics In the 1990s. 

Quick response means retailers order- 
ing precise quantities of product from 
suppliers, based on the sales that have 
occurred within a specific time - fre- 
quently, a single day. This allows stocks 
to be maintained at a considerably lower 
level. 

Spectrum Planning, the supply chain 


consultants, says retailers who have 
embraced a quick response strategy have 
halved stock levels in the product groups 
concerned. It says that extrapolating this 
to the whole fast-moving consumer goods 
sector suggests the industry could achieve 
savings of about £lbn a year. 

However, quick response places great 
demands on distribution services and 
product suppliers. To ensure product is 
always available, orders most be fulfilled 
with 100 per cent accuracy in terms of 
q uan tity and timing. 

In practical terms, this means retailers 
most share sales Information with their 
suppliers and logistics contractors. 


through electronic data Interchange 
(EDI). This is being hampered by at least 
two factors: the lack of common Interna- 
tional standards for EDL making it diffi- 
cult to link together all elements of the 
snpply chain, and the traditionally 
“adversarial’* relationship between retail- 
ers and suppliers. 

However, some encouraging evidence 
was found In a recent survey of food man- 
ufacturers by Food Industry News, spon- 
sored by BRS and Exel Logistics, and ana- 
lysed by the University of Westminster's 
transport studies group. Among food 
manufacturers, 80 per cent believed the 
quality of information flows with their 
customers had improved over the past 
two years. 

Some 40 per cent of respondents felt 
their operations were already highly Inte- 
grated with customers', and 87 per cent 
believed they would be by 1996: more 
than half already bad EDI links with cus- 
tomers, the figure rising to 90 per cat 
among larger companies. 

A final trend for distribution specialists 
is likely to be towards a single distribu- 
tion company handling the entire supply 
chain from the raw materials stage 
through to the retail outlet. This mi ght 
entail, tor example, one logistics company 
transporting rabrlc from. say. China, to a 
factory, and then transporting finished 
garments to the retailer's distribution 
centre, and on to the stores. 

Increasingly, logistics specialists will be 
expected to have international, even 
global, reach - likely to lead to more 
international partnerships, joint ventures 
and takeovers among logistics companies. 

Distributors that are international, and 
offer most flexibility, are those that win 
win the contracts as retailers themselves 
become more international. 


ost international car- 
goes make part of 
their journey by sea 
but, unless there is a dramatic 
sinking of a ferry or an oil 
tanker, seaborne shipping suf- 
fers from a very low profile. 

In recent months, however, a 
dispute over a rate and capac- 
ity sharing agreement or ‘'con- 
ference" across the north 
Atlantic has focused attention 
on the financial pressures 
afflicting parts of the shipping 
industry. The controversy sur- 
rounding the Trans-Atlantic 
Agreement (TAA) has drawn 
the European Commission, the 
shipping industry and large 
shippers into a bitter dispute. 

The TAA raises questions 
about the viability of 
long-distance, deep-sea routes 
but the problems confronting 
short-sea shipping have also 
come under serious consider- 
ation recently. The opportuni- 
ties for taking consignments 
off road and rail and transfer- 
ring than to coastal and canal 
shipping are being reviewed by 
the European commission. 


Shipping owes its low profile 
in large measure to the shift of 
the industry away from the 
traditional but now high-cost 
European seafaring nations to 
the Third World and the Far 
East. With a few notable excep- 
tions ownership has moved to 
small one or-two vessel compa- 
nies which sail under “flags of 
convenience" and employ non- 
European crews. 

Despite these cost-saving 
measures, competition in many 
areas of the shipping market 
has put fierce pressure on the 
operating margins of ship- 
owners, The traditional 
method of regulating competi- 
tion has been the shipping con- 
ference, an agreement between 
competing shipping companies 
to set prices on a particular 
route. 

The TAA was just such an 
agreement, pot in place in Sep- 
tember 1992 to stem rising 
losses on the Europe-North 
America routes. It united 15 
large shipping lines accounting 
for 85 per cent of sailings on 
these routes and included com- 


Competition flares in Europe’s sea-lanes, reports Charles Batchelor 

Flags of inconvenience 


panies such as P&O, Nedlloyd 
and Maersk. 

The TAA succeeded in push- 
ing up freight rates by as much 
as 100 per cent But it enraged 
many of the companies ship- 
ping their products across the 
Atlantic and prompted the 
intervention of the European 
commission. 

The commission took partic- 
ular exception to the TAA 
extending its influence over 
the land-based section of jour- 
neys - to and from the port - 
and to the fact that it sought to 
control capacity as well as 
freight rates. 

In July the members of the 
TAA put revised proposals to 
the commission aimed at mak- 
ing the agreement more flexi- 
ble and more acceptable to 
shippers but there is no guar- • 


an tee that these concessions go 
far enough. A response from 
the commission is still awaited. 

In its role as a defender of 
free trade and open competi- 
tion the commission has taken 
a tough line with the compa- 
nies involved in the TAA But 
within the framework of its 
transport policies the commis- 
sion is doing its best to pro- 
mote the shipping sector. 

This reflects the importance 
of shipping to the international 
movement of goods. More than 
90 per cent of the European 
Union's trade with the rest of 
the world uses sea transport. 
This amounts to 600m tonnes 
of the world's total seaborne 
trade of 3.6bn tonnes. 

The EU's international mari- 
time trade is split roughly 
equally between distant, 



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deep-sea destinations and more 
"local" ports of call in Scandin- 
avia, eastern Europe. North 
Africa and the Middle East 

Maritime transport also 
accounts for a large share - 35 
per cent - of total trade 
between the EU member 
states. Island nations such as 
the UK and Ireland are under- 
standably very dependent on 
seaborne transport but other 
countries on the EU periphery 
such as Greece, Portugal and 
even Denmark move many of 
their imports and exports by 
ship. 

As part of its efforts to revi- 
talise the European shipping 
fleet, the commission is work- 
ing on proposals for a Euro- 
pean shipping register, Euros. 
Under an early draft Euros 
would have still required offi- 
cers and half the crew to be 
European nationals but would 
have given income tax conces- 
sions to the crews of Euros- 
flagged vessels. 

The tax proposals ran into 
objections from the national 
finance ministries, however, 
and a modified version of this 


plan is now under consider- 
ation. 

A second strand in the 
commission's efforts to boost 
shipping can be found in its 
proposals to improve the 
efficiency of ports within the 
EU. This ports initiative forms 
part of a broader strategy to 
create strategic networks of 
road, rail and air links . 

G rowing pressures on 
the road network have 
led to rising levels of 
congestion and there is little 
likelihood that investment in 
roads alone can solve the 
problem. The inability of road 
investment to keep up with 
demand has ted to higher 
energy consumption, more 
pollution and a greater number 
of accidents, a commission 
report concluded. 

Ports and maritime transport 
cause less damage to the 
environment and are more 
energy efficient. New port 
infrastructure is normally Iras 
intrusive than new road 
building while the energy 
consumption of a coastal 


tanker is four times less per 
tonne/kilometre than road 
freight 

Under the commission's 
proposals, financial support 
would be available for projects 
defined as being “of common 
interest". An initial trawl has 
thrown up more than 110 
possible projects including the 
deepening of the approach 
channel to Esbjerg in 
Denmark, the construction of 
quays for a new container 
terminal in Oslo and improved 
road connections for ports 
such as Ramsgate and 
Southampton. 

But for all the apparent 
financial and environmental 
advantages of ship transport, it 
will still have a tough task in 
competing with road and rail 
shipments. The de-regulation 
of the road haulage sector to 
allow cabotage, the carriage of 
goods between destinations in 
another country, and the 
construction of transport links 
such as the Channel tunnel 
and Oresund tunnel/bridge 
between Denmark and Sweden 
increase the competitiveness of 
land transport 

"The critical success factors 
such as transit time, frequency 
of departing cost of transport 
and quality of service often do 
not measure up in comparison 
with road and sometimes also 
rail transport," according to a 


recent study* by Nik o 
Wijnolst, a Dutch academic. 

The turnaround time of ships 
must be reduced dramatically 
and port and stevedoring costs 
must be cut if shipborne 
transport is to become more 
attractive. Wijnolst calls for 
the creation of port hopper 
services, fast and frequent 
shipping links between 
European ports, to make 
maritime transport more 
attractive. 

Vessels would need to be 
equipped to toad and unload 
their own cargoes, dispensing 
with the delays and cost of 
shore-based systems. They 
would also need flexible 
propulsion units and mooring 
systems to make them 
independent of tugs and 
harbour pilots. 

Such proposals would 
require a revolution in 
working practices in many 
European ports and a rethink 
on the level of port dura levied, 
Wijnolst concedes. Hopper 
services would also require 
government assistance. 

But If these admittedly 
considerable obstacles could be 
overcome, maritime transport 
could play an even greater role 
in moving goods. 

* Multimodal Sfiorisea 
Transport - Coastal 
Superhighway. By N. Wjjnolst 
and others. Delft University 






Freightconnection 94 

Presenting the logistics options. 


4 - 6 / 10/94 


■p. ■ 




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