EUROPE’S BUSINESS NEWSPAPER
FINANCIAL
ES
NO.31,019 e FINANCIAL TIMES 1989
World News
Iraq claims
successful
launch of
space rocket
Iraq claimed that it had
launched a rochet capable of
putting satellites into space,
successfully fulfilling the first
phase of Its space programme.
Page 5
Baltic reforms
Lithuania became the first
S-. republic to abolish the
Co'ir’unist Party's constitu-
tional guarantee of power and
Estoria is set to follow suit,
paving the way for multi-party
elections. Page 22
Filipino defiance
Rebel troops holding an Air
Force base outside Cebu, the
second largest city in the Phi-
lippines, are refusing to surren-
der although most of the insur-
gents have given up following
the coup attempt against Presi-
dent Corazon Aquino. Page
22, Analysis, Page 5
Singh peace move
V.P. Singh, new Prime Minister
of India, made a dramatic
peace overture in Puqjab,
praying in the holiest Sikh
shrine and expressing regret
for years of bloodshed. Page
22
for years or Dioousneu. rage on the International Petroleum
22 Exchange in London closing
511-75 higher at $220 a tonne.
Dutch a ttack accord Page 38
The Schengen accord, allowing MONDADO RL Italian publish-
free movement of people and mg group, is at the centre erf
goods between The Nether- a legal battle fallowing a Milan
lands. Belgium, Luxembourg, court's decision preventing
West Germany and France by the group's board from sum-
January 1 1990, has come monlng a special shareholders'
under attack from Dutch MPS. meeting. Story and analysis.
Page 22 Page 23
— , _ . . JAPAN’S Ministry of Finance
Greece foils treaty actively considering moves
Attempts by Nato at present- which would take London's
mg a draft treaty to the Vienna highly profitable Japanese
conventional arms talks failed equity warrant business back
following objections by Greece to Japan. Page 23
wteh Turte invaded Cyprus
rage 6 year of acquisitions, disposals,
S Africa military cut and reorganisation with a 27
. . - - - per cent increase in pre-tax
SA profits to $1.14bn. Page 23
next sear, in a move which ITALIAN and Iraqi commercial
could substantially reduce relations appear to have been
defence spending. ■ obstructed by the reverbera-
PsseS; t tions cLthe BNL Atlanta affair.
Brazilian Page 6^
. T . MCGEAW-fflU, New York pub-
Jishtog/nd information group,
' V announced a restructuring to
tau&f 1 mSSES*,’' i staffing levels by
** 1 1>000 fuH-time jobs and cost
company $220m in special
gc^^iocrate; ^ '% / .charges. Page 26
1 JHfcPofish first communica-
Israefi peace V. - tioia joint venture, a S900m
Israel signalled its real*mess '20-year cable television project,
riL Page 6
Israeli peace L
Israel signalled its realLaess
to proceed with US efforts to
establish Israeli-Pal e s tinlan
peace talks, but only if the
PLO is excluded. Page S
UK- Argentine talks
Di plomatic and military staff
of Argentina and Britain have
concluded talks aimed at elimi-
nating potential sources of con-
flict between the two coun-
tries. Page 6
Jordanian challenge
Jordan’s experiment with
democracy is facing its first
big challenge as Mudar Bad-
ran, the new Prime Minister,
begins his struggle to secure
a parliamentary vote of confi-
dence in his cabinet Page 3
UK drugs traffic
The UK is regarded by the US
and Canada as an offshore
banking system exploited by
drug traffickers estimated to
be earning at least S2JJbn from
drug smuggled into the coun-
try. Page 8
Montreal massacre
A man who massacred 14
female students on the Univer-
sity of Montreal campus before
turning his gun on himself
was carrying a three-page dia-
tribe denouncing fe m i n i sm .
Record statue bid
A Renaissance bronze statue
that went unrecognised in a
London garden for more than
30 years fetched SlO.&tm. a
world-record price.
wifi-faring American news,
sports and rock music pro-
gramming to Poland n ex t year.
Page 6
TRYGG-Hansa, Sweden’s sec-
ond largest insurance com-
pany, is going public on the
Stockholm stock exchange in
Scandinavia’s biggest share
Issue. Page 24
QftK RK cigarette and alcohol
prices rose 20 per cent in an
economic package adopted by
the new all-party Government
to cut the country's record
public sector deficit by SU83bn
over the next year. Page 3
CALIFORNIA’S State Insur-
ance Commissioner has
ordered a rate increase limit
on car insurers as part of a
new regulatory regime.
Page 6
MPs from nine European coun-
tries adopted a report calling
for an end to many of the
restrictions on sensitive West-
ern technology exports to Com-
munist countries. Page 6
SWEDEN’S central bank
- increased its discount rate to
10.5 per cent from 9.5 per cent
in a further move to dampen
down the overheated economy.
Page 3
AMERICAN E xpress confirmed
it was reviewing a number of
options with its brokerage sub-
sidiary Shearson Lehman Hut-
ton and Nippon Life Insurance
which has a 13 per cent stake
in Shearson. Page 26
MARKETS
STERLING
New YorK lunetthne:
SI. 578
Leo don:
SI. 575 (1-576)
DM2.792S (2.7825)
FFr9.54 (9.5025)
SFr2-5U75 (2.5)
Y 227 .25 (226.5)
£ index 86.5 (88.3)
GOLD
New York: Comex Feb
$407.8
London:
£404.25 (404.0)
N SEA OIL (Argus)
Brent 15-day Jan
$19.25 (19.175)
Chief price changes
ywjareay. Pegs 23
DOLLAR
New York tainchttm:
DM1 .7705
FFr6.0515
SFrl.5915
Y144.25
London:
DM1.772S (1.765)
FFr6.0575 (6.03)
SFrl.562 (1.5B7J
Y144.3 (143.8)
S index 68.8 (68.6)
Tokyo dose: V 144. 13
USLUHCKRMtf
RATES
Fed Funds 8%%
3-mo Treasury Blfls:
yield: 7.90%
Long Bond:
10213
yield: 7.91%
STOCK. INDICES
FT-SE IQCfc
2,346:7 (-7.0)
fTOnflrmy:
-1,850-9 (-9.0)
FT-A AU-Sftarn:
1.169.83 (-0.2%)
New York lunchtime:
DJ Ind. Av.
2.735 (-1C8)
S&P Comp
348.88
Tokyo: Nikkei
37.658.11 ( + 203.82)
LON DOM MONEY
3-montti interbank
dosing 15* (same)
Ufto long gilt kituere:
Mar SI (90 j!)
Friday December 8 1989
Business Summary
Belgian group
aims for new
role in metals
business
Societe Generate de Belgique,
Belgium's most powerful
industrial holding company,
intends becoming a l ead i n g
global player in the non-fer-
rous metals business through
Acec-Union Mtaiere, an engi-
neering and metals grouping
created earlier this year.
Page 23
GAS OIL prices took another
leap with December futures
IPE Gag Oil "
2nd portion futures ($ per tonne)
Both sides seek freedom for flights • Emergency P arty cong ress in East Berlin today
E Germany backs
Kohl’s concept
of confederation
By David Marsh in Bonn and Leslie CoHtt in East Berlin
THE TWO German ys moved
closer together yesterday as
the East German Communist
Party backed the idea of work-
ing towards a confederation
between the two countries and
East Berlin joined Bonn in
pressing the Western war vic-
tors for freedom of action in air
transport.
Both Bonn and East Berlin
want sharply to expand air
traffic to neet an expected rise
in demand once visa and cur-
rency control regulations
between the two states are
abolished on January 1, as
agreed this week. Inter-Ger-
man air traffic is still con-
trolled by the Allies in a left-
over from the Second World
War.
In a policy paper drawn up
for todays emergency con-
gress, which will attempt to
rebuild a party whose Leader-
ship bag collapsed nnHw the
weight of popular protest and
scandals, the party's interim
managers expliclty endorse
West German Chancellor Hel-
mut Kohl’s call for “confedera-
tive structures. 1 ’
These confederative ties
should be part of a "common
European bouse," according to
the paper, which was made
public as the Communist-led
Government held its first ever
"round table" talks on the
country’s future with the oppo-
sition.
The talks were held on
wooden benches in an austere,
six-storey, church-owned build-
ing in East Berlin. The two
sides agreed afterwards that
the round table, whose partici-
pants will assemble regularly
between now and next year's
free elections, should become
an “organ of control" over gov-
ernment and parliament.
The mass resignation of the
Co mmunis t Party’s Leadership
last weekend has left a power
vacuum and a "situation more
serious than perhaps some of
you know,” in the words of Mr
Wolfgang Berghofer, Mayor of
Dresden, one of two Commu-
nist representatives at the
talks.
The phrase "confederative
structures" was used by Mr
Kohl in a 10-point plan for Ger-
man and European unity
which has been attacked in
Moscow as nationalistic. It
calls for p rogres s towards con-
federation, among other things
through the steady upgrading
of cooperation hi such practi-
cal rn gfo y r* as OTnn in " iralinT18
and ecology. , ,
The importance attached to
practical co-operation was
underlined yesterday as d et ails
were -announced of three sets
of ministerial talks to discuss
joint Inter-German projects on
the economy, the environment
and the sensitive area of air
transport.
. In the most sensitive area,
over air traffic. Mr Friedrich
Zimmermans, the West Ger-
- man Transport Minister, is due
to see Mr Heinrich Schofcz, Ms
East German counterpart, in
Bonn next Tuesday.
Mr Helmut Haussmann, the
Economics Minister, is meeting
Ms Christa Luft, the deputy
East German Prime Minister
responsible for the economy, in
East Beriin on Thursday next
week.
CM the same day, Mr Klaus
Topefer, the Environment Min-
ister. will also be In Beriin for
talks with his opposite num-
ber. Mr Christen Schwarz-
Cantinned on Page 22
Lithuania ends Communist
guarantee, Page 22; Bast Ger-
man anger. Page 2
A worker cleans the entrance to East Beilin's Palace of
Republic in front of the East German state emhlgm
Husak names PM $1.67bn Polish loan plan
as Adamec resigns By Lionel Barber in Washington
By John Lloyd in Prague
CZECHOSLOVAKIA'S progress
towards political reform was
thrown into confusion last
night when Mr Ladislav Ada-
mec resigned as Prime Minis-
ter, one day after he had pub-
licly threatened to do so if the
conflicting pressures about
him grew too great. '
His resi gnation was accepted
yesterday morning by Presi-
dent Gustav Husak, who then
named Mr Marian Calfa, 43, as
his successor.
Mr Calfa had been Deputy
Prime Minister In the Govern-
ment that was formed on Sun-
day, and was minister without
portfolio and latterly govern-
ment spokesman in previous
Cabinets.
However, late last night, the
Comm unist Party demon-
strated a renewed commitment
to reform itself when It
expelled its former hardline
leader. Mir Milos Jakes, and the
former Prague party chief, Mr
Miroslav Stepan, from its
ranks.
The official CTK news
agency raid their expulsions
from the party were due to
"gross political mistakes ia*
tackling social tarfafea, esse* 1
dally the events of November
17” in which several hundred
demonstrators were beaten up
by security police in the centre
of Prague.
At the same time, the party
ordered the rehabilitati o n of
thousands of refa me r s , includ-
ing Mr Alexander Dubcek, the
Communist Party leader in the
"Prague Spring.” who were
evicted from its ranks after
1968.
Continued on Page 22
Post war enquiry. Page %
Civic Forum, Page 4
THE WORLD BANK is
prepared to lend *l.67bn to
Poland to s u pport the Solidar-
ity Government’s efforts in
reforming the debt-ridden cen-
trally planned economy, a
senior Bank official said yester-
day. . - •
But Mr Eugenio Lari, who
heads the Bank's East Euro-
pean operations, warned that
the new loans are dependent
on support from tile commer-
cial banks, the International
Monetary Fund, and the Paris
Club of government creditors
which is owed the bulk of
Poland’s $39bn of external
debt.'
Debt relief for Poland is
politically sensitive because it
could spark calls from Latin
American debtors tor
treatment, but Mr Lari said:
"There has to be new money co-
debt relief. Or a of
the two. If this does not hap-
pen we are not going to have a
programme."
Speaking in Washington, Mr
Lari also criticised the "lack of
coordination” among Western
agencies who provide food and
economic assistance. Confu-
sion reigned too in Poland
about how to reconstruct the
economy. "We are back to the
late 1940s,” he said.
Mr Lari said rough estimates
that Poland would
need around *20bn over the
next three years in terms of
debt relief, economic support,
and raw lending:
At present, Poland has
halted repayment of its exter-
nal debt to the Paris Club, and
most observers believe the
loans will simply be rolled over
next year.
The World Bank’s 51.67bn
lending programme is broken
into tranches which could be
made available over tire next
18 months, starting with two
loans of S360m which are about
to be disbursed.
Many of the projects. require
co-financing, by commercial
banks, and cover ventures
such as new frozen-food pro-
cessing plants, cattle-feed
im port s , -and new-prodnetion of
natural gas to sav&hard coal,
which is badly noo d ed for
export earnings. -
— Mr Lari said tire two loans
amounting to JQtiOm would be
disbursed as soon as the IMF
readies agreement in principle
with the Palish government on
a structural adjustment pro-
gramma This could come as
early as the end of next week,
and would immediately trigger
an IMF. stand-by facility of
JTOCtm.-
Other planned World Rank
loans Include $150m for
modernising railway rolling
Ckmtinueq on Page 22
Poland in f900m telecomm
venture. Page 6
D 8523A
Bonn bid
to cover
EMU
talks rift
By Our Foreign Staff
THE West German
Government yesterday strove
to play down the impact of dis-
card with Paris, on the eve of
the European summit in Stras-
bourg, over its bid to delay
talk* on preparing the way to
European Monetary Union
(EMU) until after the Decem-
ber 1990 general election.
Mr Lutz Stavenhageu. minis-
ter responsible for contacts
with the European Commu-
nity, said Bonn was relying on
French agreement to the bid to
delay until 1991 the start of an
Inter-Governmental Confer-
ence on monetary union. Other
nffl rials gaid a letter sent on
Wednesday by Chancellor Hel-
mut Kohl to President Fran-
cois Mitterrand stated Bonn’s
mwiinng Mi commitmen t to the
idea of a conference.
The nffiriak ritininH tha t, the
Federal Republic was putting
on the "brakes” an EC integra-
tion. They said postponement
of the conference “by a few
months” from the second half
of next year - the time pro-
posed by France - would not
hold up the impetus of mone-
tary union.
Ur Jacques Delors, Euro-
pean Commission. President,
warned of “serious crises”
among the Community’s mem-
ber states if they failed to
agree a starting date for treaty
negotiations to establish EMU.
- He added that institutional
change, such as the strength-
ening of the European Parlia-
ment’s powers on which Mr
Kohl has focused, “must not
be ™«rte a precondition” for
launching negotiations on
monetary union.
Mr Defers reiterated his own
support for a change in politi-
cal institutions, saying: "One
can’t have economic and mon-
etary union without institu-
tional-reform and a democratic
counterweight.”
His warning, coupled with
his complaint that required
changes in EC . institutions
-weriTfieing nsed by some as a
' pretext for delay on EMU,
made dear he was referring to
what has been historically the
most important bilateral rela-
tionship In the Communi-
ty - that between France and
West Germany.
French and Commission offi-
ciate stiff believe Mr Kohl may
be manoeuvred into accepting
a starting date far EMU nego-
tiations that does not clash
with next autumn’s West Ger-
man federal elections.
Continued on Page 22
Pnhtics Today, Page 21
Swedish merger could create
region’s largest bank group
By John Burton in {Stockholm
PKBANKEN, the (Swedish
state-controlled bark, yester-
day launched a <SKr5.6bn
($S80m) bid for fiffc -ranking
Nordbanken in a feove that
could create thfc Nordic
region’s biggest banking group.
Nordbanken’s boaW recom-
mended the offer to amrehold-
ers despite a higher mth-hour
counterbid by Skaniinaviska
Enskilda Ba nke n. (5E«), which
is now Scandiravm$ largest
commercial bank. SS3 dropped
its offer after the bead’s rejec-
tion. 1
The merger is part of an
extensive restructuring that
has shaken the Nordiqbanjring
world this autumn, feefodtog
the creation of two ftgntaafcs
in Denmark, anotbetffo.Ser-
way. and the takeover -
of Sweden's seven ££gual
banks by the conntty5t|ftp
banks. The moves fattaffiffir-
cer competition amaa£-j]3jfe-
pean banks caused by-ffAendiw-
ation of the EC -^sisrcNi
market. ■ * '
To gain a more
image abroad, the
tag from yesterday's deal will
be called Nordbanken. Based
on 1988 figures it will have
total assets of SKr3Q9bn includ-
ing PKbanken's group
operations su ch a s Its securi-
ties business. SEB's total group
assets in 1988 amounted to
SKr2S9bn and it estimates they
wifi exceed SKrSSOtm this year.
Mr Rune Barneus, the Nord-
banken president who has
transformed the northern
Swedish regional bank into the
country's most profitable with
a return on equity of 228 per
cent, wifi head the new Nord-
banken.
PKbanken’s offer of SKr300 a
share for Nordbanken is 50 per
cent above its recent price lev-
els on the Stockholm bourse.
But it was lower than the bid
made for an -undisclosed
amount by SEB on Wednesday
evening, hours after PKbanken
anil Nordbanken made their
intentions known by suspend-
ing share trading and announc-
ing a Joint raws conference.
The Nordbanken board
explained that one reason it
accepted the lower PKbariken
offer was that the two banks
comp le ment each other in their
geographical distribution. In
contrast, Nordbanken and SEB
compete in many places.
Acceptance of the SRB offer
would probably have caused a
cut in Nordbanken personnel
and the closure of some of its
100 nff fcpg , although had
promised that Nordbanken
would continue to ran as an
Independent subsidiary.
The deal caps, the brief bank-
ing career of Mr Christer Zet
terberg. PKbanken's chief exec-
utive. who is leaving to become
president of Volvo in April. Mr
Zetterberg, a former forestry
industry executive, embarked
on an aggressive acquisition
drive to boost the bank’s slug-
gish profitability after becom-
ing its bead last year.
Mr Kfcll-Olaf Feldt, Sweden’s
Finance Minister, said he sup-
ported the merger because it
would help strengthen the
competitiveness of Swedish
banks against their bigger
European rivals.
CONTENTS
Ayfwin the fatrougjjte but Fra Fra
confounds ChHewt pollsters
Patricio Ayfwin (left),
veteran Christian
Democrat candidate,
rerrains the favourite
to v^n the first round
of Cfcite's presidential
election. Bui Francisco
JaviLr Errazurlz,
known a* Fra Fra. is a
wild/ card upsetting the
I’M— tet Ministers wave' open tra n sport mar-
ket on to the runway 3
Tachnolomn Desktop terminals — the friends
that may also be foes - — — — - 19
Bdtt ortel Comment! How to move towards
Emu; Japanese cars in the EC 20
PoMIca Todays Why 1990 will be a year of
probation for Mrs Thatcher 21
Us Grand Met. De La Rue, GUS, Johnson
Matthey — 22
Eurapa —
Companies .
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FINANCIAL TIMES FRIDAY DECEMBER 8 1989
EUROPEAN NEWS
Moscow cancels
farm debt to
boost production
By John Parker in Moscow
THE SOVIET authorities, in a
move reminiscent of the Brit-
ish government's debt write-
offs for privatised companies,
say they are willing to forgive
up to two-thirds of the coun-
try's long- and medium-term
farm debt
They will use the write-offs
to encourage agricultural leas-
ing, the new system which
allows peasants to rent land
which is designed to boost foil-
ing form productivity.
The presidium of the council
of ministers (the inner cabinet)
has declared that it does not
expect repayment of some
Rs73.5bn t£73bn) out of the
Rsll9bn owed by forms.
Mr Valentin Pavlov, Finance
Minister, has specified that
debts would be forgiven only
when farms go over to the
“lease contracting 1 " system.
Under this system, families
can rent land, and workers on
collective or state farms can
sub-contract land or equip-
ment.
In either case, after paying
for the lease, formers are per-
mitted to keep most of the prof-
its for themselves. Lease con-
tracting, Introduced by decree
of the Supreme Soviet in April,
is the government's main
answer to sluggish agricultural
production.
According to official esti-
mates the grain harvest will be
I3m-14xa tonnes higher this
year than last at 208m-209m
tonnes, but the International
Wheat Council estimates that
the Soviet Union will still have
to import 31m tonnes of grain.
The government admitted
that huge debts have been “a
serious obstacle in the path of
expanding lease contracting."
Next year, it said, Rs28m will
be forgiven to both existing
leaseholders and future ones.
Leases have to signed for
five years or more, and special
commissions, accountable to
the party's local executive
committees, will be set up to
prevent fraudulent leases
being introduced.
The government also
announced that debts run up
by farms affected by the
Chernobyl nuclear accident
would be cancelled uncondi-
tionally.
In a bleak comment on the
consequences of that disaster,
the trade union newspaper
Trud yesterday said that these
lands “cannot be used in
future."
TO encourage factories and
workshops to take up fanning
as a sideline, forms placed
under their control will also
have their debts cancelled.
E German anger brings down pillars of state
Order has virtually collapsed inside the GDR, writes Leslie Colitt in East Berlin
E AST GERMAN border
controllers instinctively
still stare Intently at the
noses and ears of Western visi-
tors. comparing them with
their passport photos to deter-
mine whether all is in order.
But inside the German Dem-
ocratic Republic, order has vir-
tually collapsed- Mr Egon
Krenz had reigned only 44 days
when on Wednesday he went
the way of his predecessor, Mr
Erich Honecker. He dazzled his
countrymen with showman-
ship and glib promises but con-
vinced few.
Irate citizens this week
stormed headquarters of State
Security in the districts of
Dresden, Rostock. Cottbus and
Suhl and physically assaulted
officials of the hated agency.
Their wrath was aroused by
word that the Stasi. as the
organisation is known, was
shredding and burning incrimi-
nating documents. But the new
head of the agency, Dr Wolf-
gang Schwanitz, said yesterday
that these were reports on the
“observation" of citizens sus-
pected in the past of “anti-
state" activities. They were
being destroyed on his orders.
Dr Schwanitz and other East
German officials appear to be
as transparent as their prede-
cessors were opaque. He
warned that if the besieging of
State Security buildings con-
tinued it could lead to “unfore-
seen" developments. “It could
plunge us into chaos."
The word “chaos" is liberally
invoked in East Germany this
days. In the Honecker era it
Acting head of state Manfred Gerlach looks back from the round-table yesterday.
was reserved exclusively for
the situation in neighbouring
Poland, which today is calm-
ness itself compared with East
Germany. Dr Schwanitz, how-
ever, assured his fellow citi-
zens that "we are not consider-
ing a state of emergency”. Hie
said Stasi staff were being
reduced by up to half, although
the number of employees
remained a secret
Many loyal employees who
had to leave were “v e ry bitter”,
he said. They felt deceived by
the old leadership after “many
years of devoted
work . . . They now stand
before a total void.”
Most East Germans though
were more worried about %
economic abyss which
appeared to loom ahead. “We
worked bard and were
deceived,” a woman building
engineer from Bad Doberan
remarked. She was visiting
Berlin with her husband.
"Only the BRD [West Ger-
many! can help us now," he
added.
The loudspeaker in the ice
cream parlour in East Berlin’s
Leipzlger Strasse was blaring a
live west Berlin radio pro-
gramme from the city legisla-
ture which was discussing the
fast-moving political and eco-
nomic and situation in the two
halves a£ Berlin. Only a few
months ago no one would have
dared to tune in a Western sta-
tion in public (though in pri-
vate everyone did).
A senior East German offi-
cial said he would immediately
resign from the party if its new
governing executive, to be
elected at the opening of an
emergency, party congress
today, contained any “discred-
ited faces” from the old regime.
At least 300,000 of the 2.2m
party m emb ers had resigned in
disgust in recent weeks,
appalled by the reports of cor-
ruption and hedonism in the
previous leaderships.
The directly-elected dele-
gates to the congress will need
to choose a young, relatively
unknown leader, if the party is
to regain authority over its
remaining members, the offi-
cial said.
Mr Wolfgang Berghofer, the
energetic young mayor of Dres-
den, is regarded as a strong
contender for this undesirable
port. He managed to defuse an
extremely tense situation in
Dresden last October and
opened a dialogue with citizens
and the opposition which led to
yesterday’s first round-table
meeting between the Govern-
ment and the opposition in
East Berlin.
A good number of party
members were urging the
Sociali st U nity (Communist)
party (SED) go back to its ori-
gins and rename itself the
Communist Party of Germany
(KPD). But the word “Commu-
nist" has a bitter aftert aste in
East Germany today.
"It stands for Stalinism -
it’s that simple," a senior For-
eign Ministry admitted.
The SED was in ruins, he said.
Only a strong government
could now save East Germany
from collapse - into the arms
of West Germany.
West Germany’s mobile telephone network poised for big expansion
By David Goodliart in Bonn and Hugo Dixon in London
THE CONSORTIUM led by
engineering group Mannes-
mawi has, as widely expected,
won the licence to run West
Germany's private sector digi-
tal mobile phone network. It
was selected from an applica-
tion list of 10 and should start
operating, in competition with
the state-run Deutsche Btmdes-
post Telekom, in late 1991.
The licence, to run for 15
years, has been described as "a
licence to print money'. Ana-
lysts expect the Mannesmann
consortium to establish a busi-
ness valued at around DMlObn
<£3.6bn). The West German
market for digital mobile
phones is considered by many
to be the most attractive in
Europe because of the size and
wealth of the population. A
further advantage is there is
no single dominant city, mean-
ing that German business peo-
ple travel a great deal
The current analogue system
run by the B nodes post has
only about 150,000 subscribers,
about a fifth of the number in
the UK. This has largely been
attributed to the Bundespost's
failure to market mobile
phones aggressively and the
high cost of using the system.
Germans pay about DM7,000
(£2^00) tor a cellular handset,
compared with £300 paid by a
Briton.
EC industry ministers were
last night locked in discus-
sion over plans to inject new
competition into the
Ecn75bn Community market
for telecommunication ser-
vices in the mid-1990s,
writes Tim Dickson. The spe-
cial meeting In Brussels was
intended to break the dead-
lock between those for and
against letting private com-
panies compete against pub-
lic monopolies in providing
basic data communication
services, the fastest-growing
part of tiie market
The injection of competition
in the form of the Mannesman
consortium, called Mannesman
Mobfifunk. is expected to lead
to much more vigorous mar-
keting. At the same time, digi-
tal technology should result in
cheaper calls and provide bet-
ter reception.
An added benefit is that the
two digital systems - the Bun-
despost is also being allowed to
upgrade its network to digital
technology - will allow cus-
tomers to roam around 17
European countries making
phone calls. Currently, they
are restricted to using their
phones in Germany.
For these reasons, analysts
are expecting there to be 15m
subscribers in West Germany
by 1995. Half a million will be
using the Bundespost’s anal-
ogue system, with each of the
new digital systems splitting
the rest evenly. After 1995, the
digital systems are expected to
eclipse the analogue network
rapidly.
Much of the euphoria sur-
rounding the licence is based
on the assumption that Man-
nesman Mobilfunk is virtually
guaranteed a 50 per cent share
of the market But the experi-
ence of the UK, where the Gov-
ernment is in the process of
introducing three new players
Into the mobile market to com-
pete with the pgjgHng duopoly
shows that such an assumption
may not be justified. Indeed,
the Bundespost has already
shown Interest in new mobile
concepts, such as personal
communications and telepoint.
Mannesmann itself will take
51 per cent of the business,
Pacific Telesis (Netherlands) 26
per cent, Deutsche Genossen-
schaftsbank 10 pe r cent. Cable
& Wireless (UK) 5 per cant,
Lyonaise des Faux (France) 2.5
per cent, and a trust represent-
ing the West German motor
and electrical technicians asso-
ciations 1 per cent
The Mannesmann consor-
tium will have to invest at
least DMZbn. in the new busi-
ness which Is expected to
employ about 3JHJ0 people.
However, the Investment could
turn out modi larger thanks to
various cost imponderables.
Most analysts expect the
company to break even after
about three years. According
to the confidential financial
data prepared by Deutsche
Mobilfunk, one of Maxrnes-
mann’s main competitors,
turnover in 1995 was expected
to. be DMlbn with post- tax
profit of DM163m rising to
DM2.6bn and DM334m by the
year 2000.
Inquiry into
postwar
Czech
trials urged
By Leslie Colitt
THE NEW Minister of
Education in the Czech repub-
lic’s government. Dr Milan
Adam, has called for a sweep-
ing investigation into the mass
political trials and executions
of opponents of the Communist
regime after it took over in
m
Dr Adam, a senior member
of the Increasingly indepen-
dent Socialist Party who took
government office this week,
told the Financial Times that
“thousands" of Socialists and
other non-communists were
arrested on trumped up
charges after 1948 and “hun-
dreds were executed."
“The terror in Czechoslo-
vakia was the most intense in
Eastern Europe," he said. “The
years 1949 and 1950 were simi-
lar for us to the Nazi terror.'’
Dr Adam raJi/vl for the imme-
diate lifting of the cloak of
secrecy surrounding this
“darkest chapter” in post-war
Czechoslovak history.
Now 61 years old, he joined
the Socialist Party before it fell
under Co mmunis t control His
uncle, Mr Otakar Klapka, the
Socialist mayor of Prague in
194Q, was arrested by the Nazis
and executed in 1941 for sup-
porting the resistance move-
ment “Until now the Commu-
nists have never spoken of this
role played by the Socialists.”
he said, speaking in the head-
quarters of the Socialist party
in Prague. .
Dr Adam said the Socialist
Party would also demand
investigations of present-day
Communist leaders suspected
of corruption and other crimes.
He said new history texts
revealing the “truth” about the
postwar era and 1968 were
urgently needed.
He would see to it that Par-
liament’s decision to abolish
obligatory courses in Marx-
ism-Leninism and Scientific
Socialism in all schools and
universities was implemented
“Immediately".
“They will be replaced by
civic education for democracy
on tiie basis of good Czechoslo-
vak traditions. Yes, we will
pick up where we left off in
1948. Remember, we really
were a democratic country,
before the war.”
Forum feeds hope, Page 4
COMPANY NOTICES
RAND MINES
RA ND MI NES
LIMITED
(Rogbnzatlan No. 01/00666/06)
("Rand Mines")
HESU1ZTS 07 RIGHTS OFFER
The tUraacn ann o un ce that starabaMaxs and/or their noounceea h
szthaaibed for 3 648 367 new sham, representing of tbe 3 689 549 11
snares alined, in man of die now* oflet
In adflaton. atceBs ap pb ca ttami warn recetrad in respect at 123 BB stews.
0 result t&e ngtaa offer was oversubscribed sad the underwriter was
required to taka up any Sand Mlnss dazes m respect of lapsed rig&fo
Additional new uteres win be sHocsd to round to the nearest 100 shares
aggregate cf the qfrpUcaat's holding at the record date and those new
taken up m terms o t aHocattona under the rights cdk The Unbrace ot
additional new shares available will be aHaatawl in the dtaoettan ot
drrecwu taking cognizance of the number of shares held by applicants go
record dote, new shares ahoCad as described above and the additional i
shores applied for by such applfcaats. Where posa&de the a B o nirtnn of
balanced additional shares win bo rounded to the nearest 100 shares.
As
not
the
Joh annesb urg
e December 1989
1-1 UnUetUOngOata
q seaeuaca:
r < Viaduct Corporate
ff Services United
V} -SO Hoibors Viaduct
« Looting BC19 1AJ
Htptervd cdOcer
i Sennas;
The Comer House
G3 Fax Street
Joha nn e sbur g 2001
Uniwd Kingdom registrars Serf paying agora*
HogtEBKtaa effloe- Dearer reception office:
Barclays Baglstma Limited HSH Samuel Bank Limited
6 Craancoat Place 45 Beech Street
London. SW1P 1PL London. SC2PZUC
cr;:: xsseaes&sr
H
BARPLATS MINES LIMITED
(tasmoty Loikochzysos Limited]
I Registration number 65/05067/00]
RESULTS OF RIGHTS OFFER
Johannesburg
B December 1989
Unaai EutgOom
soavtaAos.
viaduct Corporate
Sorriccs Ltautod
40 Ho&wre Viaduct
London EC IP ?AJ
UaiUd Kiagilaa ngttsuaM
«od paying agoots
Regasasiea office;
BaxCays Regutxam r-imwwi
6 Groeasoat Kaao
London. SWIP l?L
Ragmwrwf aflSw;
15th SMt,
The Career House
G3 Fas threat
Jotunaesbaig SCOt
.'Sviisr.vr* 'Z.V'Si' - .c sffrr> y& v» saf rstCT'
i
the
the
the
ww
the
The directors announce that gharehoiden and/or their recouncees
have subscribed for 68 408 592 new ordinary shares, representing
99.3% of the 68 868 481 new ordinary shares offered, m terms of me
rights offer by Barplats Mines.
In addition, excesz applications were received in respect of 1 937 904
new ordinary shares in Barplats Mmes. As a result, the rights offer
was oversubscribed and the underwriter was not required to take up
any shares in respect cf lapsed rights.
Additional shares will be allotted to round to the neatest 100 shares
the aggregate of the applicant ‘s holding at the record date and those
new shares taken up in terms of aBocatiacs unde; the rights offer. The
balance of the additional new shares available win be allocated, in the
discretion ol the directors taking cognizance of the number of ordinary
shares or compulsorily conv ert i ble debentures held by the applicant.
Including those taken up as a result of the rights offer, and the new
ordinary shares applied far by such applicant.
Where possible. «nn>s»rinw of the of additional shares will he
rounded to tbe nearest ICO shares.
RAND MINES
RA ND MI NES
LIMITED
(VaglsaanoD Ma 01/00656/06)
(“Band Mines’)
ANNUAL GENERAL MEETING
Nottca is hereby gtwe that the ntnaty-foazth an nual ganacal a rewdng ot Band
Mtaea Urcttafl will be brid ta tte aa CB t c rtnra . lower ground flora Tbe Comer
Hoang 63 Vat Street. Jcftnanaramig. on Friday. 12 January 199D sc 11.00 for ite
foODwfaghuahtaaK
l. lb receive tte aud&ed Otoop animal fti a rclal rrwanff la reepea of B»
yma eeded 30 Sepwrsbex 1989.
3. To alecs daactnn ta a crrali-p a wtth tte psw lafca a c< tte company'll artfctiea
of — a od ffian .
3. Special meohalcn
-Has tte cit bu du ed espial of tte cappcy be fcereaswd horn KB OOP 000,
Ortfasd fare IS DOC 000 shares of HI each, to HZ0 000 000. dMded fctfo
20 OCO 000 shares at SI each, by tte creation cf 5 000 000 new abreae of Bt
oarer. making pad passu la ail xeapecta w£h the aztetarg stereo.*
4. Tb jiaca the anjarart shares cedar rim ccosral ct tte ( U recttas in teens at
tte prcvMcos tithe Competes Act, 1913. as amedad.
The effacs rf tte spatial rearflaiPB nffl te m tog— as tte timTwrteed share
-npt™ 1 cf The enm fa - f Ow es R lfr r^HUrrr. *g 220 mgfci fo shsi— d 21 OOCb.
ta radar to ptoce sugfJe..: eSteCMd era e ri . ts.iw 1 shares to
to
wisMfl the ontapacy to take adramaga of any bestnsse oppesttumiea wtddr
may arias.
Par tte purpose of detam&cng these nezbea Brihlaam stand end vote at
tte aoerisg. tte regsrer ae raaaben of tte company wffibs etasad from B to
12 January 199G. both days sebutn.
A master oathtod u amaad and rocs a: Cra nesting nay appoint one car
more erodes to attend, vsa. spate and act m Hssread. Apraty ooednacbe
a member a! dm company
Ataattcn fcj ems » tte foot that, s! a is to be sfisedfst. a orasplccsd gmy
form cau se teach das trer«r w naetzin tn ■VitrnTi««rmTg ac tte
Kingdom registrars and poymg sgass ac least 48 bond ba&xe the rin *
appointed tor tbe bofchng cf tte mseeng.
Tte bolder cf a Aare woerxa: m bearer who deatea tn be Bspreaentad at the
meeting must pmdsce bis stem wraett oe a osettfleasta of Ms holding tea «
tenter or c£he appeared persoa as the bear* reception office of Ore Dahati
Sanction ietfauaa acd paring scents e least tea day* before tte dace
app t C tt ad for tte hotrtri g ot tte meeting and absH oriaaewise comply wkh
tte -CcBdaam s even hr g stere wa r ro* errantly ta fossa. Tbwe up tm. an
yy^Uftorra lf»T_ d g fftOX V ^rt^mr g rftiCSl irfi rfiftf w nntf hriihr pay
be represented at tte sreesne w3 bo fosaad.
By (rite cf Ore boon: Haute*
H AHDMZit gl 000X0 * 3ZX93Z8] LDtSOD lSthnot*;
SaanaaiM Tte Comer
per F D W PEACHEY WtaSUMl
3Cth ftoce rriw 1389 ti^iini Winn j 2001
There are no asrvfoe ccegacn bensem tte acjwny. or any of ka aabsJ dtel as,
and any dtrecsor or atemfoa drreaoe cf the company, wltidi used to te made
available for inspection <= reare e£ thm ;w ;n ! n» ui w in of Tte Intsmeflonal Stack
E iitea gucf the cmati Esctiata and tire BspcbUccf Ireland thab ol
TRA-tS-NATAL. COAL, COKPOKATXW UMW11)
in Cjs B apnbEe of Snsb Africa)
Regjtruioa No. <3/P100WP6
PAYMENT OP INTEREST . CLOfilNC Of XEQSTX8S 12.7 PXR CENT
UNSECURED SUBORDINATED COMPULSORILY CO NVER T IB LE
DEBENTURES
NOTCH B HEREBY COVEN I
toUWaslOii
Iwiire aiSD wa l w UB.
The nptw af daSmaam halAes be ( fas! bare 1 1
dqstadad*s.
tew tm cs»y cCteBvdEaef&aA A&k*
hysiBB bom te Ueted Xmodem eCBe> wBtwi
nt te y leihg «n 16 Imam «y P90 arris Eat day Adsaterea *UA ate* ot odmaaji
steteMe.
Oxiyias itefo a Rfarewy 1990 «31 be yeMsd byttBsaaterecsteriseteX Mnrey SSa
By order of C m boa rd
per pro. GENCOR LZUItES
1 f— —
Uln
SPEtyFten
Lcodcn EON flL'A
O P acMt u 1989
Advertise your house
in full colour in the Weekend FT.
To find out more, call Lesley Proctor
on 01-873 4896
ANNOUNCEMENTS
BEAK WITTER FINANCIAL SERVICES GBOVP
Is pleased to announce the opening
of an office in Lugano, Switzerland.
./ ..
DEAN WITTER REYNOLDS SA
Gianni Vago: Manager Nicola Safcratmo: Vftce President
Rudolfo Vlssan Assistant .Manager
Renato Bianchini: Account Eitecative
Alberto CamozzL- Account Executive
TeL 091-571123/573443
Tx 844702DWRLCH
Fax. 091-568767
Via H: Dunant 33,
6900 Miasscgho,
Switzerland.
-NOTICES
NO 007230 of 1839
(W»4 COURT OF JUSTlCe-
OF LEISURE
LIMITED
■ V "
The Monopolies and Mergers Coifnmission
would like to hear £rom any persobw
organisation with information or views on the
supply of plasterboard in
Tne Commission will be
comprehensive examina
prospective state of
The Commission woul
by 31 January 1989 to
Reference SeoTtaiy
Memo police and Mergers
Court, 48 Carey Street. “
UEQAL NOTICES
1990 NO. 12T9BP
THE HUH COURT
94 THE MATTER OF:
ANOLO BMBN SftOKMG
COMPANY LMHTED
T/A -SOLOMOM8 ABRAHAMSON
fttftVME~
AND M THE MATTER OFi
THE COMPANIES ACTS. 1903 -
NOTKC H beraby Oten 9M by Order re foe
Weft Coart ol Mart dated (be ism d*y re
re PM re me Shan Premium
above Mired Company In aw a
taJZJOOJO art me m Wow app r are d
court ete«fo 0 »■» tmgma H ow 8ter
tel ol the Compenf the eeverel
required by h» ebora sow rrera
by m* HegMer re CMipenlw ol Mend
me Zlad dey re Noranter tow.
wuiAiinrr
souaroms pom twe peimown,
PrTZMLTON HOUSE,
WLTtte putce.
January tMO to 3tat March MB0 tw
i Adforeroerd Factor nM B* aaro and
■ Warenaund art Partem si H TarM
i as poboelted wH apply.
NOnOE»HEIISSVCHVD<,pureu«ntMeee-
Hon 48 (S) of the laeofeancy Act 1980. titer s
mee Bn c re me- u n e w rwretl cradtera re tte
aw w re ratm eo company ww be MM «t me
rettoas ct Cork Gutiy. 1. East Pared*. She*-
tired Si 2£T on ii Oscsmber leap, 11.00 are
tor We purpose of Having tafct before a a
copy re tte repot prepared by rte aPmMa-
trrtrv* rece A urm under aacdoo 08 ol tte eafo
Act Tte re saBng rosy. H K Hnfcs M.re«lab-
M a c uw i iBtae ta an a n d es Ite tunedsne
c orearra d oo credtem' carowlB B aa Vt or
coder me Act-
CtkMbq wtoee realms are wtwoy ■aeorad
at Bie masOng. Otter eredOore ere coty autt-
Ued la vote K
(a] they have deovered to mu re 1 East
Pereos. P nrw a Si zet. no taler own
noon on a Oeeetnter IMS. writHra
delete erf Pm (foots Ihuy ciatai to bu oua
lo Item from Ow company, and tte dalm
tea baan Holy admitted wider tte provi-
sions re Role 3.11 re tte Insolvency
W
lie or ter tateH.
widi roe any proxy
' te botoad on
Pteasa note 8tre tea original pray afooed By
OP M tefaaH elite oredHor map bu-lodpsd
at tte addrsos maKiUonad; ptetoooptaa
(KKfodWa laaad eoplea ) are not eooapteWe
Dam 3* Kovumosr WOO - ■
D J STOKES
Joint Adminlatiattra fteeahsr
QF THE
ACTfees
litre a petition
SB presented to
•Oh Oourt .re Jusdoa for rub
the reduction ot ite Shore
' tint of the ebove^iamed Corn-
■P*>y by wb.;4jm of ES3.000 DOO.
AMO NOTICE is butter given Hire Ite sidd
PaUtlon ia dhectad to be heard before Ite
Honourable Mr Justice Herman re tte Royal
Cmira d Justice. Strand. London WC2A 2LL
on Monday Ite USh day o t DecaroterTOSg
Any Creditor or Shareholdor re tte said
Company dsatrtng to oppose tte roaUag ol
an Order lor tte eonOrmeDan re the said
reduction of Ite Share Premium Account
should appear re ite tuns at tearing In
psreon or by Counsel tor that purpose
A copy < d 8w saW Petition wfll be fumtsted
*o any ouch person recurring tte same By
Ota undermentioned Soiicttoro oe payroenr ol
tte regulated ch a rge tor mo some
□reed tills 8tt Day re December T989
Oswald Hfcftaon. Cotter A Co
Essex Noose
Essex street
sou n d
London WG3R 3AQ
SoOcBsra for tte Company
Peter HJrat Limited
NOTICE IS HEREBY GIVEN, pursuant to sec-
tion 48 (3 re ite rseohroncy Act loss, mm a
meeting o t ite unsecured credhom re the
above- nam ed co mpan y wfll m held re tte
o ffic es of Cork Cutty. 1 East Parade, Stef-
tekf Sf SET or 11 December tS 39 . HOT
Noon tor the purpose re having laid before »
a copy re Ite report prepared by tte admin,
terativa rscem et a under aereten 48 re ma
aaM Act Tte meeti n g may. If it thliAs 8 V
ea t eBB ih a commBfoe to excarctaw tits hmre
boos coo lsi red on creditor*' c om ro i tt s ea Oy
or under Pie Are.
Cts dlte e whose claims are wholty secured
are not sfltidea to stiand or be rep resen ted
at Ite mealing. Otter creditors are only anti-
tied to trots *.
W they fwra dsflrarad Brest East
Psrsdn. ShetBeid. St ZET. no tatnr than
noon on 8 Oecembar 1 B 3 S. written
deeaiia of tte debts thay claim n Da duo
to omto tram tte company, and tte realm
•» won twy retu rne d under tte prori-
aloiw of Halo 8.11 of tte tosotvoncy
Ruins 108 ft art
(b) tiiere fiaa boon lodged wUh ma any proxy
wWeh tiie ermattar intends to be used on
Ms ort
Ptaase ooM tiwiite original proxy stflMd by
*t m behalf re tte creditor roust be lodged
at Ilia address mentioned; photocopied
(Inctodtog teced copies) are rut acceptable.
Data: 24 Move rob et 1089
D J STOKES
Jew AdmMsbatfva Receiver
ART GALLERIES
MARLBOROUGH
6 Albemarle Street,
London WL LYNN
CHADWICK. New
Work 24th No v em be r.
I989-27th jann&iy 1990
Mon-Fri lOdJO
Sat ! 0*12-30
01-529 5161.
HUYS-BBiUNOBiAG
STAM 3 >-AUCTIOK 3
WSWfo.11
Wa would ba pi««Md to acMaa
you in all philatsllc matters,
without oblljjflbon
the tamest vandon
“•"Wfolon ntae - 50 ynre of
pHaaty
CLUBS
*Wttoa auffivtid Bm OOten aacauea «f .
value for ^
«<ppar Mom W 43 Q am. Discp and mq
JJ kiieltite, fltarnonaia horeaeses, axdtlna
«-W4 Oa^MSoStB?,
KM
; § J * •
3
%
%
ill
\ *
3$
'
%
a *
ivSn 4 .
?^.Jl
SS
fs-
; . <4i*,
•ft
--3>-?Sf.
j *&£
: .0 ^:! ;
4^:
:.;^£i;
^‘Ir
?*$:■
: ■■'**.
if ;y-b- -
.’Wkfit
'• r .l r* a.
", '’35;
*'•• ^ -.
; -it #
•-Va;- 1
! * <£:,
. V “.T»-.
- - _ ’1
• . !fj.
“ •*"• • 1 ^
aiip
>#■
-V-
r
„ . jS i’f
,
***’
!
. / v
■ FXNANOAL TIMES FRIDAY. DECEMBER 8 1989
EUROPEAN NEWS
Ministers wave open transport market on to runway
Governments and airlines have shown they accept the question is not if but when, writes Tim Dickson
I F PRESIDENT Francois Mitter-
rand wants to demonstrate to Mrs
Margaret Tlmtcher in S trasbourg
today that he & prepared to pot fab
money where his European month is;
be need p oint no fart her e«w fth
week's extraordinarily fr uitfu l meet*
teg of European Conmmmty nans'
port Banisters. *
Twice in 24 hoars Mr Michel Dele-
bane, the French Minister chatring
the Brusselaaessian, proved even to
sceptics that Paris was wming to
. modify or evert drop apparently
entrenched national positions in m
cause of creating a more Inte gr at e d
European transport , market.
The first breakthrough on Monday
-t he C onnell's agreement to an
expe rimen tal cabotage scheme for
evening up domestic road haulage
sectors to outside competition — is
unlikely, impor tant as it is, to ca pt ure
the puhlic Imagination.
The second ac h ievement on Toes'
day — tho dea r political c o mmitm ent
of the 12 to sweep a w ay most of the
antl-competitlve restrictions on
Europe’s st3I highly protected airline
business after a t-rgn»rHirvnq 'j p hase
which most see ending ~by January 1
2993 — at last holds out the joyful
prospect of cheaper fares toe Euro-
pean fa™* p a wngti s in mid-
19905-
ft js inevitable that the more cyni-
cal have since been quick to note that
the deal put together in the early
horns (though completed in ***** clear
fight of day) is in-the form, of non-
bfntBng condnsions; that these as yet
have no legal force; ™i that, in die
ijpteriiHii na griKatwTwt af htn fa wiTt fnl.
low under, the Irish presidency of the
Community in the test she months of
next year, the co m et v a tl ve elements
w&l find ways of wriggling out of
their political promises.
There is certainly a hard slog
ahead — but the deal on Tuesday
should nevertheless be seen as one of
the dearest indications yet that
national governments and many of
the big airlines they represent
acknowledge the irreversible process
of gftrg to gir ropAgn market, awrf
flat the main Question la not if but
when it comes info force.
By ggTPgTTTg tn abandon completely
by the end of 1992 the cosy bilateral
rarnwrify i ^harfrig aHangEffigl tS which
inhibit mare efficient airlines from
increasing their share of a route
— btwI by tjw same ihte remo ving the
veto which individual governments
effectually have over other countries’
cheap fares - the Belebarre package
provides air transport companies with
a clear but time-limited breathing
space in which to prepare themselves
-for the new world.
The significance of this develop-
ment can best be judged by recalling
die squeals of protest from most mem-
ber countries when the European
fi nrniwininn first proposed outlawing
the age-old SO/SO capacity-sharing
deals in favour of a slightly more
relaxed 60/40 split. That package,
signed in late 1987, was, and still is,
criticised for the mfafrnai impact it
made in the market place - a more
generous i nte rpre tat ion in the wake
Of fh* n p Hni to n thfa week Is *h»t it
provided the vital first nudge in dis-
lodging flw boulder of vested «din(>
interests.
At this stage all predictions about
fares remain guesswork. The Council
conclusions make explicit reference to
the desirability of a twostage jump to
75/E percent capacity -sharing targets
by November 2992 (before complete
removal of the limits) but the paccag n -
in the communique an tariffs says
that during the “intermediary period”
the current system of “flexible zones”
will contin ue, albeit in “a more flexi-
ble, amp te and effirnp.nt manner”.
At present there are two zones
— fffahtmg airHmw to introduce wifh-
The promise of a more open
airline market means that
EC competition policy
— soon to be tested in
relation to BA’s and KLM’s
tie np with Sabena — will
be a crucial factor in
determining the industry’s
shape to the year 2000
out government approval discount
fares down to © per cent of the nor-
mal economy fore, deep /Hiwm nt-
fares down to 45 per cent of the nor-
mal economy fore, provided certain
conditions are fulfilled.
As every bargain-hunting traveller
knows, these offers are often limited
not only in quantity but in the com-
plex restrictions atta ched to the*** No
one knows just how the zones will be
developed - and much may depend
on the Irish in the first half of next
year - but on the basis of ideas
already knocking around in papers
written by the French and the Bel-
gians it is possible to see the deep
discount hand being reduced to say 30
par cent and a simpler set of condi-
tions, such as one or other of the
Saturday night stay-over or forward-
booking deadlines, being introduced
for off-peak flights. There is also talk
of some flexibility in the Interim
period for normal economy fazes.
Even the optimists, however, stress
that more liberal rules even the
ultimate goal of "double disapproval"
(where governments would com-
pletely lose their veto) are worth little
if the airlines themselves refuse to
expkrit them. “It is still a rather gen-
tteman-like market,” says one mem-
ber state expert delighted with the
results this week.
For this reason the European Com-
mission is well aware that to be effec-
tive the second “interim” package to
be agreed by next June, and any final
EC air transport framework, must
provide *ha mavimom incentives for
newcomers, that Brussels’ proposals
for more “multiple designation” on
routes to break up the familiar duopo-
lies between capital cities are taken
s e riously in the negotiations, »tp ri that
foil fifth-freedom rights (the ability to
set down and pick up passengers at
an intermediary airport on route to
the final destination) are ultimately
met At the moment, for example, the
big "hub" airports such as Heathrow
and Charles de Gaulle are denied
rtiaaft possibilities.
The commitments made by minis ,
ters Oils week would appear to mean
that from July 1 1992, the current
action by the French Government in
denying its second major carrier UTA
access to European routes served by
Air France would be illegal- But while
this was one of Mr Delebarre's most
surprising concessions It is stiQ too
early to say that the conservative and
protectionist forces have been seen
off.
Denmark. Greece and Portugal, for
example, though they will not consti-
tute a blocking minority when minis -
tiers come to sign cm the dotted line,
voiced clear reservations about the
deadline for full liberalisation fixed by
their follow member states. There are
obviously sensitivities about the late
of their own national airlines but
there are also those who will argue
that too much co m pet i tion in the EC
will make European airlines vulnera-
ble to the growing commercial threat
from the giant US carriers, such as
American Airlines.
That is why negotiations over a
common external airline policy are
likely to go well beyond how to inte-
grate the countries of the European
Free Trade Association into a com-
mon EC air transport framework.
By contrast, others see the danger
of already strong European carriers
such as British Airways and Air
France gobbling up rivals after a
short period of frenzied competition
- with all that that might imply for
cheaper fares. That is why EC compe-
tition policy - soon to be tested in
relation to BA’s and KLM’s tie up
with Sabena - will be a crucial factor
in determining the Industry's $h« pp to
the year 2000.
Sweden raises
discount rate
to cool economy
By Robert Taylor In Stockholm
SWEDEN’S centra] bank
yesterday increased its dis-
count rate to 10.5 pa- cent from
9.5 per cent in a further move
to dampen down the over-
heated economy. The main rea-
son for the change was to
tains tiie discount rate more
into line with the high rates in
Sweden’s financial markets.
Five-year state bonds now have
a 123 per cent interest rate.
Housing interest rates are as
much as IS per cent.
Mr Bengt Dennis, the bonk
governor, «mid yesterday that
Sweden faced a prolonged
period of high rates. The dis-
count rate was last raised in
April from &5 per cent
Yesterday’s move is a fur-
ther indication of the growing
pessimism in the market about
Sweden's economic outlook,
particularly due the high level
of wage and price in flatten and
the rising current account defi-
cit. There is virtual unanimity
among forecasters about the
deterioration In competitive-
ness over recent months.
The main trade union federa-
tion, the LO, yesterday pro-
duced its own prognosis for
next year which predicts a
massive rise In the current
account deficit to SKr38.2bu
(£&8bn) from SKriSUbn. a fall
in the growth rate to 1.7 per
cent from 2.1 per cent and both
wages and prices rising by &5
percent
Mr Dennis admitted that the
latest rise in the discount rate
would hit investment os well
as demand, but be also pointed
out that rising costs would
have hit industry even if fiscal
policy bad not been Ughtened.
The central bank said the
decision to raise the rate was
also prompted by increases in
Western Europe and Japan this
autumn. The huge outflow of
capital from the country over
the past few months since the
Government decision last Jan-
uary to allow unrestricted
investment by Swedes in for-
eign stock has been an added
difficulty. In October the cen-
tral bank recorded a record net
purchase of SKM.lbn in for-
eign stocks by Swedes.
Yesterday’s move provides a
further sign that Sweden can
expect a tough budget next
month from Mr Kjell-Olof
Feldt. the Finance Minister, os
the Government attempts to
reverse the alarming economic
trends.
Greece Drips
np Nato
once again
By Judy Dompsey In
Vienna
A FRESH attempt by Nato at
presenting a draft treaty to the
Vienna conventional.
talks failed ; yesterday
following strenuous objections
by Greece to the exclusion
from arms reductions of the
port from which. .Turkey
invaded Cyprus. -
At least two leading Nato
countries argued at one point
for tire submission of a draft
treaty without Greek assent,
but they. were, eventually
persuaded that breaking
Western consensus would have
set a dangerous precedent
The draft treaty, whose
submission would be an
Imp ortan t .psychological boost
to the East-West negotiations
on Con venti onal Forces in
Europe (GEE)* has now been
referred toktifle iidW i lm d .
foreign minister# v and to
Brussels * ' for
dtacusdon. . / £
At the root of
the port Of
tire south of
which. Ankdra
1974 Invasion of ...
through wfaldrit cjmtjnh Bsto
supply its farces occupyfeag.tim
island’s north.
The Greek-Tnrkfoh dispute
had been partially papered
over through the adoption by
the nine Nato countries of
ambiguous language on the
Turkish reduction zone.
This states that in the case
of Turkey, the area of
application (for re du c ti o n s]
inclndes the territory of
Turkey, north and west of a
Wiw running from the town of
Goxne to the sea.
The route to be taken frran
Gozne to the sea - whether it
should be east of Martin (the
Grade view) or west of Herrin
(the Turkish view) - Is the
point at Issue. And it is that
prejudicial i nter p re tation of
the language which has
largely undermined Nato’s
draft treaty.
Several ways at -resolving
the Issue have been mooted
over the past few days. .
Meanwhile, the Warsaw
Pact Is quietly preparing to
present its own draft treaty,
probably before this round of
the CFE talks ends on
December 21.
Wide tax
increases
in Greece
By Karin Hopa In Athens
GREEK CIGARETTE and
alcohol prices rose by 20 per
cent yesterday In -an economic
package adopted by the new
all-party Government to trim
the co u ntry's record public seo-
tor deficit by DrSOObn (£L2£bn)
over tiie next year.
Transport and public utili-.
ties charges were increased by
an average 17 per cent, while
petrol and roan tax rose by 17
and 25 per cent respectively.
Mr. George. Sonflias, the
Finance M i wfatiwr , «M the mea-
sures would Increase by just
under m|1 point an inflation
rate which is already expected
to reach 15 per cent by the end
of the year.
The Government has prom-
ised to reduce the public sector
borrowing requirement by
three percentage points of
grass national product- in 1990,
toxrder cent _~
A&mfflgh the .Conservatives
teti. Socialists quickly reached
agreement on the measures,
they. -.were delayed until both
.parties agreed to a Communist
demand that no farther price
jTitees would be imposed next
year.
“ The packa ge als o includes an
income tax surcharge for peo-
ple who declared earnings
totalling more than Dz2m last
year. Private sector companies
will pay an extra 7 per cent tax
on 1988 profits of more than
DrSm.
An extra DrlOObn is to be
raised by reducing the spend-
ing of state-owned corpora-
tions. A hiring freese is already
in effect, while overtime: and
travel for public sector employ-
ees win be strictly controlled.
y < ynt i ng to t Finance Minis-
try directive.
The measures -were
announced as new . figures
showed a sharply increased
ffl y r M i t account d wflc lt for Jan-
uary-October. According to the
Bank of Greece, the deficit
totalled fLSSftm, up from 3594m
for the 8axne period last year.
A 539 per cent increase in
imports and a 19.1 per cent
decline In remittances from
Greeks working abroad con-
tributed to a deficit of 5338m
for October, compared with
S40m in 1988. Bank of Greece
officials predict that this year’s
current account deficit will
reach at least $2£bn.
FINANCIAL TIMES
Published by (be Financial Time*
(Europe) LuL, Frankfurt Branch,
(GuioJlciifttrnaee 54, 6000 Frankfurt-
am-Main 1: Telephone 069-75980; Tetex
416193) represented by B- Hugo. Fnudc-
furt/Mam, and, a* members of the
Board of tibecuns. F. Baitoj, RAF.
MeCkan, G.TS. Owner. AC. Miller,
DJEP. Nmer, London. Printer: Frank-
furter Socjcueis-Dnickorci-GmbH,
FrankfYm/Mafn. RcspooaiWe editor. Sir
Gcofftcy Owen, r ’
Financial
ber One Southwark Bridge,
SBI 9HL.
e The Financial Times Ltd, 1989.
FINANCIAL TIMES, USPS No
190640, paMified djnly except Sunday*
and hobdzyi. US subscription rata
, 5365.00 per annum. Second-da* poatr
-. bob and at New York NY and a t atfafi -
\ fmil pralitnif offices. POSTMASTER,
i mtd address chang e toe FINANCIAL
TIMES, 14 Bad 60th Street, New Yak,
' ' - 10022.
Budal Time* (See wflnavU) .Otter.
: 44 , DK- 1 I 00 Copenh^gen-K, Dea-
■ mirk. Telephone (01) 13 44 41.
F* (01) 935335.
EC jobless rate
steady at 9.1%
during October
THE UNEMPLOYMENT rate
in the- European Community
held steady at 9.1 per cent In
October on a montb-to-month
basis, but was down from 9.7
par cent a year ago, the EC’s
statistical office Eurostat said
yesterday, Beater r e p ort s from
Luxembourg.
Some 14.1m people were reg-
istered out of workin the Com-
munity in September, the lat-
est mnmth {nr which absolute
figures were available, it raid.
Eurostat said unemployment
among men Ml 0.7 points to 7 J
per cent in the 12 months to
October, with biggBr than mat-
age decreases in Britain and
Spain, and small increases in
Denmark and Italy. Unamploy-
me»* .among women also foil
" * ~ same period, from 12.6
to 12 per cent.
[y adjusted jobless
highest in Ireland
October, at 1&9
and Italy were
figures - 100
Luxeut-
lowest rate at£2
• pparahle figures
These attttiL. Qnec&
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T EE remarkable events
which have swept
through Czechoslovakia
have been mi lad many thtng n_
The Revolution of the Theatre,
so called after actors gave over
their stages to striking stu-
dents. The Gentle Revolution,
because of the elegant and
quiet way in which millions of
Czechs and Slovaks toppled the
old grey men from power. Urn
Happy Revolution, because of
the way the changes tapped
the wonderful wit and humour
of the Czechs.
But of all the revolutions
which rippled through Eastern
Europe this year, perhaps
Czechoslovakia’s can be the
only one which'" can described
as the ■'bourgeois" revolution.
For not only is it the one
most likely to avoid the pitfalls
already feeing the Hungarian,
East German, Bulgarian and
Polish experiences. But at the
core of the Obcanske Forum,
the Civic Forum, set up three
weeks ago, is ttte light of
democracy. That light, snuffed
out in three periods of the 20th
century, has now been rekin-
dled, vwra»h ^ the chrw-lr and
surprise of communists.
The light shone brightly
after 1918, when Thomas G.
Masaryk, the Republic’s much-
loved philosopher President,
engendered in his countrymen
a deep sense of humanism and
avriai democracy.
True, social democracy had
emerged in the late 19th cen-
tury and indeed had "infil-
trated" the Czech Communist
Party, so much so that it had a
degree of support in the 1920s,
precisely because it had repu-
diated democratic centralism,
the basic tenet of orthodox
mrnmrmicm
Such uncompromising ortho-
doxy was in co ntract, to Masa-
ryk’s awn cherished principles
that the only starting point for
a dignified national destiny
was humanity itself, which,
through education end enlight-
ened upbringing, could stimu-
late national creativity and
self-confidence.
But as he guarded the fledg-
ling democracy, Element Got-
twald, Moscow’s choice in rid-
ding Czech communism of its
social democratic traditions,
purged the Party in 1928-29 and
imposed Leninist norms among
its ranks. The first light of
social democracy had been
extinguished.
Yet, the Republic remained
democratic and at a time when
all its neighbours, Germany,
Hungary, Poland, and beyond,
Spain and Italy, were succumb-
ing to the diktat of fegri^i p
But by 1938, thanks to the
betrayal of Czechoslovakia by
the Munich Agreement, it was
pushed Into the Nazi net
Another light of social
democracy bad faded.
But it was to emerge again
after the Second World War.
Despite the Leninfeation of the
party, the social doMinr-rati f;
traditions reared their heads
again. >But Moscow's commu-
nists were in the ascendancy.
After the February coup of
1948, many communists with
social democratic inclinations
were purged, imprisoned or
shot
But what is remarkable is
that the communists could not
completely extinguish this
bourgeois fiama. Not even dur-
ing the frightening Stalinist
period. After Stalin's death in
1953, as if from nowhere, those
bourgeois Aiheral communists
who had survived, nudged
their colleagues in the insti-
tutes to write.
By the late 1950s, the seed of
the Prague Spring - the
reform movement which had
attempted to give socialism a
hnBian fi yg — had ham firmly
implanted by the lawyers. It
was they who brought the
country's social democratic
traditians out of internal exile.
ft was like pouring water on
parched flowers. The 1960s
blossomed as Anton Novotny,
the party leader, grew increas-
ingly uneasy. People could
again read and talk openly
about Franz Raffca and Karel
Gapek, their great literary
heros. But, again, as if thear
was something feteful about
the figure ei g ht , the tap was
abruptly turned off by Soviet-
Socialists find a
voice for protest
and eye for chan
Leslie Colitt in Prague speaks to
the leader of the Socialist Party
led Warsaw Pact tanka which
crushed the Prague Spring on
the night of August 21 1968.
Why the period of normalisa-
tion - an attempt to re-impose
Soviet-style communist rule
over the country - was so
harsh, is partly due to the
regime's determination to
stomp out once and for all the
remnants of social democratic
traditions.
B ut this time, the Com-
munist party of Czecho-
slovakia, then led by Mr
Gustav Husak, made terrible
blunders.
The party expelled 500,000
social democratic-inspired
reformers. The party thus
became a bastion of conserva-
tives, which, unlike Hungarian
or Polish communists, was
unable to promote either the
i»mgiiap> of reform, or indeed
the personnel to push through
reforms when the Soviet leader
Mikhafl Gorbachev came to
power.
While the Communist Party
cut itself off from society
throughout the 1970s and
1980s, the opposition, deeply
ingrained with social demo-
cratic and humanistic values,
retained the country’s political
and cultural traditions through
writin g.
Playwrights, such as Mr
Vaclav Havel, the doyen of the
o p pos it ion, kept the light and
hope burning through plays.
Mr Vadav Maly, the banned
priest, maintained the spiritual
beacon. The indefatigible Mr
Jlri Dlenstbier retained the
skills of organising The Insti-
tute of Forecasting, the eco-
nomics brain-trust of the
nation, kept up a barrage of
criticism and reports about
how the communists were
ruining the economy.
Thus, when students
marched an November 17, the
disparate of the coun-
try's traditions, combined with
its dvil society, finally merged
into the Civic Forum.
Unlike the New Forum in
East Germany, or Hungary’s
Democratic Forum, the Civic
Forum has three distinct
advantages.
It has a hard core of experi-
enced writers and lawyers
which form an effective leader-
ship.
Second, Civic Forum is highly
democratic, tolerant and digni-
fied which, unlike their Hun-
garian counterparts. New
Forum, are not biting at the bit
for power.
Above all. Civic Forum can
fell back upon its country’s
democratic traditions.
Although the younger genera-
tion have never read Masaryk’s
writings, the feet that posters
of him are plastered through-
out Prague is a testimony to
the continuity of Czechoslo-
vakia's democratic experience.
This Httib round, it may not be
cut short.
F EW CZECHOSLOVAKS
were even aware of the
existence of Mr BohamH
Kuctuera, the long-time leader
of the tiny Socialist Party,
until last November 19 when
the socialist newspaper, Svo-
bodne Stovo. printed a front-
page attack on the brutal
crackdown by the communist
leadership on pro-democ-
racy student demonstration
two days earlier.
Today, Hr Kuchera’s party
plays a pivotal role in the
stampede toward democratic
government in PreqpM after 41
years of communist rale.
The Socialist Party, which
the 65-yeaivald politician has
led since 1959, has gained
remarkable popularity despite
Its past role as a willing
accomplice of the communists.
Mr Kachera admitted that
he remained sDent for decades
“not revealing my disagree-
ment with the Communist
Party.” He has come under
heavy fire from his 20,000
members for again manoeuvr-
ing the party into a lop-sided
coalition with the communist
Prime Minister, Mr Ladislav
Adamec.
The opposition Civic Fonun
has also urged lrim to seek
more seats far the two non-
communist parties, his own
and the Christian-oriented
People’s Party.
Civic Forum has called for
mass demonstrations and a
general strike next Monday if
the communists ^ to relin-
quish several cabinet posts.
*T think a compromise can
be readied If the present (over-
whelming) communist major-
ity is lowered to a small
majority or a «H» balance,”
he said in an interview wife
the Financial limes.
Mr Kuchma indicated feat
his party will strontfy urge
Mr Gustav Husak. the mneh-
revfled president of Czechoslo-
vakia who helped oust Hr
Alexander Dnbcefc, the reform-
ist leader, after the Soviet-led
invasion of 1989, to step down
before the end of the week.
A heavy-set, florid man,
with the self-assurance of a
politician 30 yean in office.
Mr Kucher* is well aware that
his reviving Socialist Party
could become the n ucleu s
around which a non-commu-
nist socialist government
would be farmed after the fiat
free election* atnet 1948.
He expected the elections
would take place by next, Jane
or, at the latest, October*
which was the date advocated
by Civic Forum. “We are reedy
for a coalition with everyo n e
whose concept of aodaus^
humanism and democracy Is
the same as ours. But tkb oB
only be decided after the elec-
tions,” he empbasised-
Thte amounted ton rebuff to
Civic Forum’s offer tills week
of a coalition wife the social-
feta and fee People’s Party M
wean them away from Mr Ada-
JDBC’s Government
But the socialists regard fee
c omm unist-dominated Govern-
ment as a mere transition to
democratic rule. In an ironic
reversal, of the situation in
1948 when the communists
swiftly co-opted the s odattrt s
and converted, a democratic
system Into Stalinist rule. Hr
Knchera’s party is. In effect,
ndng - fee communists to dls-
mmitio their control of fee
state.
The socialist chairman regu-
larly meets the new leader of
the Co mmunis t Party, Mr
Karel Urinnek, "hut fee rela-
tionship is- no longer that of A
subservient : party to the
mighty communist machine.
Instead, the badly discredited
Commu ni st Party now desper-
ately seeks some credibility
from its association wife the
socialists.
**I think confidence In the
Communist Party hu sak
very deeply. The leadership of
the Party must realise it Is .
necessary to return to modem
times,” he stated.
His task was to guide the
Socialist Party on to Its next
edngressfei April and to then
turn it over to a new younger
leadership In time far fee elec-
tions. T* win end my pottfical
career.” he noted In the satis-
Soft of amanlookfng
fo rw a rd to gracebdli bowing
out of a dosing era.
EEEil
ATTAN
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“Always first with the inside info.
So were we right?”
“You ahvays are . You specified ail
the latest colourwaysfrom iw,”-
“I guess I ought a order more silk -
then.”
“As I said, Calvin, you're always
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FINANCIAL TOMES FRIDAY DECEMBER S 1989
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OVERSEAS NEWS
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PLO faces ban
on US-brokered
peace discussions
By Hugh CmnMQr In Jeruniein
readinessto^roce^^^T^
brokered efforts to establish
bm*ftH-Pal*»gHwi«YT TTfaCT talk*,
bat made it dear n murdidng
so an. tbe understanding that
tiie Palestine Liberation Organ-
isation was being kept out. of
the process. -
Washington fliwn mieri on
Wednesday that Egypt, like
brad before it, bad accepted,
with conditions, a five-point
proposal by Mr James Baker,
tbe US Secretary of State.
In an effort to convey a
sense of momentu m, the State
Department also published tbe
Baker plan on Wenesday.
Though, most of the «fafa»u
has already leaked out, one of
the paints would allow Pales-
tinian representatives at the
talks to raise “Issues that
relate to their opinions an how
to make the Elections and
negotiating process wade.”
Tbe nest step is intended to
be a meeting in Washington
between Mr Baker and the
Israeli and Egyptian foreign
ministers.
hi a carefully worded reac-
tion, nffiriaia in Jerusalem mw
M ir Yitzhak Shamir, the Prime
Minister, and Mr Mnatw Arens,
the Foreign Minister, believed
it was possible “to continue
and progress with, tbe peace
process.* .
But the officials stressed
that they did so only because
their Iff? condition of exdn-
ding the PLO was upheld.
“The US made it clear to
Egypt that it could not accept
’that Egypt would act as a post*
man for the PLO. ' *
Egypt it dear that it
was not acting as such and will
not do so,” tbe Israefi officials
rtefnwi
The success of tbe US effort
depends on somehow reconcil-
ing the Israeli position with
the PLO’s insistence that it
must have a say in any peace
talks.
Notwithstanding the Israeli
statement*. Mr Esmat Abdel-
Maguid, tiie Egyptian Foreign
Minister, said yesterday In
Tunis, where the PLO is head-
quartered, that Egypt had con-
sulted the PLO before replying
to Mr Baker.
However, the re hav e been
sufdad^tta PLoPto accept
remaining in tbe background
in order to achieve a . break-
I Iwimgly
AKHrnntng- that Mr Bate, Mr
Magmd and Mr Arens do meet
in Washington, the most
ur ge nt issues will be to agree
who will make up the Palestin-
ian delegation to talks with
Israel and exactly what win be
on the
Within Israel, these issues i
are subject to sharp disagree-
ment between Mr Shamir's i
right-wing ZJkttd party - a sig-
nificant part . of which is
a phwt flu* foTtrq at all -
its more conciliatory Labour
Hwfflten partner.
• PLO nfWfiiwiB. in Tunis yes-
terday repeated their insis-
tence on a full role in all stages
of the peace process, and
expressed fears that the
n iam w ri mpotinn between the
UsTlsrael and Egypt would
marginalise the PLO, writes
Tjamk Aniimrf in T ank.
Some Palestinian officials
are suspicions that Egypt,
which been pressing
have^^orted the PLO’s^post
tkm. Tbe FLO would not be
obliged to adhere to any deci-
sions reached at a meeting
which its representatives did
not attend.
“We retain our right to form
tyn y tn the suggested
Is ra e U - Palegtiniffli faika »mi to
iMhw the Palestinian position
at the meeting.” said one PLO
n WM >1
The PLO has demanded that
any Palestinian delegation to
the dialogue should r ep r es e nt
the organisation, and rejected
US, Egyptian and Israeli inter-
vention in naming the delega-
tion.
Coup-mongers live
to plot another day
Roger Matthews on why Philippines army
rebels could claim a mere ‘time out’
A TTEMPTED coups against the deforce* minister under both the late
Philippines Government of Pres- President Fer dinan d Marcos and Mrs
ident Corazon Aquino have Aouino. he is credited with being tbe
A ttempted coups against the
Philippines Government of Pres-
ident Corazon Aquino have
become less frequent but progressively
more serious dining the course of the
past four years.
The sixth came perilously close to
success, and senior military officers
loyal to Mrs Aquino concede that with-
out the intervention of US F-4 Phantom
jets they would not have been able to
regain control of the air - or, by exten-
sion, the country.
In the next breath they also concede
that there rflrmnt - hp arty g nar a n ta ft that,
there will not be another coup attempt,
or that next tone it win not be success-
fuL
“It would be like me assuring my
wife that I would never drink beer
again," said Brigadier General Oscar
Florendo, the Army spokesman, with
that mixture of humour honesty
which both eiianwa and, as often, exas-
perates those trying to help the Philip-
pines chart a more stable fu t u re.
And the main reason why that future
remains so is that, as an pre-
vious occasions, no-one will be seri-
ously punished fix* attempting to over-
throw the legally constituted
government, or for killing dozens of
people in the process.
“Surrender or die,” Mrs Aquino told
tiie rebels on tbe second day of the
coup. There were people who died
- mostly dvffians. And eventually the
mutinous troops swaggered back to bar-
racks, flaunting their weaponry, and
cheerfully shouting “time out” to
onlookers.
Several of the officers known to have
participated in this attempt also took
part in the coup attempt of August 1987.
The toughest sentence to be banded
down on those who have been tried
from the last batch af rebel officers was
12 years in jail, but the recipient, who
would anyway have been living in some
comfort, has escaped. But these officers,
not least because of their penchant for
appearing on television, are the only
ones who could not escape being
niiwwl
Of course, apart from these people
known to the authorities, there is a
constitutional apposition to Sirs Aquino
which - because of the relative com-
pactness of tiie top echelons of KHpino
society - has dose ties to the military.
Tate the controversial Senator Juan
Ponce Emile, for pnrnrpU* a former
dgfprw* minis ter under both the late
President Ferdinand Manns and Mrs
Aquino, he is credited with being tbe
inspiration and father figure to the miA .
dte-ranktog officers who established the
potent Reform the Armed Forces Move-
ment (Rain). Those officers, such as Col-
onel Gregorio Honasan, who was part of
both the latest and the 1987 coup
att e mpts, have been historically rin<a»
to Senator Enzile.
But Mr Entile, who in the past few
years fa”* also buffi; up an impressive
business empire, has been chosen to be
a member of a committee set up to
investigate the causes and perpetrators
of the coup.
One of the men the committee will
probably be looking at is Eduardo Coju-
angco, a dose and wealthy associate of
Mr Marcos, who returned unexpectedly
to the Philippines a couple of weeks ago
from the US.
Mr Cqjoangco faces a series of crimi-
nal charges related to earlier business
activities. He fled from Manila on the
mwib aircraft as Mr Marcos and
until recently been denied a new pass-
port to return home. Mr Cqjuangco hap-
pens to be a first cousin of Mrs Aquino
and was dose to Mr Enzile when they
were both intimately involved in the
highly lucrative coconut trade.
Then there is the scarcely less curi-
ous case of Salvador Laurel, the
Vice-President of the Philippines. While
the coup attempt was at its height he
said Cram the safety of his hotel in
CTnwg Kong that Sirs Aquino ahonld
consider her future and that he would
be ready to serve in a military gov-
ernment “if it was for the good of the
country”.
Mr Laurel said be bad nothing to do
with the coup attempt, although he
added that Mtb Aquino was quite unpo-
pular and Col Honasan very popular.
Some members of Congress wcruld like
Mr Laurel to be impeached for sedition,
but of *fa»m tMnfrg it ia likely to
happen.
It is against thte background that Mrs
Aquino will a gain be seekiiuj in the
coming months to establish some form
of authority. There are those urging ter
to act against her nature and be tough.
Others urge ter to be conciliatory in
order to avoid widening and deepening
the all too obvious fissures in the m£0-
tazy.
As dawn broke over the financial dis-
trict of Makati yesterday, the final
■t
\
Rebel troops swagg e r bade to their barracks from Manila's business district
stages of the “return to barracks”
agreement was being negotiated
between the rebels and the loyalists.
Waaritng the government «i«to was Gen-
eral Arturo “Boy” Emile. Facing him
across the table was na ptain Danny
Lhn of the Scout Rangers. When Cap-
tain Lim married last year Gen Enrlle
was a “ninang” at the ceremony, an
honoured role best translated as “godfa-
ther”. It was therefore not too surpris-
ing to tear Gen Enzile dtemlRa sugges-
tions that he was asking the rebels to
surrender.
“There is no such word in the Scout
Rangers' vocabulary,” he proudly
declared- “We are requesting them to go
back to barracks to await the disposi-
tion of their rebellion."
The happy thing for military officers
in the Philippines is that while govern-
ments may be made or broken, the offi-
cers seem guaranteed to end up on the
winning team ,
First challenge for Jordan PM
By Lands Andonl
JORDAN’S experiment with
democracy is facing its first big
challenge as-MrMndar Batom,
the new Prime Minister, begins
his struggle to secure a parlia-
m e ntary -vote of confidence in.
his cabinet.
S took the astute Mr Badran
more than_ 48 difficult Jurors .
this wed to form 7 a epvem-
ment without conceding to
demands from the influential
Moslem Brotherhood for -key'
portfolios — inchuHng educa-
tion - following its success in
Jordan’s first general election
in more than . two decades. Now
he has to confront the Brother-
hood’s opposi ti on -to same af
his cabinet choices. •-
The Brotherhood won 20
seats and was counting on the
support of a dozen Mamie
independents in the 80-seat
assembly, mating it the «dugfo
most powerful group.
Mr Badran, however, caused
tiie first crack in the Islamic
MA C by appointing ^ Islamic
de puties while excluding the
Brotherhood from the posts it
coveted.
j As a farm ft Prime Minister
- for two fa™” between 1977 and
1984, Mr Badran Is still blamed
- *by some Jordanians for allow-
ing the Brotherhood to
Increase its influence in tiie
first, place as a counterweight
to t be leftists.
But Mr Badran’s opposition
to the previous unpopular gov-
ernment of Mr Zaid Bifid -
who was replaced in April after
violent public protests - and
his declared war against cor-
ruption have won him support
and respect. -
Despite being a former infcel-
li gpnce diirf, Mr Badran also
appears to have been pushing
for a reduction of restrictions
an organised politics since bis
appointment as Chief of tbe
Royal Court in September.
Mr Badran canid face opposi-
tion not only from ftwirianwm-
taUsts but also from a coafi ti on
of leftists, and lib-
erals who have erttiowwi his
derision to appoint some min-
isters associated with the Bifid
gnirarTmumt. However, in his
letter of appointment to Mr
B adra n, King Hussein
instructed the yvwnwient to
continue liberalisation by lift-
ing some restrictions on the
press and cracking down on
corruption - both Hkeiy to be
popular.
Mr Badran’s appointment
has raised speculation about ;
the future of relations with j
Syria. In 1985 King Hussein
had to admit apologetically I
that under the previous Bad - 1
ran regimes, there had been ,
Jordanian s up po rt for Moslem 1
Brotherhood activities against ]
Damascus.
Relations with Damascus are
already lukewarm because of ,
differences over Lebanon and
other issues.
Meanwhile Mr Zaid Ben
Shaker, the former Prime Min-
ister, has been reappointed
Chief of the Royal Court after,
supervising the elections.
Iran reduces
dollar rate
IRAN is reducing the cost of
dollars sold to importers by
about 18 per cent, Mr
Mohammed Hossein Adeli,
Central Bank governor,
announced on Tehran radio.
The move, which a m o unt s to
an upward revaluation of tiie
rial for same purposes, is part
of efforts to attract currency
trade away from the black
market to official dealings at a
“competitive rate" introduced
two months ago.
It should also help curb
inflation by w«Wng imports,
cheaper. The new rate of 800
rials per dollar will take affect
tomorrow.
Tbe “competitive rate" i
applies to Imports by state-re-
lated enterprises and pur-
chases by private business-
men. It started at 1,000 rials to
the dollar on October 8 and
has been set recently at 975
rials by the Central Bank. The
official rate, used far govern-
ment dealings and subsidised
basic commodities, is about 72
rjahi to the dollar.
Pretoria to cut length of draft
By Patti Waldmolr In Johannesburg
SOUTH AFRICA is to halve
compulsory military service
from next year, in a move
which could substantially
reduce defence spending.
Mr F.W. de Wterk, the Sooth
African President, said yester-
day that the reduction in mili-
tary service from two years to
one was made possible because
of tbe improved security situa-
tion in southern Africa.
National military service,
which is compulsory only for
white males, has proved
increasingly unpopular in
recent years and has been con-
demned by business leaders as
a drain on the country's lim-
ited pool of skilled labour.
Business organisations yester-
day welcomed the move.
The number of conscientious
objectors has risen sharply
since the mid-1980s, when
troops began to be used exten-
sively to suppress unrest in
black townships.
Mr de Klerk, speaking yes-
today at Armscor, the state-
run arms manufacturer, said
the Government also planned
otter military cuts, including'
ringing some units. He gave no
details but Business Day, tiie
Johannesburg financial daily,
said last week the Government
planned to cut the defence bud-
get by as much as R1.5bn
($57701), or by 15 per cent
The final withdrawal of
South African troops from
Namibia, which was completed
last month as part of a UN-
sponsored peace plan for the
t e rritory, should greatly reduce
military spending.
Pretoria believes the with-
drawal of 50,000 Cuban troops
from neighbouring Angola will
make an important contribu-
tion to regional stability.
The war against Swapo, the
Namibian independence move-
ment, which involved cross-
border raids against Swapo
bases in neig hbo uring An gola ,
had proved a great drain on
Pretoria’s budget.
• Several black organisations.
divided over Pretoria’s
reforms, have decided to boy-
cott a big anti-apartheid con-
ference on Saturday, Reuter
rapnrt a fWww J nhnnnt-gh irrg.
The latest gr oup to pull out,
the National Council of Trade
Unions (Nactu). said yesterday
that ideological differences
with otter organisations pre-
vented it from taking part
Nactu is the second-biggest
black labour federation in
Smith Africa.
Other leftist groups, such as
the Pan Africanist Movement,
have already said they will not
attend, fnhatha. the moderate
Zulu movement, was also not
expected to be present
Nactu’a main objection is the
presence of leaders of tribal
homelands at the conference.
The homelands, qpasi-auton-
omons territories created by
Pretoria, are condemned by
radicals as extensions of apart-
heid race laws.
Iraq says
it tested
rocket
for space
By Victor Malta, Middle
East Correspondent
IRAQ announced triumphantly
yesterday that it had launched
a rocket capable of putting sat-
ellites into space, thereby ful-
filling the first phase of its
space programme.
Western officials Immedi-
ately expressed concern about
the large size of tbe missile,
which suggests it could carry a
nuclear or chemical warhead,
but they said it was unlikcly
that Iraq bad actually fired
anything all the way Into space
this week.
If it had done so, there would
be renewed fears in Israel, Teh-
ran and elsewhere about Iraq's
advanced missile manufactur-
ing capabilities and its regional
ambitions.
Details of the test were
unclear. Mr Hussein Kamel.
Minister of Industry and Mili-
tary Production, told President
Saddam Hussein that the
rocket was launched from the
Anbar space research base
west of Baghdad on Tuesday,
according to the official Iraqi
media. He said the rocket was
a three-stage system weighing
48 tonnes and measuring 25
metres long.
Mr Kamel, a son-in-law of
the President, is one of the
most powerful men in Iraq, but
has been under intense pres-
sure to Justify the country’s
heavy spending on missile
research and development
The superpowers and the
other industrialised nations,
meanwhile, ore equally deter-
mined that Iraq should not
obtain the sophisticated mis-
sile technology it wants, for
fear that President Hussein
would be tempted to attack
Israel or Iran or otherwise
destabilise the Middle East
It may be no coincidence
that tbe Iraqi rocket was
launched on the same day as a
meeting In London of officials
responsible for the Missile
Technology Control Regime,
perhaps as a gesture oT defi-
ance.
The MTCR - formally estab-
lished in 1967 and adhered to
by the US, Japan, West Ger-
many. France, Britain, Italy,
Canada and recently Spain -
is designed to limit mis&tie pro-
liferation in the developing
world by restricting exports of
sensitive equipment MTCR
signatories have been particu-
larly concerned about Iraq's
efforts to develop a “Condor 2”
missile in collaboration with
Argentina and Egypt
“We achieved a complicated
scientific leap on Tuesday,
December 5, when we success-
fully tested the launching of a
three-stage rocket to outer
space,” Mr Kamel was quoted
as saying by Baghdad Radio.
Correction
Indonesian loan
Indonesia’s $500m syndicated
loan signed last week in Hong
Kong Is being led by a group of
13 Japanese and European
banks and not JP Morgan, the
New York bank, as reported in
some editions of Tuesday’s
Financial Times. JP Morgan is
leading a $550m loan syndica-
tion for Freeport McCoran’s
copper minB development in
Tnrtnnpsia
Brutality and hardened attitudes mark end
Israeli public fears of Pales tinians tie the politicians’ hands and leave the army to cope
of intifada’s second year
with the resistance, writes Hugh Carnegy
J ABER Hawash, a 17-year-
old Palestinian member of
the "Red Eagles”, a notori-
ously violent gang from the
West Bank town of Nablus best
known for its brutal executions
of alleged Arab coHaboratoxs,
nuwte the most of Ms moment
of fame when Ms Israeli army
captors handed him over to
Israel television for an inter-
view last weekend.
With cool seifossurance, he
mM be had no regrets about
MAP O flU* AWWW m.
cfrfonprf to have killed by hand
- he did. not like using guns,
he said. The people had to be
“purified”. One of bis victims
was his cousin- *T tied her up. I
blindfolded Tier and I smashed
her head with an axe.”
Such chilling bravad o is
doubtless not mdqoe in bitter
iMBfflris such as the Palestin-
ian uprising in the occupied
territories, which, re aches Ha
second anniversary tomorrow.
The Palestinians themselves
J have plenty of tales. of Israeli
brutality from the past 24
Months. But Jabee Hawash’s
performance served as a light-
ning rod for the mixt ure o f
-tear, snspidon and hatred
■ many Israels feel towards the
, Palestinians after two years of
■ the Intifada.
; “Did yon sea that terrible
-Jztimiew? What he did to Ms
lawn cousin? And these are the
parole, we are supposed to deal
with," yipr frfa 1 ** 1 * a Jerusalem
fmiuiL....
;■ Through out the intifada,
BgartUees of the perception
feawhere of an *m r elenting
paeU “iron, list" against the
to see the uprising as a threat
in which Jews are ultimately
the victim. Concern about
Israeli troops shooting dead
Palestinian children tends to
be eclipsed by things like the
Hawash interview.
Opinion polls show a hefty
majority of Isra elis behove the
Arabs are capable of tntficting
a second holocaust. The first
public priority has been to put
down the uprising and steer
dear of Arab areas and of
Arabs generally.
In an analysis in late Octo-
ber of recent trends, Hanoch
Hart ‘ Smith of Jerusalem’s
Smith Research Centre con-
cluded -that incidents such as
the suicide attack in July on a
Tel Aviv-Jerusalem fans, which'
kitted 16 Jews, and the recent
spate of grisly collaborator Inn-
ings had hardened attitudes.’
Based on the findings of their
latest six-monthly poll, they
detected a reversal of a trend
of a cautious willingness to
make concessions to tis Rates-
ti pfawKL Between March and
September, support for a settle-
ment based on exchanging
tend for peace slipped from 53
to 48 per cent.
At the same time there was a
significant decline in the
ndnortty who felt Israel could
live with a Palestinian state in
Tunisian riot police fought
to the centre of the capital
yesterday with Moslem
sofiftants demonstrating In
snDDoart of fiif Palestinian
uprising, Reuter reports from
Tunis. Several hundred
demonstrators waving their
fists in the air and shouting,
“There is no God but Allah.
Israel is the enemy of God,"
marched down the main
shopping street, Habib
Bourgniba Avenue, until the
police fired tear gas to
disperse them. Witnesses
hand-to-hand with some of
the demonst rato rs and there
were some injuries on both
■iteL Ther e was no official
word on the arrests but
nlHriak mM the police
broke up *k>> famonstrsitan
bec a use ft was not
anthnrbi ri. PoUce arrested
witnesses said. Tunisia has
an influential Islamic
move me nt which has so for
been denied a role in
political We, Thousands of
militants were arrested In
the last years of president
TTaHti Bo u rg ni ba but Bern
AH set them freed when be
tiie territories and in those pre- to explain the
pared to accept as genuine cm- spect approach
dilatory statements by Mr Yas-.- Labour coalitii
sir. Arafat, the Palestine t owards enteri
liberation. OrganJsatkm leader, with the Pal
Most spectacular of aH, 52 per- Mkud party j
cent said they favoured expel-; - Shamir, the I
Itog Palestinians from tte West instinctively ]
Bank “if no way Is found, to make concessit
rainmna, nmoe spa
bS>aSadstoftto^es«ar These at tit n de s would seem
to explain the highly circum-
spect approach of the Lik ud-
Labour coalition Government
t nwa rt fa entering negotiations
with the Palestinians. The
f.-flenrif party of Mr Yitzhak
Shamir, the Prime Minister,
instinctively inclines not to
make concessions and sees lit-
fk public pressure to do so.
The more conciliatory Labour
Party feels public opinion
could swing dramatically if the
right opportunity for peace
presents Tfarif, but it has so far-
lacked the confidence to force
Mr ghamfr to choose between
softening his stance or the
break-up of the coalitio n.
. The net result on the ground
has been to leave the main bur-
den of coping with tbe Intifada
to the Israel Defence Force.
“The Government has decided
not to decide what to do with
the West Bank and Gaza,”
commented an officer.
ft is a role the IDF has never
been entirely happy with. Its
doctrine remains that its pri-
mary concerns continue to be
the perceived external threats
from its heavDy armed Arab
neighbours - notably Syria
- and from terrorist incur-
sions.
Mr Yitzhak Rabin, the
Labour Defence Minister, said
in a numb er of interviews this
week that the authorities had
succeeded In greatly reducing
the scale of violent demonstra-
tions in the territories - al-
though he acknowledged the
uprising has not been extin-
guished. This line does not at
first sight square with the fact
that the numbers being kilted
and wounded in the intifada
- the total of Palestinians
dead is well above 700 - have
continued to mount with
almost unbroken regularity.
The army Is quick to point out
that a large number of those
killed this year were collabora-
tors executed by fellow Pales-
tinians. But it is also true that
the army has continued to use
gunfire against the smaller,
more confined incidents it now
typically faces.
The army does not say it has
suppressed or ever will sup-
press the uprising completely.
It acknowledges that, at least
politically, tbe intifada is very
much alive. But it feels it has
gone a long way to reduce the
violence. At the same time,
IDF officers insist Wwi 1 It tea
teamed to cope operationally,
now spending no more than 4
per cent of the total defence
•.budget on ite inHfatta
■ in the the real point is
- and here the army’s disa-
vowal of a political rote looks a
Tiftte disingenuous — that the
cost to tt of doing so has not
outweighed its attachment to
the territories. “Nothing has
happened to change the think.
ing of the IDF of the strategic
importance of keeping the
mountain ridges and deploying
the IDF in the territories,” said
an authorised army officer.
Nor is the IDF keen to be seen
by its Arab foes to have been
weakened by the uprising, if
we withdraw under the pres-
sure of this, the meaning is so
earth-shattering that we have
first to make it dear that we
can control the situation,” the
officer mid
marie:
^ <vn tfa-
"■ninwr-
spread
•rand.-
f-alSi cf
o saw
sur-
d - 42
tan J
i'vi
<1
‘X •
r-
FINANCIAL TIMES FRIDAY DEC EMBER S
US consumers
positive over
economic outlook
Election
boost for
Brazilian
socialist
By Anthony Harris in Washington
By tvo Dawnay
in Rio de Janeiro
US CONSUMERS remain Caddy
confident about the economic
outlook, but their spending
plans are soft, especially for
cars and consumer rfm-g blips ,
This finding from the
November consumer survey by
the Conference Board, which
covers some 5,000 households,
suggests that the strong rise in
personal saving marked in
recent months will be sus-
tained. Demand for consumer
credit also seems like to
remain at its very low recent
levels.
The confidence fr vW , which
measures perceptions of eco-
nomic conditions, fell by 2.7
percentage points to 1H3. This
is its lowest level for a year,
but it remains strongly posi-
tive.
However, there are growing
doubts about how long present
conditions, which are over-
whelmingly perceived as posi-
tive, can be sustained. While a
majority of respondents
expressing a view expect some
improvement, less than a quar-
ter were prepared to express
any view, and the index of
future expectations fell to
1019, down 3£ per cent from
October.
Spending plans, by contrast,
softened very sharply in the
month. The percentage of
respondents planning to buy
any major household appliance
fell from 811 per cent in Octo-
ber to 24.4 per cent, while
plans for buying new cars fell
sum 3.7 to 3.1 per cent
Only the used car market
cppmw likely to set auv benefit
from the money saved* buying
plans rose bran 22 to 3 per
cent, which is in line with cur-
rent reports from care dealers.
The consumer mood appears
somewhat more confident
about the outlook for the
whole economy than recent
reports bom industrial surveys
would suggest, but the
restrained buying plans under-
line the reports of soft market
mnilitiimg wiwfa n nwl in the lat-
est purchasing managers’ sur-
vey last week.
mw Luis Trmfiin Lola da Silva,
the socialist candidate in Bra-
zil’s presidential elections, yes-
terday received a big boost for
his campaign, winning public
harictng from Mr Mario Covas,
head of the Social Democratic
Party of Brazil.
Mr Covas’ decision - though
largely symbolic - is a setback
for the centrerigfat front-run-
ner, Mr Fernando Coll or de
MeBo, who had also solicited.
hacking in a bid to shrug
o ff his opponents' c?ahn« tfrat
be is an arch-conservative.
Mr Covas, who won 8m votes,
in the first round of the two-
phase contest on November 15
and supports a liberal eco-
nomic policy, may have diffi-
culty in persuading many of
his twiddler-lass supporters to
back Lula. But his piddle stand
will help the socialist candi-
Mexican PRI accepts loss
of Morelia municipality
By Richard Johns In Mexico City
THE RULING Institutional
Revolutionary Party (PHI) has
recognised the loss to the cen-
tre-left Party of the Democratic
Revolution (PRD) of Morelia,
capital of Michqacan. in last
Sunday's municipal elections
in which the occupancy of 130
town halls was at stake.
In contrast to its customary
practice of immediately
announcing a sweeping vic-
tory, the PRI only claimed to
have won 54 of the municipali-
ties by Wednesday, although
Mr Angel Guerrero Mier, a
member of the PRTs National
Executive Committee, pre-
dicted that its victories would
total 60 to 62 by the time the
final results had been verified.
The PRD led by Mr Cuauht-
emoc Cardenas clahwa to have
won at least 60 of the town-
ships and the usual post-elec-
toral wrangle seems inevitable.
Yet the change of PRI style
has generally puzzled political
observers. The cynical and
probably correct view is that In
an exercise in "selective
democracy,” the ruling party
that it raw mate conces-
sions following what was gen-
erally regarded as a massive
baud in the votes for the state
legislature on July 2.
Repeat of the widespread
ballot rigging employed then, 1
which resulted in the occupa-
tion by PRD supporters of 70
out of 313 town halls could
meanwhile lead to an eruption
of violence.
For the Government that
would be a grave embarrass-
ment following the violent con-
frontation between supporter s
of the PRI and members of the
National Action Party in Culia-
ran, Sinaloa, last week after
the final award by the electoral
commission there of the may-
orship to the PRX candidate in
a poll held as long ago as Octo-
ber &
will help the socialist candi-
date to project himself as mod-
erate and responsible.
“There are substantial differ-
ences between the PSDB and
the pr ogram me of the Workers’
Party [PT],” he told reporters.
"But that is not going to stop
us haftWng Lula.”
Nevertheless, it emerged
that the long-hesitant Mr
Covas will not go so far as to
join Lula on the platform at
public meetings for fear of
^iterating- lus more conserva-
tive supporters.
As the campaign moved into
its last 10 days before the deci-
sive December 17 poll, Brazil-
ian electors could be forgiven
yesterday for hnflghrtng Christ-
mas had arrived early. Both
candidates and their aides con-
tinued to woo the undecided
with a series of promises
intended to capture the fiercely
disputed middle-ground.
In Rio de Janeiro, a left-wing
heartland, Mr Collor promised
a hostile crowd that he would
continue and extend a local
programme of comprehensive
community schools to the
nation as a whole.
Lula, meanwhile, recently
told worried businessmen he
would contain wage pressure
in the early days of his govern-
ment and not extend the state
sector.
The latest poll shows the gap
between the two candidates
narrowing slightly to 49 per
cent for Mr Collor and 41 per
cent for Lula.
Poland and US unveil
$900m cable TV project
By Nancy Dunne in Washington
THE first US-Polish
communications joint venture,
a 9900m 20-year cable televi-
sion project, will bring Ameri-
can news, sports and rock
music programming to Poland
next year.
Chase Enterprises, a private-
ly-held diversified US holding
company, and the Polish
embassy in Washington yester-
day announced the project,
calling it the largest cable tele-
vision joint venture in the
world.
After three years of negotia-
tion, Polska Telewizja Kablowa
(PTK) is to begin phase one of
construction in January, for
l.8m homes in Warsaw and
Krakow. It hopes that the ser-
vice will be available between
June and September and
expansion will follow in
Gdansk, Katowice and Poznan.
The initial investment is
estimated at 9270m. Mr Roger
Freedman, for Chase Enter-
prises, said the service would
be priced at levels considered
affordable to most Poles —
from 96 to 98J50 a month. Repa-
triation of profits is not consid-
ered a problem; most will be
reinvested In Poland.
Chase’s Polish American
Cable Television will bold 70
per cent of the venture with 80
percent, paid in zlotys, held by
Poltelkab, a partnership of Pol-
ish state enterprises — includ-
ing the Polish Postal Service,
Telephone and Telegraph Com-
pany, and Polish Radio and
Television Productions Com-
pany — and the Warsaw and
Krakow municipal govern-
ments.
Mr Freedman said the part-
ners might seek underwriting
protection from the US Over-
seas Private investment Corpo-
ration.
The programming for the
Systran is not yet decided, but
is expected to include the CNN
news channel; ESPN, sports;
MTV, rock videos; movies, and
drama.
Mr David Chase, chairman
and chief executive officer of
Chase Enterprises, based in
Hartford, Connecticut, is a
Nazi concentration camp
escaper who emigrated to the
US atthe age of 17 in 194S. He
is leaving for Poland tomorrow
to investigate real estate,
insurance and h anking ven-
tures.
The television project was
warmly welcomed by Mr Jan
Klnaat, the Polish Ambassador,
a member of the Polish resis-
tance in the Second World War
who was also held in Nazi con-
centration camps. He called
the project proof that Poland
was on the road to "profound
political and economic
change”.
Davignon urges
simplified trade
control regime
By Nancy Dunne
MPs back reduction of
CoCom export curbs
By William Dawkins in Paris
VISCOUNT Etienne Davignon,
chairman of the European
ftnnml Table of Industrialists,
has suggested that the EC
adopt and guarantee enforce-
ment of a simplified, transpar-
ent export control regime on
technology transfers to Com-
xnnnist countries.
Viscount Davignon, the for-
mer EC Industry Commis-
sioner, was In Washington this
week meeting business lead-
ers, representing the US and
EC Brand Tables, to
issues raised by tile formation
of a single European market,
the General Agreement on
Tariffs and Trade Uruguay
Round on liberalising trade,
and developments in Eastern
CoCom, the Viscount said*
was now a "procedure” which
is not legally binding. As
events in Eastern Europe
become dear, the procedure
should be simplified and made
“the joint responsibility
legally of the EC” to reassure
the US that Europeans are pre-
pared to abide by an agreed-
upon set of export controls.
EC businesses which then
violate the ndes would become
subject to European law.
MPs from nine European
countries yesterday adopted a
report calling for an end to
many of the restrictions on
sensitive Western technology
exports to Communist coun-
tries.
The study, accepted unani-
mously at the six-monthly par-
liamentary assembly of the
Weste rn European Union
(WEU) - which embraces the
European Community minus
Ireland, Greece Denmark
- will be considered by foreign
and defence ministers over-the
next few months. Ministers
will then decide, at a meeting
next spring, whether to call on
their gover n ments to adopt the
report’s findings as policy.
It calls for a complete review
of the export curbs adminis-
tered by the 17 governments in
ish Conservative MP. The
assembly also agreed to hold a
special session early next year
to hammer out a broader reac-
tion to Eastern bloc political
changes.
To decide bow to reduce its
controls, CoCom first needs to
cany out a ftmHawiantai reas-
sessment of the state of Soviet
technology, the assembly
agreed.
It called for common rules
against those who try to cheat
CoCom restrictions - already
high on CoCom’s own agenda
- and talks with C ommunis t
countries on getting effective
on-site Inspection procedures
to check that freely traded
Western technology is not
befog used for aggressive pur-
CoCom, the Co-Ordinating
Committee for Multilateral
Committee for Multilateral
Export Controls, which aims to
stop exports of militarily use-
fill technology to 13 Commu-
nist countries.
The extraordinary develop-
ments in the Eastern bloc in
recent months make CoCom’s
ranfrrdg look Him a ** mHc of
the cold war,” says the report,
by Mr David Atkinson, a Brit-
The forthcoming CSCE (Con-
ference for Security and Coop-
eration in Europe) folks in
Bonn next spring would be the
ideal forum for discussing
CoCom’s future, said the
assembly.
In an amendment slipped in
at tiie last moment, the WEU
assembly also called for West-
ern co-operation to stop the
sale of technology to terrorist
groups anywhere in the world.
Fra Fra confounds the Chilean pollsters
Robert Graham in Santiago ponders the success of the third presidential candidate
. * —in . 1 m *>i«inaa a nn
P OLITICAL gadfly, public
nuisance or the true
voice of Chile: Francisco
Javier Errazuriz has been cast
in all these roles while stand-
ing as thp third candidate in
Chile’s presidential elections.
With a small organisation
and even less political experi-
ence, Mr Errazuriz has proved
the most effective communica-
tor of the campaign. His home-
grown mix of paternalism,
good humour and patriotic talk
without reference to any party
has touched an unexpected
chord. "Fra Fra,” as he likes to
be called. Is a wild card dis-
turbing the pack.
Mr Patricio Aylwin, the vet-
eran Christian Democrat candi-
date of the 17-party opposition
coalition, is still favoured to
win an absolute majority in
the first round on December 14.
But if he fails, it will be
because "Fra Fra” has stolen
votes from both him and Mr
Hernan Buchi, the former
finance minister who is the
government candidate.
“Our own polls show Erra-
zuriz has 27 per cent of the
vote, and if we go to a second
round, he could win by picking
up all those who went for
Buchi the first time round —
BRcuming that he does better
than Buchi,” says Mr Jos§
Antonio Cusino, his campaign
adviser. Such projections are
riigrTMiwri as wildly optimistic
by the other two candidates*
pollsters. Nevertheless, the
Buchi camp admits he is caus-
ing damage. Mr Buctai’s high,
est current poll is around 27
per cent against over 55 per
cent for Mr Aylwin.
The career of “Fra Fra," a
47-year-old agricultural econo-
mist, reads like the personifica-
tion of Chile's "economic mira-
cle." He started off in fanning
in 1964, moved into agri-busi-
ness, transport, then construc-
tion. By the mid-1970s he was
dabbling in financial services
and had picked up the dealer-
ship for Datsun and Nissan as
well as other dealerships for
foreign companies selling agri-
cultural equipment.
With the bulk of his invest-
ments in the booming export-
oriented agricultural sector, he
Aylwin: still favourite
rode the 1931-32 crash and was
able to pick up the country’s
largest supermarket chain,
Untmarc. He also became
involved in hanking and lat-
terly in the rapidly developing
pension fund business.
ms message is simple, even
simplistic. He projects himself
as the benevolent manager of a
successful company in which
all down to the coffee bay have
a chance of rising to the top, if
not of enjoying the rights of
health and education in a
Catholic society that honours
the family.
“The cither two candidates
take their political references
from the past, or before 1973
[when General Pinochet sei z ed
power]. But Chile has not just
changed socially a rid economi-
cally in the past 16 years — It
hail alsn t-hawg ed politically.
Traditional politicians do not
automatically have the right to
stand, a businessman can as
well,” says Mr Cusino of bis
p rotege.
“Fra Fra* has capitalised on
the way Mr Buchi was imposed
on the right by General Pin-
ochet. He also appeared more
convincing than Mr Bnchi
when talking about extra
resources being devoted to the
poor's health and education
needs. Mr Buchi, while in
office, was known as the man
who tightened the purse an
such spending to promote
broader economic growth.
The chink in “Fra Fra’s"
appeal is the lack of any party
structure, as these elections
will also chorea a new con*
gross and senate. His support
5 coming from the tower add-
die whose Inc omes have
not benefited from CUrt.i»
nqipfa: miracle, and from the
more extreme elem^soathe
right who mistrust Mr BuehL
He has drawn further sup-
port by playing the outsider
and the victim. Just as he
began his campaign in May,
the government Intervened m
the bank bn owned. Banco
NsrionaL and he than suffered
a heart attack. The govern-
ment underestimated the dam -
age be could cauae to MT Buchi
mid now it may be toolatoto
sabotage hint by questtontngf
Us business career* - .
In more ■ general terms be
represents a ph enomen on sear
elsewhere frrXatin A meri ca, r--
t hfl popularity of a man stand*
fog against the political estate
jtehment without any (dear
platform. “Fra Fra’s" pro-
gramme fraT ™ out only this
weak An d reads more like the
eccentric wishes of a bustoese-
man keen to become a patriotic
philanthropist.
California to limit car insurance rises
By Louise Keiioe in San Francisco
CALIFORNIA’S State
Insurance Commissioner has
ordered a rate increase limit an
car insurers as part of a new
regulatory regime designed to
implement Proposition 103, the
“insurance revolt” ballot mea-
sure passed by the state’s vot-
ers last year.
The “emergency regula-
tions” Imposed by the Insur-
ance Commissioner on Tues-
day appear certain to prompt
new challenges in the year-
long legal and regulatory dis-
pute between the state and big
insurance companies over
Proposition 103, which man-
dated a 20 per cent cut in car
insurance premiums through-
out the. state.
Insurance companies have
poured mUHnna of dollars into
efforts to challenge the statute,
which for the first time brings
state regulation to the largest
car insurance market in the
US, with annual premiums
of well over $4bn.
Consumers are angry that
the cost of comprehensive
insurance for an average fam-
ily car in San Francisco and
Los Angeles is now well over
9LOOO per year for drivers with
In a move to placate con-
sumer groups, the Insurance
Commissioner, Ms Roxani Gil-
lespie, barred the use of “terri-
torial rating”, by which insur-
ers set higher premiums for
car insurance in urban areas of
tiw state.
Proposition 103 mandated an
end to the practice.
Although Ms Gillespie said
the move was expected to lead
to increased pramums for driv-
ers in rural areas, she imposed
a cap on rate increases to min-
imise the effect No car insur-
ance premium can rise in
year beyond the increase in the
nati onal consumer price
for the previous year.
Argentine talks
with UK raid on
positive note
By Gary Mead
In Buenos Aires
DIPLOMATIC and military
staff of Argentina and Britain
have concluded two days of
“confidence-building* talks to
Montevideo, aimed at eliminat-
ing potential sources of conflict
between the two (xnmtries to
the South Atlantic. •
The Uruguay meeting; part
of a series Initiated to Near
Colombia reels from latest drugs war blow
York to August, appears to
have passed off without any
unforeseen development. It
povea the way for a further ses-
sion to Paris on December 18,
where the main subject will be
fishing. A further high-level
is planned for Febru-
ary to Madrid, which, it is
thought is llkely to result to
restoration of full diplomatic
relations, broken since the
FaJfcfenda of 1963.
The Montevideo talks ended
with a three-point corumuni-
Gug, which included the state-
ment that "the meetings .took
place In. constructive and cor-
maladrijrand both delega tion s
reaffirmed their desire of
advancing the normalisation <rf
A TOTAL of 188 people have
died in apparent drug-related
violence since the government
of President Virgilio Barco
began its drive to rid Colombia
of the cartels believed to be
responsible for most of the
cocaine smuggled into the US
and Europe, Renter reports
from Bogota.
In the latest attack 52 people
were killed in a bomb blast
outside the headquarters of the
secret police. It was the most
devastating ground assault
against the government since
it embarked on the war a gainst
the drug cartels in August
Wednesday's explosion also
wounded 653 people and
destroyed most of the head-
quarters of the security and
intelligence agency. The head
of the agency escaped death
because he was protected by
armour plating in bis ninth-
floor office.
“We are not going to allow
ourselves to fell before the
bloody terror of the narco-ter-
rorists," President Barco said
in an address to the nation
which was relayed by satellite
from Tokyo, where he is an a
state visit.
“They will not defeat us; we
will continne the fight their
war is against all of Colombia
ami democracy,” he added.
In Medellin, the northern
Colombian city at the hub of
the country’s cocaine trade,
seven more explosions were
heard on Wednesday night,
radio reports said, adding that
two of the blasts appeared
aimed at evangelical protestant
churches.
El Tlempo, Colombia's big-
gest paper, yesterday pro-
claimed: “Narcos turn Bogota
Into a Beirut” Wednesday’s
blast came less than two weeks
after a bomb brought down an
Avianca Boeing 727 jetliner,
killing all 107 people aboard.
The latest explosion, consist-
ing of lore pounds of dynamite
stashed In a truck. Was
touched off just outside the
high-rise headquarters of the
Department of Administrative
Security (DAS), an agency . in
the front line of the drug war.
It ripped off the entire eastern
outside wall of the building
and killed 11 DAS nfffofota, the
agency said.
WORLD TRADE NEWS
Brazilian
battle over
satellite
contract
BNL overshadows Rome-Baghdad talks
By John Wytes in Rome
By Ivo Dawnay
In Rio de Janeiro
A FIERCE struggle is under
way within the Brazilian gov-
ernment over a 9150m (£95m)
contract to build the country’s
second generation of commu-
nications satellites.
With the long-delayed deci-
sion believed Imminent,
observers suggest the choice
between Hughes, the Califor-
nian subsidiary of General
Motors, and a consortium link-
ing Spar of Canada with Matra
erf France may well be decided
on political grounds.
Rwriitn- this year, Mrs Caxla
Hills, t he US T rade Represen-
tative, intervened by writing
to th e Brazilian government in
support of Hughes. Opponents
of the US bid argue that its
price advantages do not com-
pensate for more generous
concessions on technology
transfer made by the Franco- .
famuHim consortium.
According to the Folha de 1
Sao Paulo newspaper, Mr i
Antonio Carlos Magalhaes, the ,
Communications Minister, Is
refusing to accept a report I
from the state telephone cam-
panics, Embratel and TeHebras,
strongly favouring Tfn ghoa
The report claims that the
Spar-Matra proposal will
involve real additional spend-
ing of 8134m. Intensive lobby-
ing has been under way by
both sides, with Brazilian com-
panies lining up behind the
contestants. Spar is under-
stood to have won the support
of Mr Roberto Marinhn, owner
of the Globo TV empire and an
associate of the minister.
REVERBERATIONS from what
has become known as the
“BNL Atlanta affair” appeared
yesterday to have been an
obstacle to the hoped-for regen-
eration of commercial relations
between Italy and Iraq.
A two-day meeting at minis-
terial level of their joint trade
committee felted to resolve the
key problem, concerning the
delivery of II naval ships
ordered, during the Iran-Iraq
war and then blocked by an
Italian arms embargo from
1986. The Iraqis had paid
9L3hn (£825mX about half the
cost of the order.
Iraqi negotiators were reluc-
tant to take delivery erf all the
vessels without updating and
an additional contract for 10
naval helicopters. These issues
are to be returned to a joint
working group- Italian sources
admitted that overall progress
had been limited by Iraq’s
introduction Of its denum da for
the payment of 9920m of cred-
its improperly allocated by the
Bancs Nazionale del Lavoro’s
Atlanta branch but not yet
drawn down.
Altogether 93bn of credits
were granted to Iraq from
Atlanta without the knowledge
of the BNL headquarters to a.
scandal being investigated by
US and Italian authorities.
The Italian government
decided fids week that ft would
not assume responsibility for
any decision on the credits,
which it told Iraq were a mat-
ter for BNL to resolve, despite
the fact that the bank is con-
trolled bv t he Treasury.
This did not satisfy fraq and
s e ems to have limited the n*- .
stole Jesuits from the meeting.
The most positive wasjmlraqi ... .
agreement to begin repayment,. ;
I ill <jl f n _ ij. i ■■ilw
Willi iniF^ WfL' Hum. T""-* 1 - ytfiu. • -
fli^d rnprty l fmny
LLOOObn (£486m) of debts due
to Italian' companies. .:
ft emerged that Iraq is fife* :
cussing posstote new contracts :
with Italian companies far
fg . ffo n mnl Broww m»ri<i ft Hour - ;
that it would be ready to opeiL ij.
fresh credits for such contracts- .
providing the problem of the -
naval ships was settled first. /
Small gauge, big role for Alps rail
Anthony McDermott on tourism and trade hopes in Ticino canton
H OPES are befog pinned
on the development of
a small railway line
between Locarno and Domo-
doesola In Italy to expand tour-
ism in Ticino, the Italian-
speaking canton in the south
east of Switzerland, and to
boost east- west transport links
in the country.
On the Italian idite tbfi T1WT-
row-gauge rails pass mainly
through plains before snaking
steeply npHfn amM vineyards
and chestnut groves to a peak
at Santa Maria Maggiore. In
Switzerland, It is know as the
OentooaUe railway - that of a
hundred valleys - as ft twists
through tunnels and over deep
gorges on audaciously-con-
structed bridges and viaducts.
The line between Domodos-
sola »nri Locarno Is only fift™
and tafepBj at p rawmt, go min-
utes. It has no fewer than 346
curves, 34 stations, 83 bridges
gx tunnels.
Besides being spectacular,
the ride has its charms. When
the special carriage pauses on
the Italian side in a siding at
T mwbmfl to pe rmit the nq yuljir
train to pass, the engineer has
been known to shin up a lad-
der to bring down bunches of
dark blue wa americana
grapes to provide sustenance
for the rest of the trip.
The 32km on the waHmi Hide
is run by Sodet& Suhalpina di
Impress Ferro viarie (SSIF).
The Femme AutoDnee Region-
al Times! runs the rest and
the two companies cooperate
rinfifliy through an inter-state
contract.
It is noticeable - and the
Swiss are somewhat smug
about this - that the antoma-
trrm qf prints ftYlri TnftTntevifln r*
are of a tiigftpr standard on
their «Ma_ fn the lon g term,
£1 AI signs flight
deal with Aeroflot
El Al, Israel’s state airline,
said yesterday it had signed an
agreement with Aeroflot, the
Soviet national carrier, to
start scheduled flights
between Tel Aviv and Moscow
for tiie first time, Hugh Car-
negy reports from Jerusalem.
Despite news agency reports
from Moscow quoting a ctvfi
aviation official as denying a
deal had been done, El Al said
Mr Rafi Bariev, its director
general, had signed an agree-
ment with Aeroflot’s manage-
ment to Moscow on Wednes-
day allowing mitiaiTy for one
flight a week by each airline.
rail networks and between toe
Swiss cumtnwfl of Ticino and,
Valais in the west :
ft could, when, the journey.
thne ]s ff pp fxted tm help to pro-
vide the swiftest route from
Ticino to both Geneva and
Bern, the n mtol , phnllwngfrig
even Croaaair, the national
fwfawnflj irirthia - -
But Mr Meyer hopes to
tify and offset his. railway*?!:
losses not just through, this
rote, but by making it a ftd*
cram for regional tourism.
“Our marketing olrfectire Jfc
and within the context of a
Swiss national project called
Rail 2000 introduced to June
this year, the privately-owned
SSIF will be ready for a
friendly takeover by tiie Swiss
in mid-1960s so that man-
agement of thA whole Him mb
be rmflar rmo board.
Mr Dirk Meyer, the Swiss
vice-director, has ambitions for
his railway. In the short term,
one is to complete the upgrad-
ing of the tracks. This has
already started and he hopes
that, when it Is combined with
a new terminus in Locarno (to
open in 1991), the journey time
will be reduced by 10 minutes.
Eight new coaches and trains
are being purchased at a cost
of SErtTto (£29m) from Ateliers
de Construction Mfcaniques in
Vevey (part erf the Asea Brown
Bo vert group of Baden) for
delivery from December 199L
The Swiss company is anom-
alous in that, although it has a
private holding of only Just
over 7 percent - the rest com-
ing from the communes of
Tlctoo and the federal govern-
ment in Bern — it is cUmatowfl
as private. The railway sector
— the company also runs braes
and trams - is a loss maker.
Losses in 1988 amounted to
almost SFr3m. These are cov-
ered under the Federal Rail-
way Law of 1957 by the Gov-
ernment Sm wtnt nn ,
It justifies its existence on
many levels. The railway acts
as a commuter fink, »Mhnngh
70 per cent of its passengers
are tourists. Their numbers
have hardly expanded. In 1963
they amounted to 599,546,
reeaefaed a peak of 612310 to
1987 and fell to 572^82 last
year. The quantity of freight
carried is negHgtote- about 93
tonnes a year. . .
Nevertheless, according to
Mr Meyer, ft earns Locarno
through passenger transport
about SFram a year. -But, be
argues strongly, besides the
commuter «nd tourist traffic,
the railway provides a useful
link both, with the major Sim-
plon and Gotthard European.
is to persuade them tint, afters
seeing the Jungfrau mm ’the r
M a t te rhorn It is salnabfe ta~
see tiie soutbem part iff. toe. '
Alps," be says. ■ : . -r
The landscape of tha ftahatt '
Vlgezzo Valley and tfae Ceiato-
vafie is nmw gk to Ju s tif y this
aspiration. The cable - car
(another of Mr Me^art respoo- ■
atofittfeB) from ^SSEkSpthi
steep hflMda to ftas* OOttS-nV
dev as t a ti ng vtew et tbe river
running through, toe 'central
gorge and. of the yictiaesqpff 7
village*. - r -v.' 1 -:
Mr MUyer wants twwfewjo
break tmtir jo urn e y s mnd take .
cable cars up the idBsMei to
enjoy toe scenery- At Ba tbere
is a remaritebtercfrmrib^dedfc-
rated to the, Madonna uL Be,
togs - dating' baek ta toe isth
cmtury-XfooteW photo-
graphs dagdritog dfewtere that
have either -just been, avoided
or proved feteL . - : :
There is mm* potential. And
some idfoeynoass; Mr Meyer.
TOO Wffl iffoNUy be in fill!
charge from, the rateiimfra nt
next year, bad doKahoSt
bia : company’s acronym. He
baa dianged his mind. =“ft ft, to
its own way, unforgettable'
*
■K
V
7
FINANCIAL TIMES FRIDA Y DECEMBER 8 1989 .
UK NEWS
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PLANNED LEGISLATION
TV code may be
changed before
becoming law
- By Raymond Snoddy
THE Ggyamnait -made clear
yesterday that it was prepared
to consider changes to its new
controversial broadcasting'
bQl -a ML designed, to promote
competition and choice but
which will also ultimately
award commercial licences to
the hig hest bidder in an bat
exceptional dmmi«tf»nww
Mr David MeHor, the Home
Offic e minister responsible for
da^oTthif
published mat it was not a bib-
lical
“It is the best fist the d rafts -
men . could make of it We are
certainly wining to listen,” Mr
MeHor said.
“I would be i«tonii»M if t he
bill doesn't, have af gniftean*
differences when it mute its
parliamentary passage,” the
Home Office minister added.
• The ten win provide for the
creation of a new national fifth
channel rapahy? of reaching up
to 70 per cent of the UK, three
national national commercial
radio networks and several
hundred local and ima m ni wri + y
radio stations. It will also allow
broadcasting «"np«»W to be
taken over for the first time:
allhnng h thn appwfiwtf of the
new industry regulatory body
the Independent Television
C nmmtesl on win be needed.
The Government's plans
rarnu under munaHata aftaric
yesterday from Mr Roy Hatter
sley, deputy leader of the
Labour Party.
Mr Battersley said the qual-
ity of British broadcasting
would deteriorate as a result of
Government intention to *
independent franchises to
the highest bidder." There was
nothing in the Government's
quality s tan dard s about drama,
documentary programmes,
gdnnatrnnal or reHginns pro-
^gramme s.
Detoitte Haskins & Sells, the
aeemmtemfca and nwHwwpnwnt
consultants last night forecast
a significant influx of fnrafgn
investment into the UK televi-
sion industry as a result of the
Government rhawgaa .
The “ seated bid " procedure
following a quality threshold
see med tailor-made for compa-
nies from other European Com-
inanity countries, according to
Deloittes.
Government’s new legal
Bill allows for ‘ evolution ’
By Robert Rice, Legal Correspondent
THE Government gave the
first iwBmttm ttat lte plarmart
reforms of the legal profession
might not lead to major
changes in the ri ghts
of banisters and scdicttora to
appear as advocates in the
higher courts. -
Speaking following the pobfi-
cation of the Courts and Legal
Services Bill, Lind Mackay, the
Lord Chancellor, the senior
politician in charge of the jndi-
dary, said the Bill provided the
machinery far resolving the
dispute betweenbanfeterff and
SOHdtors nmrighlg of anriignnR
in the higher courts.
But he rejected a suggestion
that the Government had
mimed an opportunity to
resolve the dis p u te once and
for all by making specific
rules. “Huge change in this
area might not be right Evolu-
tion may be a better way for-
ward”, he said.
Amnng - the BSTs main pro-
posals are measures to allow
banks and bnfldmg societies to
do conveyancing and the estab-
lishment of an Authorised Con-
veyancing Practitioners' Board
to regulate them.
The Bill was welcomed by
file Law Society, the solicitors’
professional body. Mr David
Ward, the society's president
said it was a “real improve-
ment” on the original propos-
als an rights of audience which
KbH pr omp ted a stann of pro-
test
They came,
they saw,
they left
engineering
By Nick Garnett
HAS there been, a miracle
transformation, in managerial
attitudes within Britain's
manufacturing companies?
You mast be joking, says tills
year’s crop of UK engineering
graduates.
An Independent survey of
1*850 final-year engineering
students, almost all of whom
have had wor k, experience in
companies, shows a
deep-seated rtf slfinstonment
with the way manufacturers
teat engineers.
The status of engineers
within those companies
remained poor, ffMJio manag-
ers were obstructive and hin-
dered pr o gre s s and salaries
were far too low.
As a result just 35 per cent
of these graduates intended
staying in engineering, accord-
ing to Imperial Ventures
(EVL), the company which car-
ried out the survey.
One of the most disturbing
aspects of the IVL report was
that of the one third of stu-
dents s po ns ored by a manufac-
turer, 44 per cent said their
experience in their sp on so r ing
company had tended to turn
then\ off wighwwrhig '.
IVL, whose report was spon-
sored by a dozen large British
companies including British
Petroleum, GKN and Lucas,
said one of the reasons for this
was a perception that engi-
neers were no t given en ough
i interesting or »wpnH«»t pro-
' jects.
The report is upsettin g for
British companies because
they are already faring great
i inn w i itum in re c r uitin g engi-
neers. Between 1985 and 1388
applications for engineering
and technology course s fell by
22 per cent
At tiie pres s con f ere nc e to
presen t the report y ester day,
Hu» way n g com-
panies used engineers was
defended
Mr Denis filer, dir ec to r gen-
eral of the Engineering Coun-
cil, agreed there were many
problems with the status of
gngtnpwrg in the UK but said
the rimfanfa ltad mubp wfawm.
about manufacturing.
They had not worked long
enough in it to realise how.
many positive changes had
occurred over the past 10
yarn.
Lloyd’s business
distinctions to end
! By Patrick Cockbum
LLOYD'S of London, the
private insurance market, is to
end the division of its business
into the four traditional sectors
of marine, non-marine, avia-
tion motor which it says
has become a barrier to some
types of insurance being placed
in the market.
The chang e will take effect
from the beginning of 1991 to
wmH» syndicates to obtain the
necessary underwriting exper-
tise and to ensure that Lloyd’s
31,000 members or Names are
fully informed about the
change.
Mr Alan. Lord, Lloyd's chief
executive, said yesterday that
the move will make it easier
fin: rffenta to seek cover on a
rfrtgto policy for a wide range
of risks cutting across tradi-
tional market barriers. The
market would also obtain
greater flexibility in using Its
mbs capacity.
Lloyd’s originally developed
as an Insurance market for
shipping in the eighteenth cen-
tury but has non- marine
business on an equal footing
with marine since 1903 and tbs
aviation market has consti-
tuted a separate sector since
195L
Opposition presses charges of
‘sweeteners’ in Royer sell-off
By Kevin Done, Charles Leedbeafer and Ralph Atkina
Over the years, however, the
market barriers have never
been absolute with marine syn-
dicates taking a proportion of
non-marine business. Insur-
ance of energy risks is done by
both marine and non-marine
underwriters.
Lloyd’s broken were yester-
day generally In favour of syn-
dicates being able to under-
write all types of risk, but
cautious about the extra busi-
ness it would generate. Mr
David Rowland, chairman of
Sedgwick Group, the ftixnr«Tn»
brokers, said that he saw the
d eri s io n as part of a general
long-term shift by Lloyd’s
towards gre ater sensitivity to
the needs of clients.
However, underwriters at
Lloyd's have been increasinlgy
critical of the ending of tradi-
tional barriers which was
opposed by market associa-
tions uniting underwriters in
the four traditional sectors.
The nraiw objection to the rid-
ing is that premium rates may
be squeezed by big syndicates
looking for new business out-
side their traditional sectors.
Small syndicates with speci-
alised business could be i
threatened.
ADDITIONAL “sweeteners"
were involved in British Aero-
space's takeover of Rover last
year, including raising the
limit on foreign ownership of
BAe shares, Mr Gordon Brown.
Labour trade and industry
spokesman, claimed yesterday.
As the oppos i tion intensified
its pressure on the Govern-
ment over its handling of the
Rover takeover. Mr Brown dis-
closed copies of confidential
letters between Lord Young,
Secretary of State for Trade
and Industry, and Professor
Roland Smith, BAe ptiainwan
written shortly before the deal
was finalised last July.
A separate confidential
record, disclosed by Mr Brown,
of a meeting of the BAe
steering group formed to han-
dle the Rover takeover negotia-
tions, reveals how talks
between Lord Young and BAe
centred on “bridging" the gap
created by the European Com-
mission’s insistence on catting
the Government's planned
cash Injection into Rover by
around £250m.
One "indirect” concession
discussed and raised by Profes-
sor Smith hi his letter was the
raising of the Unfits on foreign
ownership of BAe equity. In a
reply of July 12 last year Lord
Young said be was willing to
consider this proposal “sympa-
thetically.”
This change in the compa-
ny's articles of association was
cleared by the Government in
August when the limit was
raised from 15 to 30 per cent.
Mr Brown claimed that the
other additional sweeteners
included tax arrangements
favourable for BAe. Mr Brown
said that while the tax advan-
tages were calculated by Brus-
sels to be worth £25m and BAc
calculated them at rasm, the
maximum could be £65m.
BAe also sought early pay-
ment of launch aid for Airbus,
in which BAe is a 20 per cent
shareholder, as one way of
“bridging the gap."
The exchange of letters
reveals how Lord Young
advised BAe on the risks of the
European Commission “pick-
ing up" up the secret financial
concessions and warns of the
need to "avoid unnecessarily
raising the profile of the
issue".
Mr Brown said the docu-
ments showed how the “ Gov-
ernment planned to conceal
and to deceive the European
Commission and the House of
Commons even to the point of
weighing the risk of being
found out according to what
particular course and decep-
tion was followed.”
Mr Brown called for a full
statement from Mr Nicholas
Ridley, Trade and Industry
Secretary, and called on Mrs
Margaret Thatcher, the Prime
Minister, to “explain her role
in this deception of the Euro-
pean Community and of Parlia-
ment “
The Prime Minister was
again forced on to the defen-
sive in the House or Commons
yesterday, as she faced an
accusation by Mr Roy Hatter-
sley, deputy Labour leader,
that the Government had
entered into “calculated decep-
tion”. In heated House of Com-
mons exchanges, Mr Hattcrslcy
said the Prime Minister was
going to the European summit
in Strasbourg with a
"tarnished reputation".
The Public Accounts select
committee which is examining
the Rover sell-off, is likely to
meet privately within the nest
week to decide bow to proceed
with its investigation.
Ministry serves up a microwave confusion
.T imm y Borns looks at repercussions of tests showing some ovens fail to kill bacteria
A MONG the Christmas manufacturers have been agreed with Mr Collis that the advice was was stiQ that there believe that the Gnvcmmcr
advertising in the forced into a damage limitation issue had been blown out of should bo no room for compla- has unnecessary confuse
newspapers this week, exercise aimed at ensuring proportion and was only now ccncy. matters and feel that they hav
A MONG the Christmas
advertising in the
newspapers this week,
two groups in particular
appear to have been vying with
particular ur gency for reader s'
attention.
One group, retailers, has
been plugging competitively
priced ranges of microwaves.
The other, leading microwave
manufacturers, has provided a
checklist of correct usage for
the raachinfls , aimed not just
at ennking fast and efficiently,
but more pointedly at how to
kiU the poisonous organism
known as listeria.
Earlier this week, public con-
cern was fuelled by a Ministry
of Agriculture report which
said that of 102 microwave
ovens tested, nearly a third
had “cold spots” at which food
was not heated to the 70
degrees centigrade necessary
to kill bacteria.
Since then, retailers and
manufacturers have been
forced into a damage limitation
exercise aimed at ensuring
that s uch c oncern with one of
the fastest growing consumer
durables of recent years does
not provoke a big slump in cru-
cial Christmas
Last night, Mr Jim Collis,
director general of Amdea, the
electrical manufacturers asso-
ciation, said he had become
“increasingly encouraged” by
reports that consumers are
“totally confident in the effi-
ciency and safety of microwave
ovens.”
Amdea had been inundated
by calls in the previous 48
hours after its routine office
switchboard bad been pub-
lished as a “hotline" by one
national newspaper. It has also
been carefully monitoring pop-
ular phone-in radio pro-
grammes and has kept in close
fawrfi with retailers.
Not everyone yesterday
agreed with Mr Collis that the
issue had been blown out of
proportion and was only now
being returned to its proper
dimwwlnn.
The Consumers’ Association,
which has iy>e n at the forefront
Of damanHe to have the mnntjf
of offending microwaves
named, has welcomed the deci-
sion by Amdea to make public
a list of the makes and model
numbers of all the ovens tested
for the Ministry of Agriculture,
Fisheries, and Food, by the
AFRC Institute for Food
A ccording to the CA’s
director Mr John
Beishon, the list offers
some help to microwave own-
ers, especially those whose
are flprignatpd “sat-
isfactory." But although the
association said last night that
public fa qniriM about micro-
wave ovens had tapered off
over the last 24 hours, their
advice was was still that there
should be no room for compla-
cency.
The CA insists that although
the advertisments In the
national newspapers are a step
in the right direction, better
and fuller information needs to
be provided on specific models
which have been covered by
the Government tests.
There was also lingering
concern last night about the
way the Government had han-
dled the whole issue, with the
CA suggesting that the MAFF
bad met the public’s right to
know by an nnneccessary tor-
tuous route.
Mr Beishon for the Consum-
ers’ Association said the “real
issue” was the MAFF's
“responsibility to make sure
that consumers are given all
the information available.”
Some leading wahnn whose
products have been cleared by
the tests are understood to
believe that the Government
has unnecessary confused
matters and feel that they hare
been damaged by the MAFF's
mishandling of the microwave
report.
The ministry was last night
insisting that it had reacted
"with speed" in producing the
report initially and had acted
correctly by advising consum-
ers to seek clarification from
manufacturers.
Against the background of
continuing controversy, some
retailers were lost night still
adopting a cautious “wait and
see" attitude before predicting
a longer term effect on sales.
Dixons, the electrical retail-
ers, which stocks six brands of
microwaves cleared by the gov-
ernment test, but which has
removed a seventh foom its
shops, predicted that it was
“very early days” to gauge the
real reaction of consumers.
rnarkj*!
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F cur
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8
FINANCIAL TIMES FRIDAY PECEMBBR »4W»
Sales outlook gloomiest
for nearly eight years
By Patrick Harverson, Economics Staff
HIGH interest rates and rising
mortgage costs have led to a
substantial weakening in
Amnestic demand and a grow-
ing build-up of unsold stocks
among Britain's retailers,
wholesalers, and motor trad-
ers.
Investment plans have been
cut and the sales outlook for
the next three months is the
gloomiest for 6ft years.
These are the main findings
of the November Confederation
of British Industry /Financial
Times distributive trades sur-
vey. They provide further evi-
dence that the Government’s
tight monetary policy is biting
bard, particularly in the high
street
Mr Andrew Sentence. direc-
tor fo economic affairs at the
CBL the employers association,
said: 'With trading conditions
tough for some time, confi-
dence about short run business
prospects has now deteriorated
across the distributive sector.”
A dearer indication of high
street spending in November
will come on Monday, when
the provisional estimate of
retail saltes is released by the
Central Statistical Office. The
City expects retail sales vol-
ume to have risen by 0.4 per
cent last month.
According to the survey,
which covered 460 companies
in retailing, wholesaling and
the motor trades between
November 13 and December 1,
overall sales remain depressed
and poor growth is expected in
December and over the crucial
Christmas period.
Of the companies polled, 39
per cent reported higher sales
volumes in November com-
pared to a year ago, while 33
per cent said they were lower.
The difference between the
two, which gives a guide to the
trend In sales growth, was 6
per cent, well down on the pos-
Retailing
1889 ’ 1888
_ noppfiad batenca
itive balance of 18 per cent
recorded in October's survey.
Six per cent of companies
expect better sales in Decem-
ber than last year, which sug-
gests tha t growth this Christ-
mas will be modest compared
to recent years.
Distributors' stocks rose
sharply in November; a bal-
ance of 33 per cent said the
stocks were higher last month.
The CB1 said orders placed
by distributors with suppliers
were actually lower in Novem-
ber than last year, the first
time that a negative balance
on orders bad been recorded.
There was better news on
prices and imports. The survey
found that distributors' selling
prices slowed significantly In
November, reflecting slower
price increases in wholesaling
and the motor trades.
A balance of 66 per cent of
distributors reported higher
prices than a year ago, com-
pared to 85 per cent in October.
A balance of 61 per cent said
they expected prices to rise
this month, well down fom the
85 per cent in the previous sur-
vey.
The CB1 found that overall,
imported supplies made up a
larger proportion of deliveries
thaw a year ago, but that the
rate of growth of imports was
still slowing. A balance of 9 per
cent of companies reported
higher imports than last year,
down from 20 per cent in
November 1988.
Among retailers, the balance
of respondents reporting better
sales than a year ago was 6 per
cent, compared with 16 per
cent in October. This was the
second lowest result on record.
A balance of 17 per cent expec-
ted an increase in sales tins
month relative to last Decem-
ber.
Growth in orders placed to
retailers also slowed in Novem-
ber. The balance of firms order-
ing more from suppliers than
last year was 2 per cent, down
from 6 per cent in October. A
balance of 28 per cent reported
higher stocks in relation to
expected sales in November.
Tbe outlook for capital
expenditure is even gloomier.
For the first time on record
retailers expect to invest less
over the next 12 months than
they had in tbe past year.
Motor traders continued to
report sales below last year’s
volumes.
Parliamentary report warns of destabilising effect of lau ndered mone^
Britain seen as home for drug traffickers
By Richard Donkin
THE UK is regarded in the US
awri Canada as an offshore
hanking system which can be
used by drug traffickers who
are estimated to be earning at
least ei ahn from drugs smug-
info the country, accord-
to report by a committee of
MPa.
The report by the Home
Affairs Committee warned that
so much drug money was cir-
culating in the UK that it could
have a destabilising effect on
smaller financial insititutions
if they found their volumes cut
by the culmination of a suc-
cessful detection operation.
Mr Barry Price, head of the
National Drags Intelligence
Unit based at Scotland. Yard
said in the report that his
department was handling one
case where £47m from drug
trafficking overseas had passed
to, or through, the UK.
He said that traffickers were
particularly concerned to
invest their money in a politi-
cally and financially stable
community. While he could
only guess at the amount of
drag money in the financial
system he said that if only half
the estimated £1.8ba found Us
way into financial institutions
it was “an awful lot of money”
He said - "It is a natural con-
sequence of having that sort of
environment within our busi-
ness world that people are
ECT Ti g to deposit money there.”
Between January 1987 and
May this year, police and cus-
toms investigators had
obtained confiscation orders
for only £llm of drug money,
the committee said.
The report said urgent
reforms were needed to
increase tbe effectiveness of
the 1986 Drug Trafficking
Offences Act Introduced to
combat international drug traf-
ficking through the seizure and
confiscation of the proceeds of
drug trafficking.
The committee has urge d th e
Hawk of England to examine
the scale and threat to the
financial community posed by
money laundering. It said it
was concerned that neither the
hank of England nor Commit-
tee of London and Scottish
Bankers bad been able to pro-
pose improvements in the law
against money laundering.
The report ruled out the
mandatory reporting- of trans-
actions above a certain value
as a measure ag a i ns t money
launderi ng. _
The MPs also want confis-
cated drug money to be
diverted from the Treasury
into a central Home Office
fund for use by police and
other law enforcement agen-
cies.
Once alleged drug moneyjp
traced, police and customs am-
cers apply for a court order
to freeze foe cash which may
be seized cm conviction.
In practice the legislation
was proving more difficult
than expected, resulting to sig-
nificant shortfalls between foe
value of confiscation orders
and the amount seised, the
committee sakL .
The report called J kmmi
provision within the ail lor
seizing interest accrued *»
drug money during foe F"
between a court omer.
m-de and confiscation.
The report describes tndney
laundering* disguising the ori-
gin of the proceeds from
crime -as one of foe meet
sophis ticated criminal dctivt
The Government should
instruct tbe Bank of Bnriand
to examine foe scale « the-
threat to foe hanking commu-
nity and any laglawtim ar
other changes required, te
counter it, t&BMMit J -
High street banks had softer
alerted the police on about
l^WOoccaaiona of anQdcfoui
deposit*.
Directors back full
EMS membership
By Patrick Harverson, Economics Staff
COMPANY DIRECTORS in the
UK overwhelmingly support
Britain's full membership of
the European Monetary Sys-
tem, a survey concluded yes-
terday.
The survey, commissioned
by Ernst & Young, manage-
ment consultants, found that
88 per cent of the 92 top UK
company directors sampled
believed sterling should join
the exchange rate mechanism
of the EMS.
However, nearly half felt
B ritain should wait until infla-
tion was substantially lower
before participating fully in the
system. A quarter said Britain
should join now. The predomi-
nant view was that the
exchang e rate should be low
when sterling entered the
khm
Two thirds of directors
believed membership would
result in a more stable
exchange rate, a stronger
pound and increased trade
with other European Commu-
nity members. A third said a
more stable pound would make
forward planning easier and
half felt it would reduce the
costs arising from the need to
use hedging instruments. A
few said membership would
underline the country's com-
mitment to tbe EC.
•The creation of a single
European market from 1992
should not to the abolition
of all UK border controls, the
European fiwmirnmitiaa select
committee of the House of
Lords concludes - advocating
that they should remain for
illegal weapons and drugs.
...a*’
; t J" %
V:
f ' ;
:V«V
AT YOUR SERVICE,
WORLDWIDE.
When shopping for gifts
come to expect at these
Club' Card:
Bucherer
Lucerne. Zurich.
Geneva
EA.O. Schwarz
New dork. Boston.
San Francisco
H. Stem Jewellers
Frank fun.
Dusscldoif. Paris
Myer
Melbourne. Brisbane.
Perth
Stockmann
Helsinki. ’Iampcre.
lurk u
with distinction, you'll find the level of service you ve
and other fine stores which welcome the Diners
Dubai Duty Free
Shopping Complex
Dubai. O.A.E.
1 ferman's World
of Sporting Goods
Throughout the l IS.
J. Ballantyne & Co.
Christchurch
Saks Fifth Avenue
Throughout the C.S.
Takashimaya
iokvo. New hork.
Paris
Burherrys of I ondon
London. Edinburgh..
New \brk
Inno
Brussels. Antwerp. Liege
wmmmmm
: ,N .
• Pin i < It 1 1 ■ .in iO
n i..\ U • >1 I br.i - ( Ini'
!ii i • m.iTm n..: I (0
In Brief
M&S first
food store
planned for
Docklands
Marks and Spencer is to open a
food store in London’s Dock-
lands. It will be the group’s
first food store in the area, and
will serve those who wfll work
in foe £4bn 71-acre Canary
Wharf development
Air weapons ordered
Short Brothers, Belfast air-
craft and missiles manufac-
turer, announced orders worth
£40m for its Javelin air weapon
system.
USAF contract won
A small British computer
software house. Precision Soft-
ware, is set to share in a SLbn
contract to supply tbe US Air
Force with a new generation of
desktop computer systems.
NHS card scheme
Raising funds for National
Health Service Hospitals is to
be made easier by a visa credit
card launched by Girobank -
the first time that a credit
card has been linked to a
health authority.
Employers budget lobby
Three of the 'UK’s leading
employer organisations are
planning to make a joist sub-
mission to the government
about next year's budget.
Toyota power deal
The first electricity contract
awarded under UK electricity
privatisation plan is a ten year
deal worth about £5Qm to sup-
ply foe £700m Toyota motor
p lant planned at Derby.
Chatlines resume
Britain’s controversial chat-
line services, which allow
groups of people to gossip over
the phone, are to be allowed to
resume from today following a
decision by the Office of Tele-
communications.
Lloyd’s review
. Lloyd’s of London, the tasur-
ance market, is reviewing the
controversial sale of Ajax
Insurance Holdings by the
directors of the John Poland
managing agency.
Fall in leasing bnsmess
The volume of leasing busi-
ness to foe third quarter of this
year foil by 2 per cent com-
pared to the second quarter,
apparently confirming the
weakening trend, to business
lending.
Bombers statement
An inquiry into the West
Midlands Serious Grime Squad
could ynrinda matters concern-
ing the Birmingham Six bomb-
ers -Mr John Fatten, a Home
Office Minister of Stats, said.
Cast of road, bridge
failures ‘at £400in’ -
By Andrew Taylor, Construction Corrwpondwtt
£Mmu Poor
contractors and donaulrag
engineers accounted for Wto.
The NAO iwrtwgl iwdfr
quale
to the use oT unsuitable mate*
rial or poor drainage causing
embankment failures" were
among the nurfa causes of pre-
mature failure Of roads and
teMgw. ■ -J •' "
It said the transport depart*
rant had^tmwywor work-
manship bY contractors for
THE premature failure of.
British roads and bridges due
to Inadequate supervision by
the Department of Transport
and poor workmanship by con-
sulting engineers and contrac-
tors has cost at least £400m
during .the past 10*15 years
according to a report presented
to MPs yesterday. . . .
The report by tbq^ Comptrol-
ler and Auditor General, Mr
John Bourn, head of the
National Audit Office, calls for
improvements in the way in
which the transport depart-
ments of England, Scotland
and Wales manages .. road
investment programmes which
cost more than Elba to 1988-88.
The office examined aid
cases, most of them stooe U8Q
involving roads and bridges
which had to be repaired ear-
lier fo«« expected. The repair
bill alone would come to
£262m. The total ecqnamfecoet
could rise to £400m if foe cost
of delay* are taken info
account said the report. .
It said poor workmanship
and inadequate supervision
were among the main causes of
premature ntaiwtew^wm.- Preh-
Ihm over design accounted fir.
£l39m worth of repairs studied
to the report. The laming ef
specifications by transport
departments acc ounted ■ for
' £S8m and poor supervision for
aiatence ^f U^se problem*
m
©*...
It *«& pumpenaatioa
obtained from contractors ami
conrnWiy engineers was small
compared with foe cost of
Rum it qjocajwi .
departments for not
'stronger sanctions _ ,
which
Depmeiita had Powers to
•upend jcmsnfthw engine**
. and c oBtra ctoi* from emnpet-
tog-forcaolraots. invite them,
to tender for adly lower value
contracts 7 or Issue a formal
wanting- but: there wee little
evidence of these s a n ctions
bring used.
T,S|pnO
after MoyrijObian’s
By John Wytos in Romo
ENGLAND’S decision earlier
fids week to deploy Hr Colin
Moynlhan, its Minister for
Sport, as a striker hitherto
untested on a foreign field
paid off yester da y when foe
national soccer team, was duly
consigned to the Italian island,
of Sardinia to play its initial
matches to next y eart World
Cup tou rn ament
Mr Moynihan’s determined
runs down foe* dar i ng
his visit to Rome at foe begin-
ning of the week eventually
broke down the defence of the
executive committee of the
international soccer federa-
tion, Fifa, which yesterday
acknowledged the wisdom of
his a rgu m ent the Rn g Hch
team’s traveffing army of hoo-
ligans could be better identi-
fied on the ftrries to Cagliari
and more jfWi^wrfiy
inside the walled defences of
the Sardinian
English soccer officials In
Some maintained, of course, '
that that their team had been
chosen as one of foe dx seeds
on pure grounds of meaH.
Tbe Spaniards begged to dif-
fer after they had been left out
of the seeds, suggesting that it
would be better for au if the
Kn gHgti and ttwfrr fan* stayed
at home next June.
Seeding brings the special
advantage of playing foe open-
ing group for. seta of four,
teams) games to the same sta*.
d tom and thus avoiding any:
disruptive fond.
. The 'other teams In
England’s group, who will to
w omiffated d urtwg the globally. ;
televised draw fur the contest
tomorrow, will have to phffa-
both Cagliari and Fakrea * f
. The Spaniards were not foe r
oily nation soured by. yester-
day's JI& decisions. West Go-~ .
many a ppare n t l y kicked up A .
two-hour fuss about being allo-
cated to Milan when (so . the ;
cognoscenti say) the natixmf*
travel trade had Mock booked •
everything around Lake Garda
in an ticipatio n of pla ying to .
Verona. V
Brazfl, whose many football-
ing talents had beat expected
to be an show to kHlim, are .
being font to Turin, with
which city the president of the .
Italian organising commttee, ■
Mk- Luca De Montezemoio, has
dose ccamectians. :
Italy, of course will be_
pteying in Rome, Buigten to.
Verona and Argemtina in
Maries: The good citizens of
fiagH a ri , not for the first time
to their hn« htetory, iriH be
taking to the tolls.
Car production rises 11,6%
By Kevin Done, Motor Industry Correspondent
UK CAE production to the first
wTTip wrnnthfl of the year was
11.6 per cent higher than a
year ago at 987,977, due to a
strong Increase in output for
export markets led by Nissan
of Japan and Peugeot of
France.
Commercial vehicle produc-
tion rose by LL2 per cent to
245,908.
Output from Nissan’s Sun-
derland car assembly plant
increased by 60 per cent m the
first nine months to 60,653.
Nissan, which began produc-
tion to the UK to 1986, started
exporting cars to continental
European markets a year ago.
It is gradually Increasing pro-
duction capacity to a planned
200,000 cars a year in 1S9&83.
Peugeot raised output by 28
per cent to 75£33 after moving
to double-shift working in
spring last year.
Ford’s car production from
its Halewood and Dagenham
assembly plants was 1L7 per
cent higher than a year ago at
291,055, but output to foe first
half of last year was depressed
by a two-week strike, which
closed all its UK plants.
Car output at Vauxhall's
Luton and Ellesmere Fort
plants jumped by 2L5 per cent
to 159,284 in the first nine
months, thanks to strongly ris-
ing production of foe new got
eratiem Cavalier to Luton. - ■ ■■
The rate of growth in overall
car production slowed to the
third quarter with a rise of
only per cent as outooi for
the domestic market virtually
stagnated.
Ford’s output in the thir d
tparter was 8.7 per cent lower
than a year ago, due to part to
commissioning problems with
a new final assembly Hn» at
Halewood,
In recent weeks car output
at both Ford and VauxhaQ-
plants has been hit by a series
of linoffifffgi one-day strikes as
industrial conflict grows to the
present wage round, -
The 112 per cent rise to com- :
mercial vehicles output is due
almost solely to higher van'
production with both IBG
Vehicles, foe General Motors/'
Isnzti joint venture (formerly
foe Bedford panel van opera-
tion) and LeylandDAF sharply
increasing^ sales, in European
foe other hand, track
production is falling at several -.
UK plants as order books for
foe amnestic- market shrink.
. Output at lveco Ford's Lan-
gley Plant was 5.5 pec cent
■tower to tha-Brat nine. months
than a year ago, while output
by Renault Truck Industries
dropped by 28 per cent and pro-
duettos by AWD (foe finmto
Bedford truA‘ operations)
by 14 per oart. Eeddfflx-Afoto 1
son production was 7 per cent
lower than a year ago- • ■' : .-
Truck output at Leybttri;
DAF*sLeylandptaht was rirtar
ally unchanged at
FINANCIAL TIMES FRIDAY DECEMBER 8 1989
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10
FINANCIAL TIMES FRIDAY DECEMBER & l«9 ■
THE PROPERTY MARKET
Banks confident, but lending rise to slow
By Paul Cheeseright, Property Correspondent
B ankers are surprisingly
confident about the
property market. Much
more so. in feet, than might be
suggested from the freely
expressed concerns that some
might take fright at the down-
turn In returns, pull out a
■plug, and precipitate a finan-
cial crisis in the sector.
He Bank of England's calls
for prudence in the sector,
expressed by Mr Robin Leigb-
Pemberton, the Governor, have
as their background the fear
that a foreign bank, having
lurched into a market it does
not understand, might Lose its
nerve.
That may happen, of course,
but a survey of bankers carried
out by Woolgate Property
Finance showed that only
three per cent of respondents
expected their commitments to
decrease while 60 per cent of
them expected their commit-
ments to grow.
The Woolgate survey
excluded the clearing banks
but covers about two thirds of
the fending market so it is as
clear an expression of bank-
ers’s intentions as one is likely
to obtain.
Bi it the growth in lending
wzH not be as fast as it has
been. When Woolgate last did a
survey in November 1987 it
found that 83 per cent of the
banks were planning to
increase their commitments.
This is consistent with the
way the official figures for
b ank ladin g have started to
move. At the end of August,
nearly £30bn was outstanding
in the sector and this total fig-
ure showed a rise of £2.7bu
over the previous three
months.
However, noted Savills, char-
tered surveyors, in their latest
property investment bulletin,
“this is a rise of only 10 per
cent, the smallest increase in
percentage terms since May
1988. Moreover, bank fending
to property is still running at
less than eight per cent of total
bank lending compared with 12
per cent in 1974 at the time of
the property crash.”
The expressions of confi-
dence implicit in the Woolgate
figures and the favourable
comparison of the present situ-
ation with 1974 do not neces-
sarily that the banks will
be generous in their attitude to
borrowers. “We expect to see
banks pressurising over-ex-
tended property companies to
reorganise their affairs, mainly
in concert with stronger part-
ners," said Healey & Baker,
chartered surveyors.
Banks anyway are scrutinis-
ing much more carefully the
flood of loan applications. They
are raising their margins
their fees for setting up loans.
And, observed Woolgate.
“more than half the banks
would not consider loan pro-
posals for residential develop-
ment and City of London office
development" In other words,
the banks are shy of precisely
the market sectors which are
most obviously the Immediate
source of worry.
One of the features of the
market gincp the mid-1960s baa
been the spread of limited or
non-recourse borrowing where
the security of the banks is in
the project itself; the borrow-
ing company has very limited
or no liability at alL
But, predicted Mr Philip Mid-
dleton of Bankers Trust, this
could be changing. He was
speaking this week at a confer-
ence on development loan
CAPITAL GROWTH f%)
Retail
Office
tiHhwartol
All Property
Year to October 89
7.7
19.7
24.7
15.1
Quarter to October 89
1.0
2J3
5.4
2.5
Month of October 89
nil
0.0
0^
U5
Sum:
huwtumu Praow^r UMbonk
monitoring organised by Bank-
ers Trust and Project Manage-
ment International
Talking of the possibility of
shifts in the type of lending
because of a softening of the
market, he said, “It will be con-
siderably more difficult to lend
bn a project basis alone. We
will want more guarantees
from the developer. We’ll be
looking more closely at the
developer’s balance sheet, his
gearing."
Two points about this should
be noted. First, his remarks
have to be seen against the
background of the Woolgate
survey which showed that
North American banks have a
greater commitment to limited
or non-recourse loans than the
average of all banks, so it is a
straw In the wind.
The second is that while the
banks may be prepared to
increase their exposure to the
property sector as a whole,
they appear to be increasingly
chary of development loans,
preferring’ the easier course of
investment loans, for existing
buildings, where it is immedi-
ately apparent if there is
enough rental income to cover
interest charges.
“Commitments to lower risk
Investment loans now repre-
sent 58 per cent of their portfo-
lio compared with 50 per cent
two years ago. Banks expect
this to increase to 63 per cent
on new loans,” said Woolgate.
To some extent, of course,
this a reflection of the way the
property market is moving.
The spurt of development in
central London, although not
in the regions, appears to be
weakening, but the investment
market remains strong. And it
is the London area which
absorbs most of the money.
Despite the uneasiness
which has crept over the mar-
ket since returns peaked at the
beginning of this year, banks
are continuing to exploit and
devise new products. Smaller
operators, for example, are
looking at new ways of provid-
ing topping-up loans — mezza-
nine finance - on the assump-
tion that, the more carefiil the
large operators become, the
greater their opport u nities to
provide funds around the mar-
gin of a project
At the same time the banks
are seeking to protect their
own position through the
greater use of commercial
mortgage indemnity, insurance
against non-payment of loans.
More than half of them had
used it and three-quarters of
the remainder said they would
consider using it, Woolgate
reported.
There is also a growing
readiness among the banks to
seek a share of the profits their
loans might generate; they are
not satisfied amply with inter-
est payments. Over half the
banks expected to take a profit
property company borrowings (£ million}
too
Source: SomQUi
share in projects they might
finance over the next year and
a further 26 per cent thought
they might.
’Hus represents a change in
traditional banking practice.
But it is not as striking as the
change which appears to be
presaged in the duration of
hank loans. “Very much in line
with their commitment to
investment finance, the banks
estimated that 42 per cent of
their wvf wring portfolio would
be refinanced rather than
repaid through property sales,”
Woolgate reported.
The banks, then, appear to
be shifting from their usual
position of abort and medium
term lending, to become more
fengterm tender s, ft this Is the
case, it offers the possibility
that one worry, current in the
property sector, may gradually
be removed. This Is the very
basic question of who can pay
back the banks.
The question has become the
more acute as the domestic
institutions have retreated
from the market As Savills
remarked, “after a fairly strong
year of institutional invest-
ment in 1988, it looks as
though 1989 investment levels
wifi barely teach £llm. n There
are better immediate returns
ftom cash than property.
Where the banks are
fng property sales to pay
back they anticipate, according
to the Woolgate survey, that
the UK institutions will take 38
per cent and foreign investors
20 per cent Given the recent
tactics of the UK institutions
and the fact that, with few
exceptions they were unable or
unwilling to respond to the
surge in values from the mid-
1980s, this expectation looks
remarkably sanguine,
The foreign investors are dif-
ficult to read. One might
expect steady but highly selec-
tive Japanese buying. But Jap-
anese institutional buyers have
tended to concentrate on a few
central buildings. Scandina-
vian investors, who have been .
more varied in their choice and
less selective geographically,
could stop their investment as :
quickly as they started It Who
jKxtTthen. fear that 20 per cent?
The Americans?
Perhaps the banks’ readiness
to refinance . their loans is a
■rfwpfe ackzmwfedgement that,
short of foreclosures, they
might have littte alternative.
Imperium doesn’t merit
many column inches.
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SOUTH BEDFORDSHIRE DISTRICT COUNCIL
SALE OF OFFICES
PROPERTIES TO BE SOLD BY INDIVIDUAL TENDER
THE WHITE HOUSE
LEIGHTON BUZZARD
5,330 sq. ft net
office end/or
sheltered residential
accommodation
PRIORY HOUSE
DUNSTABLE
4300 sq. ft net
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5 REGENT STREET
DUNSTABLE
4O90sq.ftnet
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accommodation
or conversion to
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CONTACT: THE ESTATES OFFICER ■ SOUTH BEDFORDSHIRE DtSTWCT COUNCIL
THE DISTRICT OFFICES, HIGH STREET NORTH.DUNSTABLE, BEOSLU6 ILF.
TEL DUNSTABLE (0582)4/4083 ;
OPPORTUNITIES
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•_ -A.
IDEAL FOR OWNER OCCUPIER/DEVELOPKR ■
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FINANCIAL TIMES FRIDAY DECEMBER 8 J989
FINANCIAL TIMES
u
3 Technological
progress is leading
to a kind of industrial
revolution in reverse,
as the move back to
the country from the cities gathers
pace. Bridget Bloom analyses the S
benefits, such as new jobs, and the
drawbacks, posed by the rapid
spread ^of ^development".
A golden hue
for green belt
WS MAY have to wait for
history to tell us whe ther rural
England Js » ™fay iihw as pro-
found a c han ge asStdid hi the
agrarfanrevote&ni of the 18th
Century and the industrial rev-
olution which followed that
Bat it may come as a‘ surprise
to many people tiiat the 1960 b
can even be described In these
cept of
Golden
L ffrt e n to the. academics:
“Industrial revolution in
reverse?” asked Professor Peter
Hall, of Weeding University, a
couple of years ago, -as he
spoke of “a profound decentnl-
Isatitm of the population cm a
very large spatial scale. 1 *
Prof Han traced not only the
well-known decline in the pop-’
nagfloo of Britain's inner cities
but also thelessfamfliar con-
of what he - termed the
B el t and the Golden
Horn - dynamic anas of new
growth stretching -out along
motorways and clustering'
around once-remote rural
townsto provide new jobs- and
houses and- pressures on ser-
vices undreamed of only a few
years ago.
Or Professor Howard Newby,
late- of Essex University and
now heading the Economic and.
Social Research Council, who'
tWlar wl that “fjrrr the first Limp
-dpra die industrial r evol u tion,
technological change is allow*
ing rural areas to compete on
an equal basis with towns and
Htina fry employment”
The most obvious sign in the
countryside itself of die new
rural revolution is, without
doubt, the spread of “develop-
ment?* — a p raUfaraHm? nf rwur
houses, honsing estates, new.
roads and m otor w ays, super-
stores and business parks
which you will see, for exam*
pie, on a drive northwards
frrtrn f ^ijnyi ln>n Rarf
— through Suffolk, Nc
and Cambridgeshire, paid
vtudal centres such as
wich, Norwich and
and MmnTid a score or two of
OOC8 sleepy market towns such
as Woodbddge, Hiss, Wymon-
dham or Bug’s Lynn.
The same phenomenon can
be observed westwards from
London, beyond the Home
Counties. Prof Hall defines die
Golden Belt as embracing
Devon, Dorset, Somerset.
Oxfordshire and Northampton-
shire as well as Cambridge*
shire Norfolk and Suffolk. The
Golden Horn, he argues,
stretches from the Isle of
Wight to Lincolnshire and
takes in Hampshire and East
ami West Sussex too.
The “revolution'' which all
thi« wwgim to portend baa been
brought about by many fac-
tors, though with two critical
dem ents .
One is the astonishing
The changing face of England
P m re n tage fan/ gain
ttoifctondst
; A outdoor (Bcreetfaft
Industry, commerce
Heahh, Education
T Defence bod
ftGnorals
bocfend
n
Fwmfaetd
vacant
The Rural Revolution
growth of the new information
technology which, with its
computer, portable telephone
and far machine, h««« matte it
possible for many more people
to liv e and work in the court*
tryside.
The other is the decline of
agriculture. No longer the
mainstay of the rural economy,
agriculture is releasing both
land and people for new uses
and employment
Along with these key factors
have come improving road and
rail communications, including
the much -malig ned M25, and
greater wealth in much of the
rest of the economy, underpin-
ned by the enterprise culture
fostered by the Thatcher gov-
ernment These factors
together have helped to swell
the numb ers of people leaving
the conurbations for employ-
ment for retirement and far
general “quality of life” rea-
sons.
Articles elsewhere in this
survey analyse the demo-
graphic movements in popula-
tion (in so far as this is possi-
ble. for there has been no
national census since 1981) as
well as the impact of the
changes on agriculture,
employment, housing and
property, ammnwinaHmii and
the environment
The benefits of the revolu-
tion are considerable - as are
the problems. One of the
important aehlmwrn«ifai hna
been the creation of new jobs
in rural areas at a time when,
huMiiiw of thp continuing loss
of jobs in agriculture, they
have been most needed.
It is difficult to be sure pre-
cisely how many new jobs
have been created country-
wide, but the government-fi-
nanced Rural Development
Commission (RDC), whose
function is to promote eco-
nomic development in many of
tiie more remote rural areas, is
well placed to observe the
trends.
In its 27 special rural devel-
opment areas (RDAs), desig-
nated only in 1984 as areas of
special need, it has charted
population growth of up to 4
per cent in all but three and a
dramatic drop in unemploy-
ment In virtually To <nm< *
extent, of course, these country
areas have benefited from the
nationwide Improvement In
employment.
But in the three years to last
January, for example, unem-
ployment went from 8.9 per
cent to 4.4 per cent In Norfolk,
and from around 7 per cent to
88 per cent in Suffolk, Devon
and Dorset
Even in Cleveland, an atypi-
cal area of steep industrial as
well as rural decline, the fall
has been from nearly 17 per
cent to 1L5 per cent
There is a downside to these
developments, as the RDC
notes. Within the RDAs, ser-
vices are subject to great pres-
sure.
~ Village schools are still dos-
ing, and for toe 15 per cent of
rural families without use of a
car, access to medical facilities,
shopping and other services Is
difficult- Pockets of real pov-
erty persist.
There are also areas, such as
mid-Wales or parts of Corn-
wall, which are quite
untouched by “development”
and where de-population,
though nothing like as serious
as in much of rural France, is
prevented only by substantial
direct and indirect government
aid, mainly to farmers.
Above all. rurally concerned
bodies such as the RDC drew
attention to the Inability of
local people to afford to buy
houses as prices rise with the
competition from “incomers.”
But Important though it will
be to make sure that the gap
between rich and poorer rural
areas is narrowed, the greatest
challenge of toe rural revolu-
tion is probably that posed by
' the extent and pace of develop-
ment which, if It continues
unabated and with as little
control as in the recent past,
threatens to overwhelm the
countryside itself
The debate currently centres
on toe extent to which toe rev-
olution should be managed,
particularly through changes
to the planning system. Over
the last year or two, pressure
groups and august quangos
alike - Cram toe Council for
the Protection of Rural
England and the Countryside
Commission to the Town and
Country Planning Association
and the Housebuilders Federa-
tion - have all entered the
fray.
The mast con si stent call has
come for effective strategic
planning M ni»h of the develop-
ment which has been at the
heart of rural revolution
has occurred under govern-
ment policies which have grad-
ually weakened the planning
system in favour of the freer
operation of market forces.
Before Mr Nicholas Ridley
left the Department of the
Environment last July, he bad
issued a white paper which
proposed to put planning deci-
sions pr imarily in the hands of
district authorities, taWng toe
weakening process a stage frir-
SouK»JBBncStefgwPn3teala«elRtr>lEfte>«ndftBwOOEfl{u»»
ther by abolishing mandatory
planning at county level.
He had also proposed to
allow farmers to engage In a
wide ranee of non-farming
businesses without the need
for planning per missio n.
These proposals were widely
criticised, not least by Conser-
vative backbench MPs. Mr
Chris Patten, Mr Ridley's suc-
cessor, now seems to be aban-
doning them. However, pre-
cisely what he will put in their
place remains to bo seen.
Much publicity was afforded
bis announcement that he was
inclined to refrise permission
for a new 6,000-house settle-
ment In Hampshire.
Less attention has been paid
to how be proposes to reconcile
his apparent decision to
tighten the rules on house
building, without lowering the
target number of houses to be
builL
The government's critics and
On othar pages:
Demographics,
Agriculture,
Technology, Page 2;
Leisure, Property
market. Page 3
friends alike argue that strate-
gic planning alone can provide
toe breadth of vision which
can encompass this Issue as
well as many others, which
range from the impact of mam-
moth new infrastructure pro-
jects such as the Channel tun-
nel or a new three-year £l2bn
road programme, to the preser-
vation of the peace and quiet of
the countryside which has
been one of the root causes of
recent migration into it
As the Town and Country
Hanning Association’s journal
put it recently; “The challenge
is to steer a course between the
various visions of horror of the
countryside as sterile food fac-
tory, noisy fun palace, concrete
Jungle, the preserve of the
affluent or decaying museum
piece, and find ways of widen-
ing toe options for people to
live and work In a healthy, sus-
tainable and beautiful country-
side."
A
RURAL WALES
I
A STRATEGIC ISSUE
u The Development Board fs at
the leading edge of rural
economic development,
building a fast growing
tSvereffied rundoconomy with
' GLYN DMflESi. CHAIRMAN DOW OppOftUnltlBS fOt lOCSl
people at work and leisure. Businesses are
attracted by our complete develo pm ent peckage.
As anew decade approaches
we have taken stock of our strategy
lor the future - a total c om mitment
to the continued, economic and
social progress of the region.**
'Strategy for the 1990's' covers our
objectives to build on current success
and prosperity to create a self-
sustaining market economy.
New factories, new community
facilities, new housing and much improved
communications sit happily with the traditional beauty of
a?.
- ■* 1-? ' ''*** the rural landscapes and attractive market
towns.
For your issue of 'Strategy for the
1990's' complete and return the coupon.
BWRDP PATBLYGU
CYMRU WLEDIG
DEVELOPMENT BOARD
FOR RURAL WALES
| Please send me a copy of ‘Strategy far the 1990V □
| I would like to know more about (ievalopment I I
I opportunities in Rural Wales. I — *
| NAME Mr /Mrs /Ms.
! ADDRESS
POSTCODE*
TELEPHONE
I Send to: Development Board tor Rural Wales,
Jjjsdywell House, Newtown. Mid Wales SY16 IJB.Jel: (0686)
Rural Wales
Tfc Nutt Gewfay-
rcarfcer
u? r<n ihc-
ccn.jv'z-
'-•'spread
rauodi-
r.i:h t f
t'ilVi.
'-■i wr-
*• CkSi.’.-
■J - U
'I'Jrt: 1 ' i
«ws ■-*
Four
VUmI
> 1- fjv
.1-. . *
It
12
FINANCIAL TIMES FRIDAY DECEMBER & 19*9
( RURAL REVOLUTlONg)
DEMOGRAPHICS
Projected chang# In population 1985-96
A revolution
by evolution
IF IT is possible for a
revolution to take place by evo-
lution. that is what Is happen-
ing .to Britain’s population
stractnre.
The number of people of pen-
sionable age win rise by about
a third in the next 40 years,
wbUe there will be a far more
marked increase in the very
bid.
There are about 800,000 peo-
ple aged 85 and over in the
population. This is projected to
rise to about ULm before the
end of the century and then
continue increasing. It will
reach 1.4m by 2027 - an
increase of 78 per cent on tite
present position - and go on
rising to the middle of the next
century.
By contrast, the number of
young in the population
will have declined by more
than 20 per cent by the turn of
the century.
These radical changes in the
shape of the population will
have profound implications for
employment, health, educa-
tion, leisure and social ser-
vices, as well as many commer-
cial markets.
However, they are not the
only population changes in
progress. The shift towards an
older population is being
accompanied by another trend
- one of physical movement
from centres of urban popula-
tion to more rural ones.
Two urban conurbations -
Merseyside and Cleveland -
have experienced England’s
greatest population loss in the
1980s. The greatest growth has
been in Cambridgeshire, the
Isle of Wight, Buckingham-
shire and Dorset, all of which
have had population increases
of about 10 per emit
All the Welsh counties
except West Glamorgan and
Mid-Glamorgan have been
among those gaining in popula-
tion during the decade, ranging
up to a 4% par cent rise in
Pyfed-
Office of Population Cen-
suses and Surveys projections
indicate that East Anglia will
be the fastest growing region
during the rest of the century,
with its population likely to
rise by 15 per emit to 22Bm
between 1985 and 2001. Next
wiQ come the south-west, with
an 11 per cent increase to
4 £Sm
Only two regions are proj-
ected to 3ose population by the
end of the century - the noth
by 3 per cent and the
north-west by 1 per cent.
Within the regions, however,
the tendency for people to
move from urban to more rural
areas which has been evident
in the 1980s is projected to con-
tinue.
Cornwall, Somerset, Wil-
tshire, Shropshire, Lincol-
nshire, Cambridgeshire, Nor-
thamptonshire and
BucBngfaarnaipre are ah likely
to experience population
growth of 15 per cent or maze
by the end of toe century.
The Rural Development
Commission, a government
quango, has since 1984 concen-
trated its activities in 27 rural
development areas, located in
parts of 28 counties. Analysis
by the commission of the popu-
lation shows that ther e
has been population growth in
24 of the 27 areas - toe excep-
tions being Cleveland, which
has suffered serious industrial
and the r emo te u pland
villages of Staffordshire and
Lancashire- Taken as a whole,
toe 27 rural development areas
have been increasing in popu-
lation at four times the overall
rate for England.
Someth the most rapid popu-
lation growth has been in
those rural areas which are
popular retirement spots with
the Cornwall rural develop-
ment area, for trample, grow-
ing at «n ttmea the EnpKcti
average. This type of move-
ment hmi great significance for
the planning ap rt fi m me i ng of
fUtnre social provision in rural
areas, particularly in view of
the overall ageing of the popu-
lation. People make far heavier
and more expensive demands
on the health and community
care services as they grow
older.
A high pro p or tion of elderly
people in the local population
Is one of the factors which the
commission took into account
when Anting the 27 areas on
which to concentrate its
efforts. The others were above
average unemployment and
limited job opportunities,
declining population, a net out-
flow of people of working age
and poor access to services.
Urn list is a reminder that
the lush fields and country
lanes of rural Britain some-
times co n cea l social problems
of a very similar nature to
those of the inn*r cities, where
poverty is more immediately
visible. A study two years ago
by the Anglican diocese of Her-
eford - toe most rural in the
Church of Eu glaud - which
drew on an unpublished
Department of the Environ-
ment investigation of five rural
areas concluded that 25 per
cent of all households in the
sample areas were liring in or
on the margins of poverty. _
Housing is one Of toe leading
social priorities in most rural
areas. Rising prices over a
number of years have put
house purchase out of reach of
an increasing number of people
living in the countryside -
particularly in areas where the
search for second and retire-
ment homes has pushed up
values - while the right of
council tenants to buy their
homes has reduced the avail-
ability of rented property. The
Rural Development Commis-
sion says that in some coun-
ties, such as Somerset, such
sides have been highest in
rural areas.
Alan Pike
Bridget Bloom reports on profound changes affecting agriculture
Residential farm prices rise
PRICES paid for residential
farms in the south and west of
England were nearly 40 per
cent higher last year than they
were in 1987, according to Sav-
ins, one of the country’s lead-
ing land agents.
. -S imilar farms within an
hour or so of London fetched
55 per cent more. Yet in the
same period, according to the
Ministry of Agriculture, fum-
ing incomes across Britain fell
by 25 per cent.
These statistics illustrate
one of the most marked
changes taking place in rural
Britain and in agriculture. The
apparent paradox of rising land
prices and falling farm
incomes is explained because
newly-affluent people are com-
peting to move to the country
to improve their quality of life.
Land values are also being
maintained because, while
some farmers are wanting to
sell because their incomes
from traditional farming are
declining, there are many who
are taking advantage of tax
Farmers and worker*
Agriculture
Thousand
300
Percentage contribution to GDP
an
concessions to sell some acres
and reinvest the proceeds into
land elsewhere.
On a wider front, however,
the jssiym which these statis-
tics highlight are evidence that
British agriculture - along
with farming in motto of toe
European Community - is in
the throes of one of the most
profound changes in its his-
tory-
On tiie one hand, the exodus
from the land which has been
a fe a tur e of much of this cen-
tury has been recently gather-
ing pace, exacerbated by the
refonnsoftbecoimnouagticul-
tnzal policy which, by the eariy
1980s. was nrodncinc unafforda-
ble food mountains. In an
effort to control production
teflon >wtth Conmmnflicgta Rural England, Action vrtttiCogimunttWn fa BmM England. MtawRb
fa Rural
acre is toe national charily looking toe made end problem of people who work and
five in sma3 towns and vftaaes.
Our member Rural Community Councils - one in each EngBsh county - give practical
support and encouragement to many local initiatives. This 'community development*
ranges from visage hafle to transport and housing schomesL
ACRE Is supported by the Rural Development Coramlastan, Trusts, Foundations and
Companies, induing the foOowtng:
a COMMISSION I
British
TELECOM
British Gas*
ThePostOfffce
To find out how you can help ACRE and how we can help you, please contact
Dr Malcolm Moseley (Director) ACRE. Stroud Road, Cirencester, GJos. <SL7 6JR
Tetephone: 0285 653477.
Action with Communities in Rural England
5 Rm»t Rutland, teaiow fa imiW Eflstond. tedonwlft Co w nani a ieg falter Eagfand, teflon wtfa
and so curb costs, farm-gate
prices have been p r ogre ss ively
cut and income has fallen.
Britain’s National Farmers
Union said earlier this year
that incomes were the lowest
in re al terms since the second
world war.
On the other hand, the struc-
ture of forming itself is chang-
ing. Food production Is being
Increasingly concentrated on
forms which axe steadily grow-
ing - already in Britain GO per
cent of production comes from
just under 30,000 of the coun-
try's listed 250jo00 form hold-
ings. As official form support
declines, and food production
becomes more market oriented,
this trend seems certafn to con-
tinue.
Small formers, many of
whom are over 50 and without
actual or willing successors,
are ffrWKng it increasingly diffi-
cult to make a living from the
land and if they stay, are reli-
ant on direct official aid of one
kind or another.
Between the big ami small
formers are sandwiched fami-
ly-owned farms, usually unable
to support the two or three
families of former years but
able to continue because their
borrowings are low, or because
they are increasingly finding
that they can produce for
“niche” markets, such as
organic food.
Those non-fanners who are
boosting land prices in much of
rural Britain may fit into the
first category: industrialists, or
others who have benefited
from the Thatcher revolution
of the past decade, are buying
efficiently-managed estates like
their nineteenth century coun-
terparts before them. But there
are many more Britans buying
a more modest stake in the
c o u n tryside, whether they take
over an old farm house and a
few acres for grazing horses,
or, more commonly, buy new-
ly-built houses on formerly
agricultural land.
As these changes have been
taking place, what has hap-
pened to formers? It is difficult
to generalise. If only because
soils, climate and managerial
efficiency differ so markedly:
icy (
inevitably, the 25 per cent tain
in incomes registered by offi-
cial figures masks great varia-
tions.
In broad terms the arable
sector has probably done worst
over the past three or four
years and dairying best The
dairy farmers’ good fortune is
due to toe introduction of EC
milk production quotas, which
have given them a secure (and
rising) income as well as a new
tradable asset in the quotas
themselves.
For arable fanners, the
recent good harvest has made
some ampnria for top run of
poor ones since 1985 but mar-
gins remain slim. As for live-
stock producers, while pig
fanners and to a- lesser extent -
egg producers have recently
come out of the doldrums and.
are enjoying high prices, lamb
and beef producers are alarmed
at the potential impact of EC
reforms in those sectors.
But if, with the exception of
those in dairying, formers have
been doing less well than in
the heady days of high produc-
tion and subsidies, the effect of
this on farmers' total incomes
is often less stark.
About half of Britain ’s form-
ers do not rely primarily on
farming for their livelihood,
while others are benefiting
from the general upturn in the
rural economy.
The common assumption
about agriculture in Britain is
that formers operate large and
efficient holdings. But, accord-
ing to a pilot study, published
in 1988, nearly half of the
250,000 holdings are less than
40 acres with an average net
jnfpme from farming of only
£450 a year. Fanners an these
holdings - believed to account
for no more than 5 per cent of
farm production - have
incomes an average of £9,000,
the balance being made up
from investments, pensions
and other jobs. If this is hardly
wealth - many of these farm-
ers live in mil areas where
farming is barely possible with-
out aid - toe figures also hkia
a considerable amount of
“bobby” farming , particularly
in the lowland areas.
According to last year’s
Annual Survey on Farm
Incomes (PRODUCED BT
WHOM7), Britain’s full-time
formers also have alternat i ve
sources of income, although in
the lower proportion of o ne
third to two thirds (WHAT
THIS MEAN?).
How many of Britain's form-
ers are benefiting from the ris-
ing demand for land? Unfortu-
nately, although anecdotal
evidence is plentiful, there are
no reliable statistics. Many, if
by no means the majority, do
benefit from “development”
land. Earlier this year, for
example, Strutt and Parker,
toe land agent, noted that 750
acres of farm land in diffe rent
parts of Berkshire had been
approved for housing and cal-
culated that, at £500,000 an
acre, some £375m could have
been put into formers’ pockets.
Others benefit less markedly
but there are plenty of tales of
formers sellin g barns, or land
zoned for housing, to consider-
able profit
Britain's formers are without
doubt under pressure in ways
that were not foreseen less
than a decade ago, with an
adverse impact on incomes.
One of these involves environ-
mental campaigns to curb the
use of nitrate fertilisers and
animal manures in the inter-
ests of purer drinking water.
Yet the pressures are by no
means ail one way: many form-
ers are benefiting from the
rural revolution, too.
Technology will let villagers work t rom home
New cottage i
BEAUTIFUL countryside and
modern telecommunications
could be an irresistible combi-
nation In generating new
industry in rural Britain. That,
at least, is the theory behind
much of the current interest in
telecommuting, telemarketing
and telecottages.
Britain's towns and cities
grew to their current size as a
result of the industrial revolu-
tion, which was driven fay the
concentration of economic
activity in large factories. Peo-
ple initially built their homes
around those facto ries.
As mass transport systems
developed, people began to
move out of the city centres to
suburbs. But it has been diffi-
cult for most to move out
because of the time It takes to
commute in to work.
The availability of advanced
telecommunications, cheap
personal computers and fac-
simile machines makes dis-
tance less relevant
It is therefore a realistic
prospect for many people to
work from home and, as a con-
sequence, to move their homes
further away from the city cen-
tres to more desirable loca-
tions.
The Henley Centre for Free-
casting believes there will be
4m Britons working from home
in 1995. Hie highest proportion
will be those with professional
and managerial jobs, whose
work is mainly analytical and
self-contained.
FI Group, the information
system company most of
whose employees work from
home, said advances in tele-
communications had allowed
its staff to work in areas as
diverse as Cornwall, Aberdeen,
Wales and Kent. But Ms Hilar y
Calow, one of FI Group’s mar-
keting managers, said that
although “there is an opportu-
nity to revitalise rural commu-
nities, I wouldn't call it a rural
revolution.”
A special instance of tele-
working is the telecottage, a
concept pioneered in Scandina-
via. This usually involves con-
verting a barn or farmhouse
into offices by tn stalling - com-
puters and telecommunications
facilities. Some of the first tele-
cottages to be planned in
Britain are the Eccles Bouse
Farm Workshops in toe Peek
District in Derbyshire. Coordi-
nated by the Peak Park Trust
with engineering help from
British Telecom, this project
should produce 14 high-tech
offices. Five similar projects
are p l n n**** next year in Islay,
the Shetlands, toe Orkneys,
Argyll and Inverness.
As even more advanced
systems are introduced, the
advantages of using telecom-
munications rather than physi-
cal ffwnwmtjwiHftns for busi-
ness will become even more
pronounced.
The arrival In Britain next
April of Integrated Services
Digital Network (ISDN), a sys-
tem which, can cany a combi-
nation of picture, voice and
data traffic over an onfinary
copper wire, is a case in point.
This will, for the first time.
mafcn desk-top conferencing a
reel option for small and medi-
um-sized businesses.
ISDN will also allow two
co n versations to operate simul-
taneously over toe same wire
- a feature which will proba-
bly appeal to self-employed
people working from home.
And. by the mid-1990s, moving
picture phones are expected to
be commercially attrac ti ve.
Meanwhile, computerised
telemarketing systems make it
practicable for small compa-
nies to seQ their products and
services to the whole UK mar-
ket - and eventually the Euro-
pean market — without the
need for a vast sales force. It is
simply necessary to direct
potential customers through
advertising to a freephone
number, which is answered by
a computer.
Nevertheless, rural areas
tend to be relatively deprived
of advanced telecommunica-
tions facilities co m pared with
toe main towns.
Mercury Communications,
ST’S only rival for mainstream
teleco mmunicatio ns services,
has concentrated its network
in toe big business centres,
particularly the City of Lon-
don, and neglecte d rural areas.
S imila rly, the two mobile
phone operators, Vodafone and
Celinet, started their services
in the urban areas and, even
mm, tha y do nrt W»
outlying we*”*- "Egg 1 *.**-
com has arespang ft fl Ut ynaare
its licence to {S V &S?SS
coverage of the taste jg*»e
service and also to-ra mpfo i ti
rural phone bow*. jgwww* V
new services safe wBBK-wju
be introduced later to .the
countryside than In Theritiee,
Rural areas are also often at
a disadvantage in toe tott «C
using both basic and ad vanced
telecommunications- services.
Rural customera almos t jdyw .
have to pay
rale for any can they make,
because their tocal charge
areas have such smaUpopula-
Hnnt
Two reports on the sta t e of
telecommunications . In mid-
Wales and in t bs Hi ghlands
of Scotland, which
wove carried out for the Office
of Telecommunications in 1986,
bear out these conclusions. -
"Both domestic and business
users are at a severe cost dis-
advantage vbwHrts other anas, -
largelydue to the smaR range
of local call charges and leek of
local call access to information
systems," the mid-Wales study
reported. This was in spite of
the fact that the par , capi ta
investment in tetocoamince-
ileus in Wales was £496 com-
pared with £353 for the UKw*
whole.
Similarly, the Highlands and
Islands study concluded:
“Although there is widespread
availably £y of the basic tele-
phone service, the exi sting
tely -nmjwwnfcatlflM iOfostfOO
ture does not provide an ade-
quate foundation on which to
build future tetecommuxdca-
tions fodhties.” " ;■
Since 1988. then have
undoubtedly been improve-
ments in toe quality of ..tefle-
communications in these outly-
ing regions. In particular,
earlier tola year BT announced
a £16m package to modernise
communicatio ns in the High-:
lands and Islands.
. Nevertheless, there can be
no guarantee that advanced
telecommunications will actu-
ally lead to decentralisation of
economic activity and power to .
rural areas.
Hugo Dixon
John Hunt examines controls on development
Call for concrete curb
TEffi POST-WAR years have
seen ar huge erosion of the Brit-
ish countryside as motorways
have opened previously remote
areas and housing develop-
ments have sprung up all over
toe country.
An area the size of Berk-
shire, Buckinghamshire,
Oxfordshire and Bedfordshire
has disappeared under con-
crete in the past 40 years.
Some 109,000 miles of hedge-
row was destroyed in England
and Wales between 1947 and
1985. By 2 025 , more than half of
toe sites of special scientific
interest are expected to have
suffered long-term damage if
trends continue.
The destruction of habitats
has been matched by the disap-
pearance of wildlife. At least 41
species of bird, including the
. barn owl, stone curlew and
tree pipit, have declined, in the
past 35 years. Of 56 butterfly
species, 24 have severely
declined since I960.
Conservationists are hoping
that Mr Chris Patten, Environ-
ment Secretary, will take
stronger measures to protect
the countryside than Mr Nicho-
las Ridley, his predecessor,
who came under vigorous
attack - often from Conserva-
tive MPs and party supporters
- for the over-development of
south-east Tin fflflnrt
Mr Patten had brave words
about the future of the coun-
tryside when he addressed the
Conservative conference this
year. . He accepted that an
important test for the Govern-
ment would be how it pre-
served “our priceless country-
side,” and he promised to
strike a sensible balance
between the needs of fanning,
conservation and the rural
economy.
Environmentalists have been
encouraged by Mr Patten’s
decision to reject the applica-
tion from Consortium Develop-
ments to build a large country
town at Foxley Wood, Hamp-
shire. They also welcomed his
announcement that the Gov-
ernment is abandoning its pro-
posal to relax planning con-
trols on fanners wbo wish to
diversify.
They see little sign, however,
that toe Government has a
coherent strategy for protect-
ing villages from being smoth-
ered by “fin-in” building devel-
opment or for preventing
beauty spots from being ruined
by the Introduction of inappro-
priate leisure facilities and
tourist attractions.
Mr Tony Burton, planning
officer for the Council fin the
Protection of Rural England
(CPRE), says: “The 1980s have
been a lost decade for planning
in rural areas. You need con-
trols and safeguards. By
steering development you wifi
get a better deal not a worse
one."
Organisations such as CPRE
believe that for sane planning
in the countryside' tt is mxesk
sary to retain county structure
plans which lay down the.
strategy within which the dis-
trict councils have to operate.
However, the Government has
proposed in a white paper that
the structure plans should be
abolished and that the main
onus for planning should foil
* councils.
on district councils. The critics
see this as a recipe for chaos
and piecemeal development.
The proposals were to be
There is unease and
uncertainty about the
Government’s plana
lor conservation
incorporated in a planning WH
to be pot through paiflammit
In the present session. But
once long-promised
legislation has not materialised
and Mr Patten appears to be
having a rethink. ' . •
• This has given some resp i te
to worried conservation organi-
sations but at the same time,
until the Governm ent makes
known its intentions, there is
conftzstan about the direction
future planning policy wUl
take.
There is also considerable
unease and uncertainty abbot
the Government’s plans for
conservation. A battle is con-
tinuing over the future of the
Nature Conservancy Council
which looks after nature
reserves and nominates sites of
special scientific Interest
Mr patten has . ditched tine
plans drawn up by Mr Ridley
to sell some of the nature
reserves but he. is pressing on
with the controversial propos-
als for the restructuring of the
council. It would be split into
tone bodies for England, Scot-
land and Wales - a .move
which its supporters say would
emasculate ft.
Some see it as a ploy to
weaken the organisation
because It has become too pow-
erful a voice <m behalf of con-
servation.
The Government's hostile
attitude towards the European
Community's proposals to pro-
tect natural habftats has also
angered environmentalists.
The EC's fourth action pro- .
gramme on toe environment,
which runs from '1987 to 1992,
comfoftr member countries to .•
protect -and enhance the nato-
ral heritage and envisages
community fegWattaa to pro-
tect wildlife and habitats.
TbeSC Ccmpitesfamhas pro--
docod a draft habitats directive
to put tfae.cornmttmerits into
effect but the British Govern- -
mentis response was hostile. 7
Another cause for concern is -
the tefect that water privati se -
ttoa will have on toe country-
side beauty roots. The Ifr ng
water companies - formerly,
the water authorities - ram
about sot MHO acres of country-
side, much of tt in national - ,
parks and sites of special scien-
tific i n t e rest. The water l e gists -
tlon gives the Environment
Secretary power to protect
such areas.
It Is 1 the 200,000 acres \dfv
unprotected water company^
land, that canservationfeta fear-
might be sold by the water;; ,
companies far Intrusive leisure
or tourist devefopmenta ih -
areas Of great notnrel beauty. -:7
Dame Jennifer :• Jenkins, '
chairman of the Nattonm .
Trust, has called for tite extsb"
lfahmawt of a coalition of coik-
sarvatkm groups to rates Antes
to buy the hundreds of acres
tiffs land which could be pat .
an the market • , f’
The CPRE would Ufes to*se- : :
a restoration of toe Conserve- *
tive 1987 manifesto pronto* fe.
Introduce landscape coaMCva^-.
tkn caters to prevent dense- "
tog agricultural operations in .
the national parka.
It urges a tightening of the
planning system that afimra.
certain farm buildings 'and
irods to be built without JW;
ntog pe rmi s sion on farm*. ■
Another CPBE proposaTfe T
for a frilly resourced EC Coen-. •
tryeide Protection Agency
the implBineiiiatioti.-i
tatot at protection by
states. .
The Town and Country ]
ntog As sociation su
countryside resource
evaluate mid m»p
wildlife .'and .landscape.
. tores. Countryside
centres would be
tor toe county councils' '
England and Wales and
regional councils in 5ootikcB.ii-
They would have, a duty to-
draw up a countryside ;
wttbihehfilpaf, ■
organisations.
f*
s
w
MVIRONMENTALraOBLEMS?
ENVIRONMENTAL sin
MANfCKMENT UU
CONSULTANTS
For practical solutions whateverthe .
<fevdopmen^ EMC offers objective
advice and established expertise -
and environmental issues.
fat kteUnSotattc
kn%EM
Jr&Hc
Hf^NClALTUVIES FRIDAY DECEMBER S 1989
RURAL REVOLUTION 3
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Countryside leisure emerges as a field of conflict in planning
Fun centres under scrutiny
THERE ]S tittfe doubt that the
dominant question in rural
affairs th. the 1990s win be
"Wfaat is tte countryside fmT
For the first time in 200
the idee that their fa»v is not
to tmnrtmte e production. While
fbas has been no lack of sug-
gestkme-ibr tite alternative use
of far mland , less attention has
been Kism to tite- sew pres-
sures finely to be. Aft by rural
pfenning authorities how feat
agriffjltaai -fond -few lost its
lffb doubt there- w&l ontt w a
to be tight restrict tana in » * « «« ’
of tra^mpDal cd ni m wr sy such
as hqcsing and comm erc ial
deroefopment, but “country side
Uswe” -niS almos t ce rtain ly
emerBC. as.a.new flekfof con-
tfict.
In sidte -of a succession off
fierce local skirmishes, rural .
leisure development has yet to
come into warp focus as a
national issue. This may be
because there Is stm a ten-
dency to consider Jt as an
aifianct to -tourism, There, are
well-tried local proced u res' Jar
asses sing poten tial t ourist
atfagefanaB, URfaig wtoaia wnrh
ashifrastxnianreie^iifranaits,
noise levels and “visual ame-
nity," «iWi an jwi pwrtMwt fivW
has always been the likely bea-’
gftt to the en ww mmMy , ..
But rural iflaoming «nthari .
ties, accustomed to taking a
“soft” stance on tourist devel-
. oprnent because of its eco-
no mic impo rta nce, are likely to
And their criteria inadequate
when confronted with toe raw
generation of leisure concepts.
Take, - for -example, the pro-
posal for a “themed leisure
park" at Woburn Abbey in
Bedfordshire. The scheme, pro-
visionally named the Woburn
World of Adventure, is
designed by Tussauds and
Woburn Estate s to replace the
famous' safari park with the
scat of ar tific ial “fan centre*
pioneered at the hugely-suc-
oestfbl Alton Towers in Staf-
fordshire. Initially rejected, the
scheme is expected to go to
For the developers a scheme
of thh Wwi has obvious attrac-
tions. ft is not seasonal, it is
largely weather-proof and its
sheer size and vari ety makes it
p o s s i ble to capture customers
for a whole day at a time. What
It does not do is bring any eco-
nomic benefit to the local com-
inanity .being a sealed environ-
ment with no money spent
outside Its galea. It creates
jobs, of coarse - it may even
dominate the local labour mar-
ket - but plenty of rural com-
munities have come to regret
their dependence on a stogie
Apart from the obvious
objections on the grounds of
increased noise nrri<cmro
tw« sort of proposal is likely to
provide fltzntmAq fry additional
planning criteria concerned
with the ethics as well as the
aesthetics of countryside use.
Natrona! organisations such
as the Comjdl for the Protec-
tion of Rural England are
already beginning to turn the
spotlight on “irrelevant" lei-
sure schemes, as those
which have no essentia] con-
nection with the co untrys ide
and are only there because
space is available.
So it is only a matter of time
before grass-roots pressure
groups begin to orchestrate
protest against all-year recre-
ational facilities «< ■ ' ■ ** * not pri-
marily at tourists but at a car-
bome client ele from nearby
centres.
Topnt It bluntly, local
authorities will have to deride
whether they are willing to
allow their rural mminnwiltoi
to be used as commercial {day-
grounds. If they are not they
win need to define their rea-
sons pretty cogently - a diffi-
cult task because, in effect,
they wzQ be mafcfng a stand for
the Indefinable value of the
natural landscape.
Ethical judgments along
these lines become even more
dKfirnlt in the case of “gree-
ner" p roject s . Earlier this year
the local authority rejected an
application for a countryside
leisure, sport and to uri st com-
plex on a 43fracre site at din-
ger Farm, near Buck land New-
ton in Dorset. The scheme
included a caravan site, a
hotel, a village, craft work-
shops, a “traditional farming
area,” sports facilities and
planned walks and rides
through an interpreted land-
scape. It is obviously no Alton
Towers, but it has much in
common with toe leisure park
in that it abns to bring
together cm one she attractions
which would otherwise be scat-
tered, thus ensuring a longer
visitor stay and creating
another sealed environment- It
is significant, that the main
planning objection was to the
ootential mriffance of caravans
and not to the concept,
although the deeper objection
to such developments was
voiced recantiy by Lord Swto-
800, the chairman of the Rural
Development Commission; “We
must not allow two versions off
toe countryside to develop -
the green pleasant land
which people visit and fantas-
ise about, and the place where
many people live and work."
This to be a clear hint
that planning policy should
firmly oppose toe overlaying of
synthetic countryside on the
real thing .
It is a situation that cries out
for national policy, but that la
unlikely to be forthcoming
rmTogg focal authorities formu-
late ft thmng h their own chan-
nels of communication.
L aw ren ce Gamer
Countryside welfare a priority
Patten changes
course
OCTOBER 4, 1989, could well
go down in ia d i w itmMifai his-
tory as a turning point for
rtnwdevdqnmeat.
It was the day- when" the
recently-appointed Environ-
ment Secretary announced,
derianna designed to demons
stntfe itoe. GovernmenTs con-
cern for the welfare' of the
countryside. '
Mr Chris Fatten reversed toe
decision of Mr Nkhola^Ridley,
ids predecessor, that he was
“minded” to ap p ro v e the devel-
opment, -of a new town at Fha-
foy -Wood war-JTeet, Hatnp-
3 hirer ^ He withdrew -the-
guidance to {fanners toat had -
pacwoaed:»a-^8peBiatrWPW05#^
taw"?. in^fovmR of -bottsmg-
* Hes^iwriiPteBadtalios
paper ttoiig out draft guid-
ance on planning and housing
to replace the Fwtotog Policy .
Guidance Note No 8. In tins
paper he laid mnch morestrese
on the. importance of good
design for new housing and
stressed- the -need- for more
Jooat tovatvesnent in planning
deri sions .; ’ •
It is early days tosay how
spoons ^ superficial toe min
later’* early attempts are to
moUKy- both the “greens* and
the “not Jtn my tack, rod"
Tory .lobbyists.
At tber heart of an the objec-
tions to-buHdfaig in toe coun-
tryside lies a profound shared
concern i about the .future
armearance of -the Writkh land-
scape ; Ttfe concern also, comes,
abend jbecwto -to nrany people,
feel- that new buildings In the
countryside are' always Bkriy
to be . so wnn* worse than oM
QQBS-*
\yben Mr Ridley announced
bin. rKgraiprinn Awinwit "Vflr
lage hcajscig.apd new villages",
last yeas, he took the opportu-
nity to say: “So much devatop-
ment Ja low-quality design and
layout off toning uniformity.
Building over the last three
decades could have been more
sensitive .and sympathetic to -
tho . gnno nndtng i: .We must
release the native design talent .
which was present when vil-
lages were built several hun-
dred years ago."
Mr Ridley did not get quite
the media coverage am irded to
the architecture pronounce-
ments off the Prince of Wales,
but Us words strode home to
toe housebuilders that have to
hear much of the responsibility
for the low quality of hooting
design in both town and coun-
try.
Neither Ur Ridley nor Mr
Patten contest the fact that
there is a growing need for
more houses, particularly in
toe south-east The figure off
SIOJOOO new homes by the year
aim in- London and the south- -
east isaocepted as accurate. To
achieve -this figure, Mr Patten
believes -that only the proper
nto of planning procedures can
ensure that a rchitectural and
environmental concerns, par-
ticularly in relation to tiie
countryside, are dealt wito sat-
isfactorily.
It is thfa anticipated increase
in the rural population that
needs to be planned for in
terms of houses, roads, shops
and services.
There is a whole new world
off infitong with buildings up to
the line of new bypasses;
hypermarkets. -and business
parks, as well as new houses
and new villages toat has to be ■
p lanne d and Thqm tg
also the question off what to do
with older buildings in toe-
countryside that might have
outlived their usefulness; par-
ticularly farm buildings.
Changes in farming practice
brings about the nee d for n ew
types <tf agricultural premises
3iw for tfifl co nve r si on off-farm
bufitongs into homes.
The minister has to find
ways to ensure that develop-
ment takes sufficient aware-
ness of both environmental
and aesthetic anxieties-
Mr Patten has said that “we
are not in the business of sacri-
ficing environmental quality to
sheer housing numbers.”
Although the .rate of bousing
gro wt h -has faiiwi sharply, the
Chris Patton
level of housebuilding is stm
high. There were some 78,730
housing starts in the south-
east-last year.
There is nffinwi encourage-
ment for infill in existing set-
tlements and for the redevelop-
ment of fand that hag, for a
variety of reasons, fi***™* der-
elict. But there ia one particu-
lar area that has received both
royal TWTriatBHMi encour-
agement, that is the devel-
opment of new villages.
It has to be said that there is
not a great deal to be seen on
the gr ou n d but plans are well
advanced for villages at Dor-
chester, Dorset; Upper Don-
xringtan near Newbury, Berk-
shire; Shifnal near Telford,
Shropshire; North Stainley,
Yorkshire; and Hale on the
north Cornish. coast They are
all “traditional” in architec-
tural style but they are radical
fn planning Their plana are
designed to ensure that they
bear no resemblance to sprawl-
ing housing estates but are
compact and, to a degree,
self-contained. Public buildings
and work places are included
in toe schemes — which bear
more relationship to the m odel
villages of the 19th and early
20th century than to any more
recent suburban sprawl.
Dorchester’s “village” is not
quite like the others. It is an
addition to the existing town,
to be built - with the backing
of the Prince of Wales - on
land owned by his Duchy of
Cornwall. It has borrowed an
idea from the US - a design
“code* which will determine
the appearance of the build-
ings.
Materials, heights, set backs,
fences and general proportions
will be prescribed. This will be
done in a written code and a
set at plans that can be (to a
degree) interpreted by local
builders. This approach has
been tried in some new towns
in the US, with particular suc-
cess at Seaside in Florida. j
Mating planning arrange*
manta tn tha UK do not
age planners tn interfere with
miiwnpa mi aesthetic grounds
but there is a strong argument
for & set Of afanp ln rules toat
will work positively to encour-
age developments to fit in to
printing villages and the coun-
tryside.
When it comes to form band-
ings, the replacement of the
Farm Capital Grants Scheme
and the Agricultural Improve-
ment Scheme by the Farm and
Conservation G rant Scheme in
February 19 89 shows that there
is much more emphasis on the
w m iiw ii g B ii M u t at local vernac-
ular building traditions.
Up to SO per cent grants are
available for “new or rebuilt
walls and banks constructed
ftom traditional materials."
(brants of 35 per cent are avail-
able for repair or reinstate-
ment of -traditional buildings
cons tructed of materials tradi-
tionally used in the locality.
No grant aid is available for
buildings that use “universal
materials like asbestos, fibre
cement, concrete blocks or
steel or aluminium profiled
sheeting.” It is worth noting
that, within the grant system,
lurk serious elements of a
design code for some of the
buildings in the countryside.
Codes, Intelligent private
patronage for new villages and
a revival of interest in plan-
ning at the local level are all
ways of raising the standards
of design for buildings in the
countryside. There are clear
signs that votes are to be won
or lost on both design and
green issues, and there are
hopeful signs that Mr Patten is
only at toe beginning of a sig-
nificant programme of plan-
ning changes controls that
will be the opposite of the leas-
sez-ftare attitudes of his prede-
cessor.
It is difficult to legislate far
beauty but it impossible to cre-
ate a framework that will help
architects and builders to
enh ance r ather than destroy
the rural environment.
Colin Ameiy
Housing is the farmer’s best cash crop, reports John Brennan
Planning for a cash windfall
ONE ACRE. Of. moderate
quality arable land can have a
number of sharply different
potential values.
P *S?owne r ehtfmtagaR the
grjt yrtp now available to set the ■
bm ri aside an surplus to agn-
cuftural newfe; and with -per;
imposed by its crop-yield.
House and land prices equating
to between SAfiOO and £8^)00 an
acre have become common-
place for the scenic space that
draws the buyers to “toy" farm
forestry; that ado's book value
would be written down to a
few hundred pounds. Auc-
tioned toe. agttodtu ral us». «
vnanfa peed to have re cor d
exceptional yields to- juhujy a
price beyond ttjOQft to Otn in
thepateby bare land market of
the pastfow yeas..
As an over-the-hedge pur-
chase, bid ' for by a neighbour-
[■.tag faimer
, \fQte’s worth into the S2*>00 to
* tao rente However, the r«u
} potential value only;
r |nts to emerge when that
* ,|dfc wilonger treated as
jjkat the foctory floes: of the
/Vta^eSe grasdand in .
r fefended “garden* of a r^-
. pal from, our acre's
* k fore cs the price limits
Even that is but a shadow off
the value of simple grassland
made available as pad d oc k in
£15bn incentive to sdL And the
co ntinuatio n of roll-over tax
relief provides the farther
im wnti tf e of a cushion a g ai ns t
having to hand back to the
Revenue too substantial a shoe
of such windfall gains.
Far mland agents confirm
that roll-over provisions
It can take a single signature
to transform the valuation still
further. Although developers
have geared down their land
acqtbsitian pr o gr a mmes in line
with the stomp in home sales
volume in the past 18 months ,
wTatmfng permission for devel-
opment can stffl tin'll a farm-
land acre in the southeast into
£250,000 worth of site value.
There may wall be land own-
as whose attitude to develo p-
ment is as fiercely negative as
flat Of aim of tte iMw eenera-
tfoh rf urban exiles who fight
planning applicatio ns i to p ra-
tect their adopted countryaae.
Yet h fliwdwg remains the best
cash crop for any former.
The current average of 12^00
acres rf farmland adopted far
urban use in Britain each year
represents, at a minimum , a
to be re-invested in another
working form have become one
of the mainstays of the agricul-
tural land market. Agricultural
values alone could not explain
fiie relative strength of the
market at a time whe n the
Europe-wide problem of over-
production, and the conse-
quent progressive reduction in
the value of state subsidies to
the industry, is undermining
farm incomes. Best estimates
are toat, imtRsa Britain's form*
ers work to reverse hal f a cen -
tary's effort to increase output,
as much as 6m out of the coun-
try's 24m acres of agricultural
fritd will have to be taken out
of production by the century's
end.
Given the choice of reverting
to pre-war style “dog and
stick" farming (walking the
land and watching the weeds
grow) at a few hundred or a
few hundred thousand pounds
an acre, it's a rare farmer who
wouldn’t jump at the chance of
whig a housing estate on the
lower fields.
Politically, responsibility for
land use policy is one of the
most thankless of all ministe-
rial briefs. National, regional
and local planners are also in a
“no win” situation.
Developers find the current
piecemea l approach to land use
both costly and ineffective.
Home buyers have to pay far
those extra coats and suffer
from the housing fnfffWriwplBa
imposed by site restrictions.
Home owners in urban areas
lose their gardens and open
spaces to in-ffil developments
squeezed out of often far-from- .
great “greenbeh." Traditional
country homeowners and their
children are priced out of their
local areas by incomers seek-
ing a country lifestyle. Those
ftu ^mury have an understand-
able dinfawfa of any develop-
ments Involving re-zoning of
to«» nearby landscape for addi-
tional homes. Landowners
apart, everyone, it seems, is
faring out.
The Government
has accepted
that a serious
problem exists
and has doubled
its highway
construction
budget to £12bn
over the next
decade, reports
Kevin Brown
. ' v >- r~-- >
Road to less congestion
CONCERN ABOUT Britain’s
transport infrastructure ha s
been mounting rapidly over
the past two years as profes-
sional associations and parlia-
mentary committees have com-
peted to paint the gloomiest
picture of worsening conges-
tion.
In the past few weeks alone,
a House of Lords select com-
mittee has called for urgent
action to tackle the UK's inade-
quate roads and the Confedera-
tion of British Industry has
warned that businesses may
move to northern France
unless big improvements are
frtflfto-
The Government has
accepted that a serious prob-
lem exists and has doubled its
road construction budget to
£l2bn over the next decade -
most of which will be spent on
widening motorways such as
the Ml from London to the
north Of F-n glanrt j tKa M6 from
Birmingham to the north-west,
and the M25 London Orbital
Motorway.
i.n«» the road b uilding of the
past three decades, which cre-
ated the existing motorway
network, this programme is
intended primarily to improve
communications between
urban centres.
However, Mr Richard
Diment, deputy director of the
British Road Federation, says
the w wiii t ni rtinn Of tr unk roads
does have a dear benefit for
the rural areas through which
they pass.
The obvious examples are
the Mil corridor, from London
to Cambridge, and the M4
Thames Valley corridor, both
of which have become centres
of high technology industry as
a result of improved links with
the capjtai-
There are other examples,
such as the area around the M4
in Sooth Wales, the M40 route
from London via Banbury to
TUrmlnglunn, and the A55 cor-
ridor in north Wales, Mr
Diment says.
But if rural areas are to ben-
efit, the important issues are
access through junctions and
comprehensive land use plan-
ning by the local authorities
through which the motorways
pass.
“It is not an easy thing to get
right, but given the right
emphasis on planning policy it
certainly can be done, and
many areas have shown that
growth can be generated," says
Mr Diment.
The other benefit which the
roads lobby claims motorways
bring to rural areas is environ-
mental improvement, at least
for those communities out of
sight and sound of the traffic.
“Motorways are really only a
series of high standard
bypasses linked together," says
Mr Diment “If you look at the
M5/M6/A74/M74 corridor from
Exeter to Glasgow, for exam-
ple, that effectively provides a
bypass for something like 350
towns and villages.
“Even the mm has hail a
major impact on reducing traf-
fic congestion on the roads
which run parallel to it It has
transformed those roads and
the towns and villages through
which they run to the extent
that you can actually have a
normal conversation in th**™
now."
However, not everyone is
quite so sanguine about the
impact of improved transport
links on the countryside. Pro-
fessor Tony May, head of Leeds
University’s Institute for
Transport Studies, believes
that many of the perceived
benefits are a question of faith.
“As far as the effects of
transport on economic growth
are concerned it can help to
ensure that activity takes place
in locations where it is benefi-
cial, but it will only work if
there is a dear framework for
it," he says.
Prof May says there is evi-
dence new Infrastructure
might not always have the
desired effect. For example,
many distribution companies
have responded to improve-
ments in rood links by central-
ising their depot network.
This increases their trans-
port costs because the remain-
ing depots have to cover larger
areas but ft cuts labour and
fixed costs and reduces eco-
nomic activity in some areas.
This may well be in the inter-
ests of the company and the
national economy but is
unlikely to help localised eco-
nomic regeneration, Prof May
says.
The provision of good trans-
port links is a necessary pre-
condition for economic regen-
eration but it is not sufficient
in itself. The availability of
suitable land, premises and
labour are equally important,
he says.
Dr David Banister, senior
lecturer in transport policy at
University College London,
says the main impact of trans-
port improvements on rural
areas has been the growth of
long-distance commuting and
the associated increase in rural
land values, especially for
housing.
This has the benefit of bring-
ing new money into the rural
economy, especially since the
newcomers usually choose
communities with schools and
shops which may have been
under threat of closure.
But it does raise the alarm-
ing prospect of rapidly increas-
ing atmospheric pollution,
especially if the proposed
increase in road capacity
encourages even more people
to move out of the big cities.
Private cars produce 17 per
cent of the carbon dioxide
gases released intn the atmo-
sphere in the UK and that fig-
ure is unlikely to foil Without
the widespread introduction of
so-called lean burn engines,
which is still a long way off
Even without a substantial
increase in long-distance com-
muting. the Transport Depart-
ment is forecasting an increase
in demand off between 83 per
cent and 142 per cent over the
next 35 years - and those fig-
ures were calculated before the
recent announcement of the
expanded roads programme.
One way to reduce the
impact on the environment
would be to encourage greater
use off public transport, but
there arc practical difficulties
to be overcome.
British Rail has recently
decided after a lengthy review
to maintain almost the whole
of its provincial network but
the rural network was reduced
by about half in the I960, and
now functions largely as a link
between sma& towns and their
bigger neighbours.
At the same time, the fre-
quency and reliability of rural
bus services has probably been
damaged by deregulation In
1986, although the evidence la
not yet clear. However, buses
catered for only 5 per cent of
rural travel in the last Trans-
port Department survey bdlore
deregulation, so they are at
best of marginal Importance.
In Dr Banister’s view, the
private car will continue to
provide the mainstay of rural
travel for the foreseeable
fixture because its flexibility
makes it ideal for use in areas
where the population Is dis-
persed.
But he predicts that volun-
teer and community services
will increase In Importance as
their potential is recognised:
there is no reason, for example,
why regular meals-on-wheels
services should not be used to
deliver prescription medicines
to the elderly.
The Rural Development
Commission, a government
quango, is already setting up a
system of local transport bro-
kers to organise sendees hke
this in cooperation with local
authorities.
znxrx?:
< 0 foe
crir-jjcf
fcvrarad
'.TCuOit-
cwr:t of
e sjvjl
nJt sar-
- i?
tponi.s
5'J?t iS
Four
2
rfggfc-
U COMMISSION ■
Partners in Rural Enterprise.
Willow Mill, Caton, Lancashire.
For more than twenty years the Rural Develop- country dwellers, some have been sold to their
meat Commission and En glis h Estates have worked occupiers, but roost continue to be managed by
together to stem die loss of weak in die countryside as English Estates.
agriculture has changed. Over 2300 workshops have And the task will continue as the two agencies
been built or created from conversions. strive to create work where it is needed, in buildings
Providing aver 13,000 job opportunities for that are at home in die rural scene.
p
1 ENGLISH
c
□
ESTATES
Engfeh Estates, Sc George’s House, Kmgnray, Team VaBcy, Gateshead, Tyne & Wear, NEl 1 ONA, Telepho n e; (091 ) 487 894 1 .
Rural Dewdopme n tComniiagfcm, 1 1 Cowiey Street, Ux*i?n, SW1P 3NA. TeJep&XVe; (01 } 276 6969.
Abo a E 141 Caede Sum*. Salisbury, Wiltshire, SPl 3TP. Telephone (0722) 336255.
FINANCIAL TIMES FRIDAY DECEMBERS
MANAGEMENT
C oincidentally or not, David
Probert’s generous shock of
white hair was several shades
darker before his company embarked
on a policy of acquisition In Europe.
Four years on, what the si year-old
chairman of W Canning, the UK
industrial group, has lost in pigments-
turn, he has gained in an unusually
large portfolio of Continental subsid-
iaries and a fund of useful anecdotes.
One story illustrates how the
waters of the Channel separate not
only the shores of Britain from those
of mainland Europe, but also, in some
cases, the strictness of its accounting
rules.
“There was this Italian company
we’d been talking to off and on for a
year or two,” says Probert, “and it got
to the stage where we asked if we
could have a look at their balance
sheet
“They said: Tell you what, to make
matters easy, just tell us the figures
you want to see, and then well send
you our accounts.' We didn't buy the
company."
Canning did, however, buy many
others. Indeed, in spite of its modest
size - it made pretax profits of £7m
on sales of £80tn in 1988 - it has
become one of Britain’s most active
purchasers of businesses in mainland
Europe, collecting along the way wide
experience of the pitfalls that await
the smaller company expanding
beyond the Channel.
Although Canning's acquisition
spree was accelerated by the approach
of European harmonisation in 1992, it
was originally triggered by the reces-
sion of the early 1980s. This hit its
core business of supplying electro-
plating materials to the metal finish-
ers of the West Midlands.
The company responded by setting
out to build a European business
encompassing two main areas of
expertise: one, the manufacture and
supply of speciality rhamir-Mis such as
sealants, additives and lubricants,
and the other, the distribution of elec-
tronic components such as resistors,
semiconductors . and micro-
processors.
Over the past four years, in 12 deals
costing betwee n £350,000 and £5^m,
Hanning has bought 20 companies -
mostly small, family-owned busi-
nesses. In the process it has assem-
bled an empire spanning Belgium,
France, Italy, Spain, the Netherlands
and West Germany, and now makes
70 per cent of its sales overseas.
Canning's strategy is to run a
headquarters in Birmingham (its
' home for the past 204 years) and leave
operational management to its subsid-
iaries. Consequently, it is not inter-
ested in rescuing companies; it looks
for well-run businesses with comple-
mentary products, and ahn« to keep
the management in place.
These days. Canning’s best source
of information an potential acquisi-
tions is its existing overseas subsid-
iaries; but for the beginner, it says,
the first hurdle is identifying targets.
According to Ron Brown, Canning’s
49 year-old finance director, public
Acquisition strategy
Dos and don’ts of going
shopping on the Continent
Richard Tomkins reports on the UK-based Canning group’s experiences
m
.
Ron Brown (left) and David Probert: “English Is the International business language"
sources of information are of little
use. Financial information on private
companies is not widely available on
the Continent, and does not always
give an accurate picture of a busi-
ness’s profitability.
A more reliable course is for the
acquirer to approach his own clearing
hank or merchant bank, which main-
tain registers of potential merger and
acquisition targets. Brown warns,
though, that because the banks are
big, and their M & A registers are
extensive, an acquirer needs to give a
fairly close definition of its require-
ments in terms of size, location and
product
Canning itself found Continental
banks more helpful because they were
smaller. All Its early acquisitions
came either from this source or from
company brokers - firms specialising
in corporate marriages. But Brown
says the beginner can find it hard to
get the brokers motivated.
He says: Tf they work on a success
fee basis and you have no track
record in making acquisitions, they’re
afraid you’ll be wasting their time.
That means it can take quite a while
for them to come up with anything
you're interested in. But once you’ve
made your first transaction and they
realise you're serious, the proposi-
tions come pouring in.”
Next comes the first personal con-
tact with the vendors - and with it.
the potential embarrassment of the
language barrier. But according to
Probert and Brown, the UK executive
with nnrtiing but his native English
need not be ashamed to speak it In
fact, he might do wen to insist on
using it.
“English, after all. Is the interna-
tional business language," says
Brown. “If you’re building an interna-
tional group- like ours, a French com-
pany that joins is going to be discuss-
ing its business with Englishmen,
Germans and Italians. If its manage-
ment hasn't got at least some know-
ledge of English, then that's likely to
be a major problem as far as develop-
ing that business is concerned.”
But language apart, say Probert
and Brown, diplomacy and tact are
vital in dealing with S panish, German
or French owners who have built up
their businesses themselves.
“You have to remember that
although selling out goes on all the
time in the UK and US. in mainland
Europe it is just not the common
thing to do," says Brown.
“The company is a source of pride
to its owner, and very often it under-
lies his standing in the local commu-
nity. On the Continent it’s almost an
admission of failure to be selling out,
so you have to put it over very posi-
tively.”
Probert and Brown are at pains to
emphasise in talks with vendors that
the company being sold will keep its
own name, identity, management, and
method of operation. Later, they
arrange for the vendors to visit Can-
ning’s UK facilities and, if posable, an
existing Canning subsidiary in the
vendor's own country. That way, the
vendors get a dear picture of what
lies ahead if they sign.
This is not just a one-way process.
As Probert explains, there is no point
in buying the company unless it aits
well with others in the group, so Can-
ning sends in its own managers to
crawl over It
“We operate a black ball system,"
says Probert “The people who are
going to have to work with that busi-
ness have got to see the mutual bene-
fits coming through. If anybody at
Harming who is vaguely involved with
the acquisition doesn’t like it then we
tend to walk away.”
On the investigative side, Probert
and Brown say market research is the
least of their problems. Canning, after
all, sticks to products it knows, and it
is normally easy to obtain statistics
on the level and pattern of demand in
any given co untry .
The greater difficulty is with the
vendor’s accounts. Usually, say Prob-
ert and Brown, the first glimpse of
financial information they get con-
sists of what the taxman has been
shown, accompanied by some hefty
nudges and winks to the effect that
this tails only part of die tale.
Italy and Spain, says Brown, are the
worst for black money - that la,
money that does not appear In the
accounts. “As a UK pic we simply
can’t have anything to do with black
money, so if we find any major
involvement, we just don’t do the
deal."
With audits costing perhaps £10900
to £15,000 a time, however. Canning
likes to reach a basis Of understand-
ing before detailed investigations
begin; and if negotiations do reach
tills stage, it sends in its awn accoun-
tants (Peat Marwick McUntock)
rather than n<Hng a local firm in the
country concerned.
Says Probert: Tf you use German
accountants, for example, they give
you all the detail but ignore the fun-
damentals. They'll tell you all about
the cashflow down to the last pfennig,
but they won’t tell you there’s a writ
hanging over the company that’s
about to destroy the business.”
Asked what practical advice they
would offer to a company setting off
on the acquisition trail, Probert and
Brown offer the following tips:
• React quickly to an approach. “Yon
really must put yourself out. If you
try to struct u re everything into your
diary and say you’ll visit them In two
months’ time or send someone else
along, you’ll never buy anything.”
• Respond at senior level. “At least
one ctf our acquisitions was secured
against competition from a major UK
group which had been talking about
the deal at divisional level for about
12 months without ever asking its
main board for a decision.”
• Be sure you trust the people.
“Mutual trust is essential if you are
going to work together. If you’re not
happy about the people, then howera
good the company, however good its
products, and however good the fit;
walk away.”
• Be ready to have your patience
tested. “Making acquisitions Is a great
time-waster; in our early days, only
one in 100 deals came off. People have
used us to set a price for a deal
worked out with someone else, and
some people - though more in the US
than Europe - use you to put a valu-
ation on their business just for their
own pride.”
• Do not be stampeded. “It’s easy to
be rushed Into doing something
because it’s the flavour of the day or
because three other people are lining
up to buy. Often we don’t offer the
highest price but amphadag instead
what we can bring to the party by
putting our products through their
business."
• Do not be “chipped”. “Advisers*
fees and other expenses can easily
add 10 per cent to the cost of making
a £3m-5m deal. Once you’ve got that
far, there’s a great temptation to go
ahead with the deal even if the profits
turn out to be slightly lower or the
price slightly higher than you expec-
ted. But remember if the vendor chips
you now, then once you’ve bought
that business, hen be chipping yon
for the rest of your life."
How to get more
out of less
Michael Skapinker says compames must
reappraise their manufacturing weapons
A household goods com-
pany tells the story of a
recent product acquisi-
tion- The product was made in
a wide range of different sizes
ami packages.
The company asked for a
sample of each package to be
brought to a meeting. The con-
ference room was so toll of
packages, the co mpan y almost
decided to move the meeting to
another room.
Many European factories
manufacture large numbers of
different products or the same
product in several different
packages. The cost of doing so
can be high. When the house-
hold goods company reduced
the number of packages in
which it offered its household
cleaners the savings were even
larger than expected.
The move towards a single
European market has
prom pted many manufacturers
to consider the rati o nali s a ti on
of their produc tio n
IF transport within the Euro-
pean Community becomes
cheaper and simpler, surely It
will make sense for manufac-
turers to get each ttf their fac-
tories to mate a smaller range
of products and distribute
them to a larger number of
markets?
Last year, Imede, the busi-
ness school in Lausanne,
brought together nine multi-
national companies operating
in Europe to discuss fua Issue.
Using fanighh gained from *Ma
discussion, Robert Collins of
Imede and Roger Schmenner
and Clay Whybaxk of the Indi-
ana University School of Busi-
ness divided European facto-
ries into four categories.
They outline their catego-
ries, which rdy heafrOy on mil-
itary imagery, in the latest edi-
tion of the European Business
Review.*
The first type of plant is like
an infimtry division, they say.
Its geographic range Is limited
but it can carry a wide range (tf
weaponry. Factories producing
a large number of products for
a single national fall
into this category. Plants of
this sort are extremely com-,
man in Europe.
The second type of plant is
like a tank corps. It has just
me weapon (or product) and
also has a limited geographical
range. These plaids, too^ are .
common in Europe.
The thfad
like a naval flotfibu It bottta a
wide range of weapons agd.
ranges over a large geographic
area. There-are Utwer Euro-
pean plants in this category,
producing a. wide - mgs : 9?
nroductefor moat .or all. Com-
munity countries. .There are
some in the ch emicals indus-
try, for example- ■
The fourth, type at riant, to
wire a mi-Mriie afja, containing, e
stogie weapon with a large geo-
graphical roach. There are fow
rtf these in Europe. Three that .
there are often belong to Arawv
ican multinationals. .
“Nevertheless, the Ynlssile
sUo* plant is the most attrac-
tive for many enterprise*,” the
writers argue. "The limited
product mix makes many of
toe plant’s management activi-
ties much easier ' to perform
wen. With the exbmirina of the
geographic markets served, the
plant can also exploit any pre-
vaUixLg economies of scale.
Overhead to support the prod-
net line is sot disperaed among
several plants, but can be con-
centrated In one focaUoa. and:
thus duplication can ' be
avoided.”
Of the nine compantee at the
Imede workshop, only oner *
large computer company, bad
set up its manufacturing in
this way. the others tended to
have pi frt AO into more
thaw one of the Categories. . .
The writers recognise that .
focusing factories Jn this way
to not easy. Nor is It always
desirable. Many firms have
gone to a great deal of trouble
to tailor.gnods for national or
regional markets. Whatever
the progress towards , e singl e
market. “European national-
ism to. strong, sc op ti c tm a of
awith nf rramtr v'ft Wnmufiw taff^
ing skill abounds, - and lan-
guage remains a heritor.
“Companies will be tenta-
tive at first, in taking advan-
tage of the opportunities
opened by 1992. .TM-faitiel.
goi ng may be atow, -hut when
industry will be pre ssure d to
duplicate toe feat.-- .t . :
; “In that sense ‘Europe
without frontiers'- represents a
reel frontier for manufacturing
and it wifi be intriguing to see
who wfil decfde to be pio-
neers."
*Voiwm X lam 4 V "
-ITT
numb
0 n
1 e o n a
s q u a
E C
e r
e
r d
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LONDON
EC2
-TO LET-
number
one
! e o n a r d
square
A superb new office building E
with a unique Corporate Identity
60,000 sq ft net
on a rectangular island site
•
main entrance through landscaped gardens
first-class specification including
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car parking for 30 cars
Available March 1990
Collins
Velleman
r7 Brook Stmt, London Wiy iye
01-493 7373
Prime Self-Contained Building
Full Office Use
MANCHESTER
SQUARE
London W1
4,650 sq.ft, approx.
TO LET
All Enquiries Contact Archie Cowan
Jones Lang
~ Wootton
22 Hanover Square London W1A 2BN
01-493 6040
ENTERPRISE
ZONE
INVESTMENT
An excellent opportunity to
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PRICE : E3.75M.
CONTACT:
ROBERT BLACK
01-493 9896
BALTIC
DEVELOPMENTS PLC
WINCHESTER
INVESTMENT
FOR SALE
OFFERS WI7ED Ml THEftEQKMGF
£600,000 S.T.C.
NET INITIAL YELD 657%
REVERSION MAY 1990
TO NET YEILD 8.52%
All Enquiries To:-
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21 Carlton Crescent, Southampton
0703 339181
WEST MIDLANDS
FOR SALE
Excellent Modem Warehousa/Distribution Depot
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from J. L of ULS at West Bromwich subject to existing lease
JOHN Note: Freehold disposal
EMMS considered Further detafls
COMMERCIAL Sole Agents
(0384)57284/5
220 Wolverhampton St. Dudkrv DY1 1 EF
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IVES
1 (CC
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[KIBarfbid
1 CHARTERED SURVEYORS
* Howard House, 17 Church Street,
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(ADJ.)
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TAX SAVING FREEHOLD
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THORIYA
URGENTLY.
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TWO HOUSES ON
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BOARDWALK
, Belgium (Nieuwpoort),
12 m. wide, 25 xn. deep,
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Brussels - Belgium.
BRUSSELS -
GRAND PLACE
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- interior decorated, perfect
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Tel 32JL37S.69 Al
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COURyOISIER
Y//M
16
TECHNOLOGY
Louise Kehoe examines the potential health
hazards of using desktop computer terminals
The friends that
may also be foes
A re desktop computers
hazardous to your
health? For the tens
of millio ns of office
workers who spend much of
their day glued to a computer
screen, this is a question that
demands a straight answer.
Getting one is not easy.
Computer terminals have
been blamed for all manner of
health problems over the past
few years, from eye-strain to
“repetitive strain injuries" and
from miscarriage to cancer.
The growing litany of com-
plaints has raised serious con-
cerns, but in many cases there
is no positive evidence to
assign blame solely to the com-
puter.
Other factors such as stress,
pooriy designed furniture, poor
lighting and ventilation may
be significant contributors to
“computer sickness", hi some
instances people have been too
quick to jump to conclusions.
At one US newspaper office
where a disturbing number of
women bad miscarriages,
thought to be linked to the use
of computers, it turned out
that drinking water may have
been contaminated with lead.
Nose the less, there is
mounting evidence that the
seat in front of a computer ter-
minal is not the ben% n work-
ing environment that most had
assumed. For thousands of
computer workers, numbness
in the fingers has been the first
symptom of repetitive strain
injury, a range of conditions
that involves painful inflam-
mations of tiie wrist, arm and
hands, caused, it is believed,
by the continuous use of com-
puter keyboards.
Repetitive strain injuries
and, in particular, carpal tun-
nel syndrome have reached
near epidemic proportions In
the US. The Communications
Workers of America, a major
trade union, reports that 30 to
60 per cent of its members who
use computer terminals have
symptoms. Among the victims
are journalists, data entry
clerks, telephone directory
assistance operators and postal
workers who sort mail using
automated terminals.
One of the most hotly
debated issues about the safety
of computers is whether the
non-ionising electromagnetic
radiation that all types of com-
puter terminals emit consti-
tutes a health risk. Until
recently, most scientists
believed that these types of
very-low frequency (VLF) and
extremely low-frequency (ELF)
radiations and the electric anfl
magnetic fields that they cre-
ate had no biological effects.
Now they are not so sore.
A study sponsored by the US
Congressional Office of Tech-
nology Assessment reviewed
the available data and to
the conclusion that: “The
emerging evidence no longer
allows one categorically to
assert that there are no risks
(from ELF and VLF radiation).
But it does not provide a basis
for asserting that there is a
significant risk.”
Although the OTA study,
published earlier this year,
focused upon the possible
lwaith risks of radiation j v *™
electrical power lines, the
report concluded that the prob-
lem may be Car-reaching: “If
exposure to fields does turn
out to pose a health ttt. it is
unlikely that high voltage
i i mnw ifawrinn Hruw will be ™
only sources of concern. Pow-
er-frequency fields are also pro-
duced by distribution lines,
wall wiring, appliances and
light fixtures. These non-trans-
mission sources are much
more common than t ransmis -
sion Know and could play a far
greater role in any public
Keaiih problem.”
For those who believe that
radiation from computer dis-
plays does pose a health risk,
the OTA report marked a
watershed - the first official
acknowledgement that a prob-
lem may exist. Since then,
alarming reports including the
preliminary results of a Johns
Hopkins University study that
found an increased rate of can-
cer among telephone line
repairmen have added to fears
that even very law levels of
low frequency electromagnetic
radiation may be dangerous.
Serious concerns about the
health of pregnant women
nging video display torminalg
were raised by the publication
of a study by the Kaiser Per-
manente Medical Group in
Oakland, California, last year.
The researchers repeated that
women workers nemg
a video display terminal for
more than 20 hours per week
<firrrng - the first three inrmthe
of pregnancy were twice as
likely to have a miscarriage.
The study also produced con-
tradictory findings, however. A
group of 40 women managers
who used computers showed a
90 per cent lower than normal
rate erf miscarriages.
The -researchers warned that
the issue needs farther study
and suggested that the
increased rate erf miscarriages
could be due to other job-re-
lated factors, such as stress,
rather th an directly linked to
the computer terminals.
The results of a larger scale
study are to be published early
next year by the National Insti-
tute for Occupational Safety
and wealth. Designed specifi-
cally to determine whether
VDT use affects the outcome of
pregnancy, the study focuses
upon the reproductive health
of 2*500 women telephone oper-
ators who work at computer
te rminals
But more research is needed,
many feeL “There are still
many unans wered questions
about the potential health
effects of VDTs and of electro-
magnetic fields generally, but
there is no longer any doubt
that thh form of radiation r!TTX
cause some biochemical
changes. In my view that infor-
mation alone is sufficient to
warrant a renewed commit-
ment on the part of govern-
ment and private industry to
study this issue and search for
solutions to protect people,”
says Senator Albert Gore, who
has taken a close interest in
co mp ut er safety.
The computer industry is
beginning to react to growing
public awareness of the issue,
although manufacturers are
careful to point out that there
is no proof that radiation from
rrunptw dis play s is harmfnl
International Business
Machines said last week that It
plans to introduce a range of
computer monitors with
reduced elwHmmagnfltip radia-
tion anAodnn, inemding mod-
So why are you looking at a laser beam printer* Because during the
past decade. Canon has remained at the forefront in optics,
electronics and precision mechanics. From which Canon has created
one of the worlds largest and most successftd ranges of data
processing equipment A range that includes personal computers,
word processors, disk drives, laser beam and bubble-jet printers,
imagp scanners and desk-top publishing systems. Like all Canon
business machines, Canon data processing products are designed
and mamfactured with a singfc aim in mind. To help businesses of
every type, and every size, operate more effectively. Which means
you get a great deal more than data processing.
/I RENT JN£ OVER-
lb WE AW- JONfSrNS,
electromagnetic
RRP/AT/ON SCR r£,
WSSHiGGS?
els designed for use with per-
sonal computers.
In September IBM intro-
duced a range of displays foe
its mainframe computers
wiUpH “Info Windows" which
meet stringent Swedish stan-
dards for low radiation emis-
sion. Previously, the company
offered low radiation displays
only in Sweden and Denmark.
IBM, which sells an esti-
mated 2m VDTs per year, con-
tinues to believe that its cur-
rent models are safe, however.
“This is a market-driven issue,
not a health or safety issue,”
said a spokesman.
Other co mpu ter makers may
be prompted to follow IBM’s
toad. Most US computer compa-
nies, however, say that they
have had little demand for
low-radiation terminals. Hew-
lett-Packard, which offers low
radiation terminals, s a y s that
it gets only about six requests
per year for them. “We keep a
close watch on all of the
studies, but to date we have
not seen any conclusive evi-
dence that there is a problem,"
a TO t n p !,T, y nffidai said.
Sweden Is so far the only
country to st an d a r ds
far video display terminal radi-
ation. Last year management
and labour groups in Sweden
agreed to low radiation stan-
dards that are now widely used
in that country.
“There has been extraordi-
nary negligence on this issue
in the united States," main-
tains Louis Slesin. publisher of
VDT News and a respected
commentator on computer
health issues. “There has never
been any sy stem a tic study of
the wwdwrfnnfr from different
types of VDTs,” he points out
Such a study would be rela-
tively simple and would pro-
vide a valuable service to the
public, he suggests. “We are
burying our heads In the sand.
We should have a government
agency, perhaps the National
Bureau of Standards, doing
this.” Sweden has set an exam-
ple for the world, Slesin says.
*Tt has demonstrated that com-
puter manufacturers will
l yq ww fl to market demands.”
A simple, yet effective way
to protect computer users from
radiation is to place a radiation
shield over the computer
screen. A handful ofUS compa-
nies offer these shields and
sales are growing rapidly. “To
the extent that electromagnetic
radiation from a VDT repre-
sents a health hazard, 1
personally believe that it does,
there is nothing that rednoes it
more than OUT product," Hnlma
Michael Hines, president of
NoRad Corporation of Santa
Mo nic a , California, a company
♦>»tt haw fatknw the lead in the
low-radiation trend.
NoRad backs up its claim
with the results of independent
laboratory testing that com-
pared the attenuating qualities
of its ahifridg with those of
other US i M u nrar tnwwi
NoRad* s screen b only a par-
tial solution,' ' however. :
Although it shields the user
from the electrical Add created
fry low-frequency radiation, it
does not attenuate the mag-
netic field, which same medical
r es e a r ch er s believe may be an
important factor in Mntagteff?
changes. NoRad says that it
plans to introduce an addi-
tional product, which it will
fpll in mmhlngHnn with its
screens, that substantially
reduces tiie magnetic Odd. The
cost of the comMned package
will be well under $200.
The NoRad shield is a spe-
cially treated metallised mtero-
mesh screen that slides on to
the front of a computer moni-
tor. The polyester mesh is
coated with nickel, copper and
a proprietary crystalline coat
lng. The metallic elements
Mock more than SMS per cent
erf the electrical field emitted
from tiie face of the computer.
Placing a shroud over the
front of the computer screen
has some beneficial side
effects. The grey badfeground of
most monochrome computer
screen looks blacker when
viewed through the mesh,
<nwyiring the contrast and
clarity of the text. The
grounded shield also gets rid of
roe static electric effects that
draw some dust particles to the
screen and repel others on to
the face and eyes of the user.
A common misconception
about computer terminal radia-
tion emissions is that they
emanate primarily from the
front of tiie computer, through
the screen. But many comput-
ers emit mace radiation from
tiie bade and sides. This pres-
ents a problem in crowded
offices, or those in which work-
ers' dims are arranged so that
they face one another.
The radiation from a com-
puter terminal attenuates
qnidriy over a distance erf a
few feet In 1987, the World
Health Organisation' recom-
mended that computer termi-
nals be spaced at least one
metre apart - in all directions.
It is unwise, most experts
agree, to arrange computer ter-
minals so that w ork ers tit, tor
#**mp*, in front of one and
behind another.
While the effects of low-level
wm-itmiirinir r aiHaHnn remain
a subject of debate, there is
overwhelming evidence to sug-
gest that prolonged use of a
computer terminal can cause
eye-strain. Local authorities in
Suffolk County, New York,
passed legislation last year
requiring employers to provide
eye c are tor those who use
computer terminals and estab-
lishing standards for K pKtfnp
and other factors.
Although the Suffolk County
law has been challenged by
local business gro u ps, similar
legislation is pending in
approximately 25 uS states, to
Califo rnia, for example, state
legislators Introduced a pro-
posal in February calling for
all computer equipment to
comply with ergono mi c stan-
dards established by the Amer-
ican National Standards Insti-
tute. The bill would also
establish a committee to
develop guideline s for preg-
nant computer operators,
to tiie private sector, butd-
mpaaaa that gmpln y large num-
bers of computer users asp utaq,
taking “preventative m&st-
soras”. Several US cowjxfepiest
now offer employees
reading glasses . designed to
focus on the computer screen^
which hi typically about two
feet away firomthe user, rather
than at the one foot or so «Ha-
tanoe where most people hold
written material;.
With over half of tiie work-
ing population expected to use
computers fay the turn of the
century, it Is extraordinary
how little attention la bring,
paid to this Issue. ,
*
size up
B ridges should bwbmj
safer tfareughnrwea re h
project . Involving the
West German. chftMlcaf cflte-
pany Bayer, the Cologne Stra-
bae Bau ari the
West German Federal JBWWty
of Beeeerch apd Tednwfegf.;
By integrating srnamjm
composite fibre mate ri al* ,
which are being o«d to
strengthen concrete, tlteGete
mans have^evdapea « system .
Out detects potential or aetata!
defects in * hridan. . > .
The research- protect w»
conceived when poiyital ..•« «.
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glass re in fo rce d plastic. eo
polite with the advantages
steel yet corrosion resistant,
conside^ly^Ujgt^^W*
cally neutral - was shown to
have a tensile strength; that
made It air ideal alternative to
steel used to preatreoasd vcoo* .
crate. ■ . . .
A bridge was hail* fit which
the new composite material
was used to pBestrres the con-
crete to a-.weefefar load of. .60 =
tonnes with “tendons.* eon- .
stating tf U glass fibre rods,
each 7-fattm in dbritatet atal
c n api M rfB^irihitat
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light permeability, optical
fibre senrars aroused to trans-
mit telecommunication
nab. wefc adasted for
the f i iii^ ii t ' iMiwn iW yia»S
control of forces within tin :
wesii e as e d tendons. It; was
men posrfhte to ffisoovsr whet
was battering inside a pse*
tressed concrete structure, fc?
determining changes - lit
stresses^ from . measured
Sactri, ra £S ri riasaffbre .
rods and : cQttdiurteS a laser
beam tfctoort it\3he? *stab»
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fibre. - ;
However,- any detfeteptag...
stress or crack to fim-erieer ete
bent the beam attifelw tat at
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thereto ictiveness of ^helr
load fa earink sfruc-
tmxp on bridgra fa Berlin tod
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cato tint for safety;
new bridges be _
automatic monitoring 1 L,.—
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$ 1 , 100 , 000,000
8.30% Debentures
Doted December 11, 1909 Due Decanter 12, 1994 ;
interest payable on JunS 12.1980 and natemwSy theresTteC . .
Series SM-1994-H. Cusip No. 313586L E3 7
Callable on or afterDeceitiber 12, 1992
Price 100%
$900,000,000
8.65% Debentures
Dated December 11, 1980 Due December 10.1999
InteretePtenbleonJunelOL'IQQOendwn d in n uBlIyBienwItei:
Series SM-1999-F Cusip No. 313566 L 31
Callable on or afterDecember 10, *1994
Price 99.875%
Tte dHte ra u iv a oft?ecgrptert2, W teere i e dee w te i l e onoretterDeoeinberlg, SSB2 -
and the debenturoacd December TO. 1999 am r ad e ama Wo on or alter Oacattoei 0 KVi
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r Initial redemption dateaMOOX at
at anytime (and tent time to time} on or after die
the crincipei
amowt redeemed accrued bQerete thereon to thadateol redemption.
Thedebeteire aarB the obU gattona olthe Federal National Mortgage AaaodeBon.
a corporation organized and existing under the Laws of the United States, and ■
ane Issued under the authority eamsined in Section 304rt>) of the Federal
National. Mortgage A—odatton Charter Act (12 UA^llflBet sea).
The debentures, tooethereffli any interest Sierooa ate not guatanteedby tte
ddo nMeonatnsesdaWerebfiotoonar the United SteMi or of eny :
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of a ns&omMe Se»*B Group o» recognized dealera in securities
Dabantures teavaUHe In Baoh&itry form ante
Thera wW be no definitive eecurttoe ottered.
Gary L.
SMvHblfl
Perttn
UndaK. Knight
Uteftetetanfewf
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FINANCI AL TIMES FRIDAY DECEMBER 8 1989
"-if
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before you pick up your paper.
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TTZT?^
s,
i
FINANCIAL TIMES
FRIDAY DECEMBER
8 1989
ARTS
OPERA AND BALLET
London
Royal Opera, Covent Garden.
Further performances of the hid-
eous new production of Idameneo
by Johannes Schaaf, conducted
by Jeffrey Tate, with Philip Lan-
gridge in the title role, and Ann
Murray, Sylvia McNair. Elizabeth
Connell and Robert Tear com-
pleting the of princlpals-
Paris
Theatre des Champs Elysfes.
Bolshoi Ballet dances Giselle
ffiT ’ri act and Spartacus (2nd act)
choreographed by Yuri Grigorov-
itch (Wed) 47203637).
Amsterdam
MnzleMheater. The Netherlands
Opera in Don PasqutUe, con-
ducted by Carlo Rizzi in a pro-
duction by Renata Acfcermann,
sung by Henk Smit, Lillian Wat-
son and Peter Brooder. The
National Ballet appears in The
Sleeping Beauty (255 455).
Brussels
Theatre Royal de La Monnaie.
The Monnaie Opera in Fierrabras
by Schubert (concert version)
conducted by Ingo Metzmachar
(Fri. Sun, Tnes).
Vienna
Staatsoper. La Traviaia Is con-
ducted by Fabio LirisL with a
cast including Pan! Winsauer,
Anna Gonda and Horst Nitsche.
Berlin
Opera. Samson taut D aHla , pro-
duced by Gian Carlo del Monaco,
wfU have its premiere this week
with Marjana Lipovsek, Wladi-
pdr Atlantow ami George For-
tune as leads. Httnsel und Gretel
features Karan Armstrong, Mar-
cia Bellamy. Gndmn Sleber and
Gerd FeldhofL
Hamburg
Opera. A Bans Sotin Lieder
recital, accompanied by Hehnnt
Deutsch with songs by Loews,
Strauss, Greener and Shostakov-
ich. Zar und Zimmermarm is
a well done repertoire perfor-
mance.
Bonn
Opera. Udo Zimmermann will
be conducting his. own opera
Die ictmdcrsame Schustersfrau,
which will have its premiere this
traik produced by the East Ger-
man Christine Mielitz, with a
strong cast led by Marla Hus-
mann , Rolf Haunstein, Brigitte
Lindner and Christine Obermayr.
Der Nussknacker has Youris
Vamos choreography.
Frankfurt
Opera. Cost fan tutte has a
first-rate cast led byMargaret
Marshall , Mifanikn Shirai , Chris-
topher Robertson and Hans Peter
Blochwitz. Rusalka, conducted
by Oleg Caetani Is sung by
Eliane Coelbo in the title role,
Seppo Ruhonen, Manfred Schenk
and Gail Gflm rrrp
Cologne
Opera. Faust stars Josef
Prolschka in the title role. Die
Zauberflole has Susan Burghanil,
Teresa Ringholz, Dieter Schwei-
kart and Randall Outland as
leads. The ballet Nussknacker
und Mausekardg closes the weds.
Stuttgart
Opera. Der Preischutz is respect-
able with Helena Doese,Tom
Kraemer and Helmut-Berger-
Tuna. Elektra in Harry Kapha's
production features Anny
Schl emm. Eva Marton, Wolfgang
Probst, conducted by Garcia
Navarro. Tosco stars Simon
Estes, Giovanna Casolla and
Michael Sylvester.
Madrid
Teatro Lirico Nactonal. La Zar-
zuela. Under the artistic leader-
ship of Jeannette Ordman, this
Israeli company presents a series
of performances distinguished
by very modern choreography.
Ends 10 Dec.
Rome
Teatro DelTOpera. Beni Montre-
sor’s production of Verdi’s Pal-
staff, surprisingly set in the Po
Valley in northern Italy, is con-
ducted by Evelino Pido. The cast
includes Paolo GavaneUi, Manri-
zio Bolognesi and Adelina Scara-
befli. (461755).
Milan
Teatro Alla Scala. Pier Luigi’s
Pizzi’s lavish production of
Verdi's I Vespri Stdliani, with
dramatic sets in which Pizzi’s
favourite colours, red and black
predominate. Rlccardo Mutf con-
ducts a fine cast. Led by Ameri-
can tenor Chris Merritt as
Arrigo, Cheryl Stnder as Princess
Elena. Giorgio Zancanaro and
Ferruccio Fnrlanetto as Prodda,
in place of the indisposed Paata
Burchuladze- The third-act bal-
let. with Carla Freed, is given
in fun (809128).
Now York
Metropolitan Opera. Pre-Christ-
mas celebration is brought by
the premiere of August Everd-
ing*s new production of Der flit’
gentle Hollander . conducted by
James Levine with Eva Marton,
James Morris and Paul PUshka.
Lincoln Center Opera House (382
6000).
New York City Ballet. The Nut-
cracker takes up the holiday sea-
son untO Dec 3L New York State
Theatre, Lincoln Center (870
5570).
Chicago
Lyric Opera. Barbara Daniels
is Rosalinda and Neil Rosenshein
sings Alfred In director Glullo
Chazalettes's new production
of Die Fledermaus. conducted
by Julius RudeL Frederica van
Stade continues as Rosina in
Roberto De Simon's production
of The Barber of Seville con-
ducted by Alessandro PinzautL
Lyric Opera (332 2344).
Washington
Amahl and the Night Visitors.
Zack Brown's production con-
ducted by composer Gian Carlo
Menotti is a one-act retelling
of the story of the Bethlehem
shepherd boy whose life is
changed by the visit of the three
kings following a star. Ends Dec
17. Kennedy Center Eisenhower
Theater (467 4600).
Tokyo
Alda. The spectacular Arena
di Verona production, with Maria
Chiara and Aprile Milo alternat-
ing in the title role, and Nicola
Martinucci and Mario Malagnini
as Radames. Conducted by Nello
Santi. National Sports Stadium,
Yoyogi (Tues, Wed. Tbur) (355
5611).
THEATRE
London
Jeffrey Bernard Is Unwell
(Apollo). Brilliant performance
by Peter O’Toole as on alcoholic
journalist who embodies a Fal-
staffian, nay-saying life force
while committing public suicide
by vodka. Keith Waterhouse has
stitched a fine play, the season’s
highlight, from Bernard’s own
writing. Ned Sherrin directs (437
2663).
The Good Person of Sichuan
(.Olivier). Magnificent National-
Theatre revival by wonderland
Deborah Warner of Brecht’s
greatparable of moral ambiguity
about a Chinese prostitute who
canonly do good by adopting
a vicious disguise. Dec 19-21, Dec
28- Jan 3. Jan 11-18. Jan 29-Feb
3(928 2252).
Another Time (Wyndham's).
New Ronald Harwood play,
directed by Elijah Mosh insky,
about a white Sooth African fam-
ily in Cape Town and Mai da
Vale. Albert Finney plays father
and concert pianist son across
35 years, suggesting that talent
is a means of escape and a rea-
son for not going back. Janet
Suzman and Sara Kestelman
are electrifying in support (887
1116).
M. Butterfly (Shaftesbury)- Peter
Eg an h as taken over from
Anthony Hopkins as the tortured
diplomatic hero in a Peter Shaf-
fer- style “spectacle of ideas"
dressed up in John Dexter's
superb production as a metaphor
of homosexual life. The transves-
tite tragedy proves less electrify-
ing than in New York; the play
is not very good but still worth
seeing (379 5399).
New York
Heidi Chronicles (Plymouth).
Wendy Wasserstein's award-win-
ning drama covering 20 years
in the life of a successful Ameri-
can baby boomer goes from sup-
port for Eugene McCarthy’s pres-
idential aspirations to electoral
ambitions In the 1980s, accompa-
nied by the musical and emo-
tional flavour of the period (239
6200).
Gypsy (St James). This 30th anni-
versary production doevnon
than revive a rich, vivid musical;
it also introduces a new belter
in the Merman tradition, TYne
Daly, as the bossy, tireless and ■
tuneful Rose, who shame le ssly
leads her daughter into bur-
lesque while rejecting a personal
life fcr herself; (346 0102).
Grand Hotel (Martin Bede).
Tommy Tone. Broadway’s pres-
ent musical doctor, directs this
remake of the Garbo film to at
least shake the bones of this
inert depiction of lives cr issc ross-
ing in an elegant, but some wha t
random setting (246 0102).
Sweeney Todd (Cbtie in the
Square). An intimate production
of the Sondheim- Wheeler musical
in contrast with the elaborate
original a decade ago emphasises
the descent into madness of Bob
Gun ton as the demon barber
of Fleet Street (239 6200).
Lend Me a Tenor (Royals). a
sprucing up in the set of a decay-
ing town's big time opera ambi-
tions m ak es a transatlantic hit
of this ferce, first produced in
London, but now with a local
cast led by Philip Bosoo and Vic-
tor Garber (239 6200),
v nmnn r c (Broadhurst). Nff fl
Si mo w's latest comedy is a self-
conscious farce, with numerous
slamming doors and lots of mug-
ging but hollow humour that
misses as often as it hits. Chris-
tine Baranskl i«i<k an
cast in the inevitable but disap-
pointing hit
Cats (Winter Garden). Still a
sell-out, Trevor Norm's produc-
tion of TB. Eliot’s Children’s
poetry set to music is visually
startling and cbareographScaliy
feline (239 6262).
A Chorus Tine (Shubert). The
longest-running musical in the
US has not only supported
the musical genre with its badi-
stege story in which the songs
are used as audWons rutber than
emotions (2396200). _
Las Mbdraldea (Broadway). The
Tokyo
On offer.
at- ■ s m sssssssm ■» *
MAJOR STAKE
in Scotland’s
INDUSTRIAL
PROPERTY
MARKET
The SD A is offering for sale the .major part of its
industrial property holdings in Scot lan d. The portfolio,
comprising 10 million square feet of prime industrial
property with an asset value in excess of £100 million
and an income of £12 million, is being sold in two lots.
Portfolio A comprises 63 estates, concentrated
mainly in the central belt of Scotland totalling
S million square feet, and portfolio B, 13 estates
p rimari ly in the Glasgow and Dundee areas totalling
2 million square feet.
The qal* offers an immediate opening for the
private sector to take up a key position in the Scottish
industrial property market, and will provide an
excellent opportunity for income growth through the
ownership, management and development of these
estates. Both portfolios will be sold by competitive
tender on the basis of short listing for each portfolio.
There has never been a sale of this magnitude in
Scotland nor a more immediate way to gain a major
stake in Scotland's industrial property market.
For full information on the portfolios, the pro-
gramme and method of sale, please
contact the appointed agents, James
Barr & Son or Herring Son & Daw.
K
00 '
JamesBarr & Son
Herring
Son &Daw
Consultant Surveyors Consultant Surveyen
2UStVbnotSo(«l,Qln9»(!2SQ i H 26-28 Street. Lonxioo W1X 2QL
Tel: 041-248 3221 Tel: 01-734 8155
Hugo’s majestic sweep of history
and pathos brings to 1
lessons In pageantry and drama
(239 6200). '
Me and My Girl <Marqub& Even
if the plot tun® on ironic minir
icry of Pygpnallon, thlstenoclas-
Hic, with forgettable songs, and
dated leadenness in a stage ftitt
of characters. It has nevertheless
proved to be a durable Broadway
hit (947 0033).
U. Butterfly (Bugs®® O’Neill).
The surprise Tony winner for
1968 is a somewhat pretentious
obvious meditation on the
true stoty of the French diplomat
whose long-time mistres s wa s
a male Chinese spy (246 0220).
Phantom of the Opera (Majestic).
Stuffed with Maria BtJomson’s
gilded sets. Phantom rocks with :
Andrew Lloyd Webber’s haunt-
ing melodies in tfate mega-traps-
far from. London. (239 6200).
Chicago
Driving Mbs Daisy (Briar
Street). The touching 'relation-
ship betw e en a dowager, played
in this production by Dorothy
Loudon, and her black chauffeur
exposes the changes In the South
over the past several decades
(348 4000).
Steel Magnolias (Royal George).
Ann Francis and Marcia Rada
play the leads In this view of
southern life from under the dry-
ers in a busy hairdressing estab-
lishment (968 9000X
A Christmas Carol (Goodman).
For the 12th year, the Goodman
company does its holiday thing,
with William J. Norris as .
Scrooge for the IZth year; but
a new director, Steve Scott, and
new adaptation by Tom Creamer
about a eon-man Who C
himself asApr^gh At
(541 3131);
grammes, at Uam
gaturiSmaitdy youggsrkabukl
actors. T " ™
ftii:
phone cotmiientary.fYtei 1 ^
to Kyoto should nute thatroge
an also all-star MMAgNj*:-'
ml-za
SdthS^it^oy Art^«d . ,
lots off colour and movement.
able production. Gloat Salwn
^5^^‘Swsticatedpup-
in Japan’s cultural teftogt-Ai
5pm: extra c ts from yto A fl aw e
Cherry Trees), a historical drama
ofmedlaeval times. At Uam and
am- Heike Nyogo ga Shima, by
CWkamatsu Mocuaemon, some-
times called tba Shakespeare
of Japan. Since the mati-
nees are Intended, mainly tor -
KboolchiWren. expect the midt.
ence to be btfatecora. Earphonw
commentary to English available
at the theatre. Opens Tbur. :
Body Wars i. A science fiction .
allegory about power, performed .
by energetic fringe co mp a n y.
Dalsan Erotica. Honda Theatre,
Shlmo-Kitazawa 069 1127):
EXHIBITIONS
London
The Hayward Gallery. The Other
Story - an intriguing but .
uneven survey of the work In
Britain stnoe the war tf artiste :
drawn from cultures other than
that of the western European
tradition - weak In its socio-po-
litical and historical analyste .
but often strong in the individual
wort Dally until February 4,
except bank holidays.
National Portrait Gallery. Tom
Phillips - The Portrait Works:
a thorough, self-explanatory,,
painstaking survey of the work '
of our most painstaking artist,
always interesting and some-
times lively. Daily until- January
21 except bank holidays. '
Camera Portraits from the Col-
lection 1839-1989 - a necessarily
brisk but delightful and intrigu-
ing survey-cunKXlebrcdiomnntn
January 21.
Euroo&tta Japan 8ft
Mm^Jtojuazd’Art et d’Hte-
toire. N ambam Art explores the
Portuguese influence esi Japa-
nese painting anil SptendoUT
of No Theatre shows props and
costumes from the Rokuro Ume-
waka Collection. Closed Mem.
Ends Dec 17.
Modem Ait MUsenm. Takeo
Yamaguchi and Yoshishige SaHm
— pioneers of Japanese abstract .
art Ends Dec 17. Closed Mon.
Hessenhuls. 53 FalconruL Japa-
nese posters by 12 graphic
Bine Horse). The muaeum Is die-
ploymg around 61 pdeoes from
Sown collections as well as
some additional paintings on
loan from East Germany and
by other artiste who belonged
to tba same Munich-based group.
Works by Wassily Kandinsky: . .
Frans Marc, August Macke, -
Aland von Jawlettsky, Gabriele
MQnter and Marianne von Wer-
fafctn can be viawed until Feb
UL
laxtsn-
Hnseam Ladwig. _
strasm-1. The most -. .
slve retrospective on Andy W*»-
h£d, who dud in 1987, with"
around xeMaces from New York.
They can be awn only in Cologne
until Feb lL lhe retrospective
includes worksfrom the 1940s
and 1950a ns well as his famous 7
portraits ofElvis Prealey, Mari-
iynMomoe r ^«n«nBeatty. :
Mns^e des Arts Deooratffi*. Je
sols la Cahier - Picasso’s sketch-
books. After two years of mean- ;
daring the world over, the exhibi-
tion ends, aptly. In Baris. The
40 sketchbooks covering a period
of 64 years foilow-dosely Picas- -
go's development. There are odi-
ist flat planes decomposing real-
ity next to the fulness of .
neo-classical figures, there b ■.
the almost sugary rendering of
the mother and child theme next ;
to the cruelly distorted female
feces, there are all the feeds
of Picasso’s inventive geniusaOT,
Rue de Rivaii (42603214), dosed
Toe. Ends Dec 31.
Grand Palais. Eros, Some 100
vases, marbles, bronzes and Jew-
elsdattng from Greek antiquity
describe most explicitly the ver-
vewith which the god of love
enconiafced humans «nd gods
aMkan their uninhibited pursuit
of pleasure. Closed Tue. ends
Feb 5 (42885410).
Mnsde des Arts Decoratife. Bohe-
mian glass 1408-1969. Some 200
exhfidte, among them the famous
ruby-coloured glass, show how
- — having freed themselves from
Venetian influence — the glass*
makers of Bohemia parried the
art of trotting and engraving and :
painting to such perfection dur-
ing the baroque pratod that the
renown of Bohemian crystal con-
quered countries as fer apart
as Spain and America, Egypt
and Ireland. 107, rue de RivoU
(42603214). Closed Toe, ends Jan
28.
Tnatffart du Monde Arabe. ]
Egypt An exhibition of 25 1
tToeuvrea, including the most
recent finds, starts with statues
and bas-reliefe dating from the
middle-empire^ continues with
a golden crown of a high priest
of Osiris with some el e ments
of Roman art and Coptic icons
and concludes wtth Islamic
exhibits. 1, rue des Fosees-Saint-
Bernard (closed Mon). Ends Jan
14(40518838).
Dee 17.
Madrid
Fundadom Juan March. Retro-
spective oT Edward Hopper opens
the autumn season at the founda-
tion. 61 works by the New York
realist covering a period of 56
years. Until Jan 4.
Barcelona
Calxa. de Barcelona. Raoul Dufy.
Works by the French feuvist,weU
known for his lively use of colour
and interest In varied forms of
art, are on show In Spain for
the Erst time. The exhibit
includes paintings, watercolours,
drawings, ceramics and fabric
design, belonging to private col-
lections and museums. Ends is
Dec
Hanover
Sprmgel Museum. Kurt-Schiwtt-
ers-Platz. Der blaue Reiter (The
jyaft lfrwj hii Cdwia fan Mau l nd t-
Inna. The most complete retro-
spectiveef theexprassto pl st
painter. Bud SchmMfc-Rottiuff
to date wtth ahnost 370 works . . .
from 70'prfVate and publlcoolleo-
Hariwl writlWtitMMi, this tS tin _
tiiird significant project from '
ou tf flu IMnEg menib«s
of the BrWoe fttoop. S<*anidt-
R otthx ft , who'cttedm Ba ri fr O n
U976. wasstranglyattacked dur-
ing the Nazi yeers- -
Vkma ’
Ifoseum for AnpHed Arte la host-
ing a large exhibition devoted . -
to * ' . .
the itaUan artist and
1 he theme is focusing on.Tbe
Other CHy". TJnttt Jan 15. : -
NmrYork
BDetropbUtan Museum. A decade
of febulouB. shows borrowed from
around the worid^ culminates . r .
in the present exhibit of the
major works of Velazquez, much
of which is borrowed from the •
Prado in Madrid. Ends Jan 7.
Metropolitan Binseum of Art. .
A major exhibit of the works
of Canaletto brings aMve scenes
of Italy in its secular giocy .
Though many are familiar, the _v.
exhibit makes the artist’s vision
abreaflrtaMngpanorama with-:- .
touching attention to ■
Ends Jan'SL
of Modem Art. Covers
ing only eight years, from 1907
to 1914, Picasso and Braque; Ffca- F
neoing Cubism consists of more
than 350 works of the two artiste :
during their fruitful coUabara- '
tkm before Braque left far war.
EndsJhnie.
Centre for Intexuatianal Contem-
porary Art*. A new New Y<ak
institution with, the goal of catal-
j curato rial infonn ation -
; artiste around tbe .world .
opens apprimriatedy with a retro- ;
spectfve of JSgi&neise artist Yayol
Kusama. 57th & rath Ay.
Wash ingto n
National GaUny. Almost three
dozen painting? of the eariy 20th
century German movem ent a,
Banhans. NBoa Sacblichkeit and
Blaua Reiter, leart by tbe Thysr
aen-Bornemtoa collection, make <
a teUing commentar y cm a part
tf the world again at the centre
tf attention internationally. Ends
Jan 14. .
Tokyo
Idemitsu Knsetun. Flowers of
EA>. Paintings and prints of flow-
era from the Edo Period repre-
sent a new flowering in Japanese
art. In fl uenced bothby new
trends in the decorative arts tf
Chin a and by the botanical illus-
taations tf Europe. Closed Mon-
Museum, MSguto. Yam
KuniyoshL Retrospective to
mark the centenary tf a Jape
nase artist who emigrated to
US as a teenager. His earlier
wmk is gliun and faux-naif, 1
In his last decade his palette
“berated and he produced a
Images of downs and caitfvab, •
•Tolcyu Art GaUesy, NBionhashL
(fenJL Daring retnter-
KUo Bteako, of one tf the great
works of Japanese dasslcalHtm.
a^ne, depicted in countless
scrolls and prints over the oast
500 years.
Bualununm. The Musoum. Mater
works from the Detroit Art
Museum. More than lOo paint-
Ings from one of the largest nub-
I
FINANCJAt-TTMES FRIDAY DECEMBER 8 1989
19
ARTS
End of the line for Harriet Walter
■ag
The Duchess of Malfi
SWAN THEATRE,. STRATFORD-UPON-AVON
il-
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: r ’• C 3SS
John Webster's great sickly
play is done rarely ewmg h to
warrant a. revival in the "Royal
Shakespeare Company's Swan
Theatre at Strat-
ford-upon-Avon. And Bill Alex-
ander’s foil-text, fan value ver-
sion deals magrrfflwttil justice
to its guttering, malevolent
poetry of death and lustful
deceit (Peter Grecnavray’s fine
modern Jacobean fUm, The
Cook. The Thief, ms Wife and
Her Lover, has many.Webster-
ian virtues - and vices -
except the only-one that really
matters: its language. Helen
Mirren. Michael Gambon’s
abused doxy - Georgina in the
ffan, was a memorable Duch-
ess in Adrian Noble’s Royal
Exchange. Manchester, produc-
tion.)
The personal theatrical
vision comes first from a text
which, alongside the same
author's The While Deoil, is
sorely the most r emark a ble in
the canon, and I do not exclude
Shakespeare. In doing Webster, .
as in doing Ben Jonson, the
RSC renews its major, commit-
ment by taking on the opposi-
tion. An actor Okie Bruce Alex-
ander, seizing -voluptuously on
the lycanthropic fratricide,
Duke Ferdinand, both deepens
his ranp - and iwdnlg wy' in rtio
darker- side of madness
untouched. by Shakespeare.
The Swan - is ideally
exploited, Fotfnl Dhnaa’s great
mustard curtains revealing an
irinw picture frame stage for
the grisly waxw ork masque of
death arid tiring house for the
parade , of ma dman Tha play is
about spying and observation,
from the destructive rale of the
hired intetHgencear. Basda. to
the view of herself as victim-
ised portraiture by the Duch-
ess. Not even the RSC at its
best will match the interpretar
five ni ghtmare vision Of Philip
Prowse with this play, but in
doing all of it (Ptowse’s two
versions, for tile Glasgow Citi-
zens and the National, were
heavily cut) and in the appro-
priate dimgnainrw and cockpit
ambience of the Swan, Alexan-
der comes mighty close.
The flight from Ancona is
conceived as a compositional
fugitive image, and where the
play may sag after the Duchess
is strangled, the fate of Anto-
nio at the Fmwijg of the Duke
and Cardinal remains interest-
ing because of Mick Ford's
determined and sympathetic
performance. There is great
poignancy in affiming clois-
ter, savage beauty in the death
by poignnfwg of the Cardinal's
whore Julia (Patricia Kerri-
gan’s flame-haired floozy is
brutally unlaced, legs spread,
under a suspended crucifix and
despatched at a great
prie-dien), and terror, too. in
the sweaty fidgeting of Bussell
Dixon's damned crimson-clad
prelate, who finally
bis fish pond to be
by piranhas.
The Duchess’s tragedy lies in'
tins displacement of her good-
ness by mental cruelty. Death
is merely a minor faridgnt in
such a scenario, aside effect, a
stage trick that taunts the
imagination. Harriet Walter
re-joins Che RSC to play Che
role with translucent beauty,
unhinged by p gT ” r- - , arms
small voice whirring like a
hellish helicopter, when her
mediating mortician, Bosola.
puts murder on the agenda.
Webster’s genius lies in the
theatrical condensation of the
idea that all life, anyway, is a
preparation for dpath.
In a strong company that
actually looks like one, Jerome
Flynn and Sally Edwards tell
with relish on the rewarding
minor roles of the dislocated
witness Delio and the a
servant Canola, who is almost
hilariously unprepared for her
own grim demise, being
pregnant and not lately in
confession. Nigel Terry's
Bosola lacks a certain edge and
devilry, but is greyly sinister
and serenely untroubled by
guilt, unlike the madman who
cannot sleep because his pillow
is stuffed with a litter of
porcupines.
Terry's time in the galleys is
indicated by the ferocious
triple plait mtft which his bah*
is wrenched, allowing him to
unpin and subside into the
elderly de ath dealer later on.
The production, very .wen lit
by Wayne Dowdeswell, is good.
In such ways, at indicating the
passage of timp 1 ttw persistent
and pitiable certainty of decay
and corruption.
Michael Coveney
Lucia di Ldrhmermoor
DOMINION THEATRK
¥•***»
•t— : '
There was one outstanding
contribution to this everting.
The Welsh National Opera is
•v* 5'- 1 - fortunate to have secured the
t «• services of a Musical Director
• as experienced as Charles
• - - ;r - Mackerras. As we had many
•• ■' happy years to tfiscoverduring
his tenure of the same post at
tt«w flie London Coliseum, Macker-
ras is adept at operas of all
periods mid dominate even
a Donizetti work, where erne
.. might not . usually expect the
l-i conductor to assume a high
• m 1 * profile.
Without him, this . second
:k!- c v offering in WNO*s week-long
London season might have
<• -- been a gloomy affair. The com-
: pony’s production of Lucia di
Lamme r moor, originally staged
r - \ by William Gaskfll in 1S86, had
■ \2j-. here been revived to Car
greater purpose by Rennie
9 ? Wright. But it is stnL difficult
r ’“ lt y- to rouse any feeling of entirafli-
- asm for a setting that relocates
. Sir Walter Scott’s romantic
' Scottish tragedy in a rocky
lunar landscape equipped only
with a pair of sfidfog walls and
a drinks trolley.
When a. production is
visually so; depressing, it is
that much harder for the
performance to catch light.
That tins WNO evening did so
time and a gain was thanks
almost entirely to the keen
dramatic sense of Mackerras in
the pit. The text of the opera,
had been thoroughly
reconsidered and the seme was
given absolutely complete; hut
it is this conductor’s ability to
drive to the heart of an opera
that fired the whole
performance with theatrical
There was never any doubt
-that the work was to be drama
first, VOCal display Tatar . In the
days when Lucia di
Lammermoor was regarded as
the opportunity for a soprano
to show off vocal fireworks it is
doubtful that Frances Gmzear
would have made a suitably
dazzling success of the
title-role. (She is an agile lyric,
rather than a coloratura
soprano.) But from her first
aria, where she was not merely
singing but urgently telling a
st ory, th is was a compelling
portrayal.
Alastair Miles was a fine
Raimondo and Mark Holland a
cleanly-sung Enrico, though
the difficult acoustics of this
theatre really demand more
power. Nod Espiritu Velasco’s
Edgardo swept an to the stage
with flaflmp arms and a big,
black cape, as though he was
an escapee from some nearby
House of Hammer, and gave
body and soul to his singing
with somewhat exhausting
results. By the end this was,
nevertheless, a performance
that added up to more than the
sum of its parts.
Richard Fainnan
‘Work of Angels’ at the British Museum
“if yon take the trouble to look very
closely, and peogtram with your eyes to
foe secrets of foe artistry, you will
notice such intricacies, so delica te and
subtie, so bound and dose together that
you will not h«dtete to declare that all
these thing s m ust have been the result
of the work, not of th” 1 , but of angels."
That was Gerald of Wales in the late
12th century, marvelling at the virtuos-
ity of an early illuminated gospel he
had seen at Kildare. If yon take the
trouble to penetrate to the secrets of
Room IB in the British Museum, you
wil] ifad his appraisal is as appro-
priate to foe elaborate metalwork that
evolved hand in Tumd with Celtic manu-
script Qlammation. It will be impossible
not to share his wonder, not least
because these vigorous and often
extravagant brooches and buckles, chal-
ices and shrines are products of the
so-called Dark Ages.
Gleaming, centre-stage is the 8th cen-
tury pate« PTid «*haiirp discovered in
1S80 cm the monastic site of Detxynafian
in Co. Tipperary. The sumptuous paten,
or plate for communion bread in partic-
ular, represents the exact antithesis of
the meagre barbarity we are led to
expect of this dim and distant period.
Its hammered silver plate is firM to a
complex double-walled hoop which pro-
vides the means to display exuberant
and technically astonishing panels of
die-stamped gold around the rim and
panels of granulated gold filigree work
around the side to be seen. The 24 pan-
els bear different designs of interlacing
beasts and birds, spirals and trumpets.
Equally intricate gold studs carry a
variety of coloured enamel inlays.
The Derrynaflan hoard - foe p^ten .
stand, chalice, strainer-ladle and the
copper basin which covered them when
they were buried out of the grasp of the
Viking marauders - is both the centre-
piece and the reason d'etre of this show.
The treasures were all restored by the
British Museum conservation depart-
ment for the National Museum of
Ireland, and in return they have been
sent back to London for p»hfliifrmn
Around them are the masterpieces of
Celtic metalwork of foe 6th to the 9th
centuries - not just from I reland, hut
ftom the Pictisb Scotland and
Anglo-Saxon England. (There is a
dearth of material from Woles which
appears to have been impoverished
throughout foe period.) Loans have
been gathered principally from collec-
tions in Dublin Edinburgh but also
from Scandinavia - thanks to the
Vikings - and Italy, a tribute to foe
missionary zeal of foe Irish
The only mzyor pieces absent are foe
Ardagh chalice and the Tara brooch,
too frail to travel but represented here
by copies. It is probably our only oppor-
tunity to see these objects side by side,
and attempt to unravel the comptesfficni
of the cross-fertihsEricn of patterns in
this eclectic international “insular"
style.
ff the two most remarkable features
of Celtic metalwork are the vigour of
design and the high level of craftsman-
ship, the third is its indication of the
opulent of the aristocracy. Witness the
lavish gilt harness mounts, buckles and
belt-shrines, scabbard chapes, ornamen-
tal buckets, silver bowls with animal
friezes, and the odd copper door
knocker of a beastie baring his fangs.
Most spectacular of all are the mag-
nificent silver and gold brooches and
pins. These elaborate dress fasteners
were worn by men at the shoulder and
by women on foe breast. As foe Ttii
century progressed, their conception
became bolder and the decoration more
various, wifo Insets in amber or xniL’e-
Gori glass. This aspect of the Celtic
goldsmith’s art reached its zenith in the
Irish or Irish-type Huncerston brooc! 1 .
illustrated here.
Such is the desirability of thus?
brooches - and ef the massive ard
pleasingly simple Pictish silver harsh*.;
and chains - that X wonder tvhv more
contemporary jewellers don’t follow foe
lead of William Burges or Ereon
O’Casey and look to the triumphant
achievements of the these craftsmen, be
they angels, monks or lesser mortals.
The Work of Angels is supported by
the Irish Government and Aer Lingus.
and continues at the British Museum
until April 29. 1990.
Susan Moore
The Love for
Three Oranges
COUSEUM
Reviews composed in large
part of overheated superlatives
can make wearisome reading,
but occasionally the pressing
need for one outweighs all
other considerations. English
National Opera's new Proko-
fiev production is just such an
occasion: a feast of hilarity, a
joy and a delight, a production
of unrepeatable originality of
style which strikes with deadly
precision at the centre of Pro-
kofiev’s modernist comic fan-
tasy. There is no more exhila-
rating musical entertainment
in town at the moment, and
already the familiar glooms of
the approaching festive season
hang less heavy for its arrival
This Richard. Jones staging
of The Lace for Three Oranges,
in sensational sets by the
Brothers Quay and costumes of
madcap brilliance by Sue
Blane, is a co-production with
Opera North - it was first
shown in Leeds last Septem-
ber, and praised on this page
by David Murray. In the Coli-
seum tiie polish and foe deft-
ness of the stagecraft have not
been lost, since foe ENO com-
pany (chorus and quite
as much as principals) and
ENO orchestra under David
Atherton (a master Prokofiev
conductor) take it on with
enormous exuberance - it
looks to be a productum quite
as pleasurable to set in motion
as to TTfitew to aryf WBtdh.
“AH I tried to do." Prokofiev
said of his adaptation of Gozzi,
“w as to write an amusing
opera.” At Glyndebourne some
years ago the facetiousness of
Frank Corsaro’s production
tricks and foe over -elaborated
cuteness of Maurice Sen dak’s
sets and costumes severely
reduced foe amusement quo-
tient, and raised unwelcome
doubts about the quality of foe
whole work. Here, because
Jones has divined the exact
combination of artifice, cornme-
dia dell 'arte naivety and zany
comedy, its “modern-classic”
status is unarguably renewed.
The fun comes so thick and
fast that the spectator may be
forgiven for not noticing how
carefully blended, how erudite,
is the Jones mixture, how
nicely judged to the work in
hand. This is, after all a 20th-
century meeting-point of Gozzi,
Busoni’s theories of the theatre
as “magic mirror,” and Meyer-
hold’s revolutionary artistic
id eals and enthusiasms - a
magic -lantern show inlaid with
elements of grot esqu erie, alien-
ation aoant la lettre, and pure
farce.
The EpgMah identity of the
production is asserted in the
touches of Victorian Gothic
surrealistically splayed, of
dawdpan eccentricity out of a
Glen Baxter cartoon, of
Python-esque sight-gags and
aleights-al-hand, and Of rude-*.
Philip Gny-Bromley, Alan Woodrow and Bonaventura Bottone
jokes (endlessly repeated, and
sidesplitting every time) that
come bearing the most ancient
miwInJuin pedigree. Hie mas-
sively wind-breaking F’arfarello
seems almost like an old
friend, «n*i tin* scratch-'n -smell
cards revive an audience-in-
volvement device of honour-
able lineage.
But alongside all thig there
are graceful tributes to the
Venetian theatrical sources of
foe libretto, to Russian Revolu-
tionary art, to tiie lyrical glit-
ter awi motor-driven en e r gy of
Prokofiev's score. In style and
pace, in gesture and detail
right down to th»» marvellous
use of footlights (a Jones
thumbprint), thfe is an opera-
comedy production that taps
the essential' magic of music~
theatre, that sets new stan-
dards.
The stage is a feast of
expertly judged comic acting,
with no exaggeration allowed,
no look-what-fun-we’re-havlng
semaphores to foe audience.
The ENO's resident comic
genius. Bonaventura Bottone
(Truffaldino), was said before
curtain-rise to be unwell but
nevertheless turned in another
of his inimitably daffy charac-
terisations, matched every inch
of the way by Donald Maxwell
(Leander), Fiona Kimm (Smer-
aldrna in a St Trinian’s gym-
slip). Christopher Booth -Jones
(a Pantaloon making much of
very little). Phillip Guy-Brom-
ley (Farfareflo, ditto), and the
glorious Anne Collins (Clar-
issa).
The giant cook. Richard
Angas in drag and on stilts,
becomes here an oddly poetic
creation, as does Peter Rose’s
King of Clubs. As tiie Prince.
Alan Woodrow manages the
sickbed routines capably
enough but phrases with fours-
quare solidity in the little des-
ert love-scene - Lesley Gar-
rett's Princess Ninette is much
more inside the musical idiom
here. Also not yet entirely on
foe right lines is the Fata Mor-
gana of Jane Eaglen, a bossy-
boots dumping about the stage
- the tone gleams, and the
attack is steely-bright, but
words are inaudible, and
punch-line bits of business
seem ever so slightly mistimed.
Max Loppert
More Haydn
QUEEN ELIZABETH HALL
As all music-lovers must be aware, we
are in tiie middle cf a festival of late
Haydn, with Sir William Glock as artis-
tic director. Last night the Orchestra of
the Age of Enlightenment gave their
final performance — extravagantly suc-
cessful (and sponsored by* an anony-
mous benefactor) - in the portion of
the series devoted to Haydn’s masses
and oratorios; in January there will be
a survey of bis late chamber music,
performed by the Domus piano trio and
foe Britten and EndeQion Quartets with
various soloists.
The oratorio The Seasons proceeds
through the rural calendar from foe
point where winter ends, but nothing
else sounded premature in this perfor-
mance. Not even the solo soprano role,
for which Anne Dawson stepped in to
replace an ailing colleague: obviously
Miss Dawson knows the part very well,
and her bright, vernal tone was an
asset throughout
Her diction was creditable too. If not
as superlatively clear as Anthony Rolfe
Johnson’s; this tenor Is now enjoying a
splendid prime. His labours as Montev-
erdi’s Ulysses at the ENO seem if any-
thing to have sharpened foe virile edge
of his tenor, without any loss of its
melting, individual timbre.
The remaining soloist was the bass
Benjamin Luxon, avuncular and bon-
homons as the music implies. Mark
Elder conducted with verve and style
(The Seasons can seem to take a long
time: not here, despite the real length of
the work). The period instruments of
foe band made nothing noticeably
quainter of Haydn’s pictorial effects
than modem instruments do, but the
overall sound was lithe and hand-
somely articulate.
TTiis was the British premiere of a
new English translation by Pyatt and
Pyle; mostly it sang well, but same false
accentuations in the recitatives need
re-doing. Otherwise, we had a very
happy and bracing account of every-
thing in this delectable score.
David Murray
Chamber Orchestra of Europe
BARBICAN HALL
The four orchestral concerts In the
Chamber Orchestra of Europe's series
at the Barbican have been shared
between two conductors - Sandor
Vegh fax* charge of the opening pair,
and the orchestra's artistic adviser
Claudio Abbado the remaining two. The
series ended last night with both
Abbado and the COE on their most
sparkling- form in a programme of Ros-
sini and RaveL
With the overture to La gaz s a tadra
to open and the addition of the Generen-
tola overture as an encore. Rossini
framed the evening in tiie most positive
way. With a band as readily responsive
as this, capable of such deft articulation
and tonal nuances. Abbado conducts
the overtures with quite flaaBrig con-
trol. buoying up each melody with a
mixture of nudges and winking rubatos,
building the crescendos without any
sense of machine-like automation. In
his hands they become phabtefresh and
witty.
And under Martha Argerich’s fingers
foe Ravel G major Concerto takes on
the same set of adjectives; only Michae-
langeli's very different account rivals
hers in this concerto, and one doubts
that any two of her performances are
alike. Here foe slow movement was n
slightly mysterious, curiously wayward
construction, not as limpid as one
would expect, but flecked with half-
lights and expressive asides; foe first
movement was a series of ever more
propulsive explosions, the finale a typi-
cal Argerich adventure, full of miracu-
lous sleights of hand and foot, and
accompanied by Abbado with a remark-
able instinct for the placing of each
downbeat.
He then unfolded the complete
Mother Goose ballet with perfectly
judged paring and textures. With an
orchestra as commanding as this - and
really the COE can now have few rivals
among the world’s chamber orchestras
- such a score might seem to play
itself, but Abbado interlocked its move-
ments with constant care, and saw to it
that no detail were allowed to go beg-
ging.
Andrew Clements
■ F-
ft**®
PTOELmnffiNBERFUND ;
Soc£&£ tTInvestissetnent k Capital Variable
5, boulerard de la Toire — Luxembourg
BLC. Luxembourg B 20494
Notice of Annual General Meeting
NOTICE is hereby given that the Annual General Meeting of ihe share-
holders of FIDELITY FRONTIER FUND, a sod the dTmesdssement a
capital variable organized under the laws of the Grand Duchy of Luxem-
bourg (die oFunda), will be held at (he registered office of the Fund.
5, boulevard de la Forre, Luxemboarg, » 11 am on December 2S, 1989,
specifically, bat without Uan ration, for the following purposes:
1. Presentation of the Report of the Board of Directors;
2. Presentation of the Report of the Auditor;
3- Approval of the balance sheet and income s t ate men t for the fiscal year
ended August 31, 1989;
4. Discharge of tbe Board of Directors and the Auditor; -
5. Ejection of sewn (7) Directors, specifically the reekedon of the fol-
lowing seven (7) present Directors: Messrs. Edward C. Johnson 3d,
Charles A. Fraser, Jean HanriL'us. FRsashi Kurokawa, John M- S- Pat-
ton, HanyG. A. Seggennan and H. Evan den Hoven, being ail of the
present Directors except William L. Byrnes, who by reason of his
retirement does not offer himself for re-election;
6. Election of the Auditor specifically the election of Coopers &
Lybnrnd, Luxembourg;
7. Declaration 'of a. cash dividend in respect of the fiscal year ended
August 31, 1989;
R Cbajde mtion of mch other business as may property come before the
meeting. „
/Approval of the above Items <* Agenda will r^urnt the aflEnnahve
voteofa majority of the shares present or represented at the Meeting with
no mimmum numb er of shares present or represented^ m order for a qu o-
rum to be present- Subject to the limitations imposed by the Amdes of
■ frwrraotatkm of the Bind with regard to ownership of shares whtch con-
afbrte m ibcaggregaremore than three percent (3%) *■* outstanding
Shares, each stare is entitled to one vote. A shareholder may act at any
By order of the Board of Directors
. tated: November 27, J9S9
ARTS GUIDE
December 8-14
MUSIC
London
London Cancel Orchestra
conducted by Philip Simms, with
Judith Howarth (soprano) and
the Thomas Tallis Choir per-
forms Rgoh Handel and Mozart
In a Christmas concert (Sat).
Barbican Centre (01-638 8 891).
I ff winn Symphony Orchestra
con d ucted by Leonard Bernstein
performs mna gpls from Candide,
with Jerry Hadley and June
Anderson (Toe and Wed). Barbi-
can Centre (01-638 8891).
National Westminster Choir
with the National Westminster
Choir conducted by Ian Hum-
phris, with Juliet Booth and Alan
Opie, performing Mende l sso hn .
Dvorak and Smetana (Thur).
Barbican Centre (01-638 8891).
Paris
Orchestra Co) oame conducted
by Philippe Sntzemont. Michel
Legrand, with Michel Legrand
(Mon). ThMtre des Champs Ely-
sties (47203637).
Jean-Bernard Pommier, plana
Beethoven, Franck, Chopin
(Tue). Salle Gaveau (45682030).
Paul Badnra-Skoda, piano.
Schubert, Schumann. Chopin.
Brahms CTh
(45632030).
iur). Salle Gaveau
Amsterdam
Royal Ccajcertgehonw Orchestra
conducted by Charles Dutmt,
with choirs and soloists. Mes-
siaen, Ravel (Sat). Concertge-
bouw (718 345).
Netherlands Philharmonic
Orchestra conducted by Hartmut
Haenchen. Mahler (Mon, TUes).
Concertgebouw (718345).
Utrecht
Royal Con m t g eb wt w Orchestra
conducted by Charles Dutoit,
with choirs and soloists. Mes-
siaen. Ravel (Sun). Beurs (27 04
66).
Brussels
RTBF Symphony Orchestra con-
ducted by Vit Micka,wlth Jindra
Kramperova (piano). Dvorak,
Eben, Micks and Weber. Maison
de la Radio (Fri).
Vienna
Kochi Quartet!. Beethoven, Lei-
termayer, Brahms. MusOcverein.
(Ftf, Mon).
Wiener VMHummmnt pr con-
ducted by Christoph von
DohanyL Lufcoelawski, Richard
Strauss, Berlioz. Musticverein
(Sat, Sun).
MR an
Cedle Ousset paino recital. Bee-
thoven, Liszt, Ravel and Rach-
maninov (Wed). Oonservatario
G. Verdi (76001755).
Rome
Scottish Chamber Ordi Bta^
^Mrod^wihn witii Barry
Tuckwell as conductor and solo
trumpet CFri); conducted
by Yuri Ahronovitcb in Poulenc,
Shostakovich and Goldmark's
(Sat. Sun, Mon, Tubs). Audito-
rium in Via Della ConcQianone
(6541044).
Frankfurt
Rankftazt Opera and Mnsetxm
Orchestra conducted by Yakov
Krelzberg with the piano duo
K a ti a and Marie fie Labeque play
works by Hartmann. Mo zart and
Dvorak (Sun). Ahe Oper.
Cologne ’
Gldon Kramer (violin) and Val-
ery Afa nasal ev (piano). Schubert,
Henze (Fri). Fhflharmonte
Opera Gala with the Bolschol
T h ea t re and the Kirow Theatre
(Leningrad). Arias from Boris
Godunov, Eugen Onegin, Turtm-
dot, Aida and La Traviaia
(Thur). Philharmonic.
Madrid
Spanish National Orchestra con-
ducted by EHahu Inbal. with
Smile Naoumoff (piano). Tchai-
kovsky, Stravinsky (Fri. Sat,
Sun). Audiiorio Naaoaal de
Musica (337 01 00).
Belgrade RTV Symphony
Orchestra conducted by Vladimir
Kranjcevlch. J.SRach (Wed).
Audiiorio Nadonal de Musica
(337 0100).
Barcelona
Ehgttah Chamber Orchestra con-
ducted by Jacques Delacote, with
Agnes Baltsa (mezzo-soprano).
Rossini, Mascag ni . Donizetti
(Wed). Palado de la Musica Cata-
lans (301 11 04)
Daniel Barenboim (piano), Bach
programme (Thur). Paine so dela
Musica Catalans (301 il <U).
New York
Musica Sacra conducted by Rich-
ard Westanbuig. Handel (Mon).
Avery Fisher Hall (S74 btto).
New York Philharmonic con-
ducted by Giuseppe Sinopoli.
with Gil Shaham (violin). Mus-
sorgsky, Paganini, Schumann
(Tue); and conducted by Zubin
Mehta, with Gerry Mulligan and
the Mulligan Quartet. Beethoven,
Mulligan (Thur). Avery Fisher
Hall (874 6770).
Isaac Stern (violin), Yo Yo Ma
(cello), Emanuel Ax (piano).
Brahms (Mon). Carnegie Hall
(247 7800).
Washfasgton
Jerome Bose piano recital with
Phyllis Bryn-Julson (soprano)
and Theodora Hanslowe (mez-
zo-soprano). Chopin programme
(Tue). Kennedy Center Terrace
Theater.
Chicago
Chicago Symphony Orchestra
conducted by Leonard Slatkin,
with the Chicago Symphony Cho-
rus. Stravinsky (Thur). Orchestra
Hall (435 6666).
Tokyo
Ensemble Wlen-Beriin. Reicha,
Ibert, Danri, Bozza, Francaix.
Suntory Hall (Mon) (2S9 9999).
Boston Symphony Orchestra
conducted by Seiji Ozawa. Mah-
ler. Tokyo BunJca Balkan (Mon).
And with Anne Sophie Mutter
(violin). Suntory Hall (Tues).
Strauss. Bunkanmra, Orchard
Hall (Thurs) (289 9899).
Takacs String Quartet. Mozart,
Bartok. Casals Hall (Wed) (403
8011).
Japan Philharmonic Orchestra
conducted by KenTchiro Kobay-
ashL Beethoven's 9th symphony.
Suntory Hall (Thur) (234 5911).
SALEROOM
Faun comes in from the cold
For months Sotheby’s has been
s i ng i ng the praises of a bronze
figure of a dancing faun by the
Dutch born Mannerist sculptor
Adrien de Vries. It had been
brought into its Billings hurst
saleroom with a group of 19th
and 20th century garden
statuary and was down to be
sold there.
Then Sotheby’s London
expert Liz Wilson saw its
photograph in the catalogue;
felt a tingle; and asked to study
it more closely. She identified
it as the work of this rare
master, dated it to around 1610
when he was working in
Prague, and saw her expertise
handsomely rewarded when it
sold yesterday for £6A2m, a
record for any sculpture,
antique. Renaissance or
modem, and way ahead of the
top estimate of £LSm.
It was bought by the London
dealer Cyril Humphris who
commented “in my 35 years of
dealing this is foe greatest
sculpture to come on to the
market I think de Vries was
the greatest sculptor of his
time." a sweeping statement
for an era which also included
Giambologna, who tanght de
Vries in Florence in foe 1580s.
By coincidence, Christie's on
Tuesday sold a Giambologna
bronze for£2.75m. at the time a
record for a Renaissance
bronze.
Given the price paid by
Humphris, who beat off a
telephone challenger, be must
have a buyer in mind. An
ancient marble of a dancing
faun, now in the Uffizi in
Florence, was excavated in the
16th century and was probably
known to de Vries, whose
version is a free
interpretation.
A slightly later (1630s)
Florentine bronze of David
with the head of Goliath by
Gianfrancesco sold for £286,000
and an unusual North I talian
bronze oil lamp in the shape of
an acrobat, probably’ made in
Mantua around 1500 sold for
£187,000. Leicester Museum
paid £4,400 for a recently
excavated seal of the 15th
century which belonged to the
prebend of St Margaret's
Leicester.
Among the Illustrated books
at Sotheby’s a copy of
Redoute's “Choix des plus
belles fieurs ” 1827-33, sold for
£74,800; Brookshaw's “Pomona
Britannica" for £ 68 , 200 ; and
Gardiel’s early 18th century
French herbal for £49,500.
Christie’s had a good auction
of French furniture which
totalled £1,528.736 with less
than 4 per cent unsold. A pair
of Louis XIV ormolu mounted,
marquetry and ebony
anuoires, in the style of Boulle,
doubled their estimate at
£170.500, while a pair of Empire
ormolu and bronzed
candelabra in the shape of
Egyptian figures, quadrupled
their estimate at £ 115 , 500.
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FRTDAY DECEMBER S
1989
FINANCIAL TIMES
NUMBER ONE SOUTHWARK BRIDGE, LONDON SE1 SHL
Telephone: 01-873 3000 Telex: 822186 Fax: 01-407 5700
Friday December 8 1989
How to move
towards Emu
WHEN THE heads of
government of the European
Community foregather in
Strasbourg this weekend, they
will have at the top of their
agenda a proposal from Mr Mit-
terrand to call an inter-govern-
mental conference on economic
and monetary union. There
will be much huffing from Mrs
Thatcher about the principle
and much puffing from Mr
Kohl about the timing; but the
likelihood is that the leaders
wQl agree to call such a confer-
ence.
Emu has been presented as a
way of strengthening the EC,
not least politically. It is also
presented as a way of diluting
German domination of EC
monetary arrangements. Yet it
seems inconceivable that West
Germany could be bound more
tightly within the EC by a
monetary arrangement that
does not deliver at least as
good a performance as the
R imitewliinlc A mrtnntpd BMR.
Not that the desire to loosen
Bundesbank control is surpris-
ing. In the absence of exchange
centrals (most of which are to
disappear alto gether by J uly 1
1991), large r e a l ig nm e n t s will
become infeasible, the reason
being that the cost of resisting
an anticipated adjustment
would be huge. Fur this reason
any realignment would have to
be a surprise. Such a surprise
would be difficult to pull off
the second time and impossible
by the fourth or fifth. In effect,
currencies will either have to
become fixed altogether or be
adjusted more frequently
Within t fr» P rr foring hands
Public good
For reasons indicated in the
British Treasury’s paper on
currency competition, an bms
without exchange controls
means even more of a D-mark
standard than at present. This
would be no bad outcome. Eco-
nomic and monetary union is
not an md in it is a
moans to the ends of ti» citi-
zens of the EC. The aim is to
provide the public good of
monetary stability, which
allows individuals and busi-
nesses to pursue their private
interests successfully. Compet-
ing currencies, disciplined by
the obligation to fix exchange
rates against an anchor like
file D-mark, are likely to serve
fills purpose rather well.
The fear is that a monetary
monopoly, however well-inten-
tioned, will not do as good a
job as institutions disciplined
by competition. This is no
purely theoretical fear. The
history of politically managed
monetary monopolies has been
lamentable. If there is a politi-
cal imperative fin* EC institu-
tions to assume the respot
bility for monetary stability,
then they must be so organised
as to do at least as good a job
as would an EMS.
Necessary conditions
How then is the EC to obtain
a common money that is also
good money? There are three
necessary canditians: the first
is that the European System of
Central Banits «mnM be inde-
pendent; the second is that it
should be judged, solely an its
ability to deliver price stabil-
ity; and the third is that there
should be no possibility of re-
introducing exchange controls,
except in a condition of mani-
fest crisis, preferably by unani-
mous agreement of the Council
of Ministers. Of these the last
may be the most important,
since in the absence of
exchange controls the new
European money would remain
shbject to the competition of
file dollar, the yen or, better
still, the Swiss franc.
For its part, the British Trea-
sury has put forward a pro-
posal that would avoid the
risks of a monetary monopoly
altogether. It amounts to "EMS
plus," the plllS being gnhannwi
opportunity for monetary com-
petition. As a way of reaching
a Union, tfrio plan ha« mn^h to
recommend it. It could lead
naturally to fixed exchange
rates over a transition period.
None the less, it has little
chance of being taken seri-
ously. Mrs Thatcher is not
noted for her sense of the ridic-
ulous. Yet even she may find
the idea of stoutly advocating
the virtues of the kms to its
longest standing and most
enthusiastic supporters too
ludicrous to contemplate. If tbe
UK is not within the exchange
rate mechanism by the tuna of
an intar-gnvn rnTT>pfntai1 confer-
ence, it will only have itself to
hismp ff fixe outcome is just
the bureaucratic, over-inter-
ventionist monetary and eco-
nomic arrangements that it
now fears.
Japanese cars
in the EC
THE EUROPEAN Community
is getting into a deep muddle
over how to treat Japanese car
sales after 1992. Unless it
thinks the issues through
m u c h more dearly, it risks tak-
ing decisions which wOl dam-
age Europe’s economy and the
healt h of its motor manufac-
turers, while handing a gift to
the Japanese industry.
The starting-point of the
EC’s deliberations is the
national limits on Japanese car
imports in force in Britain,
France, Italy, Portugal and
Spain. The European Commis-
sion conducted that
will have to be efimtnated by
1992, since they are inconsis-
tent with plans for a single
European market The argu-
ment centres on what, if any-
filing, should replace tham
The commission agreed this
week on a proposal to negoti-
ate with Japan an EC-wide vol-
untary restraint arrangement
(VKA) as a “transitional” step
on the way to a completely
open market Exactly how such
restraints would work, their
duration and the level of
import ceffings have not been
spelled out Nor has Brussels
specified how it proposes to
treat cars assembled at Japa-
nese plants in the EC, though
it has rejected on legal grounds
French and Italian demands
that they be counted as Euro-
pean products only if they met
a mandatory local content
requirement. Apparently
unable to resolve these issues,
the commission has tossed
them into the lap of the Coun-
cil of Ministers.
Import quotas
The Council needs to think
hard about its objectives. Quite
apart from the widely-observed
tendency of temporary YRAs
to become permanent import
quotas, they would almost cer-
tainly benefit Japanese export-
ers as much as - if not.
i nflow* more than — Eurooean
carma k e r s. In the US, where
Japanese car Imports have
been subject to VRAs since tbe
early 1980s, they have allowed
Japanese manufacturers to fat-
ten thek maxgim substantially
at the expense of American
consumers. VRAs also induce
Japanese companies to concen-
trate on exporting top-of-the-
range models, on which they
make more money than on vol-
ume cars. Hence. BMW, Mer-
cedeoBenz and Jaguar would
be likely to pay the juice for
any relief provided to Fiat or
Renault
Even that relief would proba-
bly be short-lived, since it is
hard to see how tbe EC could
legally prevent Japanese man-
ufacturers from boosting pro-
duction at European plants.
Nissan is already assembling
cars in the UK, and Honda and
Toyota also plan to build
plants there. Transitional
import restraints would also
onshla Japanese companies to
establish distribution and ser-
vice networks in currently pro-
tected EC markets in a much
more orderly manner than jf
national restrictions were
lifted immediately.
Increased protection
The biggest mistake the EC
could make would be to seek
restraints which limited Japa-
nese carmakers rigidly to their
current 9.5 per cent share of
file Community market That
would greatly increase protec-
tion of EC carmakers. At pres-
ent, the anti-competitive
effects of import restrictions in
countries such as France are
offset by the impact of Japa-
nese exports to open markets
such as West Germany. As a
consequence, German manu-
facturers are obliged to price
exports to France at the same
level as in their home market,
where they face the disciplines
of Japanese competition. For
German companies to do other-
wise would expose them to
under-cutting by parallel
imparts.
A tight Community-wide
VRA would remove these disci-
plines and enable European
carmakers to raise prices with
impunity. That would amount
to sanctioning an EC motor
Industry cartel, whose mem-
bers would have little incen-
tive to take tbe tough actions
needed to raise their efficiency
and competitiveness to world-
class shmflwnfa
Much file best course tor the
Community Is to take no
action on Japanes e car imports
and to conce n t rate on remov-
ing all its internal trade barri-
ers by 1992. Purely national
restrictions on imports from
outside tbe EC would then
become une n forceable, because
they could be evaded by trans-
shipments from elsewhere in
the single market
Stephen Fidler opens a series on international capital markets in the 1990s
All of a sudden, in investment
houses all over Wall Street, the
erstwhile Bond Bores were making so
much money they took to
congregating after work in a bar on
Hanover Square called Harry’s, to tell
war stories . . . and assure one
awnthpr this was not dumb luck but,
rather, a surge of collective talent
Tom Wolfe, The Bonfire of the Vanities
While most of America imagined
that Wall Street meant the stock
market, our bond market was setting
the tone and the pace on Wall Street
in the 1980s ... I once walked
through (the bond trading floor) when
the firm was attempting to sell the
bonds of the drugstore chain Revco,
which later went bankrupt and
defaulted on those very bonds. The
voice boomed out of the box: “Cmon
people, we're not selling truth.”
Michael Lewis, Liar’s Poker
T he first of these accounts is
on tbe face of it from a work
of fiction; the second ostensi-
bly fact Together they epit-
omise the financial permissiveness
and speculative excess of the 1980s,
file reaction against which is likely to
dominate the international capital
mar kets in the co ming Herpfle
The 1980s has seen an unprece-
dented expansion in corpor a te debt.
mainly in the US. Mr Christopher Bal-
dwin of the credit rating agency,
Moody’s, outlined at a conference in
New York fins week an important leg-
acy of this explosion. This year, even
as interest rates have fallen and
before the US has entered into a
recognised economic downturn,
defaults on corporate bond issues
have reached a high tor the In
the early 1990s, default rates, he pre-
dicted, would rise even higher. The
reason: five years of corporate
restructuring which added $900bn in
debt to US corpor ate balance sheets
and removed $465bn of equity .
Behind this Is Wall Street’s creation
erf the 1960s; the junk bond market
Led by Drexel Burnham Lambert the
“hi^i yield" market in the bonds of
risk y companies grew from nowhere
to $200bn in a rieeyrip- Untramnipl fej
by regulation and prone to manipula-
tion. the market financed a raft of
leveraged buy-outs (LBOs) - take-
overs finan ced by laige amounts of
debt Its pace of growth, the underly-
ing US economic expansion and
high-pressure salesmanship meant
investors were Minde d to file likely
indHonw of default
Mr Barrie Wigmare, a limited part-
ner at Goldman Sachs, showed
recently that LBOs were being carried
out with progressively higher ratios
of debt: as time went by, the junk
lnnii market got junkler. He con-
cluded that unless default estimates
include the years when bond principal
repayments fall due - for many 1980s
LBOs, this Is nearly 10 years from
now — they will underestimate the
risks attached to the bonds.
The junk bond market carved out a
new US corporate landscape which
may turn out, when the dust has set-
tled, to be a desert. It win leave one
expanding business on Wall Street:
salvaging insolvent companies.
The reaction, legislative, regulatory
and emotional, to the excesses of the
1980s are already being felt Despite
the US’s waning economic dominance,
its financial markets still retain their
pre-eminence. Together with broader
developments outlined below, the
result is likely to be less tolerance of
Unsserfaire in die internat io nal finan-
cial system. Mr Albert Wojmlower,
senior adviser to First Boston in New
York, has described the alternative to
regulation of the US financial markets
as "not deregulation, but nationalisa-
tion’, a message underlined by the
coats (estimated at J200bn-$300bn) of
the bail-out of a savings and loan
industry deregulated In the early
rices.
Its banka haw hdPgd Jo
averaged takeover* leading w
a broad inflation of Share prices.
w5ta October,
boycotted a finan cing for *5
wftelSine, UAL. a Judder ran
through Wall ’’Street share prices
A tightrope for
the regulators
1980s. This Illustrates a growing view
that the financial market place should
be seen as a public utility: users, left
to their own devices, consistently
.underestimate its value.
On top of that, international finan-
cial businesses are getting worried
about thuir imagp , a ?g n that they
believe that if they do not riwan up
their own act, it will be done for
them. In a survey published last
month by the management consul-
tancy arm of KPMG, chief executives
of SO international finanriai institu-
tions - admitted to grow i ng concern
over ethics.
"Ethics gnd morality have emerged
as posing a real challenge to the chief
executive officers of banks and in a
different way to those of securities
houses," the survey concluded. It
added that society is expected to
demand evidence of ’financial institu-
tions and their well-paid staff per-
forming a real economic role.”
OTHER TRENDS of the 1990s:
• The growing sophistication of Jap-
anese investors win make them less
content with the US Treasury market,
and keen to diversify. But they win
still want liquidity, placing a pre-
mium on markets that can provide it.
• Stock and derivatives exchanges
will be liberated geographically by a
shift to screen trading; they will face
heighte ned competition from Renters,
the clearing houses and the Associa-
tion of International Bond Dealers.
• Removal of historical market
restrictions, particularly in Japan
and the US, such as those which have
separated commercial and invest-
ment tanking, could lead t o the ri se
of universal banks in these countries.
Fixed commissions in Japan, which
have ensured Tokyo remains the
Just as the Third World lending
boom of the 1970s brought about a
new capital regime for Hanks tn the
1980s, so the permissiveness of the
1980s is leading tbe authorities to
attempt to improve the policing erf the
securities markets. This will aim to
ensure that those dniwg investment
business are adequately capitalised,
that public market places are trans-
parent and that the small investor is
not duped. Closer international scru-
tiny of investment banks win follow
that airaady tn place for commercial
banks. The growth of swaps and other
derivatives markets, and the likely
expansion of screen-based trading
maaq that the scrutiny wfil have to
stretch across traditional divisions
and be International in scope.
Regulators will have to walk a tigh-
trope for fear of what is called regula-
tory arbitrage — the shifting of finan-
cial activity to the regime where
nfficiaT interference is least. Too much
most profitable securities market for
Intermediaries, are likely to go.
Result no let up soon in the squeeze
on profit margins.
• As regulations tighten, private
placement markets - where deals
are struck between institutional
i n ve s tor s - win grow. New SEC reg-
ulations, expect ed next month in the
US, will speed this.
• Increased conflict is likely
between small shareholders and large
investors, whose use of mechanistic
investments strategies seems likely
to increase. This could be heightened
by periodic sharp “ correct i ons” such
as the October market collapses.
• Deregulation - In Europe and in
Japan - suggests a threat to the
Euromarkets. Japanese-oriented busi-
ness in London, particularly the
of it may farther a trend which is
already reducing the significance of
the public financial markets: the
growth of private placements among
professional investors.
As this occurs, another develop-
ment suggests more rather than less
official involvement in the interna-
tional capital markets: farther growth
in Japanese financial power to catch
up with the country’s economic influ-
ence. The sensitivity of the world’s
fiinmriwi markets to in Japan
has never been higher. Tbe explosive
growth of Japanese stock markets in
recent years means they now account
for 45 per cent of all the world's
equity markets.
Japan’s asset price inflation has
started to be e xport ed to the rest of
the world. The rising stock market
has allowed Its companies to raise
fresh capital cheaply; they have used
it to buy real estate in New York,
London and elsewhere, so pushing up
equity warrants market driven there
exclusively by Japanese restrictions,
has been subsidising the rest of tee
Eurobo nd market tor two years.
• wm tee 1990s be a decade of low
returns ? A few (main ly Eu ropean)
exceptions apart, the extraordinary
returns on man y investments during
the 1880s seem unlikely to be
repeated in tbe 1990s. Asset prices
have already risen, qqd a of
economic growth in most of the main
industrialised economies seems
unlikely to be sustained. In tire 1980s,
equity holders reaped huge rewards
from a tolerance of high corp orate
debt which is unlikely to continues
For financial intermediaries, those
trends will not be good news. One
thing is almost sure: there win be
fewer of them 10 years hence.
Finance on
booses and investment institatioM u
SSftoown- As rite** business**
expand their global real*, themes*
ay's influence is likely Jo amandin
fine. Tokyo, sees global floaacial ste-
bffity as being fa J^rests,
and is keen to avoid xenophobia MKU
backlash of protectlonimn agai nst
Japanese goods, parttaga riy fr og
tSTAsthe Finance Mbdstiy contin-
ues and intensifies to efforts to pre-
vent the growing power of Japanese
capital from destabilising other tear-
tots, so the worW'scapital markets
win. in a way, become more Japanese.
Although Japanese bpks played a
part to totagfog ab^ttaWantoeet
fright of last October, official Japa-
nese intervention ensured, it was a
Friday the 13th with a happy ending.
By persuading securities firms and
institutional investors not to sell
heavily in the Tokyo market, the Jap-
anese authorities were able to prevent
a worldwide downward spiral rtf stock
prices. By making it dear that h eavy
selling of the dollar would be strongly
countered, they helped_to avoid a
destabilising drop In the US currency.
The events of October also under-
line that the attitudes of Japan's
Finance Ministry towards the role of
government in financial markets are,
by default, becoming more important.
If in the long-term, everyone still
accepts that there Is no bucking of tbe
market, manag in g it over a succes-
sion of short runs can prevent damag-
ing consequences.
If Japanese asset prices continue to
rise, tbe potential for Tokyo to be the
source of Instability in the world
fimmrfal system grows. Ironically, as
the importance of' the Japanese
Finance Ministry as an anchor
increases, pressure trom the US inten-
sifies for a loosening of the official
over Japan's financial markets.
Japan has used great discre-
tion in deploying her financial
power,” says Mr David Hale, chief
economist of Kemper Financial Ser-
vices, a fund management group
based fa Chicago, "the institutional
contrast between America's permis-
sive financial system and Japan’s
highly disciplined one will baa recur-
ring source of tension in asset mar-
kets, In tike co-ordination of monetary
policy and attempts to manage
exchange rates.”
He "When mw examines- the
pattern of tbe worlds capital flaws
during the- 19808, it soon' becomes
that' the much celebrated
___ of financial markets is
latvely a euphemism' for AmdoSason
financiers andgovemments selling
assets or debt claims to Japan, Gen
many and Taiwan.”
Constrained markets for financial
assets In Japan have been encourag-
ing the Japanese to invest overseas in
the more- open financial systems of
the Anglo-Saxon countries. Freeing
Japan's markets may thus fa. the lon-
ger term shrink Japan's capital
account exports. Other factors, such
as the shift of Japanese productive
capacity abroad, and the growing
anese consumers, suggest the
surpluses of the 1980s may be unsus-
tainable. ff the 1990s are going to be
Japan’s decade of domination on the
international capital markets, by the
end of tee mfllenfam to dotal influr
ence could already be in decline.
These themes witt be explored in
greater detail -in farther articles to
appear on the International Capital
Markets page, starting next week.
Seldom on
Fridays
■ It’s Friday, so if you work
fa the securities industry, you
can relax: the chances are that
your business wfll not be
closed down today.
According to the experts,
staff are not often jettisoned
at the end of the week. Manag-
ers may be tempted - it allows
teem to head for the weekend
cottage with the deed already
done and a weight off their
shoulders.
But humanitarian concern
for tee victims generally pre-
vails. After a weekend brood-
ing, they tend to be so demor-
alised by Monday morning
they find it Impossible to take
on the world afresh.
"We have a rule - we wont
take on a Job on a Friday,"
says John Hall of Peat Mar-
wick McLintock. As a “career
counselling consultant” (tbe
job was called "outplacement”
nntii that particular euphe-
mism lost favour). Hall has
the job of picking up the pieces
of senior executives’ shattered
careers, and prefers to start
work the day after the event.
Which days are better? Not
Monday, says Hall: “The adren-
alin is low. ft’s a Mt like com-
ing back from holiday.” Not
a good day for wielding the
So the middle of the week
remains the favoured time for
putting people out of work.
Morgan Grenfell Securities
shut on a Tuesday almost
exactly a year ago. There are
only six more sacking days
to Christinas.
Small steps
■ Perhaps one should not criti-
cise London Underground on
details when tee whole system
is close to brea ki ng down com-
pletely. But the to-fags and
frn-lngs at Kensington High
Street station are a shambles
and could be rectified.
ft is one of those stations
where entry to and exit from
the platform are by the same
Observer
staircase. Although the station
serves both the district and
circle lines, it was just about
tolerable in tbe days when
K e nsin gton High Street was
a sleepy sort of place - devoi d
of tourists and office-workers.
The station, and indeed the
street, are now a scrum.
There must a means of devis-
ing a way out and another way
fa Otherwise, there might be
a riot.
Morgen, Morgan
■ Staff at Morgan Grenfell,
shortly to be taken over by
the Deutsche Bank, are already
wearying of being greeted with
“Guten Morgan".
Crocs strike
■ All la not well in the Ivory
Coast, where President Felix
Honphouet-Boagnjr's pet croco-
diles have disgraced them-
selves. They have eaten a ten-
year-old boy. Six of tbe beasts,
traditionally regarded as a
symbol of power, lounge in
the moat around tee Presi-
dent's palace fa his home-viL-
lagfrternedcapital of Yamous-
soukro. The youth fell Into the
moat when attempting to bal-
ance on the railings in
response to a dare from his
schoolmates.
In a country where supersti-
tion is rife, the si gnificance
of the episode is being hotly
debated. One theory involves
the octogenarian President's
favourite project at Yamous-
soukro - the $L30m marble
and concrete basilica he has
built as a gift for the Pope.
Within days of the boy’s
demise, rumours spread that
the Holy Father, thought to
be highly embarrassed by the
presidential folly, has rtactrnpd
an invitation to Consecrate the
hftgflica when he visits the
region in January . The croco-
diles, piqued by the snubbing
of their master, became angry
“ft’s baked Alaska — it’s
meant to have cold spots.”
- 90 the theory goes - and
decided to pick out a Christian
as their victim. The boy was
on his way back tram church.
Slow boats
■ Last week ft was the Cayzer
femfly returning to ship-own-
ing. Now tee I nverf orths,
another of tbe UK’s aristo-
cratic shipping families, are
going back into the deep sea
passenger business after a gap
of five years.
Unlike the Cayzers, who
once ran tbe Union Castle
steamers to South Africa and
now plan to acquire a stake
in the Isle of Wight ferry ser-
vice, the Inverforths have
never left tbe industry. Enno-
bled by George V, they have
operated British merchant
ships since the Scottish entre-
preneur, Andrew Weir,
acquired his first ship in 1885,
even though his 22-year-old
namesake, the present Lord
faverforth, prefers medicine
to shipping.
The family's privately-owned
Andrew Weir Group, which
also has insurance^ engineer-
ing and other interests, sti&
owns 10 cargo ships, some of
which carry passengers on
routes to the Baltic under the
Fhtangda Ferries name. The
group is looking at plans to
carry eight paying customers
on each of its four Bank line
container ships sailing to tee
South Pacific via Central
A mer i ca . Bank Line, founded
in 1905, is one of the most
famous names left fa British
shinning, although it operates
rather fewer ships than in its
heyday.
Holyg Cks tensMoM. wfai
manag es the group's shipping
division, says the accommoda-
tion will be comfortable rather
than luxurious at about £50
a day. But don ’t book if you
are fa a hurry: the round trip
takes five months. The main
targets are pensioners and mid-
dle-aged couples taking the
"trip of a lifetime."
Tokyo tops
■ Sony’s purchase of Columbia
Pictures fa September raised
tee now famous plaint from
Americans that Japan had
bought a piece of America’s
souL An enterprising Japanese
magazine has polled a few Jap-
anese on what companies they
would be shocked to see pass
into US ownership.
The results suggest that peo-
ple are still more worried
about jobs than culture. People
fa their 50s felt especially
attached to rfippon Steel and
NTT, while people fa their fas
valued Toyota and Mitsui Peo-
ple of all ages would protect
Matsushita, the giant, if rather
dull, consumes' and industrial
electronics group known
mainly by its Panasonic,
National and Technics brands.
Dirty work
■ Now that the season of road
gritting is with us the grafft
tists are again pursuing their
art in the grime on the back
of lorries. Spotted on the rear
of a slow moving van yester-
day was: “Please pass, driver
an overtime."
«
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T he ffcUyof the British system
of elective dictatorship win
be •mnwli^^ opry i mam fhic
weekend, as the 12 heads of
government of the European C a mi n n-
nity meet in Strasbourg ?nd or >o -of
them - only (me — . wfE be in a posi-
tion to let her unique political
instincts decide what she does,
regardless of whether or not these
represent the considered view of. bfr
Cabinet, her Parliamentary col*
leagues, the members of her party, or
the. electorate. If »hg is H g lit ^ Britain
be n e fi ts; if not, not
I do . not blame Mrs Margaret
Thatcher for this. She is merely rrcfrnp
the power of the Prime Ministership
as she finds tt. Some will say that dm
is doing so to a greater orient than
did her predecessors, bat that is a
j ud g ment that not all historians of No
10 Downing Street share. (As to one
possible future, only assurance
that those close to her- p ut a tiv e
Labour successor, Mr Neil Kinnock,
can offer is that if the occupant of the
supreme post is a man of goodwill -
La Mr Kinnock - the elective dicta-
torship will -be benevolent).' The
undisputed difference . in Mrs
Thatcher's case is that since she came
to office in May 2979 she bag com-
bined the force of her own strong per-
sonal conviction — some may it
wilfulness — with the n ppn r tm rtti«fc
open to any British Prime Minister.
ft has therefore become more diffi-
cult than ever to get her. to discuss
proposals she knows she will not
favour. Hie foil Cabinet has not for-
mally debated the p rop o sit ion that
Britain should join -the ww-hawp* rate
mechanism of the European. Monetary
System, or, now that it is committed
to joining, the i m por tant question of
when it should do sa G etting such an
Item on the agenda after all that h y
happened would require the combined
The post of British
Prime Minister must; be
especially e xhilarating
at the moment
POLITICS TOD A Y
Probation
in 1990
By Joe Rogaly
m
■ I &
force of several courageous ministers,
pins a willing secretariat - and there
are those who doubt whether even in
flint c jpM TitHrf'jinrg it iwnW be dnna
against Mrs Thatcher's wfIL
ssp ha« acc umu lated extraordj-
nary degree of ascendancy over our
affairs an the strength of 4&9 per cent
of the votes cast in IS ?® and a decid-
ing share ineach subsequent contest
— or, if you calculate votes for the
Tories as a_ proportion of the entire
electorate, on the strength of the posi-
rive vote of a third of those eligible in
1979 and even less -popular atylahn
.ctupp than. There have been Cabinet
majorities against her from time to
time over the past 10% yearn, but she
has always been able to appeal over
the heads of her appointees to the
loyal ranks of Conservatives in the
House of C ommons. Provided that the
Tory - MPS are with her, she can hire
and fire mere ministers at wfQ. as she
showed in the July, reshuffle, or sur-
vive the resignation of even the most
mighty, as she demonstrated when Mr
Nigel Lawson resigned as Chancellor.
It is partly for this reason that
there was so much i n ter est in this
week’s challenge to her leadership by
Sir Anthony Meyer. It turns out that
the assembled Tory MPs constitute
one electorate willing to give Mrs
Thatcher an overwhelming, 85 per
cent, majority. Before Tuesday’s poll
of 374 MPs, only 60 of whom did not
vote for har, it was that her posi-
tion would have been untenable if,
say, 100 had either abstained, spoiled
their papers, or voted Meyer.
There seems to me to be more force
to the proposition that only a major-
ity - that is, 188 votes - against her
would oblige her to resign. The post
of British Prime Minister must be
especially exhilarating at the
imywg"*, for it {daces its occupant at
foe centr e table of world affairs at a
moat exciting time in European his-
tory, as the east European former sat-
" w^tj n -m jt, u u 1
eQites start converting themselves
into liberal democracies and the
Soviet Union begins to crumble. Who
would contemplate abandoning all
that, plus foe greatest concentration
of power of any western head of gov-
ernment, fix* foe sake of a minority of
disgruntled MPs, diaranttod ex-minis-
ters, and no-hopers?
If you are a wholly convinced
paid-up Thatcherite in every detail
this is all to the good. But what if «h«*
is wrong about Europe? There 1 b some
comfort in foe observation that, in the
pnfl, the pragmatic politician in Mrs
Thatcher leads her to accept proposi-
tions she bad hitherto opposed: the
abandonment of the unclear e) e i n«mt
of the electricity privatisation pro-
gramme is one recent example. This
is not good enough when it comes to
the farther development of foe Euro-
pean Community, on which her tone
has become increasingly negative.
Britain can only participate folly in
foe affaire of the region of the globe
to which it belongs if it puts forward
its own positive proposals and enters
into serious, non-obstructive debate
on the proposals put by others.
The widespread sense of unease
about this is one reason why 1990 will
be a year of probation for foe Prime
Minister, The question that will hover
throughout the next 12 months will be
whether there will be a second chal-
lenge to her leadership next autumn
- and, more important, whether the
challenger win be a politician of suffi-
cient stature to stand a chance.
As ever, the course of the economy
win he the principal factor in deciding
the answers to both questions. To see
how this works, consider the current
political scene from the point of view
of, say, a Conservative politician who
is convinced that the post-1979
Thatcherite revolution is the best
thing that has happened to postwar
Britain and who wants the momen-
tum maintai n ed. The consensus
among MPs and ministers of this per-
suasion is that with a Tmvffmm pf
luck, and a steady nerve, they will
have their wish granted.
The key man charged with the
responsibility for making such
dreams crane true is the new Chancel-
lor, Mr John Major. His task is to get
the economy through 1990 in accor-
dance with the forecasts that accom-
panied his recent autumn statement
- that is, the balance of payments
deficit 25 per cent lower tha n this
year. Inflation down below 6 per cent
and. by implication, a subsequent
strong downward trend in interest
rates. H he is firm enough now, the
argument runs, he may get away with
it. That would provide the back-
ground for a tax-cutting budget in
March 1991, followed by lower mort-
gage rates in the Spring and a trium-
phant fourth election victory for Mrs
Thatcher in October. She would retire
soon afterwards, leaving Mr Major to
reap the reward far his good steward-
ship by being elected her successor.
As a matter of fact I would put a
decent wad of money on Mr Main
getting the prize if he delivers foe
goods. He is a pleasant enough indi-
vidual, a politician who has achieved
the remarkable feat of rising quickly
to near foe top without making ene-
mies in the party. His Thatcherite col-
leagues regard him as - aiwmtt —
rase of them. Those who seek a frien-
dlier approach to Europe and a more
caring feel for social policy also
regard him as an ally. Before he
became Chancellor it seemed that it
would be the party chainnan. Mr Ken-
neth Baker, who stood the best
chance of winning foe succession if
he could claim credit for an election
victory, but now, surely, the political
stars favour the man whom fortune
has chosen to fry for an economic
miracle.
I haven't forgotten that “it" It is a
big one. Mr Major could pr ec ipi tate us
into recession, fall fiat on his face,
and perhaps bring Mrs Thatcher
down into the bargain. His unspoken
fear of doing just that may help to
explain his apparent reluctance to
increase interest rates yet farther hi
response to the slide in foe value of
sterling. But we all know that foe
? ‘Annual re-valuations are feasible’
FrxmMr Tony Christopher.
Sir, The arguments pres-
ented by Mr John MueDharmr
and Mr Anthony Murphy (“No
Exchange Rate Mechanism
entry without a property tax,"
December 5) deserve serious
attention.
My own instincts are that,
basically, these arguments are
sound. What I question is the;
form of property tax which
they advocate: a tax on resi-
dential land values.
It seems to me that this sort
of local property tax would suf-
fer from the same weakness as
the present basis fin- rateable
value assessments — a defi-
ciency of evidence. If there are
not many rented properties
outside the public sector, there
are probably not many land
sales. Valuations would
Qu ick l y become as unreal as
the hypothetical rents used for
rates purposes.
But this does sot invalidate
foe thrust of foe case. . -
It is extremely important
that definitive work on a possi- : .
Me property tax should now be
undertaken. Whether it is foe
present Conservative Govern-
ment or a Labour one which
bjis to bKotb up or replace the
poll tax, it wffl be serai as a
serious weakness that the data
is not available to plan a fair
and acceptable property tax.
The one area of existing
knowledge about property is
capital values: a mass of "arms
length" sale* every year. The
base far a property tax must
surely be g ^ pflai value. Annual
revaluations by the valuation
office of Inland Revenue are
Fra: reasons I can under-
stand, Mr- Ridley sought to
scare voters - how many
times did be ask whether resi-
dents of the south-east of
England really wanted to pay
-tax on thedr £300,000 bouses?
That was never the point, as he
knew' very well
To set up such a tax wifi,
take at least four years, per-
haps five, once government
has . decided what it wants to
do. What Parliament should be
demanding is some sample
value lists so that we may con-
sider what could be done.
There are many questions:
• What would be the redistri-
butive effect, with its implica-
tions for transitional arrange-
ments?
• What rate of tax might we
need?
• What might we do to meet
the reasonable criticisms of the
present rating system?
Without such a sample
(which probably only the
inlan d Revenue valuation
office could undertake to pro-
vide), I am not sure what confi-
dent planning anyone can do.
Certainly Parliament’s choices
will remain restricted, and
local democracy may suffer a
severe blow If central govern-
ment has to assume full
responsibility for financing
important local services.
Tony Christopher,
cfo Institute for Public Policy
Research,
13 Buckingham Gate, SW1
Fact and fantasy both ride in the company car
Sir, Mr L.W. OrehartFs non-
sensical letter ("Opportunity
knocks for the Chancellor,"
December 4) should .not go
uncorrected.
First, the facts. According to
the Inland Revenue, about
L4m persons paid tax for pri-
vate use of. company cars last
year - That is only some 7 per
cent of cars in use. -Further-
more, total new car last
year were 221m, of which
were ^Sports. Mr
urcharu s figure of™ imnnrtg
a year is a fantasy,
ffis ideas on pdttcy are as
unrealistic as his figures.
Excessive taxation of company
car use may drive some peopl e
to give' them up and instead
use own cars for business
travel with a mileage allow-
ance. What diff erence would
that make to foe total number
on tim road? It is inconceivable
tfwt payment of mileage allow-
ances could be prohibited.
There would be no surer way
of hobbling the efficiency and
productivity of sales personnel
than to require them to do
their jobs by public transport
instead of car. I wander if Mr
O wJhflr d has ever tried to make
What matters is the margin
From MrFabkm fftnlqy
Sir, Janet Bush’s examina-
tion of the arguments in the
us over computerised pro-
gramme tradingCWhea tradi-
uon is swept aside," /November
tno ■ . y «•
(gram tradhE?- ■- .touches am
ethe real problem «matw two
?, occasional Mg leans In stock
;■ -market volatility which gmmr-
rvate so much fear mid hostility
Jamong Wall Street critics of.
Jr computerised pro gw m iwm tw>4 .
ng strategies.
v' It is not the index arbitra,-
-..'■eurs who create; volatility,
i 1 hey merely seek to bring two
di v ergent markets, in foe same
ultimate product, back Into
lrrtft. Rather it is tbediscrep-
ancy in margin requirements
between the stock market and
its derivatives in both fatures
and options which creates a
mnm volatile s eco nd ar y mar-
ket ,
If the futures markets were
regulated by the US Securities
and Exchange Commission
(SEC) instead of the Commod-
ity Futures Trading Commis-
sion (GFTC), perhaps foe mar-
gin requirements for
uncovered long or short
futures positions would be
raised to fop 50 per cent of
10 or 15 sales calls a day by
public transport?
His letter suggests a belief
that company cars are used
largely for private travel. The
198588 National Travel survey
showed that tins is incorrect It
found that the average com-
pany car driver covers almost
7,000 wiflwa a year on business.
FOr most of them the company
car is an indispensable tool of
their trade.
Geoffrey Pelting,
The Society of Motor Manufac-
turers & Traders,
Forbes Bouse,
BaOan Street, SW1
gross value required by the
stock market
The ability to take volatile
speculative positions would
then be seriously circum-
scribed.
I believe that if this were
done it would be found that
index arbitrageurs would cease
to he seen as an enemy, but
would quite properly be
granted the privilege of consid-
erably reduced margin require-
ments wherever futures posi-
tions could be shown -to be
hedged by stock positions, and
vice versa.
Fabian Finlay,
9 North Audley Street, W1
Combustion
bums in heat
and light
From Mr Alan Hershman.
Sir, On Friday November 24
my car was taken away in a
car conveyor vehicle of some
kind from Mortimer Street,
London Wl, at about 8.15 inn.
It had been there for about
20 minutes in aD. Z got to the
car immediately, but I still bad
the mortification, of not being
allowed to drive my own car
away, although it had not been
strapped and therefore was not
ready for hoisting onto the car-
rier vehicle.
The police officer who was
busy taking notes of cars was
unable to answer my question
as to where foe car could be
retrieved, and when I asked for
a receipt for the vehicle he told
me that he would not give me
one.
My car was subsequently
returned to me at the Oval
Road car pound in south Lon-
don, on payment of £75, about
one hoar later.
Mortimer Street, at this
hour, is invariably clear. I have
parked there regularly in the
evening for many years (when
I dine at the same restaurant),
without any problems or incon- .
venience of any kind.
Conversely, the congestion
of traffic ami foe hooting of
cars which built up in Mor-
timer Street while the carry-
away process was going on was
unbelievable. The carriers
were actually compounding
more highway offences - and
getting away with them.
Had the policeman used just
a little common sense, and
given me a parking ticket but
allowed me to drive away my
car, all foe noise and conges-
tion would have been easily
avoided.
But of course the private
enterprise company which
handles this parking control
system would be lighter in
pocket. Privatisation seems to
have brought out a rather
mean, money-grabbing aspect
of the treatment of motorists.
Is it not time that this form of
traffic “control” had an over
haul of its rules?
Furthermore, what seems to
have eluded the police in this
context are the opportunities
offered to sophisticated car
thieves by this Systran of traf-
fic control At this stage, it
would be unwise to put these
into print . .
Alan Hershman,
Allans of Duke Street
56-58 Duke Street Wl
current depreciation in the value cf
the pound should drive inflation
higher, while the trend in earnings
remains extremely worrying.
The Chancellor could therefore tail
to reduce inflation, interest rates raid,
by extension mortgage rates, with
much foe same devastating effect on
the Prime Minister's career as a reces-
sion. He could produce a dull techni-
cal Budget next March, with no signs
of progress emerging in time to save
the Conservatives from a humiliating
series of defeats is foe May local
council elections. If that were to coin-
cide with, say, a couple of poor
by-election results, the courage of the
big-name potential challengers of Mrs
Thatcher would start to rise. The pos-
sibly fanciful notion that she could be
quietly urged to retire in favour of
someone who stood a better chance of
winning would be put to the test
This is why so many Conservatives,
high and low, are agreed that 1990 is
likely to be a critical year for both foe
party and Mrs Thatcher. If things go
well, she will parade around the capi-
tals of Europe, proclaiming Britain's
resurgent greatness. At home, she
might perhaps support Mr Chris Pat-
ten, the Environment Secretary, in
his endless series of diplomatic visits
to the Treasury, and the ministries of
energy, transport and agriculture.
The result would then be a Patten
10-year plan for saving the globe, ini-
tialled by the Prime Minister, to
enrich bar manifesto for a late- 1991
election. It would proclaim the heavy
use of the price mechanism, and a
light dose of regulation, as a means of
reducing noxious emissions into the
atmosphere. The speeches of Sir
Geoffrey Howe and Mr Douglas Hurd
urging a shift to **quaUty-of-life M
issues, such as better transport,
schools and hospitals would be
combed for further manifesto sugges-
Sorely the stars must
favour Mr Major, whom
fortune has chosen to try
for an economic miracle
tions, someone would have
to square greater spending on roads,
electricity, school and hospital build-
ing and the like with care for the
environment
If things go badly, however, the
above might be regarded as periph-
eral not to say irrelevant. The talk
would be of unnecessary privatisa-
tions, traffic jams, the poll tax, and
high mortgage rates. The Tories
would have to endure a year of
increasing discomfort, as the Prime
Minister steered between those who
wanted another leader and those will-
ing to stick with her. I do not know
how this might turn out. During the
past five months (me political blow
after another has fallen, but Mrs
Thatcher is stiff gtawHing. Could it be
that the power of her office has
become so very great that only a
defeat in a general election would be
sufficient to remove an unwilling
incumbent?
Lombard
A nation that
can’t count
By Michael Prowse
AT KING’S COLLEGE.
London, the post-graduate
teacher training course in
mathematics is half empty.
The college, which has a high
reputation, has been able to fill
only 19 of its 41 maths places
despite a policy of accepting
graduates without maths
degrees. The shortage of maths
graduates willing to contem-
plate a teaching career Is likely
to intensify in the 1990s.
Yet schools have already
experienced two decades of
famine: at present only just
over a third of maths teachers
have degrees in tnnthg and 27
per cent have no relevant qual-
ification beyond A level Fig-
ures for teachers with sub-A
level qualifications are not
recorded, but In 1982 the Cock-
craft Committee reported that
21 per cent of maths teaching
was undertaken by teachers
with “nil" qualifications.
Schools' inability to attract
able mathematicians is but one
facet of a far-reaching malaise.
The numbers of pupils attain-
ing high standards in maths
are pitifully low by interna-
tional norms. At 16 only about
a third of schoolchildren
achieve the equivalent of an O
level pass in maths. Research
by Professor Sig Prais of the
National Institute suggests
that roughly twice this propor-
tion achieve a comparable level
in West Germany. Japan
appears to be even further
ahead. As Professor Prais puts
it: “To match the Japanese, we
must bring the average com-
prehensive school-leaver up to
grammar school standard, and
get him there a year earlier."
If anything, Britain’s relative
performance is even worse at
the post-16 stage. The problem
begins with the UK's abnor-
mally low school staying on
rate: only about 40 per cent of
16 to 18-year-olds remain in
fan-time study compared with
55 per cent in West Germany,
75 per cent in France and
about 90 per cent in Japan, the
US and Sweden. Since most UK
16 to 18-year-olds do not study
anything, the proportion study-
ing maths is necessarily low.
In fact, Britain’s maths per-
formance is for worse than the
low staying on rates might sug-
gest In most developed coun-
tries, watha is regarded as an
essential part of the post-16
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curriculum. The French bacca-
laureate, the West German
Abitur, the US high school
diploma and the Japanese
upper secondary school curric-
ulum all require students to
demonstrate mathematical
competence. Maths is held in
particularly high esteem m
Japan where it is regarded as
foe best guide to pupils' innate
ability. It forms a crucial part
of the exams for university
entry. Students must do well at
maths regardless of what sub-
ject they intend to study.
The contrast with Britain
could hardly be Greater. In
England and Wales (but not
Scotland), sixth form study Is
exceptionally narrow with
most students taking just three
subjects at Advanced level.
Such exams were designed
only for the top 20 per amt of
the ability range. Studies indi-
cate that matiis A level L's sig-
nificantly harder than other A
levels: a “O’ in maths Is proba-
bly equivalent to a “B” in
English. As a result, maths
tends to be taken by small
numbers of able pupils, mainly
those with scientific leanings.
It has never been regarded as a
necessary part of a rounded
sixth form education and is
avoided by mast arts students.
In 1987, maths A level was
passed by Just 5.4 per cent of
English school-leavers.
The UK is locked in a vicious
circle. The structure of the
exam system and the quality of
much teaching ensure that few
school-leavers are well quali-
fied in maths. But given the
needs of industry, commerce
and research, few graduates
are available to improvo the
situation in schools.
So far ministers have done
little but wring their hands.
The sixth form curriculum
remains unreformed: the
Advanced Supplementary (AS)
exam is nearly useless as a
means of increasing foe num-
bers studying maths because it
is as demanding as A level
maths. Meanwhile, schools
remain npnhin to offer the kind
of financial rewards and work-
ing environment likely to
appeal to able maths gradu-
ates. The Government’s failure
to respond to the crisis in
maths education seems likely
to perpetuate Britain's relative
economic decline.
CA
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BALTIC REPUBLICS CHALLENGE MOSCOW
Lithuania ends communist power guarantee
By Ouentin Peel in Moscow
LITHUANIA yesterday became
the first republic within the
Soviet Union to abolish the
Communist Party’s constitu-
tional guarantee of power and
Estonia is ready to follow suit
The moves by the two inde-
pendently minded Baltic repub-
lics are to pave the way for
multi-party elections to their
parliaments early next year.
They amount to defiance of
Moscow and of President Mik-
hail Gorbachev.
Moscow has readily accepted
decisions in other East Euro-
pean countries to dilute the
Communist Party’s monopoly
of power, but Mr Gorbachev
has argued that the party’s
role is the one unifying force in
the Soviet Union.
The Baltic moves, however,
raise pressure on Mr Gorba-
chev to allow a similar step in
Moscow, already being vocifer-
ously demanded by radical
reformers.
The Lithuanian parliament
voted by an overwhelming
243-1 with 3S abstentions to
remove a clause from the
republic's constitution enshrin-
ing the leading role of the
Communist Party.
Deputies replaced the article
with a clause allowing the exis-
tence of political parties, public
organisations and other move-
ments provided they remain
within Lithuanian law.
The Estonian Communist
Party’s central committee yes-
terday gave the go-ahead for
the republic’s parliament to
make a similar move. An Esto-
nian journalist told Reuters
newsagency: “All agreed that
Article Six could be thrown oat
when the parliament meets
F grrin late tftig month. 44
Article Six in the Soviet con-
stitution and that of the coun-
try’s 15 republics guarantees
the leading role of the Commu-
nist Party in establishing a
workers’ and peasants’ state.
In the Baltic states, Commu-
nist leaders argue that they
can retain credibility only by
allowing the emergence of a
multi-party system.
Mr Mfkk Titma, ideology sec-
retary of the Estonian Commu-
nist Party, argued in an inter-
view two weeks ago that the
likely future in the republic
was for “some sort of coalition
government.”
Yesterday’s decision in Lith-
uania made it likely that
republic-wide elections there
on February 24 will be the first
multi-party polls in the Soviet
Union since 1917. when several
parties fought for seats in a
constituent assembly.
In Estonia, candidates repre-
senting Christian Democrat,
Independence League and
other parties are already on
the ballot for local elections
next Sunday. Bat since the
Estonian parties have yet to be
Indian premier may launch Punjab move
By K.K. S harms in Amritsar
HUNDREDS of thousands of
Sikh and Hind u Punjabis linuri
the streets of Amritsar yester-
day to welcome Mr V J>. Singh,
India's new Prime Minis ter, as
hopes rose that the Govern-
ment would launch moves to
settle the Punjab issue.
Mr Singh is the first prime
minister to visit Amritsar since
1384, when Mrs Indira Gandhi
made a brief trip after the
Indian army attacked the
Golden Temple, the Sikhs’ holi-
est shrine, to flush out terror-
ists. The assault led to her
assassination by Sikh extrem-
ists.
Sikh militants have
launched a violent movement
since then to seek an indepen-
dent nation called Khalistan.
Although Mr Singh declared
he was not on a political mis-
sion his visit has raised expec-
tations of a breakthrough.
The rising tension in the
Punjab is likely to be the most
testing issue for Mr Singh’s
administration, especially as 10
of the 13 MPs elected to the
Lok Sabha (lower house) from
Punjab are extremists, includ-
ing the widow of Mrs Gandhi’s
assassin.
The welcome given to Mr
Singh far surpassed that
received by Mr S-S-Mann, the
EMU tops
agenda at
Strasbourg
Continued from Page 1
Nor were British officials
elated at signs of stress in the
Franco-German axis, though
they welcome anything that
will make Mrs Thatcher Look
less Isolated at Strasbourg.
They pointed out that Mr Kohl
endorsed EMU and some sort
of timetable for its achieve-
ment, while Mrs Thatcher
wanted the Twelve to increase
monetary co-operation only
gradually and without treaty
new leader of milit ant Sikhs
who was freed last week after
five years in prison. Mr Mann
did not meet the Prime Minis-
ter yesterday.
Mr Singh said there would
be an aE-party conference on
the Punjab soon.
“The Government will move
fast to bring peace to Punjab,”
he said.
The move was underlined by
the resignation yesterday of Mr
S.S.Ray, Governor of Punjab.
Mr Ray was appointed to the
post by Mr Rajiv Gandhi, the
former Prime Minister, and has
been associated with what both
militant and moderate Sikhs
describe as a “repressive police
rule” in Punjab in the last
three years. They claim that
hundreds of innocent Sikhs
have been kille d by security
fences allegedly hunting terror-
ists.
After Mr Singh and three of
his senior cabinet ministers
visited the Golden Temple, he
threw aside se curity measures
and drove through the narrow
streets of Amritsar in an open
jeep.
He was cheered by thou-
sands of people in what is said
to be an unprecedented demon-
stration of affection for the
new Indian leader.
iSMT
Prime Minister V. P. Singh is conducted on a tour of the Golden
Temple by the Sikh shrine’s secret ary , Maujit Singh Calcutta
Husak appoints prime minister
Deploying to a more than
usual extent his traditional
tactic of raising the political
temperature on the eve of a
summit, Mr Delors said the
Community was at an historic
crossroads in its Internal and
external policies.
The summit agenda will set
aside a substantial amount of.
time for farther discussion on
relations between the Commu-
nity and the countries of East
Europe, following the dinner
meeting on the recent reform
moves in Paris on November
18, in addition to internal EC
issues such as the completion
of the single market and the
adoption of a Social Charter.
Elysee officials were display-
ing confidence that a decision
on an Inter-Governmental
Conference would be taken, if
necessary by a simple major-
ity. French officials discounted
reports that the West German
Government might be drawing
back from an IGC. They said
that the essential requirement
for the French Government
was that the summit should
take the decision of principle
to hold an IGC;
Michael Cassell in London
adds: Mrs Thatcher flew into
Strasbourg lost night having
made clear In the House of
Commons earlier her belief
there was no room for
manoeuvre this weekend over
the Social Charter on workers’
rights.
Continued from Page 1
The reason for Mr Adamec’s
resignation was not clear last
night, al thoug h a go v er n ment
spokesman pointed to the tele-
vised speech that he made on
Wednesday evening. In it, Mr
Adamec said he would resign if
the pressures on him - from
the opposition movement Civic
Forum, from the Communist
Party and from other parties
- became unbearable.
Indeed, the valedictory tone
of the speech — in which he
thanked his colleagues for
their support - led observers
to believe he had already
decided to go.
Yesterday, he had been due
to present his new Government
to the Praesidium of the
National Front, the body which
brings together the Communist
Party with the "official" Social-
1st and People’s parties and
other Communist-dominated
organisations. Instead, he
informed the meeting that he
had resigned.
The Communist Party Cen-
tral Committee went into emer-
gency session yesterday even-
ing. In a statement, it said that
it maintainori tftp view that
“the Government must he in
accord with the present politi-
cal situation and the ratio of
the existing political parties." -
Civic Forum, in a statement
issued before the news of Mr
Adamec’s resignation was
made public, said it had pres-
ented the Prime Minister with
the names of seven non-party
individuals who should become
Hamsters in the new govern-
ment
In a clear effort to avoid
being blamed for the collapse
of the latest government India-
Germanys embrace ideal
of confederation
Continued from Page 1
Schilling, the Post Minister,
also plans to visit East Ger-
many before Christmas.
The air traffic question is
particularly delicate because,
as the result of roles dating
back to the end of the Second
World War, air links between
the two German states are still
under the jurisdiction of the
war victors.
The Bonn Government
increasingly sees as an anach-
ronism the three air corridors
between the two states
reserved for US, British and
French airlines. Underlining
the restiveness, Mr Erich Riedl,
State Secretary at the Econom-
ics Ministry, caned last month
for the allied regime to be abol-
ished.
Mr Heinz Ruhnau, rfiairman
of the West German carrier
Lufthansa, met Mr Hang Mod-
row, the East German Prime
Minister, in East Berlin on
Wednesday to discuss Luf-
thansa’s long-standing wish to
fly directly to Berlin.
Direct East-West German air
routes to cities outside West
Berlin started in August Luf-
thansa and Interflug, the East
German airline, have now
agreed 11 flig ht s per week link-
ing Frankfurt, Dttsseldorf,
Hamburg and Munich with
Leipzig and Dresden. A Luf-
thansa spokesman yesterday
said that the two sides wanted
to expand further, but this was
a “political decision” depend-
ing on the aides.
Interflug said in East Berlin
yesterday that it favoured
talks to open a new air corri-
dor between East and West
Germany passing over Bavaria.
In a further sign of increas-
ing economic links, Mr Lothar
Spaet h, t he Baden Wfirttem-
berg Prime Minister, is visiting
Dresden this weekend with a
team of indust rialis ts.
five, Civic Forum said: “This is
not our crisis but the crisis of
the Government — Civic
Forum is ready to publish the
records of all negotiations with
tiie Government to show we
did not use any threats.”
Earlier, Mr Frantisek Kind,
the former Interior Minister,
said that he had been ordered
by a “high Communist Parly
functionary" to “stop the stu-
dents by any means” rim-jp g
tiie demonstration of Novem-
ber 17
Civic Forum’s coordinating
committee yesterday met the
Soviet Ambassador in Prague
with others of his staff for
taikft- The TwmA of Mr Alexan-
der Dubcek was mooted as a
possible future president but
last night, Mr Jan Urban of
Civic Forum ruled out Mr Dub-
cek as a candidate.
Bank prepared
to offer loan
Continued from Page 1
stock; $10Qm for new telecom-
munications; $l00m for new
livestock feed processing
plants; and $300m to support
the reform effort in Poland, to
be disbursed possibly by the
m iddle of next year. The last
sum would probably be similar
to the Slbn stabilisation fond
set up by Western govern-
ments to ease Poland's transi-
tion to a market-oriented econ-
omy.
Aside from Poland, Mr Lari
said that there was concern
about Hungary’s economic
plight.
He did not dispute a report
that Hungary's current
account deficit was deteriorat-
ing at such a rate that in six
months it may not be able to
service its debt. Hungary's
political uncertainty and slow
pace of privatisation were also
worrying, he said.
WORLD WEATHER
T
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Dutch criticise travel accord
B. NfM
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F m 84 Mm 3HB*m 8a 8uu. T-n—tor
THE Schengen accord,
allowing free movement of peo-
ple and goods between The
Netherlands, Bel gium, Luxem-
bourg, West Germany and
France by January 1 1990, has
come under attack from Dutch
MPs, writes Lanra Raon in
Amsterdam.
The agreement is due for
rigning on December 15, but
the MPs are insisting tfta* the
asylum policy of all five must
be harmonised in terms of cri-
teria, not just procedures.
They have also complained
that a proposed databank of
criminal records, to be shared
amoim the Schengen countries,
would risk an invasion of pri-
vacy.
However, Mr Bund Lubbers’
Christian Democrat-Socialist
coalition government might
find some sympathy for a move
to delay the December 15 sign-
ing ceremony.
The French Government
wants to tighten up both asy-
lum «"ri immigration criteria
while other Schengen coun-
tries are also thought to have
their own concerns.
But even if the accord is
signed this month it must still
be ratified by the five which
could take 18 months.
The proposals have put the
UK and Italy under pressure to
remove border controls for EC
nationals travelling within the
comm unity. Both say that they
are being pushed to choose
whether to participate in
extending the reach of the
agreement or accept that they
would join the slower portion
of a two-speed Europe.
X ( Ol t MX
formally registered, candidates
have had to declare themselves
formally as independents.
The Baltic moves add to &
growing clamour from radical
reformers in Moscow for the
Communist Party of the Soviet
Union to follow suit
A protest is due to be
launched next Monday, when a
two-hour token strike has been
called by leading radicals in
the Congress of People’s Depu-
ties, to demand a debate.
The whole question of the
party monopoly on power, and
the pressure for change, is cer-
tain to be a key issue at what
promises to be a crucial ple-
num of the party central com-
mittee tomorrow.
Philippine
rebel troops
keep grip
on air base
By Roger Matthews
in Manila
REBEL troops holding an Air
Force base outside Cebu, tiie
second largest city in the Phi-
lippines, were still refusing to
surrender last night, although
most of the insurgents gave up
earlier in tiie day.
President Corazon Aquino
yesterday began working on
details of a Cabinet shake-up
in response to the week-long
crisis. Mr Adolfo Azcuna, Mrs
Aquino’s spokesman, stressed
that she was taking stock of
tiip ritaiaHwi ami that whhiBj ,
changes could come any time.
Brigadier-General Oscar Flo- :
rendo, an Army spokesman, !
said that the Cebu rebels
refused to believe television
film showing tiie ending of the 1
insurrection In Manila, the
capital, earlier in the day.
He estimated that there
were about 400 rebels in Cebu
and about 1,500 involved in
the capital area. Gen Florendo
conceded that other rebels
might have chang ed into civil-
ian clothes and escaped.
He detailed serious equip-
ment losses suffered by the
armed forces, including 16
helicopters damaged on the
ground, one F-5 lighter and
two T-28 propeller-driven air-
craft.
Gen Florendo said that the
armed f mices remained on foil
alert In anticipation of a possi-
ble third stage in the coup
attempt Officers such as Colo-
nel Gregorio Honasan, the
1987 coup leader, are still at
large.
Mr Azcuna defended the
i ntrodu ction on W ed nesday o f
a state of emergency, stressing
that the crisis was not yet over
and measures might be needed
to p reve nt more serious dislo-
cation of ft* economy.
“We are going to be taking a
long, hard look at ourselves to
see where we have gone wrong
ami what needs to be done,”
he added. Mr A mnia said tiie
officers Involved in the coup
attempt had made a “naked
grab for power”, unlike the
enlisted men who stiQ nursed
grievances about conditions of
service within the armed
forces.
He said Mrs Aquino was
hoping for a massive demon-
stration of popular support
from the people of Manila
today to show that they still
hm-fcwi the Government.
Mr Azcuna also sought to
reassure the international
business community that the
f undamentals of the economy
were unchanged and it was an
attractive country for foreign
investors.. However, with
troops yesterday searching
| buildings in the business dis-
trict for possible booby-traps
or unexploded ammunition,
the restoration of interna-
tional confidence could be a
long process.
• US help in defeating the
coop attempt against Presi-
dent Aquino has Improved the
atmosphere for talks on the
future of US military bases
there, according to Mr
~R i |M |i»mipl Pelaez. Philippines
ambassador to the US, Reuter
reports from Washington.
But he argued the negotia-
tions, expected to start in
mid-December, should be post-
GrandMet settles
into shape
The market’s view of Grand
Metropolitan in recent months
has been clouded by two con-
cerns: lingering doubt over
Pillsbury and - after the
about-turn on betting - honest
confusion about group strat-
egy. Yesterday's results at
least addressed the former.
Trading profits from the
retained Pillsbury food busi-
nesses are up 2i per cent; and
while Burger King’s profits are
flat overall, the underlying
trend is upwards. There is also
a more fundamental argument
for GrandMefs managerial tal-
ents in the 15 per cent growth
from established businesses,
despite a family worrying 10
per cent fall In profits from UK
pubs restaurants.
As for strategy, the William
Hill affair might best be
described as a profitable blun-
der. GrandMet now defines its
business as food, drink and
retailing, with the stress in
each case on international
branding. Betting, it now
appears, could not be taken to
the US without entering Mafia
territory. But Bwnwig the other
rate fling brands, BuigCT K~fng
is international already and
Fearie might be exportable. As
for acquisitions, the plan now
seems to consist of modest
expansion of Pfllsbuxy’s food
interests in Continental
Europe.
Certainly, the balance sheet
seems to leave tittle scope for
anything more surprising.
Gearing is at 128 per cent
including intangibles, or at
L900 per cent an the conven-
tional basis. Interest cover was
only just more than 3 times in
last year's second half and,
even in the current year, might
be no more than 45.
But from the investor’s view-
point, tins is all to the good.
On the assumption of at least
15 per cent earnings growth
this year, the price of 580p puts
the multiple at 10. With luck,
GrandMet is settling into a
shape the market can live
with. Everything depends, of
course, on the group’s notori-
ously hyperactive management
not doing anything to spoil
that
De La Rue
For months, De La Rue’s
price has been 'saying that a
bid is coming and sooner
rather than later; and it cannot
be ruled oat entirely that
somebody genuinely wants it,
even at the 23 times expected
1990 earnings at which its
shares closed last night A
mere 10 days ago, after all, a
single buyer, identity
unknown, was foolhardy
enough to pay £23m for a mere
3 per cent; and there Is Mr
JohnsoftlMthey
Share price relative to toe
FT- A Aft-Share Index
1082 84
Maxwell still sitting on a fifth
of the equity. Butriewed dto-
S^^^^f&i^^with' tra£ng
profits down SI pec cent at
gi , g-4m , make prospects .of a bid
by anyone but De La Roe’s
own management seem dis-
tant. .
De La Rue has spat out one
poison pill by selling its loss-
making Crosfleld business to
Dupont/Fuji. hut found two
more in its Printrak and Rams-
daq fingerprint and security
printing software subsidiaries,
ft is bad news that De La Rue
will have to repay some of tins
£235m sale price for Crosfleld;
but this has to be set against
the fact that the City only
expected the sale to bring in
gisftm anyway. Much more dis-
appointing is the fact that the
damage to the profit and loss
account should have , come
from operations as small as
Remsdaq and Printrak, with
only 500 employees between
thgrn
An obvious next move would
be to sell them both; there
were ready buyers for Printrak
six months ago. The snag is
the throwaway tine that Rems-
daq and Printrak are strug-
gling to ftrifil some big con-
tracts in the Middle East This
is not another Ferranti, but
problems like that should
malm any ftirttter think more
than twice.
Gtrs
Great Universal Stores may
have problems selling dresses
via catalogue these days, but it
knows how to sell its invest-
ments. Last year’s £34m profit
on the sale of the Harris
Queensway stake and the
£L0.7m cash from the sale of
Leonards gave the company a
much-needed cushion to
smooth the ride through the
consumer downturn. Agency
mail order is a tough way to
make mousy those days, with-
out- the government adding .to
the problems by- clamping
down on demand. Even the
d efopa i ve quality at matt order
sales has now gone. since, the
high street has long been wm.
lug. to compete on credit InriU-
ties. And w competition gets
tighter, GOB has the most mar-
ket share to foee. " .
Of course, the interest rate
cycle has boosted the profits of
GUS’3 consumer finance divi-
sion; and .tiie same rent
increases that are the curse- of
store groups’ flntoce directors
are good news for GUS’s prop-
erty portfolio. That spread of
interests has allowed the com-
pany to announce a & per cent
profits increase in a sector
Where decreases are the mam.
But the stock’s defensive quali-
ties probably owe as much to
the company’s willingness to
buy back its shares. A more
remote attraction is tiw.ihope
that the asset value, which
could be more than £11 per
share at the next balance sheet
date; might some day be
unlocked under a post-Wotitan
Johnson Matthey
There was a vain attempt to
exude - calm at Johnson
Matthey yesterday, which
managed fo lose bOtitltS Chafr-
manandchief executive In just
under 18 hours. Chief execu-
tives do not quit the night
before a
without good reason. Mr.
AndersOn certainly bad plenty
' iff reasons for pride in his
record at Johnson Matthey and
he could have chosen a better
note-on which to deport than a
. 6.3 per cent profits -increase.
The hiatus between the
announcement of his departure
- and the appointments Char-
ters men certainly confuted
shareholders; the {Shares need
ahead in the interim, before
falling sharply back an the too
nwd apnm mgwmiwit. The affair
was haritty an advert for good
- investor rotations.
' Ever since Minorca gave up
.tiie struggle tor .Gold Fields,
tiie market has expected some
restructuring between Charter
and Johnson Matthey. But
ihvtetars had a good run under
Mr Anderson; now. rather than
fathoming out the details of
the grand plan, they may sim-
ply decide to leave tiie South
Africans to it. Without the
major acquisition that Mr
Anderson seemed to be favour*
tag, JM’s profits are likely to
be pretty flat over the next 18
months. And now that Charter
. has ruled cute b&d, at.leasrta
the short term, speculative
taterest.in the shares wfil dis-
appear.
number?
It takes a lot of hard work to JmiIM a company worth
seven figures or more. • •
Which is why, If you’re thinking about setting, you’ll
want the best advice you can got. Advice that can help
you find a buyer, who will nbt only pay the highest price,
but also consider the welfare of your employees and the
future of your business.
At 31 Corporate Finance, we are spedaHsts bi
advising on the sale of private companies worth between
£1 mUllon-£50 million and are hi dally contact with many
potential purchasers both tai the UK and overseas.
So, H your company Is worth a telephone numberi
caHusom
01-928 39024
Or if you would like more information, write to uss : "
31 Corporate Finance LtdL,
91 Waterloo Road, London SE 1 SXR - XN
3 i CORPOR.-ATE F! N ANC
Your Future Could Depend On tt.
BEGULAreD N THE CONDUCT OF BU8#lESa W fiA ' ^
A .
PlanScan
~ manipulating maps
ft 0845 224440
23
FINANCIAL TIMES
MEMOREX TELEX
COMPANIES & MARKETS
The biggest name in
IBMcranpatibiGty
Friday December 8 1989
INSIDE
Physician heal
thyself.
Even a printer of bank-
notes can have difficulty
maintaining its profit
level. This was dear
yesterday when the De
La Rue group revealed
that trading profits at its
continuing security prod-
ucts business had
slipped 31 per cent to
£ 12.4m from £18.1 m. As
the company’s share
price fell 22p to 31 5p,
the company blamed persistant losses at De
La Rue's high technology subsi di a r ies. Peter
Orchard (above), De La Rue's chairman, said:
“There are problems related to the fulfilment of
-contracts which are proving somewhat intrac-
table and are very difficult to quantify."
Page 30
Watching their profits by night
Shopping halls are decked with tinsel, angels
and boughs of holly hi stores throughout the
US, buT-the retailers themselves are finding it
hard tojoln in .the .Jollity after a set of mostly .
dull monthly safes figures for November. At
Christmas, US stores generally record one
third of ttieir total sales and make as much as
half of their total earnings. But this year price
cuts are likely to eat into profits. And with the
spectre of a softer economy, there may be
some stock market casualties. Page 50
Storm in a coffem cup
Once there was an
awful lot of coffee In
.BraadL Now however
the country’s c off e e
farmers are locked in
a vicious circle of
faffing yields and
declining incomes. -
-Prices have halved
sfnce July when the
International Coffee
Agreement’s export
quota system col-
lapsed. The lower
prices go, the less
farmers can spend
on preparing for
their next harvest — so production fails and
Incomes drop. In a murderous international
market, Brazil was sure its cost advantages
and 30 per cent market share would guarantee
victory, but its next sa tis f a ctory 1 harvest may
well be several years away. Page 38
A stocking full off stocks -• •
Almost a million Swedes are to receive ah
extra Christmas gift this year. They are all pol-
Icy holdera with Trygg-Hansa, the country’s
second largest Insurance group, which is going
public today on the Stockholm stock exchange.
In what IS Scandinavia^ biggest ever share
issue about one in five of the country’s adult
population wiH receive a total of 50m tax-free
shares worth over SKr200 each. For Trygg-
Hansa the issue is part of adynamic Internal
revolution engineered by Bjorn Sprangare, -
who took over as managing director three
years ago. Sprangare says the Issue will
strengthen the company’s artillery domestically
and overseas. Page 24
Market Statistics
Base tamftig rales
BmohmaK tart bonds
Biropaan options hm±
FT-A indices
FT-AwaM tadees
FT Ini band service
Financial futures
Foreiga ortnnon
London recant teanra
48.
a
48
*7
48
a
London Snre service -
London traded options
London trarift options
Haney mates
New ht bond beues
Wedd conmxBy P*e»
Vtatd stock mkt Moss
IRC dMderab ammed
Urit tests
47
Companies bitftls section
American Express ; 28
Amro Bank 84
Archer (AJ) 1 32
Avesco .30
Balllle. Glftord V: SI
Bond Corp •_ - 38
Bund 80
CarfaNRUlng 32
ChanhoJ Express Op :32
Clayhithe - 33
Compagnle Bancaira . 24
De La Rue 30
Dixom . . . . - 31
Drummond 81
Feedback 32
Flat Auto 24
First Interstate 28
Fluor .28
GWR 32
Graham Wood - - .32
Grand Met ropolitan . 23 '
Great Universal _ . 30
Greycoat 32
Qroavanor Dev Capft 38
Guernsey Press 30
Gutton 30
In Shops Sf
JOhnson Matthey 28
KCA Drilling 20
Lovell (YU) 20
MS Engineering - - 31
Macdonald Martin EMs 31
Murray Enterprise 32
NRJ 24
Navistar 20
Phoenix Timber Group 31
PDtdngton 32
Pinnacle West . 28
Sage .33
Seagram 24
Shearson Lehman 28
Smith & Nephew 30
Toyo Tat .31
Trygg-Hansa 24
UK Paper 31
Veba 24
Wharf Hohfinga • 28
Chief price changes yesterday
BMW
nuan mwr fpap
408
S45
720
KadM 637
Mercedes HUB 580
Tbyssm 280
Maw YORK It)
w— ■ vevea
10
Mtemft
ftmdeWM
W—aphm W
Hot War
tend Steal
NateDodg*
■wmpt)
LKMt
STB
+
282
+
125
IfcU
- U +
05
+
+
.11,
-2T
Total Can .
.106
+
47
+
20
Ms
+
20
Ecu
SB
—
174
+
105
am
1094
-
7BJ
TOKYO (Vari)
i +
%
■m
+
4*
KnsaCaMl
MED
+
140
- iii
NtyMiGaacmai 1830
+
140
i
3bori
2500
+
270
r —
Tokyo DUp
1200
+
110
%
tanlfedag
IIS
'+
120
+
142-
TkutaSrtu
SOS
-
240
•tevVafk prices aL 1238
LOMOOWPaape)
1!P 323
\ Brand MM
.7 teem-
iBkScrd
of Use
328 . + 41
855 . + 7
fi 80 : +
273 + 0
B2B + 9
2a +.18
1037 .+ 18
205 + 7
384; + 6
'754 '+ 14
It-
Man
101
- 11
craswka
512
- 14
0* la Rub -
315
- 22
ORE
245
- 9
Jofenu Moray
SO
- 12
US M
92
- 13
Homs' ‘
245
- 10
Generate regroups its non-ferrous metals
By Tim Dickson in Brussels
SOCH5TE G4a£rale de Belgique,
Belgian's most powerful indns-
trtal amt commercial bolding
company, yesterday announced
its Intention of becoming a major
global player in the non-ferrous
metals business.
La G&terale said it would do
by nwi^lng its irnrfw activi-
ties in the sector into Acec-Union
Jfinfere, an en ghwwfog and wink
als grouping which it created ear-
lier this year, to form an inte-
grated TTrui “more coznmercially-
qrtented" indnstrial group.
Tim Belgian holding co m p an y
attracted international attention
last year when it found itself cm
the remnring And of an unsuc-
cessful bid from Mr Carlo De
Benedetti, the Italian business-
man. The complex operation,
which involves buying cmt minor-
ity interests in copper refining
specialist MetaQurgie Hoboken-
Overpelt (MHO) and the zme pro-
(!nwr y ipiTTp - M owfa g m * re p resent
one of the most ambitious steps
in the strategy followed by Mr
Herve de Carmoy, chief execu-
tive, and Viscount Etienne Davig-
non, di air m a n , jriqnp they took
over the reins at La G£c£rale in
xmd-1388.
in short they are designed to
turn a collection of valuable but
hitherto poorly managed assets
into a single entity capable of
meeting the growing competitive
c hallenge of industry leader s RTZ
and West Germany’s Metallge-
sellschaft
Figures disclosed yesterday
show that the new Acec-Union
Mfalfere «r31 be 87.5 per cent con-
trolled by La Generate, that the
group’s share of net operating
prefits will be roughly BFrSAbn
($240m) in 1989, and that its own
funds will total BFr34.7hn. Earn-
ings per share are put at around
BFr453 before the merger and
around BFr434 afterwards.
La G€n£rale, which, bad previ-
ously increased its stakes in
MHO and VM from roomily 50
per cent in each case to respec-
tively 75.3 per cent and 96 per
cent last year, is now offering
nine Acec-UM shares for every
two MHO and 11 Acec-UM for
each VM share to mop up the
remainder.
In addition there is an 11-for-l
offer for the 1.67 per cent stake
HpIH publicly in a «™»n
«i gi np » i|n g business which will
also be integrated into the group.
The final piece in the Jigsaw is
Sagem, formerly G4n6rale Trad-
ing which had a tarnished
image recently but which has
been reshaped to act as Acec-
UM’s intpr rw yi oP a 1 trading arm.
Sogem, unlike the other busi-
nesses which become divisions of
the new group, will remain a sep-
arate company more than 95 per
cent owned by Acec-UM.
Mr De Carmoy. chairman of
Acec-UU, refused to disclose
details of any investment plans
but said new acquisitions and
alliances would be annwimwi in
due course.
Berlusconi wins court injunction
By John Wyfes In Rome
MS SILVIO Berlusconi struck
the first legal blow in the Mbn-
dadori battle yesterday, when a
pHim Court gra w t od an injunc-
tion to prevent the pahlfoMng
group's board, still dominated by
Mr Carlo De Benedetti, from
summoning a special sharehold-
ers’ meeting.
Prince Canto Caracdolo, the
board dmiiimm, adjourned the
meeting until Saturday after-
noon, by which time the De
Benedetti forces hope to have the
injunction lifted. The Milan
courts are now dosed until Sat-
urday morning because of a pub-
lic holiday.
hi a formal sta te m en t issoed
yesterday, the Mosdadori board
mrfri that the Italian CfrllCotie
requires boards of directors to
call special shareholders meet-
ings when presented with,
requests r epre senti ng more than
20 per emit of a company's capi-
tal. Mr De Benedetti’s holding
company, dr, which owns 42 per
cent of all Mondadori capital
presented Just such a request
yesterday, and his camp believes
fiiat the Judge will have so alter-
native bat to lift the injunction
when presented with evidence of
this request.
Mr De Benedetti and his allies
hove a majority at special assem-
blies and their aim is to approve
a repttal increase which would
dfiute the existing majority of
ordinary shares held by Mr Ber-
lusconi’s gro u p.
This majority materialised last
weekend when the Formenton
ftanfiy switched its 25.7 per emit
of ordinary capital away from
Mr De Benedetti to Mr Berlus-
coni «od his «niM
Duel for the soul
of La Repubblica
John Wyles reports on the fierce fight between
Carlo De Benedetti and Silvio Berlusconi
T he battle now under way
for control of Mondadori,
Italy’s largest publishing
group, offers a rather gruesome
portrait of current business prao-
tices in Italy. Deception and bad
faith abound, l eg al contracts
have been questioned and so
great are the issues at that
toe clandes tine of politi-
cal power could yet help to deter-'
victors »wH vanquished.
Tins pifimin that Bm affair
rather more than a spaghetti
soap opera, although it is undeni-
ably rich in the necessary ingre-
dients; from a family recently at
perpetual war with itself, to a
television mogul in bitter compe-
tition with a highly resourceful
financier, to the deployment of
vast (and undisclosed) sums of
money. By the closing scene of
the final episode, however, same
positions may be irrevocably lost,
reputations tarnished and the
power balance
crucially changed
among, the hand-
ful ’ of giant
groups which
dominate Italian
business.
The man with
most at stake is
Mr Carlo De Bene-
detto. Although
his business
future does not
Tiartg nn maintain.
ing a control of
Mondadori which
began only 18
months ago, its
loss as an eco-
nomic and politi-
cal powerbase in
Italy would be a
severe blow to Ids
domestic stand-
ing, and could
weaken ids repu-
tation among hi a in t e rnational
blue chip partners such as S.G.
Warburg and Nomura Securities.
As a financial wizard, De Bene-
dettt’8 image has already taken
some knocks from the failure of
his hid last year for Belgium’s
Soddtd Gdndrale and more
recently from Olivetti’s general
difficulties culminating in a
weakly - supported capital
increase.
of provincial newspapers, Italy's
top two weekly news magazine
and, the jewel in the crown
acquired this year, Mr Bngenio
Scalfari’a La HepubbUca which,
with Ccsrfere tfen« Ser a , is the
nation 's top selling daily newspa-
per.
The prospect of these titles foil-
ing into Mr BerluaconTs sphere,
along sido his three wnuriHriBl
television networks, is generating
a great AmI of genuine alarm
about the growing concentration
of Thorite power. President Fran-
cesco Cossiga’s concern, voiced
on Wednesday was also undoubt-
edly sincere. But, imprisoned in
their lobbies, the p oliticians have
repeatedly failed to provide Italy
with a properly functioning anti-
trust law governing bath newspa-
per and television ownership.
Having been strenuously
wooed by Mr Berlusconi, the rul-
ing Christian Democrat-Socialist
Locked in battiei Carlo De Benedetti (left) and Silvio Berinsconi
ere stand to pluck some very :
fruits from capturing a company
with sales of L2^00ta ($L75bn)
and profits flria year of more than
LlOObn. First and foremost, Mr
Silvio Berlusconi who would
establish Wwwlf an nn Inriigp nt-
able power after the Agnellis
both m terms of personal wealth
and actual political influence.
. Publishing, particularly of
newspapers, is regarded by all of
Italy's Teodhip business barons as
a crucial key to social and politi-
cal power, aid thus to cementing
the formidable economic
advances they have made during
this decade. Agnelli, fterriini, De
Benedetti, Berlusconi all have
their newspapers winch, by and
large, are givm considerable, but
not total editorial freedom.
Among other firing* their own-
ers efing to -them as a kind of
insurance against the bad old
days of the 1970s when a lack of
assertion left them prey to ram-
pant trade onions, corrupt politi-
cians and murderous terrorists.
In this respect, Mondadori is a
prize, offering not only
jhBhhsg but also a ^-hflln
political establishment is for
from preoccupied about a trans-
fer of control at Mondadori. *T am
not isolated, I am independent,"
grid Mr De Benedetti this
week. He is, in fact. both.
Although he is a board member
of Italy’s dominant merchant
bank, his independence of view
and conduct has kept him apart
from the Agnelli-Mediobanca
business establishment, and few
his chaBeng- in tills group would regret his
defeat, even if they are not
actively working for iL
Standing outside fide charmed
inner business circle may si gnify
iTirigpgndencn, but it is also iso-
lating. Mr De Benedettfs some-
what lonely state has been seated
by his tolerance, greatly exagger-
ated by his foes, of the Commu-
nist Party.
Since this attitude is perfectly
in accord with Mr Scalfori’s at La
Repubblica, the “if you are not
with us, you are against us" men-
tality in Italy on such matters
guarantees Mr De Benedetti and
M ondado ri the deep mistrust of
the Craxi (Socialist leader) -
Andreottif Christian Democrat
prime minister) - Forianl (DC sec-
retary) axis, which Is currently
raffing the shots In HaHm poli-
tics.
This then explains why the
Formenton family’s decision to
deprive Mr De Benedetti of his
control of a majority of Monda-
d art's ordinary shares is rather
more a cnknirfai boardroom
squabble. Though they justify
their act in terms of alleged
attempts by Mr De Benedetti to
acquire a de facto control
through covert market pur-
chases, they have probably been
subject to political pressure and
most certainly to a heavy seduc-
tion by Mr Berlusconi. He aHtnftg
.to. having provided, them with an
TTTvtotinpd financial umbrella"
which Mr De Benedetti riahns Is
worth L140bn.
Since mid-1988, Mr De Benedet-
ti’s co n trol been based on
affiance with Christina Farmen-
ton (Nee Mondadori) her son
Luca and her daughter Silvia
inside Amsf, a financial holding
which owns 503 per cent at Man-
dadori ’8 ordinary shares. Having
fought bitterly last year with her
cousin Leonardo and his mother
over forging an alliance with Mr
De Benedetti rather than with Mr
Berlusconi, Christina and her
children have now made common
cause with the other half of the
family and with the TV king, to
achieve a com-
bined control of
more than 60 per
cent of Amefs
capital
Unless they suc-
ceed in legally
nullifying the
agreement, the
Formentons can-
not, however, sell
to Mr Berlusconi
because of a
signed arrange-
ment with Mr De
Benedetti to sell
their Amef hold-
ings to him by the
end of January
199L Before losing
his majority on
the Mondadori
board, Mr De
Benedetti’s target
is the calling of a
special general
meeting to consider a capital
Increase which would to dilute
Amefs majority of Mondadori
ordinary. This decision was due
to have been taken yesterday by
the Mondadori board but was
postponed, at least until Satur-
day, after Mr Berlusconi was
granted a injunction by a Milan
court. Mr De Benedetti’s justifica-
tion for a capital increase of
around LSOObn is the need to
fund thte sp ring' s purchase of La
Repub blica and L’Espresso
group.
Mr De Benedetti has enough
votes to call a special a*, jmbiyto
deliberate such an increase,
through Ins ownership of a. least
71 per cent of Mondadorl’s privi-
leged shares and 173pc of its
ordinary. If he succeeds in win-
ning a ca p i ta l issue on a one-Cor-
one basis, Amefs bolding of ordi-
nary stock would be (hinted to
around 35 per cent, because It
does not own any privileged
shares. Mr De Benedetti’s stake
would rise to around 33.5 per
cent, which he c laims would
guarantee a majority for
and hfat altipe
Inevitably, the lawyers are set
for a field day since FQrmenton-
Berlusconi will dispute any beard
decision on a capital increase
•which they are not party to (the
Formentons resigned from the
M o nd a do ri board last weekend),
and have not foamed to their own
advantage. In other circum-
stances, the warring parties .
migh t seek a compromise, but Mr
De Benedetti is a very angry man
who needs a victory.
GrandMet raises
pre-tax profits by
27% to £732m
By Philip Rawstome in London
GRAND METROPOLITAN, the
food, drinks and retailing group,
yesterday emerged from a testing
year of acquisitions, disposals,
and reorganisation to please the
City with a 27 per cent increase
in pre-tax profits to £732m
(51,153m).
Concern about the integration
of the Pillsbury and Burger King
operations, acquired in January
this year, was eased by their
nine-month contribution to the
results. PiDsbury made a trading
profit of £166m and Burger King
turned in 278m, well ahead of
expect a tions. The shares rose 18p
to close at 580p.
“GrandMet’s business pwtfniift
is now streamlined, better bal-
anced and with strong manage-
ment in depth,” Mr Allen Shep-
pard, ehafrn tan and group nhlrf
pngn U ro ebrimpd- “Despite eco-
nomic uncertainties in the UK,
due to its global strength (hand-
Met faces the current year with
well-based confidence.”
, Earnings per share for tire year
ended September 30 grew I&6 per
cgnt to 55U5p. A dividend of
lip is recommended, making a
total dividend of 17.5p, an
adjusted increase of 20 per caxL
Group trading profits rose 48
per cent to £967m an sales reve-
nue Of £9.2 fan. TntwnnHrmnl Qjg,
tillers and Vintners led the
group’s strong organic growth
with a 23 per cent rise in trading
profit to 2389m. Margins
improved to 14 per cent from 122
per cent
Wines, spirits and brewing all
contributed to this performance,
the result of sustained marketing
investment - an which Grand-
Met spent a total £600m last year
- behind key brands such as
Smirnoff,the world’s top vodka
brand y J &B whisky and Baileys
Irish Cream.
IDV now owns 17 wines and
spirits brands selling more than
1m cases and has increased the
proportion of brands sold
through its own distribution net-
work to more than 80 per cent
to the beer market, both Web-
sters and Ruddles gained share
and the key agency lager brands,
Fosters, Holsten. Carlsberg and
Budweiser performed strongly,
though the disposal of some
gmaifer pubs put pressure on vol-
umes.
Retail trading profits increased
8 per cent to £l54m In spite of a
setback in the UK pubs where,
the company admits, manage-
ment “took its eye off the ball”
during wrtnic tunng .
In the US. Pearie strengthened
its already dominant pwHion in
the eye-care market with the pur-
chase of the Eyelab chain of 71
superstores.
Finsbury’s gules volumes in all
divisions are currently running 5
per cent ahead of last year in real
t e r m s and two operations. Has-
gen Dazs icecream, and the food
services division, have been ear-
marked for strong expansion.
Property deals contributed
£45m to profits after charges of
gflfim ra n rgn Titration roots
Business disposals generated
profits flftgf t8X of
£560o, helping to reduce the
group’s total borrowings -
mainly a result of the Pmsbury
acquisition - to £3£bn. Interest
costs of £280m are covered 38
times. Gearing at 128 per cent
should foil to around 80 per cent
in the current year.
• Mr Nicholas Ridley, Secretary
for Trade and Industry, yesterday
gave the go-ahead for GrandMet’s
sale of the majority of Mecca/WU-
ham Hffl betting offices to Brent
Walker irfter statut o ry undertak-
ings to ensure the deal would not
eliminate local competition.
Lex, Page 22
Warrant
business
may return
to Japan
By Andrew Freeman
In London
JAPAN’S Ministry of Finance
(MoF) is actively considering
moves which would take Lon-
don’s highly profitable Japanese
equity warrant business back to
Japan.
It emerged yesterday that
senior re prese n tatives of lead i n g
Japanese securities booses were
summoned by the MoF In Tokyo
and warned that fixture US doi-
lar-denomlnated warrants deals
may have to be listed on the
Tokvo stock exchange.
This would lift a current bar
on Issuing foreign currancy-do-
nominated warrants in Japan,
meaning there would be little
advantage to issuing fax the Euro-
markets. Equity warrant deals
are bond issues with warrants
attached that give investors the
right to own equity In the issu-
ing company at a rat price.
The warrants are split from
the braids and traded as separate
Instruments. They have provided
many Investors with substantial
profits as the Tokyo stock mar-
ket has continued Its long
upward run. In an otherwise dix-
flcult year far the Eurobond mar-
ket, equity warrant Issues have
been e xtr e m ely profitable.
Over $55bn worth of deals
have been launched In 1989, rep-
resenting around one quarter of
total new Eurobond Issue vol-
ume. Issuance is dominated by
the biggest Japanese houses.
(Nomura. Tamaichl, Nlkko and
Daiwa), which allow many other
banks to have small participa-
tions in ft** 11 deals.
Even «™»n amounts of the
warrant bonds have provided
returns to the hanks that have
offset losses In other areas and
allowed some of them to stay in
the Enrobond market.
It is understood that the secu-
rities houses were told by the
Securities Bureau within MoF
that the Tokyo listing require-
ment will be compulsory. No
timetable has been laid down,
bat if tiie measure Is introduced
It would prompt issuers to
Iwnwrii Awh 1 Awh Jn Tokyo.
The Securities Bureau is
thought to have told the houses
that the listi ng req uirement
would increase transparency in
the secondary market for war-
rants. Privately, the booses said
the move would be r egressive at
a time when the trend in the
market is away from stock
exch an ges tow ards so-called
l)QSill6S8a
The Securities Bureau Is gen-
eraHy thought to represent the
views of smaller Japanese securi-
ties houses, which have been lob-
bying hard to gain a share of the
lucrative warrant bus ines s.
Access to Japan, Page 27
Molturacion Espariola
Sruppo Ferruzzi
has acquired a controlling interest in
Oleaginosas Espanolas, S.A.
a wholly-owned subsidiary of
Institute Nacional de Industria (I.N.I.)
m
Coordinated by
Infoleasing, S.A.
(a wholly-owned subsidiary of I.N.I.)
The undersigned initiated this transaction and acted
as financial advisor to Infoleasing, S.A.
Prudential-Bache Capital Funding
nurkrt
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24
FINANCIAL TIMES FRIDAY DECEMBERS
INTERNATIONAL COMPANIES AND FINANCE
Fiat to acquire 49% of Maserati
By John Wytes in Rome
HAT AUTO yesterday moved a
step closer to becoming Italy’s
sole car manufacturer, with
tiie annmiTirwTwwit of a manu-
facturing and mflrfrgff Ti g a g r ro -
ment B tth 'MW WT ^-Tw TlOCT nitt,
which has been limping for
more than a decade.
The agreements satisfy
Fiat’s need for increased manu-
facturing capacity in the ft»»
of strong demand in Western
Europe in the last four years.
while pointing to the possi-
ble future absorption of the
Maserati-Izui ocentl marques,
they also reveal an unusual
degree of caution on the part of
the Turin group, which rarely
accepts a minority stake in a
manufacturing joint venture.
Flat Auto has agreed with
Mr Alejandro De Tomaso, who
controls Maserati, to accept a
49 per cent stake In a new com-
pany, Maserati Spa, which will
be responsible far the produc-
tion of existing and future
marques at its plant at Lam-
brate in Milan, together with a
rfofly output of ISO of the
flat Panda.
At the same time. Flat will
take a controlling 51 per cent
stake in Innocentl Milano, a
new marketing company,
which win develop the existing
MaseratMnnocentl 170-strong
dealer network. Hat so urces
suggest that in the future some
of the vehicles, which the
group is set to manufacture in
Poland and the Soviet U ni o n ,
could be sold through this net-
work.
Maserati has been register-
ing rising losses in the last five
years, culminating in a L37bn
flfgsaiw) deficit last year on a
turnover of L200bn. The com-
pany is secretive about its pro-
duction levels, but these are
fhnw ght to be less than a com-
bined 15,000 units a year of its
Maserati high performance car
and of the British Mini, manu-
factured under licence.
Fiat is currently making
300,000 Pandas a year and the
addition of another 30,000 is
judged necessary to meet
demand, especially in its
domestic market. The group
says production at Lambrate
can start early next year with-
out any great overhaul of exist-
ing machinery.
Mr De Tomaso exercised an
option at the end of September
to increase his holdings in
Maserati to 83 per cent by buy-
ing-out the 32.7 per cent stake
in his compa n y held by Gepi, a
state holding group with the
nominal function of turning
around lame ducks.
Charter tightens grip on Johnson Matthey
By Kenneth GoocHng, Mining Correspondent
CHARTER Consolidated, the
UK industrial holding company
in the throes of a shake-up at
the hands of MLnorco, the
South African-controlled
Investment company, yester-
day tightened its grip an John-
son Matthey, the world’s big-
gest platinum refining ana
This fallowed the resignation
late on Wednesday of Mr
Eugene Anderson, JM's
executive and the man credited
witil guiding tho group 'Fr om
near- bankruptcy In 1985 to
renewed financial health. Yes-
terday Mr Neil Clarke, who
recruited Mr Anderson,
resigned as chairman of JM.
Charter owns 38i5 per cent of
JM and receives about one
third of its «wrniwp from thh
source. Now two of its key
managers will give up their
executive dirties at Charter to
take senior positions at JM.
Mr David Davies, the former
THU Samuel chief executive
who is currently deputy chair-
man of Charter, wfll become
JM's chairman. Mr Richard
Wakeihus. execu-
tive and finance director of
Charter, will join JM as deputy
rjhirf executive.
-Effectively tills is a way for
Charter to consolidate Its con-
trol of Johnson Matthey with-
out bavins to bid " commented
Mr Robert Sassoon, analyst
with County NatWest "It
should come as no surprise,”
he added.
These wijmwpmHmt manoeu-
vres, and a statement from
Char ter that it bad "no p nWOlt
intention" of e ither buying or
selling JM shares, resulted in
the JM price dropping I2p to
369p yesterday whue Charter’s
shares shed 8P to 4S2p.
Both campaniles are loosely
linked with Mr Hazxy Oppen-
hehner's Anglo American Cor-
pora tion-De Beers mining
empire. Mtoorco, a 60 per cant
subsidiary of the South African
mining group, owns 36 per cent
of Charter. A year ago
Mlnorco, which under chief
executive Sir Michael
Edwardes has changed from a
passive In ve stm ent company to
An »» which' w»nte “hands an"
management of those groups in
-which it is heavily invested,
prompted wholesale manage-
ment changes at Charter.
These included the departure
of both t he chairman arid chief
executive.
Subsequently the new Char-
ter management team, in
which Sir Michael as non-exec-
utive chairman played an
active role, dropped heavy
hints that it was not com-
pletely satisfied with JM’s
recent performance.
Mr Anderson resigned after
a board meeting to consider
JM's interim figures,
announced yesterday, which
showed taxable profit up by 6J
per cent to £3&5m, roughly in
line with analysts' expecta->
Veba reports 28% rise Amro in credit card link
VEBA, the West German
energy and chemicals concern,
said Its group pre-tax profit
Pltmhwt around 28 per rwnt In
tiie first 10 months of 1989,
AP-DJ reports.
It said 1989 group net
income wonld rise at least 10
per cent to a minimum of
DMl.lSbn (8668.5m) from
DB£L07bn a year earlier.
Mr Klaus Plltz, chairman
said 1989 earnings pa share
will be flat or only slightly
higher than a year earlier
because the company boosted
its share capital by 10 per cent
earlier this year.
In the first 10 months, pre-
tax earnings rose to around
DHL7bn from DM1.33bn a
year earlier, Mr Piltz said.
Group sales advanced 15 per
cent in the first 10 months.
Veba confirmed press
reports that Merrill Lynch has
acquired a 25 per cent stake in
FeMmfihle Nobel, which could
Mode Vein's attem pt to gain
control ova the group.
Veba has boosted its stake
in Feldmflhle to 50.001 per
cent in recent months from 46
per cent by buying shares
firom an investment f ind, but
it cannot take control of the
com p any because of a voting
right Umtiatkm at Feldmflhle.
Mr Pfitz said Merrill Lynch
has offered its shares to Veba
for a price above the cur rent
market price, but Veba
rejected the offer because it
was too high.
By George Graham in Paris and
Laura ftaun In Amsterdam
CETELEM, the consumer
credit subsidiary of the French
financial services group Cotn-
pagnie Bancaire, is to form a
joint venture with Amster-
dam-Rotterdam Bank (Amro), a
IwuHwg Dutch Iwnh, to wrarfcpt
credit cards in the Nether-
lands.
The new venture, named
LeCard, wffl market a version
of the Carte Aurora distributed
by Cetetem in France, a revolv-
ing credit card which is co-
branded, or issued in conjunc-
tion with retailers. Amro will
own GO per cent of LeCard, and
Cetelem 40 per cent.
Compagme Bancaire said the
card would probably be dubbed
Aurora Card, and wonld be the
first co-branded card in the
Netherlands. The Netherlands
is viewed as a promising mar-
ket as credit cards have so for
hardly found their way into
Dutchmen's wallets. There are
only about 500,000 credit cards
in issue.
The country has lagged
behind most of Europe in the
introduction of new payments
systems because of satisfaction
with the traditional giro clear-
ing system. Bitter battles over
who will pay for the new ser-
vices have also hindered their
introduction.
French pop
FM station
relaunches
flotation
By William Dawkins
in Paris
NRJ, THE Paris-based cult FM
radio statical which claims
more teenage pop listeners
than any other lit the country,
will today relaunch its flota-
tion on the city’s secondary
market.
NRJ, France's third largest
commercial radio station, M
to a arl l a.
this week after being swamped
by what its stockbrokers
b elieve was a record ovexsub-
wrtpl Inn.
They received applications
for 800 times more than the
512J340 shares, 10 par emit af
the company’s capital, on
offer. That mew™ offers were
put in for more than 153m
shares, worth FFr48.9bn
(S8.Q8bn) at the FFr320 per
share
To try to bring demand back
to more realistic levels, NRJTs
advisers will reopen the offer
today at a higher price, FFr380
per share, valuing NRJ at
FFrU9bn, or 23JZ times this
year’s forecast net
The enormous dema nd is
believed to come from a mix-
ture of small inve sto r s . Listen-
ers, and institutional floods
attracted by the rarity of radio
station investments on the
Paris bourse. Europe L, which
has older listeners and a
larger market share NRJ,
is the only other quoted radio
station.
NRJ, founded In 1081 at the
start of the liberalisation of ;
tiie French radio industry, i
now numbers 6m regular lis-
teners.
Seagram ahead
SEAGRAM Company, the
drinks group which has a
stake of almost 24 per cent in
Du Pont, the US chemicals
group, moved ahead strongly
in the third quarter, writes
Robert CSbbens in Montreal.
Third quarter net profit
including Du Pont dividends
and share of unremlttad earn-
ings was US$189 Am, or $1.77 a
share, np 19 per cost from
$l42Am or $L46 a year earlier.
Excluding the Du Pont earn-
ings, Seagram’s net profit
equalled $L05 a share, against
95 c en t s .
Swedish insurer makes
Christmas come early
Robert Taylor on a tax-free gift for policy-holders
T rygg-Hansa, Sweden's
second largest insur-
public today on the Stockholm
Stock Ffrehana a in Scandina-
via's biggest share issue.
As many as 930.000 Swedes
who are policy-holders with
the company are about to
receive 50m tax-free shares.
Thera are worth more than
SKr200 (831) each. This
amounts to around one in five
in the country - andTQOjoooaf
them have never owned any
Ton can call it a Christinas
gift," says Mr Bj&m Spr&ngare.
mma giw g director. There has
beat almost a national teach-in
on the meaning of this flotation
with widespread advertising in
thepress and on billboards.
This Is a further and dra-
matic indica-
turn of the I
growing trend
of individual -
share owner- PiemUuns
whip jn Sweden from haw
in recent Qpou dfri i— l
years. In the Tatml ■— 1 *
rapidly dung-
ing Swedish financial world
the Trygg-Hansa flotation is
something to celebrate. How-
ever, this is not perhaps the
best iwwwffl it to laimrfi a pub-
lic company, given the uncer-
tainties of the Stockholm
bourse.
However, Mr .Sp rfag a re has
his eye firmly on the fixture.
"The 1990s will be a completely
new era for Sweden's insur-
ance business," he — m in the
to take a dvantag e of business
, opportunities." He wants to see
Trygg-Hansa much better
equipped to st ren g th en, its post-
tfam in the competitive domes-
tic insurance market and
increase its activities overseas,
particularly Inside the Euro-
pean Community, where it
hopes to p u rc h ase c o mmercUl
indust rial Insurance compa-
nies. '
Hu aim A also to improve
the resources of the company
to face the ch all en ge of foreign
insurance companies operating
in the fixture In Sweden among
the c ountry ’s multina-
tionals.
The company has a long way
to go before it op with
the International strength of
Skandla, Sweden's largest
insurance company, but Mr
FIVB-YMAR RECORD (BKr n
res* tses lies
VB7 MM 4,339
It is increasingly facing the
iwnflHnnii with which which
Swedish industry has been
familiar for many years -
exposure to international com-
petition and adaptation to the
requirements of customers."
The decision to float Trygg-
Hansa stems from the com-
pany's desire to raise more risk
capital. "The traditional
mutual form of ownership does
not provide the same fr ee dom
of action and capacity for adap-
tation as does the Hmited com-
pany form," argues Mr Spr&n-
gare.
"The mutual form would not
be suitable in the fixture, where
success will largely depend an
strong huH confident action in
the financial market, personal
commitmen t and the capacity
Spr&ngare has his sights set
high. Moreover, he also waste
to see Trygg-Hansa. exp a nd i n g
its financial activities beyond
insurance.
However, the present Swed-
ish laws are rather restrictive.
Inflating flat insurance com-
panies in Sweden can o^own
a maximum of 5 per cent of
companies with business other
than insurance.
T he law is likely to be
changed soon as the
Ministry of Finance
recognises the distinctions
between banking and insur-
ance are becoming increas-
ingly hard to maka.
In the three years he has
headed Trygg-Hansa he has
turned the company from
being a rather staid and sleepy
ymtwri inhn a competitive and
c ornm erdfll venture.
"When I first came here peo-
ple were not talking about
profitability but the <empmy
as a social institution," he
R is no exaggeration to sug-
gest he has carried out a cul-
tural revolution in the com-
pany.
Back in 1986 tiie company
made a loss of SKrl32m but in
the first eight months of this
year it made a profit of
SKr?67m and a 5 per coni
return on equity. Under the flo-
tation the company’s policy,
holders will receive stock in
proportion to the amount of
premiums they paid for prop-
erty and car insurance from
1984 to 1988.
The avenge policy-holder
can expect 85 shares at a total
value of SKr6,000. Ttygg-
Hausm's own employees are
also to benefit throw the
acquisition of convertible
loans, repayable by 15 April
1994.
The damutuaHration of the
i-gmrmy bos involved a com-
plex restructuring of Trygg-
Hansa with the creation of a
holding company.
Trygg Ufa mutual insurance
■ will be the
% majority owner
i — — through a
lew iiie*- - - sKr ?.hn capital
4.7SS s.10* injection, with
-a ia * 63.4 per cent of
sea a*s the voting
yyaa shares and 3741
per cent of the
r» r tta>1 - This safety measure
ensures that Trygg-Hansa does
not run the risk of losing con-
trol of its own creation to any
aggressive institution or indi-
vidual that tries to buy up the
individual shares.
The 930,800 poUcyholdtta in
Hansa General and Hansa Tra-
ffic will provide between them
724} per cent of the capital.
They win, however, control
only 36.6 per cent of the voting
abates.
S pecial legislation was
passed to enable Trygg-
Hansa to be the first com-
pany In Sweden to be Hnked to
the new paperless system
known as VPC, Stockholm's
central registry of stocks.
Today's flotation has already
started to shake up the Swed-
ish insurance scene.
Yesterday ' Folksam. the
Labour movement's insurance
group announced a joint finan-
cial venture with Sparhanken.
Mr Sprftngara is charting
Trygg-Hansa -into unknown
waters but is confident there is
no going back. He believes his
biggest problem la finding a
hall big enough to seat all nis
shareholders for their first
axhxnsl meeting next year.
New Issue
All these securities having been sold, this announcement appears as a matter of record only.
December, 1989
SEKISUI PLASTICS CO.,LTD.
U.S. $100, 000, 000
3% per cent* Guaranteed Notes 1993
with
Warrants
to subscribe for shares of common stock of Seldsui Plastics Co., Ltd.
The Notes will be unconditionally and Irrevocably guaranteed by
The Sanwa Bank, Limited
Issue Price 100 per cent.
The Nikko Securities Co., (Europe) Ltd.
Yamafchi International (Europe) limited
Daiwa Europe limited
Baring Brothers & Co., limited
Daiwa Bank (Capital Management) limited
Goldman Sachs International limited
Merrill Lynch International Limited
New Japan Securities Europe limited
Tbwa International Limited
Wako International (Europe) limited
Cosmo Securities (Europe) limited
Hanshin Securities Co., Ltd. Ei
Sanwa International Limited
Nomura International
BNP Capital Markets limited
ed Dresdner Bank Aktiengesensdhafl
IBJ Inte rn a tion a l Limited
Morgan Stanley International
Norinclmkin International Limited
Toyo Triist International limited
Barclays de Zoete Wedd Limited
Robert Fksning & Co. Limited
Kuwait International Investment Co. s^uk.
RAND MINES LIMITED ■■■■■■
EARNINGS AND DIVIDENDS AT
HISTORIC HIGH
Flam the Statement by the Chairman, D T Watt, for the year ended 30 September 1989
Overview
The Group achieved outstanding results for the
financial year to 30 September 1989.
Attributable profits reflected an increase of 31
per cant over last year. Turnover far the year
ex c eeded one button. rand for the first time and
was 43 per cent up on the previous year. This
rewarding performance was due mainly to
exceptionally strong earnings gr ow th by the
coal, base minerals and p faparty divisions.
Results
at a glance
The Board declared a final dividend of 440
cents, thus raising total dividends far the year
to an aOrthne high of 660 cents a share -a 24
per cent increase over the 450 cents declared
last year.
A miles tone in the Group’s expansion into
pl a ti nu m production, and for the South African
p l at inu m industry, was reached an 30 June
1989 with the pouring of the first bar
1999 1988 %
Ramon RmOHop Change
anff managed
Ttnnorar
* Total assets
3108.1
S2S&2
207918
4606L2
+16
+34
NUznber of enqfloyras
77409
94 990
-19
(Iwnp ammlWiMil
Turnover
1387.7
967-3
+43
Profit before taxation
mi
241£
+39
Pmflt ta
2103
164.6
+31
Total assets
2907.8
2413JB
+24
Bandogs per Share
Cauls
1929
Cents
1467
+31
DMdoods per sbam
690
460
+24
Net asset value per share*
9769
8809
+11
nMdeod cover (times)
&4
&3
-HJ
r boo* Tafcw of Ontf tavntnentt.
Prospects
A lthough world economies appear to remain
somg, there are In dic a ti o ns that some,
co mmo dity prices may have peaked and farther
growth in eamingB from these markets will be
dependent on hjqtwr volumes and the US
doOax/rand exchange ra te.
The Group is budgeting for a further
increase in pro fi ts in 1990 though at a mare
modest rate than achieved in 1989. Barring a
malar variation in economic and mineral market
condi ti ons, eamii^s per share on the increased
capital following the rights after are wvpann^
to be marginally lower than for 1989. However;
the improvement in the hniimm sheet
will allow the 1989 dividend to be repeated in
the current year.
Johannesburg
30 November 1989
gonapo w ra laths
Rftwbfio of Sooth Afeod ■
SaabaaOoa Mo. OVOMSSflNI
rand mines ■■■■■
BR EAKIN G NEW GROUND EVERY DAY
^INANdAI TIMES FIUD Ay -DECEMBER 81989
$?S
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Branches - Hanking and other subsidiaries (evidently this list includes only compa nies unde r the group’s control) :
ydaodens Discount Company - Alexander Trade Finance - Avista Bank - Banco San Marco - Ranqnp Franco n«»n^ni«j^ de
?; ' Commerce international et Maritime - CLN Assurantie - CLN Oyens and Van Eeghen NV - Crediofina - Crediolease - Credit
iLyonhglte Bank Nederiand - Credit Lyonnais Bank Sverige - Credit Lyonnais Belgium - Credit Lyonnais Ca pita l MaArt« _
' Credit Lyonnais- Equipment Finance “CLLF.” - Credit Lyonnais Euro-Securities - Credit Lyonnais Finanz AG - Credit
Lyonnais Portugal- Crgdittyonnais Rouse-CreditLyonnais Deutschland OHG - Credit Lyonnais Securities - Credit Lyonnais
-<>- Suisse - Credito Bergamasco - Direkt Bank - Laing & Cruickshank Investment Management - Lentjes and Drossaerts -
9 SaltahdSche jBank - Rh5ne Leasing - Slibail Belgique - Slibail Iberica - Slibail Portuguesa.
Aalst - Albino - Alkmaar - Almelo - Amersfbort -
Amstdvecn (2) Ainsterclam(7) - Antwerpen (7) -
R Apeldoom(2) - Arnhem (2) - Assen - Athlna (2) -
Aveiip - fiagbaflea^- Bareelona(7) - Beichem(2) -
^ Op2qOii±i>Bfll3ao-BociauiUiOO
^? Baxmeer - Braga - Bxanzi - Breda (3) - Biembate -
■>- Biembate di Sopia - Brescia (2) - Brugge - Brussel/
Bnix^^C8) ? B^St&in^nds-]^^ Bussum -
■' '? f Bustp. Arsizit) Calcinate - Cadolziocorte - Cambiago -
v Cascais r Cassano d’Adda - Castegnato - Castelli
y : - Calepio-- Gastrezzato - Charleroi (2) - Cisano
; i':: Beigaxnasco Chisone - Cologne Biesdano -
; r : Cotqgfib al .Sferib - Coite Franca - Cuyk - Delft(2) -
*£■ DdUq V- Den Hague -..Den Hdder - Deume -
• Deventer(2) ^I)oainchem-.Dordiecht-Dusseldorf-
Eastbourne - Ede - Edinbuigh(2) - Eindhoven (2) -
‘h Emnleri - Enschede - Eibusco - Eara Gera d’Adda -
J Foppblo FjaiJdurtC2) - Gandino - Gazzaniga -
Geneve (3) - Gennep - Gent(2) - Goes - Gorgonzola -
Gomo - Gouda - Groningen (2) - Grumello del
Monte - H a aiiem - Hambuig(2) - Hasselt - Heerlen -
Helden Fanningen - Hengelo - Hertogenbosch (2) -
Hilversum - HoofiJdotp - Hoom - Hulst(2) - Inzago -
Istanbul (2) -Jersey -Jesolo Lido - Kampen - Kerikrade
- KObenhavn - Kortrijk(2) - Leeu warden - Lefife -
Leiden - Li^e(2) - Lisboa (9) - Lisse - London(lO) -
Lovere - Lugano - Luxembourg(4) - Madrid (12) -
Malgrate - Manchester(2) - Maitellago - Masstricht -
Matosinhos - Mazzano - Merksem - Mestre -
Middelburg - Milano (5) - Mira - Mons - Naaldwijk -
Namur - Nembro - Nijkerk - Nijmegen (2) - Noventa
Padovana - Oisterwijk - Oltre il Colie - Oostende -
Oosterhout - Osio Sopia - Oslo - Ospitaletto - Oss -
Palazzolo sull’Qglio - Passiiano - Piazza Brembana -
Ponte San Pietro - Porto (3) - Provaglio d’Iseo -
Purmerend - Putte - Quehiz de Baixo - Rijssen -
Rodengo Saiano - Roermond (2) -Roma- Romano di
Lombardia - Roosendaal - Roselaere - Rotterdam (6) -
Rovato - Rudiano - San Dona di Piave - San
Omobono Imagna - San Paolo d’Argon - San
Pellegrino Terme - San Sebastian - San Stino di
Iivenza - Santarem - Sas van Gent - Schiedam - Seriate
- Serina - Sevilla - S’Gravenhague - Sittard - Sluis -
Sneek - Soest - Sottomarina - Spinea - Stockholm -
Stuttgart - Teuton - Temeuzen - Thessaloniki - Tilburg
- Travagliato - Tienzano - Heviglio - Treviolo - Tieviso -
Torino - Uden - Urago d’Oglio - Urgnano- Utrecht (2) -
Vaassen - Valencia. - Vaprio d’Adda - Veenendaal -
Venezia (5) - Venlo - Venray - Verdellino -
Verolavecchia - Verona - Villa d’Alme - Villa di
Serio - Vlaardingen - Volendam - Vught - Weert -
Winschoten - Worthing - Zaandam - Zeist -
Zoetermeer - Zurich (2) - Zutphen - Zwijndrecht -
Zwolle(2).
fantfitoiiN; fbiget our Eumpartners s Banco di Roma, Banco Hispano Americano, Commerzbank.
ar -x^A
rofi
nurkc:
ra iftt*
tcc^acr-
S'-trirJi
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*’ iUVS.
r.s au-.
• CoiU;
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Ftjli'r
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SBaiTfrgRS&ffiirSfBB-EBassBEr * ftBB6H» , SMSBMilH*BSaca<<as »H «jf k* b esrtfe tret a» «
ua $700,000,000
Republic of Portugal
Floating Rate Notes due 1993
Interest Rate
Interest Period
Interest Amount due
8th June 1990 per
U.S.S 10,000.00 Note
US. $100,000.00 Note
U.S. 3250,000.00 Note
8,2375% per annum
8th December 1989
8th June 1990
US. 3 416.45
U.S.S 4,164.51
U.S. 810.41 1JZ8
Credit Suisse First Boston Limited
Agent Bank
lii H il i f \ JX* 1 > H m *** ] '• 1 : 1 1 ^
Navistar incurs loss
in fourth quarter as
truck market slides
By Roderick Oram in New York
Notice to Holders of
TOA GOSE I CHEMICAL
INDUSTRY CO., LTD.
SnhufttbrSiinsarCwan
Stock arttic Caraptoty, Issued in
CseJaactian with On fame of
USS100, 000,0004**%
Advortisemont
The Bank of Nova Scotia
Sir Graham Day
At a recent meeting of the Board
of Directors of The Bank of Nova
Scotia, Sir Graham Day of
London, England Mas appointed
a Director of the Bank.
Sir Graham is Chairman of
Cadbury Schweppes pic.
NAVISTAR yesterday reported
a loss for its fiscal fourth quar-
ter and warned of a further
deficit this quarter because of
declining demand for medium
and heavy duty trucks in the
North American market.
The Chicago-based company,
the largest US truck producer,
turned in a net loss of $13m, or
8 cents a share, for the three
months ended October 31,
against a net profit of $82m, or
29 cents, a year writer. Reve-
nues dipped to $954m from
SLISbn.
Net profits for the fiscal year
plunged to 587m, or 28 cents a
share, from 9244m, or 84 cents
on revenues which were flat at
$4.02bn, against $4.08bn. Its
heavy truck shipments fell 9
per emit to 38,000 and medium
trucks fell 5 per cent to 50,000.
Industry shipments of
iripriinin trucks fell 8 per
to 42,000 during Navis tar’s fis-
cal fourth quarter from a year
parfiw and orders fen 25 per
cent. Heavy truck shipments
fell 8 per cen t to 40,000 and
orders dropped 31 per cent
Profit n wrgl"* «»n» imrtw
increased pressure, preventing
Navistar from passing on
higher costs for some pur-
chased components.
Navistar forecast the indus-
try will Ship 157,000 to 160,000
medium trucks In the compa-
ny's fiscal 1990 year, down 2 to
4 per cent from last year. It
wiU ship 138,000 to 155,000
heavy trucks, down 8 to 18 per
emit
As business weakened this
year, Navistar cut its produc-
tion rates, which stood at a
record 438 trucks a day in the
second quarter. They were
reduced by 9 per cent in the
third quarter and 15 per cent to
338 units a day in the fourth
quarter. As a result, invento-
ries were in line with current
demand, it said.
Navistar’s results were also
hurt by the cost of assimilating
27 new truck models into its
range. Over the past two years
it has overhauled 85 per cent of
Its product line.
in shipmen t s of die-
sel wn ginpw to other equipment
manufacturers fell 3 per cent
in the quarter, hut for the full
year rose 12 per cent to a
record 106,700 units. Sales of
spare parts dipped 2 per cent in
the quarter but were flat for
the year.
Mr James Getting, chai r m an ,
said the company has begun
prog ramm es to reduce the cost
of components, both those pro-
duced internally and, through
design changes, those sourced
outside.
Fluor recovery continues
FT STATIONERY AT
HALFPRICE
FT Stationary paries let yon 6nHd np your personal organiser precisely tbe
wqy you want is.
Luting 12 months, each pack b compatible with most other 6-ring binder
systems and contains a hefty 200 pages.
Tberefe nothing hefty about the sale price, though. £740* each Exctasrea
to FT readers. t .
Ffar Coll Information - mid a FREE copy of the PT ™ pi
01-7992002 M.
PTH— In— iTnCnraiftnn T hi . Ninnlm Qn», 8 opfli»-»ABddg».LiionBB 19 HL-lUg.Np.g 808 B 6 .
By Karan Zagor In New York
FLUOR, one of the world’s
Hifl gw a t iiiiiwimtirmai engineer-
ing and construction services
groups, yesterday consolidated
its recovery by reporting
strong profits for the fourth
quarter and year.
For the three months ended
October 31. net income rose 23
per cent to $29.lm from $23.6m
the previous year. Earnings
per share advanced 20 per cent
to 36 emits. Revenues in the
period were up only 4 per cent
to $L67bn from $L61bn.
The Irvine, California-based
company, which was in the red
as recently as 1987, saw net
earnings for 1989 leap more
than 90 per cent to $10&5m or
L35 from 356.4m or 71 cents a
year ago.
Extraordinary items
accounted for a gain in net
earn mgs of u cent a share in
the recent year’s earnings.
Revenues Jumped 22 per cent
to $&23bn from $5J3bn in 1988.
DRG public limited company
MEETING OF BONDHOLDERS
Notice of a meeting of the holders of the £40,000,000 6V, per cent. Subordinated Convertible Bonds 2002 of DRG public limited comp an y
(“the Company”) c on v er t i ble into Ordinary Shares of die Company (the "Bondholders” and the "Bonds” respectively).
The Offer made on behalf of Pembridge Investments Ltd. ("Tonbridge”) on 27th September 1989 to acquire the entire issued share capital
of the Company became unconditional in all respe ct s on 10th November; 1989 and on the 15th No v ember , 1989 the d ir e ct or s of the Co m p an y
unanimously recommended all shareholders to accept the Offer. It is expected that Pemb ri dge will soon branny the beneficial owner of
sufficient shares of the Company to enable Pembridge to acquire compulsorily any oatstanding shares. Pembridge also intends to apply in due
course for .the shares co be delisted. As required by the Gty.Code on Thke-onera and Mergers the proposals set out below; gxe made to ensure
that Bondholders receive a co m parable offer and to ensure Ast they art: not left as minority investors in an u n listed company. The price at
which Bonds will be redeemed is calculated on the basis of the conversion price of £4.92 foe e v ery Ordinary Share aDoued on con v ersi on of
die Bonds pursuant to the TYua Deed (as defined below) and on the bass of Femhridge’s Offer of £5.90 for every Ordinary Sure of the
Company On redemption in accordance with the resolutions detailed belong Bondholders will forego any right that they may have otherwise
had to interest that has accrued since the last interest payment date pursuant to die Ttast Deed.
In accoadance with the terms and conditions ("the Cond itions") of the Bonds contained in the That Deed dated 30th April, 1987 constituting
the Bonds, notice is hereby given that a meetingof Bondholders wiU be held at the offices of The Chase M an hattan Bonk, NA_ Wxdgoie
House, Coleman Street, London EC2P 2HD on vfcdncsds^ 3rd January 1990 at 9.00 un. far the purpose of considering and, if thought fit,
passing the following resolution which will be proposed as an Extraordinary Resolution:
EXTRAORDINARY RESOLUTION
THAT this Meeting of the holders of die £40,000,000 6% per cent. Subor dinated Convertible Bonds 2002 of DRG pAdic limited c o mp an y
(the “Company”) convertible into Ordinary Shares of the Company (the “BondO consti tuted by a Trim Deed dated 30th April, 1987 (“the
Thus Deed”) executed between the Company and The Law Debenture Thist Corporation pic. (The Truster”) hereby:
(a) unconditionally authorises the Company to caned with immediate effect die conversion right and related undertakings of the C omp any
awiraingd m Condition 4, and Chnure 6 rad 7 nf the TYuat Deed}
(b) unconditionally authorises the Company; (notwithstanding die prov isi ons of Condition 5(b)), to re deem at any time all outstanding Bonds
an 24th January 1990 (the "Redemption Date”) at £1,199.19 per Band of £lj000 and Candnian 5 shall be coosnued accordingly;
(c) a u th orises the Company and tteTVunBe»concnrin,eaecuteordo an y docum e nt , act ok Thin g ne ce ssa ry to gi ve effe ct in ibis Extraordinary
Resolution; and
(d) sanctions each and every mo difica tio n, abrogation, variation or compromise of or arra n ge men t in respect of the rights of the holders of
dm Bonds arising from the foregoing.
BY ORDER OF THE BOARD
M. S. Painter
Secretory
Dated 8th December; 1989
THE BAYING & CONVERSION AGENTS
The Chase Manhattan Bank, NA. Chase Manhattan Bank Lmcembourg S A.
Ubolgate House 5 Rue Plaetis
Coleman Street L-2338 Luxembourg-Grand
London EC2P 2HD I a n t emh o urg
Chase Manhattan Bank (Switzerland) - Basque Bruxelles Lambert SA
63 Rue du Rhone Avenue Mamix 24
CH-1204 Geneva B-1050 Brands
Switzerland Belgium
QUORUM AND VOTING FOR MEETING OF BONDHOLDERS
A Bondholder wishing to at t end and vote in person at the meeting of B o ndhold er s must produce at that a
or valid voting certificate^) issued by a Plying & Conversion Agent at one of the o ffi ces specified above
either one or mare Bonds
A Bondholder may alternatively either deliver a voting certificate to the pe r son whom he wis hes to anend on his behalf or give a voting
instruction on c voting instruction form obtainable from the Paying Agents or from CEDEL SJL at 67 Boulevard Grand Duchessc
Charlotte, Luxembourg- Ville, Luxembourg or Morgan Guaranty Trust Company rtf' New 'fork (as oper ato r of the Euro-dear system) at
Euro-dear Operations Centre, 1000 Rue de la Regence AB-1040 Brussels, Belgium instructing the Plying Agents to appoint a proxy and
to attend and vote « the meeting in accordance with the B o ndh o lder ’s instru e n on s. Bonda may be deposited with (or to the order of) any
Paying Agents for the purpose of obtaining voting certificates or appointing proxies under a voting instruction until 48 hours before the
time fixed foe the meenng but not thereafter. Bonds so deposited will not be released until the first to occur a£
(D tbecondusion of the meeting or any adjournment thereof;
or if a voting certificate has been coned,
(il) the su r render of the voting ce rtifi c a r e to the Paying Agent who issued die same;
or if a block voting instruction has been given,
(iu) the surrender; not less than 48 hours before the time for which such meeting or adjournment thereof is convened, of the receipt far
each such deposited Bond which is to be released to the Paying Agent which issued such receipt, coupled with notice thereof being
given by such Paying Agent to the Company
2. The quorum required at the meeting of Bondholders for the pas s in g of an Extraordinary Resolution is two or more person s present
holding Bonds or voting certificates or being proxies and holding or representing in the a ggregat e not less than t hre e-quarters in principal
amount of the Bonds for the time being omsninrfing . If within fifteen minutes from the time appointed for such meeting a quorum is not
present the meeting shall stand adjourned (unless me Company and the Trustee a gree dial it be dissolved) for such period, being not less
than twenty-eight days nor more than forty-two days, as may be appointed by the Chairman of dm meet i ng . At such a dj ourned meeting
two or more persons present in person holding Bonds or voting certificates or being proxies (whatever the principal amount of Bands so
held or re p re sen ted) shall form a quorum for the tr ans a cti on of any busmen which could p r op erly have been dealt with at the mwtiwg
from which the adjournment took {dace.
3. Every question submitted to the meeting will be decided oa a show of hands unless a poll is (before or on the d ef lo ratio n of die result of
the show of hands) demanded by the Chairman of the meeting , the Company or by one or more per son s holding one or more or
voting certificates or being proxies and holding or representing in die aggregate not 1ms than 2 per cent, of the principal amo un t of the
Bonds then outstanding.
In the case of an equality of votes, whether on a show of hands or on a poll the Chairman of foe meeting shall have a casting vote in
addition to any other votes to which he may be entitled as a Bondholder or as a holder da voting certificate or as a proxy;
On a show of hands every person who it present in petsoo and who produces a Bond or voting certificate or who it a proxy dull have one
vote and an a poll every *uch person shall have one voce in respect of each £ 1,000 principal amount of Bands so produced or represented
by the voting certificate so produced or in respect of which he is a p ro xy .
Without prejudice to the obligations of praties named in am block voting instmaiiu^ any piwm entitled m mote than aw mad
not use or cast all the votes to which he xs entitled in the same way.
4. *Ib be passed, the Extra ordinar y Resolution requires a majority of not less than three-fourths of the votes cut thereon at dm meeting. If
passed, the Exgaordinaiy Resolution will be binding on all Bondholders and on ail holders of the coupons atttchuig to the Bonds whether
present or hoc at such meeting and each off such Bondholder* will be bound to give effect thereto accordingly
5. The proxy named many voting amme ti oa need not be t Bo n d hol de r.
GENERAL
Copies of the Trust Deed, inehiduwCondifions of the Bonds referred to above, and the documents sent to the Company 1 * shtrebokkra by
Pembridge in connection with die Offer; will be available for inspection by Bondholders » the specified offices of die Paying Agents set out
(lb™ 1 * Tn pranrtfance wilh normal practice the IVunee ex pi v sae * no opinion an the mi-ipy flf thf PfOTTOial iMT bf rafhnrm-ri itfnh* that
it has no objection to the Extraordinary Resolution being submitted to the Bondholders.
Pembridge currently owns over 75 per cent, of all outstanding Bonds and intends to be represented in person at die meeting and vote in favour
of the 1 Extraordinary Resolution.
If the resolution set out above is passed, payment will be made upon presentation and surrender of the Bonds in the above listed Plying Agents,
together with all appurtmant coupons, if anx mamring subsequent to the Redemption Date.
proxies under a voting hmmiriioa until 48 hours before die
released until the first tn occur a£
Every question
the show of hai
| Wharf rises
9.5% after
‘difficult
conditions’
By John Elliott
In Hong Kong
WHARF HOLDINGS, the Hong
Song property, hotels and
transport group controlled by
Sir Yne Kong Pao’s World
International Holdings, yester-
day unveiled increased profits
far the half year.
The group reported interim
pro fi t s for fixe period to Sep-
tember 30 of HK$581.1m
(US574J37m) after taxation but
before extraordinary items.
This was 9.5 per cent above
HK$530.5m in file same period
last year.
Profits after unspecified
extraordinary Items rose 10.8
per cent to HK$592m, while
turnover jumped 29.7 per cent
to HKSL57bn.
The company, headed fay Mr
Peter Woo, the chairman, who
Is a son-in-law of Sir Yue Kong
Pan, said “economic implica-
tions” e r ifti ng from the June
events in China had an
“adverse effect on the group’s
operations.”
Wharf’s Hong Kong hotels
had experienced “difficult
trading conditions” bat, in
recent months, there had beat
a recov ery in the colony’s
property market.
Wharf bought the US Omni
Hotel chain from Aer Lingua
18 months ago. It said yester-
day that the group’s 41 hotels
under franchise or manage-
ment arrangements produced
satisfactory operating results.
Wharf is now l eading a con-
sortium called Hong Kong
Cable Communications, which
has won licences for Hong
Kong’s first cable television
service. Along with property
developments, this is its big-
gest new v entu re in the col-
ony, where 90 per cent of its
An interim dividend was
declared of 30.8 cents per
share, np from 2&2 emits last
thne. Wharf is 40.1 per cent
owned by World, whose
Interim results will be pub-
lished today.
New York
publisher
restructures
By Anatole Kalotsky
in New York
MCGRAW-HILL, the big New
York publishing pnd i ufimiift.
tkm group, has announced a
restructuring which would
reduce Its staffing levels by
1,000 full-time positions ana
cost the company $22Qm in
special charges.
The restructuring pro-
gramme came as no surprise,
although the company went
through a major num^iwut
reorganisation only last year.
Some Wall Street analysts
had expected a mare aggres-
sive programme of asset dis-
posals and responded without
mthniriflffln to the company’s
moves.
The main measures include
asset write-downs in its Gen-
eral Books and Data Resources
economic forecasting divi-
sions, cuts in headquar-
ters staffing. Some of the staff
savings would be achieved by
a realignment tn the structure.
Ihe present three companies
- McGraw-Hill Publishing,
Financial Services and Infor-
mation Services - would be
abolished and replaced with a
single management system,
the company said.
US bank to cut
problem assets
FIRST Interstate Bancorp, the
US West Coast-based hamirtng
group, is setting np a pro-
gramme to step up the dis-
posal at problem assets at its
Texas affiliate, AP-DJ reports.
As part of the pro gramme ,
the company said it would add
$400m to its reserves, includ-
ing a 8300m provision in con-
nection with the rirmi w n e nta -
tlon of the asset disposal
Mwaw nw of its Texas bank.
First Interstate said that to
maintain its equity capital
position, it was planning to
raise about 8400m of addi-
tional i * pk»ii through an offer-
ing of 7-fim common nhap i y ,
Shearson faces Amexco review
By Janet Bush in New York
AMERICAN Express yesterday
confirmed that it was review-
ing a number of options with
Shearson Lehman Hutton. Us
brokerage subsidiary, and Nip-
pon Life Insurance, which has
a IS per cent stake in Shear-
son.
There has been a Curry of
speculation over the past two
days surrounding Shearson, 61
per cent owned by American
Express, centring on a substan-
tial recapitalisation of the bro-
kerage.
American Express also con-
flrmed yesterday that it was in
discussions with Mr Ronald
Perelman. chairman of Revlon
Group, reported to be inter-
ested in taking a stake in
Shearson.
American Express said: "Mr
Perelman is one of the
The company would only say
yesterday that the current
talks were consistent with two
of its objectives.
First, American Express
wanted to help Shearson reaf-
firm its credit rating. Moody’s
Investors Service last month
put Shearson under review for
a poHriM* downgrading of its
$6bn "in "outstanding commer-
cial paper.
A downgrading in its com-
mercial paper, a crucial tool for
short-term borrowing to fend
trading activity, for example,
would mean substantially
higher borrowing costs tor
Shearson and umtee wiM its
profitability.
Moody’s has made dear that
it believes Shearson has a
severe capital shortage,
although il has declined to give
a figure. There is speculation
that Moody** has tdd Shearson
privately it must add 8750m in
new capital to avoid being
downgraded by the rating
agency.
American Express’ second
objective, knur known, is to cut
its stake in Shearson to below
50 per cent.
The company declined to
comment, an. bat did tot deny,
a report in the Wall Stmt
Journal that it planned to
pump between $70Qm and tlbn
into Shearson and that tuana
included the public sale of
between 10m and 22m new
Shearson shares and an invest-
ment of about 8300m by Ameri-
can Express.
It also declined to comment
on a report that Mr fterolznan
was discussing bvringa SA per
cent stake In Shearson for
around $2SQm. -
Shearson has had a vary dif-
ficult two years since it bought
the ailing Wall Street broker-
age EjF. Hutton just after tbs
October 1987 Crash. It has
found it to absorb the
costs involved in that merger
at a time when trading volume
in securities markets was in
the doldrums.
Last month, . - Shearson
announced the catting of SOD.
lobs, a management shake-up
and cuts in motors’ commie-
Bond shares in pre-deadline rise
By Bruce Jacques in Sydney
THE BOND group, headed by
Mr Alan Bond, the troubled
Perth businessman, saw shares
tally in some of its key listed
companies yesterday ahead of
two I m port an t deadlines.
Today is next designated
riAariitm* far Bond to begin for-
mally the complex sale of its
beer interests to Lion Nathan,
the New Zealand brewer.
There was also speculation
that the West Australian State
Government Insurance Com-
mission (SG1C) may issue a
statement cm its bitter indem-
nity dispute with the Bond
group.
Shares in the f fogsiup com-
pany, Bond Corporation, rose 5
cents to 20 cents on Australian
stock exchanges.
Band Media, the subsidiary,
also put on 5 emits to 17 cents,
to close 7 cents above the value
in Mr Kerry Packer’s
foreshadowed share-swap bid
for the com pan y. But shares In
Bell Resources, another subsid-
iary, tel 5 cesxts to 40 cents,
suggesting that the possibility
of a takeover bid for the com-
pany has receded even further.
The proposed first step of the
b re w er y sale deal today is for
Bond Corporation to register
formal documents for a bid of
A$L60 (USIL25) a share for
Ben Resources.
The deadline for registration
has now been put off five
But and Uon Nathan
have been negotiating on possi-
ble changes to the deal and an
announcement is expected
today.
Speculation is that fixe deal
will either be abandoned or
substantially changed, with
the stated $A2Jjbn price tag
reduced and the bid for Bell
Resources probably dropped.
Both Band and Lkm were con-
Cash help for MeraBank
By Roderick Oram
PINNACLE WEST, the deeply
troubled Arizona holding com-
pany, has agreed with federal
regulators to inject 8450m of
fresh capital into MeraBank,
Its debt-ridden savings and
loans subsidiary.
The sum — 8300m in cash
mmT the balance^ in a 12-year
note 1 — is some 860m less than
demanded by regulators and
far short of the level needed to
restore the Phoenix-based sub-
sidiary to some semblance of
health, .analysts esti-
mate. MeraHank was hit hard
by bad p roperty loans.
The mftwian meets, though,
& crucial condi t io n of a take-
over offer Pinnacle West has
received from PadfiCaxp, an
electric utility bold i n g com-
pany serving seven western
states. PadfiCorp. has bid
tLfltm for Ptamade West, aim-
ing to divest MeraBank and
keep Pinnacle West’s Arizona
Public Service utility. Phmacle
West has yet to respond to the
offer.
The new cakh for MeraBank
la camlireftama < *ni t fedllty
arranged bra group of banks
indudtng embank and Chase
Manhattan. The facility is
secured against the 82bn
equity of the utility, a move
which might complicate Pacifi-
Corp’s offer for Pinnacle West
The 12-year note will be
unsecured and the infusion
wffl be completed by March 3L
Fresh capital wlH help Mem-
Bank’s problems, which along
with tr ouble d ve n tur es in ura-
nium mining, zeal estate and
venture capital, have dragged
down Pinnacle West
fldent yesterday that a deal
would pr oceed.
Meanwhile, the SGIC has
foreshadowed possible wind up
proceedings against Bond Cor-
poration over a disputed
indemnity it received from the
company.
Bond gave the SGIC the
indemnity over a 194* per cent
interest in Bell Group, the
Bond subsidiary, under a com-
plex arrangement last year
when the ccmmany was sold by
Mr Robert Holmes & Court
The SGIC Is claiming it te
owed up to lAlSOm under the
deal, but Bond has already
lodged court proceedings dis-
puting the validity of the
inde mnit y .
This could mean that any
wind-up proceedings launched
by tne SGIC against
Bond may have to await the
outcome of the earlier court
ai-rtwi-
Varity boosted
by engine side
By Robert Gibbons
in Toronto
VARITY Corporation, the
Toronto-based farm and indus-
trial machinery group, lilted
profits in the first nine months
to US858.4m, or 22 cents a
share.
The figures were up from
853.7m, or 21 cente a year ear-
lier, .mainly, due to a strong
performance by the Perkins
tw ginft subsidiary and the Mas-
•ey-Ferguson farm equipment
diviafanL
Sales in the latest period
ended October 81 were®L59bn,
down framflAfini, because of a
decline in volume by the car
co mp onents division.
Longterm debt was reduced
to 8204m, down M2Stn from a
year, earlier and the lowest
level afawe 197L
NOTES DUE 1993
For thi perhid December 06y
1969 to March OflL 1990 the
rate fora been fixed
at 10,75% PA.
(tad payment dote:
March 0ft 1890
Coupon nr: 13
Amount: FRF 268,75
The Principal Faying Agent
AL8ACEHNE DE BANQUE
15, avenge ErcSe Reuter
LUXEMBOURG
EUROPEAN ECONOMIC COMMUNITY
USD 200-000000 11,50% 1983/1995
We inform the bondholders that the redemption Instalment of USD 20000000,
nominal due on January W> 198a has been satisfied by a drawing on 20
November, 198* In Luxembourg in the presence of an htMet
The 2000 bonds of USD 10000 wM be reimbursed at par on January 18, 199a
coupon due on January 18 , 1991 and following attached, according to the
modalities of payment on the bonds.
The numbers of such drawn bonda are as folows:
in denomination USD IOjOOO 10040 A 14*31 and from 1&832 A 17048
The following bonds In d enomina t io n USD lOOWcafied for redemption on
January 18, 1988 have not yet been presented for the payment: '
1042-1043 1048 1143-1144 1232
1249-1254
The following bonds to denomination USD 1.000 cafied for redemption on
January 18, 1988 have not yet been presented for the payment:
9047 9086-9093 9123-9127
The following bonda
January 18, 191
10-13
40
136-137
161-163
211-225
342-348
490-493
533-534
782-813
1486
2463*2458
2526-2527
2867
In denomination USD 1.000 called
9 have not yet been presented for
3581
3614-3615
3910
18-19
74-80
145
182-185
229232
366-368
518-519
554-563
834-835
1520-1521
24692471
2548-2615
28782664
3168
3508-3897
38172624
21
88-104
149
168-192
301212
404-405
522-523
570
916218
1793
2477
27252728
28832894
3306
36002606
37072711
I for redemption on
the pa y ment:
3427 .
117-128
157
209203
321-326
479477
526
754
1463
24432447
24802481
28S02853
2937
34082407
36072608
39002904
7,10 *223 STSLE *™* B * im W-MO^ ran* far nriempttai ob-
Januaiy 18, 1889 have not yet been pmantadfor the piymeM; , v
ra 10 «KS0
S «W1 74-76
* 100 10S 1Q9
128 132-133 483 jqr
$16-518 559-561 495
Amount outstanding after January 18, 1990: USD 100.000.000
TH E PWNCIPAL PAYING AQEMT
SOCETE GENERALE ALSAOENNE DE BANQUE • ’
15, avenue E mlto - Reu ter - LUXEMBOURG
EESANCIAL times FRIDAY DECEMBER 8 1989
ac b;
;
INTERNATIONAL CAPITAL MARKETS
NZ futures,
trade back
tQ,noraial--
after default
■ "•:»*:
TRADE ON; the New Tfertariij-
Futures- Exchange - hat?
retumedtonotmalafter fafl-
tog off steeply two tracks ago 1
following a member default,
according to Mr Lea w art, the
exchangers uw nagtpg dire c tor ,
Agencies report. '?
Good trains yolmraa In the
December and Marehfiv^yeai^
g OTB r aa em - bond _■ contracts
and ffife 90<fiar Irak MU coa-
tiact had been recorded in the
last few- days, Mr Ward said.
He added that badstadd*
HaedL - - . : ^ - -V •.■
Open interest h ifae Decem-
ber government bond contract
has been mare ft«n halved Trat
Mr Ward stressed fills- was to
be expected given the forth-
criming expiry of file contract,
on December 13-
Overseas experience of simi-
lar default problems suggested
that, overall confidence is the
market, could be Mr
Ward said. However, recent
evidence indicated “confidence
in the fundamen t al credibility
of the market r wimltm Mgfa "
The New Zealand Govern-
ment Is doe to pass a bill soon,
similar Jo the DK% Financial
Services ‘ Act;' which wlH pro-
vide tougher oversight of the
c ountry^ markets. ■
*" NZFE ‘members will meetort
DecemberlS to consider expel-
ling Jordan Samitm i n Futures,
a tnowih w fU r m mtiMi suffered
a client' default of about
NZJ7m JUSWJJm). It is ear-
Japan allows banks direct
access to money market
By Rdbart Thomson in Tokyo
ALTHOUGH the Bank of Japan
says the restrictions have
never existed, foreign bankers
believe that with a wink and a
nod the central 'bank has
approved direct Interbank deal-
ing in the short-term money
market, a sfgniftoant advance
in th e reform of the country’s
finaniial system.
, US and European govern-
ment officials have long com-
plained about " adnilnlHinrii va
guidance” that has prompted
foreign and Japanese banks to
tub brakes knows as “tanstd,”
wb3e the- BoJ has argued it -
gives no guidance and' imposes
no restrictions on direct deal-
ing. '
According to a foreign offi-
cial win has attended- a bilat-
eral meeting' on the matter:
“We say we want the restric-
tions lifted and the bank peo-
ple -sfiay' that there are no
restrictions.”
Nevertheless, banks have
-found it prudent to use the tom-
shi, which have traditionally
allowed the central bank to
exercise control over the
short-tarn money market even
though the BoJ does not want
to be - seen to be exercising
fight control.
In return the tansfaf receive
a'BJj fr to 0JK25 per c entc om-
nnsskm on fatwhitnir ■ ii ^nuni^ .
A BoJ official maintained
that “we have never had a reg-
ulation pro hibiting direct deal-
ing for private hanks,” but a
wninr rpUpgg po added that the
bank ‘‘appreciates" the use of
the tuckers.
However, he said the bank
also appreciated the concern of
foreign governments atv * insti-
tutions over financial system
reform and he indicated there
had been, a policy change.
"We appreciate people using
the tanahi but that does not
mean we don't want to see peo-
ple in file market dealing on a
direct basis. We h ave b ecome
more and more sensitive to for-
eign banks’ needs.
“I think we have come to put
a more con-
sideration tntn mousy market
activities.’
That translates into a
change of direction. A British
bank representative said if that
was indeed the case, ’it is
something we have wanted
for a long time and represents
a move towards a more
western style of Interbank mar-
ket."
He addM it ahftwid ghre for-
eign banks a more level,
playing flaw
But foreign bankers caution
that the test of the BoJ's inten-
tions will be whether Japanese
banks consistently make funds
available for direc t deals, as a
lack of funds would suggest
the central bank was still exer-
cising wwrtmB.
The tanshi have traditionally
been well-stocked with former
BoJ officials, and so it was
thought rtw* their influence on
the central hank bad slowed
reform.
An official far the Associa-
tion of Tansht Companies said
that if the BoJ allowed unfet-
tered direct dealing “it would
be a big change for ns.
“I think foreign banks would
continue to use us because
they don't have a good enough
network for fond c o l le ct io n on
their own. They will ask spe-
cial brokers like us to do it for
them."
A representative of a Euro-
pean bank stressed that some
foreign banks were likely to
continue to use the tanshi for
convenience, but he argued
that they were already capable
of handling 1 the paperwork that
accompanies direct dealing In
Japan.
Hie «a<d the iang ed rules of
the game were likely to apply
gradually to Japanese city,
regional and agricultural
banks, as "this is a step in a
series of steps.”
The tanshi were created with
the advent of the modem Japa-
nese money market in 1902. Six
companies have been licensed
in perpetuity by the Ministry
of Finance.
MoF to tighten accounting standards
•rwrt
IS
m m
The London-based Interna-
tional Commodities Clearing
House (ICCfi) is dose to emit
ptetinganftmngenraaxt with
the Sydney. Futures Exchange
on conifamed provision - of
some services . - for the
e xcha ng e's own - clearing sys-
tem.- .. -- :.-
The new system wfil involve
JAP AN'S F inance Ministry is
considering setting new corpo-
rate acco unting standards for
fkianriai- futures jind options
trading to ensure more accu-
rate disclosure, Reuter reports
The move is *Wgw«* to pro-
tect investors from risk should
companies hide big losses on
growing futures and options
trading. - Under the new stan-
dards companies would have to
report potential profits or
losses from unsettled futures
and options positions based on
market prices at the end of reg-
ular business terms.
Companies now have to
report profit or loss only after
futu r es and options positions
are settled. There is.no indica-
tion when the standards will
be introduced.
• The Tokyo International
Financial Futures Exchang e is
planning to develop a comput-
erised trading system in 1990,
although the exchange baa no
plans for extending trading
hours, partly because of staff-
ing problems.
The exchange is waiting for
discussions on unification of
the Globex and Aurora com-
puterised tracBng systems to be
completed.
• V' -1 • •
Ji ssncsYSttH
Multi-currency
Euro-paper loan
for Sumitomo
By Radmt Johnson . V" *.
SUMITOMO; Corp, jthe
Japanese- tit ling company,
Sas appointed JJ'. Morgan io
arrange a 1500m' multi-cur-
rency Euxo-commexcial paper
programme- for . Its -financial
arm, Sumitomo Corporation
Overseas Capital. ~ ;
- Standard ft Poor’s,'
credit rating agency, gives the
pr ogra m me an Al rath ?; while
its rival,. Moody’s, gives it
Prime 1. •
Dealers to the programme
are Citicorp, Datwa Europe;
JJP. Morgan, Swiss Bank Cor-
poration, and UBS Phillips and
Drew.
• Gallaber Limited, the inter-
national group Involved fax
tobacco, optics, retail distribu-
tion and housewares, ha s
signed a £$50ibt financing
agreement wftb a. group of is
UK and I n ter na flop irt h anks . . '
The facility will "be used to
finance the group's commer-
cial activities and expansion.
The loan has an Inte re st mar-
gin of OJH^petcaxtage prints.
• Banca Coahiwerriaie ftaHama
mid Slge Capital Markets have"
behalf of RadioTstevistono ftal-
iana of Rome. Five Italian
banks with' London offices
have been allotted EeuUUim
each.
• Morgan Grenfell has
announced a £42m debt financ-
ing arrangement for .Trini ty
Park, an office derefoparaent in
Birmingham. Long Term
Credit Bank of Japan and the
Ifitsubl&hl Bank have partied-
patinm of £UL5m WhBe MliSUi
Trust has one of £5m.
The development is a joint
venture. It comprises 10 office
milte and is located adjacent
to Birmingham International
Airport. The loan financing —
secured against the: property
- will be repayable as units
are finished and st^d.
Advisers to NZ
seU-oiEF appointed !
THE New Zealand Government
has appointed Old O’Connor
Grieve, a local - investment
hank, and Baring Brothers
Burrows & Partners of Austra-
lia as advisers to its public Do-
tation of the State- Insurance ■
Office, Router reports. '
' The Gove rnment announced
the flotation -of the State
insurance Office i»«* w on be 2k
hopes to raise at least
NZ$5Whn (US$297m).
tTff-
IHfFT*
da wwk YMd
,-«%-«%
8J3
-0% 40%
8.45
-0% 40%
838
-0%-0%
8-46
-0%
0
830
-«%
-0%
rs
8.73
RX0
-0% -0%
8.44
-0%
0
8.64
-0%
0
831
-0%
0
836
-0%
0
833
-e%
0
R55*
-rOV. 1
40%
830.
-o%,
-0%
8.42-
"■ V
. '8>aA$£
-0%
0
-fl%
-#%
851
-0%
-«%
BM
-®%
-*%
851
HM.
0
040
o
0
853
u
-0%
0
BM
8.42
-c%
-0%
850
■«%
0
8JB
-0%
40%
842
■Vi
40%
641
0 40%
834
-0%
40%
BJ*
-«% -m
843
-«%
-0%
837
-8%
0
858
-«%
-1
8M
227
-0%
0
847
-Vi
-0%
852
-•%
0
858
. -V, 40%
8j63
-e%
-o
8U
-0%
-0%
aw
-o%
-Ml
-in
-0%
0
831
0
40%
852
-0%
0
846
~s%
Vi
242
B
40%
8M
-0%
-0%
842
-0%
846
-0%
0
822
-«%
-0%
857
-0%
a
854
■Vi
V*
850
mm ®
\ v > i r fi s . ' gr r
swbs nunc
sruoGsrs
African De>.8t 596.„ —
Aritaaq 5 03
B.F.C.E. 4i, 98
B.M. W_Fln.Near.-5 13,
Britwa* B/S. 4% 9«
CtR. Tat. W/W 3U
CreHtIjmiials** 00.
EJ.B4% «.
Flan. Exp. Cd. 8k 92.
FWdwCloJI.4%98
LAP3.6ZXM.
KobeCtty4%9e-
Lwk Pern. B/S. «Ji«.
Malaysia &^9S.
Maxwell Comn.Crp. 5SS.._...
881- Bk. Hungary A 9<L..
. ttaUonwUtAnfi-B/5.493
- Pim. NewfotndlaadSOS.
TlaiUnd 4% 93.
World Back 3 03 —
ABtnge price dange.
KUj-rOS
>0V +1
m e 0
O-OJ,
0-HU*
O-iOV
0-HM,
0 0
0 40%
Ml% '
NM W Offer d« weak TUI
150 , 100 VO% -0% -0% 637
MO «5 86-0% -10% 634
ago 187 88-0% -40% 633
150 *184 B4*, ^-3 -Z 630
■■V30 Jta. 87-0% 40% 7»l
125 167% 88% -1-0% 635
100 86% -0% -0% 631
ISO 186% 87% 0-0% . 634
75 tl00100% -0%-<O% S38
H2 ■ ©-0% -0? 7.78
«Ki"«%HM.-0% 6.47
1» «7 88 010% E57
»0 «J8% 89 0-0% 837
100 182% 83-1% — 1% a 08
190 «Z% 83 43+1% 9-10
75 »6% 87%40%-O% 880
- 200 W% 87%.-0%-4% 8J7
150 184% 85-0% -0% 6.73
2M m 86-1-1% 7.92
ISO rffl 87% -0% 40% 644
On«QiH)% onwaik-0%
Aicoafalt 02 US.
Amer.Bnadi 7% 02 US
CBS. Inc. 5 02 US
OxHdiI Kan. 3% 04 US —
Prlmrfca 5% 02 US
Eng-CMn Omr6% 03 C
FuSBaSWUS
LaiflnkeCrp. 5% 04 £.
UMSccs.UD2£ :
KMnCaaoa2li9f(M
aw western
HmabUIBL3l|SWS-
HmPtcSV B 3 £
WMp|L8k2%flSIIS
BwWebbIk.6U2%MUS
0nMMTMU2%02US
CafelMtMiflSC
fedal7%02E
SiaWASiMtDt
SUmGevklcsaiMUS
SMmoM3%MiIS
TtalteLZiECS
IMJMMPWTB04I
W.ILfinaM KBS
priea BM Offer
62. 122% 122%
56.7 124% 124%
200. 102% ICO%
3486. 100 101
6675 74% 74%
48 91% 92%
sm. 219% 211%
7J 101', 102
632 88% 81%
loot. urn. mi.
Mi* U» VBk
3266 97 W
43 13% W*
S04 145 146
2B. 102% 1B%
im m 29i
15 1B\ 12B%
14 1IB% 106%
441 Mil W%
2U8 UB 119
3897. 90% U%
aa 77% 7H6
177 120% 121%
4212 91% 92%
riaor Prww
40% 026
-0% -LZ7
-0% 3.91
+1% 9.70
0 7339
0 3.76
-»% -237
-4% 125 «
40% 10150
-1% 714
-0% BOB
40% an
-0% 37679
-4 152
40% UU4
40% -Ml
40% DJ4
41% 232
40% 4025
40% 7J2
40% 630
0 7803
42% 12445
-0% 2BJ0
* No taformatloa avalbMnmloia day's price
f Only enr marint maker supplied * price
StnlgM Bonds: TTw yl«W % the yield to redempUan of tlw mJd-prke;
Lbe amqanl teacd b M mtllhm of catrtncy unha except hr Yen
brads where Hhta WUlrat. Ornga oa week- pons* over price a
woA urilff.
Floating Rate 'Nous Demraluied bi dot Ian mtles o th erw te lodk
rated Coupon showihmlnliauin. Cjfte- Date next coupon becomei
effective. Spread - Marijln a bore slaHnoRtO offered rite (ttfuee-
moatl^ tabaw mao ate) far US doKue. C.epo-The am*
ComvSle Bonds: Denominated In (Ml» unless otherwise Indicated,
dm. day-Cftanse m day. Oh date- First date of comersiM Mo
shares. Cnv. price -Nominal amount of bond per state expmud
iecurrencyitfslunaico«miooniefi9(edatlnie.Prm-PeRan-
aae premium of tlm currenteffecUye price of acquiring shares via the
bond over the most ream price of the stares.
This anmunceiTUTU appears as g matter of record only.
NEW ISSUE
7th December, 1989
0
NIPPON METAL INDUSTRY CO., LTD.
U.S.$100, 000,000
3 per cent. Guaranteed Bonds due 1993
unconditionally and irrevocably guaranteed by
The Daiwa Bank, Limited
with
Warrants
to subscribe for shares of common stock of Nippon Metal Industry Co., Ltd.
ISSUE PRICE 100 PER CENT.
LTCB International Limited
Bank of Yokohama (Europe) S.A.
Baring Brothers & Co., Limited
Credit Suisse First Boston Limited
Daiwa Europe Limited
Pre sdner Ba nk
Gol dman Sachs Tn»«*mnrinnai Limited
Kleinwort Benson Limited
Lea Securities Limited
Nomura International
Daiwa Bank (Capital Management) Limited
Barclays de Zoete VVedd Limited
Cosmo Securities (Europe) Limited
j Dai-ichi Europe Limited
Deutsche Bank Capital Markets Limited
Fuji International Finance Limited
lited Kidder, Peabody International Limited
KOKUSAI Europe Limited
Morgan Stanley International
The Nikko Securities Co., (Europe) Ltd. Paribas Capital Markets Group
Sbearson Lehman Hutton International Sock*t£ G£n£rale
S.G. Warburg Securities
U.S. $150,000,000
Bankcflreiand
(EatabBatmd in kvimnd by Charter In 1733. end fwting Smiutd hobOty)
Undated Floating Rate Primary Capital Notes
In aoooidanoB with the provisions of the Notes, notica is hereby
ghmn that tar the three month interest Period from December 8.1989
to (March 8. 1990 the Notes win cany an Interest Bate of
8%% per annum. The Interest payable on the relevant interest
payment date, March 8, 1980 will be U.S. $217.19 per U.S.
$10,000 principal amount
By: The Chaee Manhattan Bank, N JK.
London, Agent Bank ACHA8C
Decembers, 1989
The Hongkong and Shanghai
Banking Corporation
(taebrooraterf itr» Hong Kong wHh Bruited tiabWy)
U.S.$400,000,000
PRIMARY CAPITAL UNDATED FLOATING RATE NOTES
(SECOND SS4ES)
OPORTO GROWTH FUND
N07KE TO SBAKBHOLDER5
Nana B HEREBY GtVENTHATTHE ANNUAL GENERAL
MEETING OF
1HH OPORTO GROWTH FUND
WILL BE HELD ON THURSDAY 21 ST DECEMBER 1989 AT
TOB OFFICES Oft
CHASE BANK ATRUST COMPANY (Ci) LIMITED
CHASE HOUSE. (BIENVILLE STREET, ST. HEIiFR. JERSEY.
TIME; IlJXJ AM
COPIES OFTHB ANNUAL REPORT A ACCOUNTS WILL BE AVAILABLE
HtOM THAT DATE THROUGH SHBA8SON LEHMAN
GLOBAL ASSET MANAGEMENT
WILL BE HELD D4 LONDON IN JANUARY AT THE OFFKSS
OF SBEARSON LEHMAN HUTTON INC PLEASE CONTACT SHEABSON
LEHMAN CHwOBA L ASS ET MANAGEMENT FOR
FURTHER DETAILS
TEL: 01-601-0021 X2347
<z>
Notice la hereby ghwn ewl 8w FMe ol Intoraat has been Itxad at 8329%
and that As interest payable on ttw relevant Merest Payment Data
March 8, 1890 h respect of $5,000 nominal of the Notes W« be
$10731 and in respect of $100^00 nomlnel of Ihe Notes wabe$R15A2S.
Daemtnr B MSB Lomlon h b a m i/ew
By: CMbanRNA.(CSSI Dept). Agart Bank UlffiAAKO
Floating Rate Depositary Receipts due 1992
asutd by The Law Debenture Trust Cartumatim p Lc. ettJenant mndrnvni M
per^new prbiopd and mlricM on ibpiwo vidi
ISTTTUTO BANCARIO SAN PAOLO D1 TORINO
latawpcumtd in die RcpdMie of luf, M a Cnfa Inmnunm of PhMk* Lour)
London Branch
For the six month period 6th December, 1969 to fith June, 1990 the
Receipt will carry an interest rate of 814% per annum with an interest
amount of U.S. $417.08 per U.S $10,000 Receipt. The relevant
Interest Payment Date will be 6th June, 19*70.
H
Bankers Trust
Company, London.
Agent Bank
1™“ taL '. lw 9:
9X52; Lint 80M0S1N TnmcalJM occurred. S
W- RwradacUoa bi whale or in part In any form not permitted without written MKKaL
| 19 DATASTREAM intenutAxal.
DOMUS MORTGAGE FINANCE N0 1 pic
£100,000,000
Mortgage Backed Floating Rata Notes
due 2014
In accordance with the conditions of the Notes, notice is hereby given,
that tor the three month period 6th Decemb er, 19 89 to Bih March, 198C
the Nates will carry a rats of interest of 15J537S per cam. per annum
with a coupon amount of CMQ1.16.
GtSMCALBANC
Agent Bank
INTERNATIONAL
RESIDENTIAL PROPERTY
ADVERTISING
Appears every Saturday.
For further details please contact;
Clive Booth
Tel 01 873 4915 Fax 01 873 3063
pan-holding U Brasilvest S.A.
SOCIETE ANONYME
LUXEMBOURG "
As of November 30, 1989,
the unconsolidated net
asset value was
USD 318,577,219.47
Le. USD 518.01 per
share of USD 100 par value.
The consolidated net asset
value per share amounted,
as of November 30, 1989
to 529.85.
Net asset value as of
30th November. 1989
per NCZ Share: 16378.22
per Depositary Share:
US$20,662 A4
per Depositary Share:
(Second Series)
1)5519,290.15
per Depositary Share:
(Third Series)
U SSI 6,41 6. 16
per Depositary Share:
(Fourth Series)
US$15,336.17
US. $275,000,000
of which
US. S200.000.000 has been Issued as the Initial Tranche
The Bank of New York Company, Inc.
Floaling Rate Subordinated Capital Notes due 1997
Notice is hereby given that the Rate of Interest has been fixed at
8.5% p.a. and that the interest payable on the relevant Interest
Payment Dare, March 8, 1 990 against Coupon No. 17 in respect of
U-5-$l 0,000 nominal of the Notes will be USJ$21 230.
December8, 1989 London .
By: Otflnnk. NA. (CSSI Dept). Reference Agent CITIBAN<&,
»•
28
■ X-
I NTERN ATION AL CAPITAL MARKETS
Gilts trading volume again driven by swaps business
By Rachel Johnson in London, George Graham in Paris and Janet Bush in New York
SUDDENLY, activity in the UK of the banks’ appeal in Jana- BTHE French Government 8.98 per cent, 2 basis poi
government bond market is ary next year. BENCHMARK GOVERNMENT BONDS yesterday sold FFr7.Q2bn of higher than at last moni
FINANCIAL TIMES FRIDAY DECEMBER 8 I 9 ®
SUDDENLY, activity in the UK
government bond market is
once again being driven by
swaps business. Retail interest
remains minimal
After the High Court ruled
GO
BONDS
in November that Hammer-
smith and Fulham’s currency
and interest rate swaps were
ultra vires, banks were left
with an estimated £500m expo-
sure to local authority transac-
tions.
On title day of the ruling, the
gilts market lost a point -
either because the banks that
bad bought gilts to hedge
fixed-rate positions sold them,
or the market anticipated tbs
shedding of guts.
However, recent activity sug-
gests that not all banks bold-
ing gilts to hedge “exotic”
transactions with local author-
ity counterparties have sold
out in advance of the outcome
of the banks’ appeal in Janu-
ary next year.
Almost all the gilts trading
in London over the past few
days - except, possibly, one
sate by a Middle Eastern client
which ran to nine figures -
has been as a result of swap
■transactions of some sort.
The upshot has been a mar-
ket gain - of almost % point.
The benchmark Treasury 9 per
cent doe in 2006 pot oat ft to
reach 92.
Some traders are saying that
yesterday’s activity is mostly
derived from a bout of interest
rate sueculation.
Tn the last few days there
has been a lot of activity. Fixed
and floating rates are being
bought, which shows the view s
about interest rates are swing-
ing both ways,” said one
house.
However, this is not a con-
sensus view.
On Wednesday, when the
market fell a point, It was
rumoured that banks were still
unwinding outlawed swap posi-
tions with gilt sales.
Coupon Pete
UK GILTS 13JOO W92
8.750 1/88
9.000 10/06
US TREASURY * 7.87S 11/98
8. 125 8/19
JAPAN No 111 4-600 EST
No 2 5.700 3/07
GERMANY 7jQ0Q 9/99
FRANCE BTAN 8.000 1Q»*
. QAT & 125 S/99
CANADA ‘ 9250 12/89
PCTWERLANPS 7250 7/99
AUSTRALIA IZJOOO 7/99
London dosing, 'donates Now York
Ylofds: Local mariort standard
— ■- -*
win mo run
103-il +4/32 12.03 12.00 1120
93-18 47/32 10.96 1020 1029
82-00 414/32 995 929 9.77
10048 4302 722 720 727
102-12 -1/32 721 720 726
94.8342 -0247 053 047 £59
1012255 -0.193 &4S S.46 &48
982000 -0300 726 72S 728
94.1622 -0.142 855 9.61 9.70
94.1600 -0540 9.05 9.11 9.11
972000 0175 9.88 9.89 049
96.8300 -0190 7.7S 7.7B 7.73
93.6424 -0229 13.18 1009 1842
morning session
Prices: US, UK In 3 2 nda.. others In dedina]
Tubnkml OXVATIAS Pricm Soemm
■ IN Sweden, the 1 point hike
in the discount rate to 10.5 per
cent had the effect of depress-
ing yields on government
bonds. Traders at James Capel
in London were taking the
news as a strong indication
that interest rates would stay
high for some time. This
caused bonds, which are only
measured in yield terms, to
move downwards.
Ten-year bonds went from
32.65 to 1SL57 per cent, while
the most liquid benchmark,
five-year 11,5 per cent, dropped
16 basis points to reach
12130.
■ THE French Government
yesterday sold FFr7.02bn of
bonds at its regular monthly
auction, at prices fractionally
above secondary market trad-
ing.
Hie auction takes total net
fending by the Government in
the franc bond market this
year to FFrlOOJibn.
This figure may be
increased, however, by non-
competitive bids submitted
after the auction by primary
dealers, or reduced if bidders
in the auction have chosen to
offer existing renewable Trea-
sury bonds (OATs) instead of
cash for their purchases.
In gHfUti«n n France haw this
year raised EcuJL88bn from an
eight-year tap stock denomi-
nated in the European cur-
rency unit, the OAT Ecu&S per
cent 1997.
Yesterday's auction focused
on the 10-year fixed rate OAT
8.125 per cent 1989. The Gov-
ernment served FFr3.77bn of
the FFr6.45bn bids lodged, at a
cut-off price of 94.60. This gives
a weighted average yield of
8.98 per cent, 2 basis points
higher than at last month's
auction but slightly below
recent market yields.
■US Treasury bonds slipped
modestly yesterday amid ner-
vousness about interest rate
policy and caution ahead of
today’s November employment
report
At midsession, the Trea-
sury's benchmark long bond,
was quoted & point lower for a
yield of 7.91 per cent Short-
dated maturities were up to V4
point lower, reflecting some
renewed pessimism abont
whether the US Federal
Reserve will ease monetary
conditions soon.
The bond market reacted
negatively to Wednesday's pub-
lication of the Fed’s latest Tan
Book, a monthly economic sit-
uation report which said that
the economy was stable to
modestly expanding.
This was a more bullish
assessment than many felt was
justified by recent economic
Issue activity patchy as secondary trading stays in doldrums
By Andrew Freeman
EUROBOND markets saw
patchy business yesterday,
with syndicate managers
bringing many targeted deals
for a variety of Issuers.
With the exception of the
INTERNATIONAL
BONDS
Ecu sector, where interest'
remained steady, secondary
markets were quiet and traders
reported low turnovers.
Late in the day. Bankers
Trust launched a fungible
Ecu50m issue for Swedish
Export Credit, adding much-
needed liquidity to a successful
existing EculOOm deal The
new paper sold almost immedi-
ately, mostly written down to
investors at 100%, a discount
equivalent to full underwriting
fees and in n™ with the exist-
ing bands.
Three convertibles emerge d .
Morgan Stanley brought a
$75m 15-year deal for FMC Cor-
poration convertible Into the
company's precious metals
subsidiary. The bonds were
quoted at 99% bid, well inside
2V» per emit full fees. Traders
said the paper was well-priced,
although final terms have not
yet been set Morgan Stanley
said the bonds offered inves-
tors a bullish play on gold in
addition to a cuiT e nt yield.
UBS Philips & Drew issued
a £40m Eurosterling convert-
ible for Hickson Capital, offer-
ing investor put options In
order to attract i n t ernation al
interest. The naner was tzadine
at 99% bid, just below the par
issue price. Of the deal, £28m is
subject to existing sharehold-
ers’ clawback.
In an otherwise quiet Swiss
market, Banca della Svizzera
Ttntiann was the lead Ttumngpr
of a SFrTOm deal for Footwork
Corporation, the Japanese par-
cel delivery and mail order
company. The bonds offered no
coupon but met a good recep-
tion, and were quoted away
from the lead manager at a 1%
point premium to the par issue
price.
Elsewhere, Kansallis-Osake-
P ankki (EOF) made a rare
foray as lead manager, bring-
ing a $i00m floating-rate note
issue for United Paper Mills.
The notes carried a yield of
15 barns points over six-month
Libor and were trading on fnii
fees at 99 JO bid. A KOP official
said the deal was going rela-
tively slowly because many
banks were unfamiliar with
the borrower as a credit.
• CedeL the Luxembourg-
based clearing organisation,
annnrmnoA that, from Decem-
ber 18 it will be offering settle-
ment and custody services far
about 500 Japanese equities.
• An internal reorganisation
at Socfete Gdn&ale’s London
operations Trill result an Mon-
day in Twari cet making fn Ger-
man s tocks pagghtg from the
group's merchant bank to its
securities arm, Strauss Tum-
buXL
This is part of the bank’s
move to rationalise the
operations of the two units,
aithnngh it has stopped short
of wholesale res t ruct uri ng.
Strauss Turnbull, which
already makes markets in
Dutch stocks and began in UK
equities two months ago, plans
to offer “a comprehensive mar-
ket-making service in major
European shares," said Mr
Peter Hogarth, chief executive.
London has 19 market mak-
ers in German stocks, with an
average of 17 quoting firm
prices in each stock.
NEW INTERNATIONAL BOND ISSUES
US DOLLARS
Flash Ltd. Series Kt4
FMC Corp.S
Long Term Cr.Bkof Japan#
United Paper Ml list 4
Issue update:
DaMppon Screen Manu-44(9)
Nippon Oil Co. UM40)
AUSTRALIAN DOLLARS
PK-Banksn4
YEN
PK-Banhen4
Flash Eleven Ltd. 4
Forsmarfca Kra&grupp4
Bence di CRT(CaymanJ4
D-MARKS
.Issue update:
Dtdwa Denchl Co.*4
TotMi Sores Ca*4(h)
Footwork Corpse)
Issue ■
SekfauJ Jushl Cotp-**44(b)
Dshra Denchl Ca.**44(e)
■Nippon Yusen K-K.**44
Amount m. Coupon %
30 (d)
75 <8l*-64|}
10/Sbp Senate lot
2 * 2 / 1*2 Morgan Stanley tnt
2/1 \ i LTCBInt
25H5 KensentahOseke-PaiiKkl
2Vlti Yamslchl Int
2 i/l£ Nomura Int
fiqueJParfbas CspJMkte.
Hickson Capital LM-Sffl 40 (0V7M) 100 2004 2\f%\ UBS Phfltps & Drew
ECUs
Swedish Export Credtt40) BO 102% 1994 1 Vlt« Bankers Trust
4 Final terms. **Prtvato placement. IFloatlng rate note. «Wtth equity warrants. fConverUMe. apndJcotad pm to yMd
3202%. bJPut to yield 3.425%. c) FI rat coupon at 3-month Yen Ubar plus i. subsequent coupons will be bed using e formula
linked to Mkkei-Oaw Jones Japanese Stock Market Index. d)6-montfi Libor plus 18bp. aJPut to yield 3412%. f] Coupon cut by
V gJCoupon cut by h- h)Coupan fixed as indicated. ijSemf-anaual coupon. Put altar 5 and 10 yean at 50bp over 5 year gOL
j) Fungible with Ecu 100m deal launched 20/11/1989.
Mitsubis h i Finance InL
Sanwa InL
I8J Int
Nomura InL
2V1 1 ! West LB
2Vlra Drsedner Bank
n/a Banca Svizzsra Katlaaa
n/a Nomura Bank (Saritzl
n/a UBS
n/a Credit Suisse
2\n\ UBS Phfllps S Drew
LONDON MARKET STATISTICS
[7j
f* (
Y* 1
LjJEg
^ 4 ^
X c i ,
gW nOlHHUU, MJD 1^11 n-lW
rhflirlMn said 768- D0P«rt* following- tfi8 tentifr
mm
i reserves tar
ftfUMBpOSt
*
• i. ' .
.... -Y^ ^
[^7
Nasdaq to trade NYSE
listed shares in London
By Stephen FkSer, Euromarket Correspondent
NASDAQ, the screen-based
trading system of the National
Association of Securities Deal-
ers. intends to open a market
in London in shares listed on
the New York Stock Exchange.
Nasdaq said earlier this year
it would extend its system in
London by opening trading at
9am London time, 4am in New
York.
It added it would list 300 to
400 issues as eligible to trade,
some of which would also be
listed on the LSE.
Mr Joseph Hardiman. Nas-
daq president, said in London
yesterday that the exchange
intended, subject to approval
traded on Ames. Trading will
end before tire opening of the
New York exchanges, so per-
mission to trade their issues fo
not
The action will be .viewed as'
a competi tive move against
both foe NYSE and the LSE,
aTthaugh Nasdaq says it will
have little effect on London's
Seaq 'International service.
Only about 5 per cent of trad-
ing on Seaq International la
accounted for by trading in US
stocks, although London trad-
ing ta American issues is heav-
ier . than., implied, .by that
because much of the market is
Commission and the UK
Department of Trade and
Industry, to add out-of-honrs
trading in New York and
American Stock Exchange
issues to the system.
initially thin would mainly
be aimed at the 40 American
depositary receipts traded on
the NYSE or the half dozen
Ntedaq hopes to. main the
expansion towards the mid of
next year’s third quarter. At
present, although several thou-
sand screens m London are
equipped to receive Nasdaq
prices, only two or three deal-
ers have use capacity to deal
through the system. The estab-
lishment of a computer node hi
. Landau trill ease .trading.
FT-ACTU ARIES SHARE
Theee IwBcbu are 9m jofat corop infl on of tho Financial Thnas,
the Institute of JLctuaries and the Faculty of Actuaries
RISES AND FALLS YESTERDAY
Britisa Fuads
Corparations, Dominion and Foreign Bonds
Miatrlais
Financial and Properties
EQUITY GROUPS
& SUB-SECTIONS
TRADE was robust on the London
Traded Options Market with
41.565 contracts traded. This was
mode up of 26^92 calls and
15£B3 puts.
Far and away the busiest stock
option waoBP which traded 7,496
contracts. The underlying market
was also busy with 13m shares
traded. Calls contributed 4,303
contracts with interest concen-
trated in the January 300 series
which traded 1,361 contracts and
also the January 330s which did.
1,119. On the put aide 3,182 con-
tracts traded with the July 330a
busiest with 1.350 contracts.
FTSE was active In two-way
trade wflh &274 contracts made
up of 5^27 calls and 4J347 puls.
Business was concentrated in the
near month series. The December 1
CALLS pun
mm Jte Am M Jw Jte M
AIM [job 420 73 92 98 lb 5*2 U
NR1J 460 37 62 68 6 14 19
500 16 39 48 27 S3 38
ASM 110 11 U 3 H 9 11
m3) 120 i U 15 U IS U
130 3 7*i U » 22 23
BrfLAtenw 180 30 41 43 1 4 5
raOB) 200 16 24 27 4% 9 11
220 S 13 17 19 18 21
Bril Con 90 14 20 22 7 10 12
1*45 ) 100 9 lb 18 14 IS 17
So Kl Bae-
ctenA 541 72 — - 3 - -
rani sso - as w - u u
600 M SO 65 19 25 30
2,350 calls with 1,624 oo h trac t a
were the most pop ular. T he mar-
ket share of the FTSE contr a c t
was somewhat lower than of late
at 22 per cent
Of the other stocks TSB made a
rare appearance among the top
performers with 1,954 contracts
made up of 1,885 calls and Just 59
puls. The busiest strike was the
December 130 with 600 contracts.
British Aerospace traded 1,750
contracts, almost exclusively
cells. The average bargain size
here was unusually large at 58
contracts.
Dixons had an altogether cal-
mer day with 1,359 contracts,
again predominantly calls. Aver-
age bargain size was 23 con-
tracts, perhaps Indicating retail
interest
James Capel accou n ted for thg
bulk of trade ItrBeechams. It add
1,000 July 600 puts at 27. Total
volume In Beeanama was 1.353 of
which 1,104 were pula. Volume
was also strong In Rolls-Royce
wtih l.519 contradta traded, 1,284
of them puts of which 504 were
March 180 puts and 640 Decent-
ber 180 puts. In British Gas the
vast bulk of contracts were calls,
with 1,317 traded out of a total of
1,406 contracts
• The London Traded Options
Market Is launching two water
options. One will be a Thames
Water contract The other will be
a package unit of 10 water com-
panies. The package unit will be
the only package other than the
FTSE on the LTOM. Trading wHt
abut on December 12.
. _ out ms
M tej
it
FINANCIAL TIMES FRIDAY DECEMBER 8 1989
UK COMPANY NEWS
Norwegian ship owners
take 80% stake in KCA
By Andrew Bolger
A NORWEGIAN ship-owning
famil y has bought a majority
gmltp in KCA Drill tag, the Brit-
ish oil services company
chaired by Sir Monty Finnis-
ton.
Outline Ltd. a Guernsey-reg-
istered vehicle for the family
funds of Mr Wilhelm Blystad,
has bought 80 per cent of KCA
at 12p per share, which values
the whole of KCA at
£9Bm.
Outline agreed the deal with
Rosshold. KCA's management
company, and ChembanK Nom-
inees, Rosshold’s bank, which
held the shares as security for
loans made to
Rosshold.
Outline's interest in KCA
will be reduced to 51 per cent
by the placing of 23m shares by
stockbroker T C Coombs at I2p
per share.
Under Role 9 of the Takeover
Code, Outline is obliged to
make an offer for all the
remaining shares of KCA
Accordingly Henry Ans-
bacher. Outline's bank, has
offered I2p per share to
remaining shareholders.
However, Outline will urge
existing KCA shareholders not
to accept the offer.
Outline wants to maintain
KCA's listing and keep the
other masting shareholders.
Any acceptances of the offer
will be placed by T C Coombs.
Shares in KCA closed yester-
day at I6p. down 2V*p.
Outline said KCA’s expertise
at an operating level was won
demonstrated by Its ability to
win and retain platform rig
service contracts with major
international oil companies in
difficult market
conditions.
Outline said KCA had been
adversely affected by market
conditions in common with
other drilling
contractors.
Turnover of £3&9m in 1983
fell to £26.5m in 1988. while
pre-tax profits fell from £&7m
to £2.Sm over the same period.
Although KCA's North Sea
platform business had grown'
significantly since 1931, its
profitability bad fallen as a
result of these very competi-
tive conditions.
YJ Lovell advances to £33.4m
By Roy Baalrford
YJ LOVELL, which is in the
early stages of a struggle for
control erf its competit o r in the
hemsing and construction
Industry, Higgs and Hill,
boosted pre-tax profits 38 per
cent during the year to Sep-
tember 30.
In line with the forecast con-
tained in the offer document
released at the time of the
£137m bid, Lovell increased the
pre-tax result from £24. 43m to
£33. 37m. Earnings per share
rose by 37.5 per cent to 3&5p
I28p).
The company’s house build-
ing operations made an
increased contribution to the
group result although condi-
tions have tightened atirp tiw
halanpp date.
Much of the increase from
housing came through the
group's partnership building
with groups such as local
authorities.
This has helped insulate
Lovell against the difficulties
of rising interest rates.
The construction, commer-
cial development and rental
businesses also returned
increased contributions.
The group turnover
improved to £414. 99m
(£394 26m!. Directors said that
the net trading margin finned
from 6-2 per cent to 8 per cent.
The board has recommended
a final dividend of 6.?ap a
share which coupled with the
interim lifts the total to 8.75p,
representing a 31.6 per cent
improvement.
• COMMENT
These figures add further inter-
est to the Intriguing battle
which is developing with Higgs
and Hill. They do little to bol-
ster Higgs and Hill's claim that
Lovell is excessively dependent
on the house building sector.
While the current 12 months
will be more difficult than
those under review, the pro-
gressive relocation of the com-
pany's principal house building
operations away from the
south-east of England and con-
tinued participation in less
risk-prone partnership build-
ing, will help Insulate the com-
pany from the worst of the
decline afflicting many of its
competitors. The construction
business is likely to provide a
further increased injection to
the group result. A chase far
improved margins on this side
of operations appears to have
paid off with operating profits
estimated to have almost dou-
bled during the past 12
months. Lovell appears on
course to return a pre-tax
profit of £37m this year, plac-
ing the shares on a prospective
multiple of &5 and reflecting
concern about the housing
market and possible dilution of
earnings if the company wins
control of Higgs and HilL
<£> Pre-tax profits up 124% to £10.1m
<£> Earnings per ordinary share rise by
53% to 19.6p
INTERIM RESULTS (urcxu)
FOR THE HALF YEAR ENDED 31st OCTOBER 1989
Turnover
Profit on ordinary activities
Before taxation
Profit on ordinary activities
After taxation
Dividend per ordinary share
interim dividend -net
Earnings. per ordinary share - Basic
continue to grow both in terms of profits and earnings per share—
' Our financial controls are strong, our interest rate rover is good and we are well
protected against' adverse interest rate movements.
These factors and current business activity levels lead me to look forward to
reporting the Group’s full year results. 55 robert j-montague- executive chairman
1988
Increase
£74.8
£45.1 m
65%
£10.1
£4.5m
124%
£10.1
£4.1 m
146%
Mm
2.15p
25%
19. 6p
18.3p
ma
53%
N/A
TEPHOOK PLC, LANCASTER HOUSE, 7ELMFDELD ROAD,
BROMLEY, KENT, ENGLAND. TELEPHONE: 01-460 6060
1
^ Johnson Matthey-uslng
precious metals for all their worth
R efining and marketing precious metals are just part of Johnson Matthey's
wide field of activities. Operating in 25 countries, we exploit the unique
properties of these, and other specialised materials, to provide an unrivalled
range of products for applications as diverse as cleaning the environment
bringing new hope to cancer patients, decorating fine china, and satisfying
the demanding needs of the electronics industry.
DEVELOPING TOMORROW'S MATERIALS
CLEANING THE.AIR.
More than 200 million cars throughout the
world are now fitted with autocatalysts. Using
the catalytic properties of the platinum metals,
they provide the most effective means of re-
moving the pollutants from car exhaust gases.
Johnson Matthey, who lead the world in auto-
catalysts, will soon open a new plant in Brussels,
raising our European capacity to 6 million
units pa. as emissions control legislation takes
effect.
WINNING THE WAR AGAINST CANCER
Thanks to the special properties of certain pre-
cious metal compounds, some forms of cancer
can now be treated successfully. Carboplatin,
the platinum-based anti-cancer drug that re-
warded 12 years' effort by Johnson Matthey.
DECORATING
The world's pottery and glass manufacturers
use Johnson Matthey's liquid precious metals,
ceramic colours and decorative transfers.
Matching the trend towards greater automa-
tion, we have developed new materials ideally
Johnson Matthey's commitment to advanced
materials technology is backed by far-reaching
R&D programmes. Our principal Technology
Centre in the UK is one of the best equipped
units of its kind, and is presently being expanded.
It works closely with our worldwide businesses
on existing products and new materials.
* * 'i
suited to automatic application by our customers.
Our new high -specification equipment and ex-
panded capacity in the UK and France will main-
tain our leadership in these specialised products.
ENSURING RELIABILITY IN ELECTRONICS
Sophisticated electronic components and equip-
ment require basic materials of the highest
purity. Johnson Matthey's refining, chemical
and metallurgical expertise meets the most
stringent specifications in products (some
99.99999% pure) for high-speed semiconduc-
tor devices, sophisticated circuitry-for defence
equipment and
Already well-established in Europe, we view
1992 and the Single Market os a fresh and
exciting challenge. The opening of our new
autocatalyst plant in Brussels, the concentra-
tion of platinum metals fabrication on an adja-
cent site, and the expansion in Milan of our
metal joining materials unit, coupled with a
computer network serving ail our European
locations, mean that we arc well placed to grasp
the new market opportunities.
1986 1987
NOTE PUs performance is nut
necessarily a guide to the future.
I Please send me a copy of your 1989 Annual and Interim Reports.
Bristol-Myers Squibb and The Institute of 1 j^ ame
Cancer Research, is now saving lives in Britain,
America and Canada. New agreements just
| Address.
signed by the three parties are aimed at . ■
developing new and improved forms. Much ] to; TT h: Company Seoeuuy. Johnson Matthey Pic. NewGarden House. 78 Hatton Garden. Lond on EC1N SJP^
of our continuing research effort goes j T^TlTlQ/VKft kjMRvJ s' jA
towards further biomedical applica- | UUlilloUll IfiaLLilUJ I //St!
tions of precious and other metals. L
marker
cn rfio
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6B8rfB78K.fffe , f3g , &8B l? P,ffBS2* l,, HB s 3KB nag B - &s,a sc»eE* SB wff asp^R-fl w ctf eruffHcsqis-H
UK COMPANY NEWS
High technology subsidiaries blamed for downturn
De La Rue shares hit as profits fall
By Andrew Hllf
PERSISTENT losses at De La
Hue’s high-technology subsid-
iaries have again hit the bank-
note printer’s profits, in spite
Of management arHrm to cor-
rect the problems.
The shares fell 22 p to 315p
yesterday after the group
revealed that trading profits at
■ its continuing security prodr
nets business had slipped 31
per cent in the six months to
September 30 - from £18.1 m to
Emm.
Mr John White, De La Hue's
finance director, said most of
to at sho r tfall could be Mamed
on Printrak, which makes fin-
gerprint identification systems,
a nd Rem sdaq, the electronic
security subsidiary.
First-half taxable profits for
the whole group fell from
£L&5&1 to £9.65m, although the
1988-89 figures included a
pk 74m contribution from print-
ing technology subsidiaries,
principally Crosfleld Electron-
ics, which was sold to Du Font
and Fuji Photo in August for
£235m.
Yesterday's statement by Mr
Peter Orchard, De La fine’s
chairman, said: "There are
problems related to the ftilffi-
ment of contracts [at Printrak
and Remsdaq] which are prov-
ing somewhat, intractable and
are very difficult to Quantify."
Mr White said the companies
had suffered from a shortage of
orders at the beginning of the
financial year and had then
difficulty completing large
software contracts in the US
and East on time and as
specified.
De La Rue will also have to
repay part of the £235m
received for Crosfleld, which
incurred “a substantial trading
loss’* in the first half. The deal
with Du' Font and Fuji was
completed in October, but the
price can still be adjusted by
the difference between the sub-
sidiary's net assets of £134m at
the end of March, and Us net
assets at September 30.
Mr White said he hoped
accountants for the two sides
would have agreed a final,
lower price by the end of Janu-
ary. Crosfield’s actual losses
will appear as an extraordinary
item, offset by the final pro-
De La Rm
May
1989
ceeds of the sale, in the full-
vear results.
Mr Jeremy Marshall, the for-
mer BAA chief executive who
took on the same rede at De La
fine two weeks ago, was
looking ver y bard at the high-
technology subsidiaries, said
Mr White. He would not say
whether Printrak and Remsdaq
might be sold or dosed,
although he admitted their
pffl hluniw Were
a good performance from the
core banknote and security
printing business.
Turnover was down from
£247m, including printing tech-
nology, to gunm in the first
half and earnings per share
dropped to 6.lp (ll.3p). The
mfpH r n div idend was arid at
3J5jp.
Poor performances from
Crosfleld and printrak ran^e^
the collapse in De La Rue's
1988-89 profits from to
£ 26 .3m, and helped trigger a
short-lived hostile bid from
Norton Opax, the specialist
print and packaging group.
That cost De La Rue £960,000
below the line in the first half,
in spite of the fact that the
group did not have to publish a
defence document, because
Norton fell to a bid hum Bowa-
ter Industries.
Bid speculation is still buoy-
ing the De La Rue share price,
based on uncertainty about a
22 per cent stake controlled by
Mr Robert Maxwell, the pub-
lisher, who was interested in
buying the Crosfleld business.
See Lex
Bunzl sells EESCO to management for £55m
By John Ridding
BUNZL, the distribution and
specialist manufacturing
group, yesterday announced
the disposal of EESCO, its US
electrical products distribution
business, to management for
in ceeh-
The disposal Is the first step
in a radical restructuring strat-
egy announced in September
which involves the sale of
three of the group's businesses
representing about 15 per emit
of trading profits.
Bunzl is seeking to refocus
on four core business areas
after a process of rapid expan-
sion and diversification had
overextended the group’s man-
agement resources and
resulted in borrowings of over
fSOQm. At one stage, in the two
years after January 1966, Bunzl
was buying a new company
every two weeks.
EESCO, which is based in
Chicago, has only beat part of
Bunzl since October 1987 when
it was acquired for £40m. ft is
one of the largest independent
electrical products distributors
in the US, and is principally
involved in electrical compo-
nents, wire and cable, and
lighting and control equip-
ment
As with Bunzl’s paper manu-
facturing and graphic arts sup-
plies businesses, the two other
operations up for sale, EESCO
is profi t able. In 1988 it report e d
pre-tax profits of £5.6m on
sales of £140.6m.
But Mr JamaH White, Bunzl’s
chairman, mM that "the Oppor-
tunities to expand EESCO by
acquisition and gain a signifi-
cant market presence have
been limited by the high prices
currently demanded for busi-
nesses in this sector.”
for EESCO. But he added that
the disposal of the paper manu-
facturing and graphic arts
businesses may be more diffi-
cult because both had passed
"their cyclical P«»l» and r wtj rin
of the businesses were already
operating at capacity levels.
Mr Brian Ford, Bunzl’s man-
aging director, said that he
expected the programme of dis-
posals to be completed by the
end of the first quarter of 1990.
He said that both of the two
remaining business areas to be
sold had received a good
response and that the group
was in the process of “narrow-
ing down the field to the
few runners.”
Bunzl's dMTM, which have
fallen sharply from I 80 p at the
beginning of February, were
unchanged yesterday at 104p.
Bunzl argues that the
growth prospects in its four
core businesses - paper distri-
bution, building matPi-Miin dis-
tribution, filter manufacture
and plaaHcg manufacture —
are more promising that
there are advantages in con-
centrating fill an rial and man.
agement resources on a
smaller range of activities.
Mr Tim RothweQ, analyst at
Barclays de Zoete Wedd, frit
that Bunzl had got a good price
Smith & Nephew below
forecasts with £100m
By John Rkfeflng
SMITH Sc NEPHEW, the
healthcare and consumer prod-
ucts group, yesterday
announced a 17 per cent
increase In pre-tax profits,
from £85m to £99.6m for the
first three-quarters of the cur-
rent financial year. The results
were slightly below market
expectations and shares
slipped 3p to close at 138Jp-
The company also revealed
that Mr Leon Fern, head of the
group’s medical products divi-
sion in the US, and a director
on the main board, has
resigned. The company said
that Mr Fern had resi gned to
pursue other business inter-
ests.
Pomtplus Public Limited Company
Recommended Offer forThe Monotype Corporation pic
James Capel & Co. Limited {"James Capel*) announces on behalf of Pointplus Public
Limited Company ("Pointplus") that; by means of a formal offer document dated 6th December,
1989 (the "Offer Document") despatched to shareholders of The Monotype Corporation pic
("Monotype"), James Capel has made an offer (the "Offer") on behalf of Pointplus to acquire the
entire share capital of Monotype not already owned by Pointplus or its associates. Terms defined
in the Offer Document have the same meanings in this advertisement.
The Offer for Monotype shares is on the basis of 150p cash for each Monotype share. There
is a Loan Note Alternative. The toll terms and conditions of -the Offer are set out in the Offer
Document This advertisement does not constitute and must not be construed as an offer. Persons
interested may only rely upon the Offer Document for all its terms and conditions.
The Offer will not be made directly or indirectly in, or by the use of the mails or by any
means or instrumentality of Interstate or foreign commerce or of any facilities of a national
securities exchange of, the USA. The Loan Notes have not been, and wHI not be, registered under
the United States Securities Act of 1933. as amended, and, accordingly, will not be. cfirectJy or
indirectly, offered, sold or delivered in the USA or to or for the account or benefit of any US
person.
The existence of the Offer is by means of this advertisement advised to all persons to whom
the Offer Document may not be despatched who hold, or who are entitled to have allotted or
issued to them. Monotype shares. Such persons are informed that copies of the Offer Document
and Form of Acceptance will be available for collection from Bank of Scotland, New Issues
Department, Apex House. 9, Haddington Place, Edinburgh EH74AL or Bank of Scotland, New
Issues Department, 3rd Floor, Broad Street House, 55, Old 8road Street, London EC2P 2HL.
The Directors of Pointplus accept responsibility for the information contained in this
advertisement. To the best of the knowledge end belief of the Directors of Pointplus (who have
taken all reasonable care to ensure that such is the case) the information contained in this
advertisement is in accordance with the facts and does not omit anything likely to affect the
import of such information.
This advertisement is published on behalf of Pointplus and has been approved by James
Capel, which is a member of The Securities Association, solely for the purposes of section 57 of
the Financial Services Act 1986.
8th December, 1989
This advertisement is issued in compliance with the requirements of the Council of The Internationa]
Stock Exchange of (he United Kingdom and the Republic of Ireland Limited (“The Stock Exchange”)
and does not constitute an offer or an invitation to any person to subscribe for or purchase any shares.
App l i c a t io n has bed made to the Council of The Stock E x ch a nge for the whole of the ordinaij share
capital of The Sage Group pie ("the Company), anted and to be issued, to be admitted to the Official
IJg. IV.-ilhtgsintheWinaryshartiBnfth^Cnmpanyaw^qvH-fi^rfrnrww.'rwMirenn 14th December. 1989.
THE SAGE GROUP
pic
(Inc o rpor a ted in England under the Companies Act 1985 Registered No. 2231246)
Placing' by
SCHRODERS
°f.
5,726,591 ordinary shares of 5p each at a price of 130p per share
Share capital
Authorised
following the placing
In issue following the
ring (all foil
placing (all folly
Sited
paid or credit
as folly paid)
£815.384.45
£1.150,000 in ordinary shares of 5p
The Sage Group pic develops and markets a range of business software for personal mrnp.,^
i relating to the Company are available in the statistical services of Extel F inancial
Limited and copies of the listing particulars may be obtained during normal business hours on any
weekday up. to and including 22nd December. 1989 from:
The Sage Croup pic
NE1 House
Regent Centre
Cosfonh
Newcastle upon Tyne NE3 SDS
Schroder Securities 1 imir-fi
120 Cbcapside
London ECZV 6D5
Wise Sprite Limited
Commercial Union House
S9 Pilgrim Street
Newcastle open Tyne NE1 6RQ^
and (for collection only) during normal hours on 1 1th and 12th December. 1989 from The Company
Announcements Office of The Stock Exchange at 46-50 Finsbury Square. London EC2A IDD.
8th December. 1989
During the period, which
c over e d the 40 weeks to Octo-
ber 7, group sales Increased
from £449 .6m to £529£m, an
increase of 18 per cent. How-
ever, about 40 per cent of sales
accrue from the US and, hav-
ing removed the effects of cur-
rency movements, the increase
was only 13 per cent.
Earnings per share showed a
slower rate of growth, increas-
ing by 10 per cent from 609p to
6JOp, despite the benefit of a
lower tax charge.
The results in cl uded a first -
time contribution from Ioptex,
the US manufacturer erf optical
lenses, which SAN bought at
the end of 1988 for £126m.
■ But the costs of acquiring
I op tex, combined with other
US acquisitions in the period,
prompted a sharp rise in the
net cost of borrowings from
tSj m to ffiAn-
Tbe majority of the improve-
iiwnt In profits Bflinn fiiHi. tlw
patient care division, which
represents more than 50 per
cent of profits. Richards, the
joint and surgical implant
maker, experienced another
strong period, increasing sales
by about 20 per cent Nivea
skincare products also enjoyed
a strong quarter as a result of
the hot UK weather.
However, sales to the NHS
continued to be affected by de-
stocking and losses con tinued
at the group's rienfrm business.
The lack of new product
approvals at its generic phar-
maceuticals ope ration, which
prompted a write-down in cer-
tain assets, and the temporary
closure of a glove mannfactur-
ing plant in Canada, resulted
in an extraordinary charge of
£13nL Against this, there was a
£l2m extraordinary profit on
the sale of its 50 per cent gfa»fa»
in British Tissues in Jnly.
Aihkr Aahwood
Mr Godfrey Bowles (above) was yesterday ap po in ted managing
director of Pearl Group following the success of Australian
Mutual Provident’s Elittn offer for the UK insurance company.
After joining AMP in 1959, Mr Bowles held several senior redes
and takes up the post with the Pearl following a period as the
Australian company's general manager in charge of corporate
affair s.
Sir James Baldexstone, who becomes totrinwan of AMP's main
board early next year, and Mr Ian Salmon, chief of toe group's
international operations, were also appointed to the Pearl board.
Mr Einion Holland win be replaced by Lord Catto, riwbmwi of
AMP’s UK operations, as Pearl’s ghrinnm, hot he wfil remain
on the Pearl board as a non-executive director.
Water flotation heavily
oversubscribed
By Clare Pearson
THE OFFER far sale of shares
in each of toe 10 water compa-
nies has been oversubscribed,
it was confirmed yesterday as
counting application forms for
the £5.24bn flotation continued.
J. Henry Schroder Wagg,
financial advisers to the Gov-
ernment on the share sale,
revealed iiwnanH for the
companies' shares in aggfp gafr*
had been at least 1.75 times the
size of the £L2bn public offer -
enough to trigger clawback
from overseas investors.
It is also now clear that
demand for shares in some of
the companies has been
enough to trigger clawback
UK institutional holders,
from
a process which only comes
into play when an individual
Offer is more than times
subscribed.
Speculation mounted yester-
day that in aggregate the pub-
lic may have applied for as
much as three times the num-
ber of shares available.
The exact levels of oversub-
scription will be announced
next Monday.
The Government designed
the share sale so as to encour-
age full subscription of the
offers for each of the 10 compa-
nies.
This was done by means of
providing' attractive incentives,
such as cash discounts on the
240p fully-paid price and loy-
alty bonus shares to people
who chose to invest in their
local company.
Even so, there had been con-
cern that some of the compa-
nies might not attract enough
interest from local buyers to be
fully subscribed.
Overseas clawback lifts the
p ro portion of the total flotation
being made available to toe
pnhlie and company employ ee*
from 2655 per cent to 3L18 per
Cent- The ro»Timnm pmpnr finw
that could additionally be
made available through the
institutional clawback is 15.7
per cent
The basis on which applica-
tions win be scaled down fay
each erf the ten companies wfil
be decided over the weekend,
and announced on Monday.
Stock market dealings start
next Tuesday.
Guiton versus Guernsey
takeover verdict today
By Jane Fuller
particuJ
flagshij
THE FIRST takeover battle
between two Channel Islands
companies will be decided
today when Goiton’s final
£17.2m offer for Guernsey
Press doses.
As rivalry between Jersey
and Guernsey dates back to
the Civil War, emotions have
run high throughout the battle,
icularly as the target’s
' ip is Guernsey’s only
newspaper.
The offer values the Guern-
sey Press shares at 30(L9p each,
whereas the latest matched-
bargain trade was at 290p. But
because of thin trade in the
stocks, some doubt has been
cast on the value of the offer,
whic h now includes a 50 per
ffigy ii. fissh 3it8Hlfln V6»
Deciding the bid are 227
shareholders, of whom 189 are
Guernsey based. More than a
third of the equity lies in the
hands of people who inherited
it
However, about 27 per cent
Is with fa iiHin H n na, toe ZDOSt
important- being the Guernsey
-branch of top London-based
investment company 3L It has
a 195 per cent stake in Guern-
sey Press and a 2 per cent
stake in Guiton. It also has the
sanw focal chamnan, Mr John
Morris, as the Investment
Trust of Guernsey .which has
35 erf the target's equity.
The trust has a London-
based fund manager, who
makes a recommendation to
the local board. In Si’s case, the
local branch makes the deci-
sion after di s c ussions with
advisers in both London and
Jersey.
Even if Guernsey Press'
escapes, there is same specula-
tion that it will "never be the
same again.” This is because a
substantial dip in profit cre-
ated the opportu n ity fra* Gui-
ton to strike and it is Mt that
earnings growth must be
rest ored to deter any other
predators.
Grosvenor Capital seeks
investment trust status
By Clare Pearson
GROSVENOR Development
Capital, a venture capital
organisation which emerged
from the old National Enter-
prise Board in the early 1980s,
is seeking to turn itself into an
investment trust by joining the
main market via a piarfng q f
ordinary shares and loan stock.
Some 3m ordinary shares are
being placed, at a price of lOOp
each, giving it a market value,
exclusive the loan stock, of
£856m. Convertible unsecured
loan stock worth in total £12m.
payahle as to 50p on applica-
tion and 50p in November
year, is being issued.
The company intends to con-
duct its affairs so that with
effect from December 14th it
should qualify as an invest-
ment trust for tax purposes.
Its biggest investment is in
Sage Group, the business soft-
ware concern that joined the
market yesterday. Grosvenor
sold 998,000 Sage shares, leav-
ing it with 14.7 per cent of the
enlarged share capital.
DIVIDENDS ANNOUNCED
Current
payment
Date of
payment
Cones -
ponding
dividend
Total
for
year
Total
last
year
Arctar (AJ)
—fin
5
Feb 28
*25
8
4^5
Carr's Mining ..... fin
5.75
Jan 25
5.75
7 JS
7 JS
Channel Exprssa§.
— int
1
Jan 19
1^
CfaytiBhe -
-Jnt
1A
Fab 5
1.5
m
425
Drummond Group _Jnt
1
Jan 18
1
•
3.7
Euromoney
tttfln
10.5
_
9
18
14
Feedback §
— int
0.75
-
nil
Graham Wood
— Int
3tn
Feb 23
124
GrandUat
—fin
11
Apr 9 •
‘ 9.5
17.75
15
Greycoat -■■■
— Int
2J3
Jan 26
2
4.5
GUS
-int
11
_
10
-
31J
GWR Group §
—fin
at
Apr 6 •
12
In Shops
-int
0.6
Jan 5
0.5
1.7
Johnson MoOhey ^
-Int
2L5
2 J6
8
Lores (YJ)
-fin
6.75
Apr 2
5.15
8.75
6 2.
Macdonald Martin _.l rtf
6
30
Macdonald Martin.
-int
4W
3
15
MS (ntarrurfora! —
—int
It
Feb 3
(L9
3^6
Murray Enterprs —...fin
nil*
02
nil
02
Phoenix Timber —
-int
1-1t
Jan 19
1.1
2.75
PHUngton
-Jnt
2.93?
Feb 19
2.66
9.5
Robertson Group .
-int
1.3
Jan 6
1.1
_
3-8
Stateless Metaf§ —
-fin
1
Janll
nil
4*
2
Dividends shown pence per share net except where otherwise stated.
‘Equivalent attar allowing lor scrip issue. tOn capital increased by
rights and/or acquisition issues. §USM stock. SUnquoted stock. 4Thfrd
market. ♦Dividend per ‘A 1 ordinary share (limited voting rights). ♦Pei-
'S* ordinary share. JScrip alternative.
■ fr Fourteen months to September 30. ♦Includes special 3p dividend.
BOARD MEETINGS
Dm Mcartng oompanta* beve oaiBtad
ot bawd RtMtngB to Dm Slack Qtctamg*.
merttans art owalty hold tor tw pan-
pom al caeWsriog dhMand* Official Indio*.
dtvWonds ara tatarims or Amis rod the cub.
«wMona shown mknt ora baaed mabdy oa
TODAY
Mnkiro. Mddng P ocdaceat. toy a Sima,
Ogtaaby A Butter, Rosa.
Rnaie- Burra Anderaon, Carrol (PJJ.
Aadm, Group
Btza T Tnai ey Group .
Oold Qrawdess TroK .
Laanoomh & Burctiea Man .
MSG Second Dual Tha_
Prieat (Benjamin) ________
Smith (WM
TGI
Dee. IB
Deo. 14
Oao. 14
Walknm,
— - Oao. 11
— Oac. IS
Oao. 13
Mn. 31
— Dae. is
— oac. IS
Hanbra Advanced TactL .
Ketaoy tads.
Kuniek.
l (Arthur) .
Cunbey i
McConbey i
NFC.
Sons.
Pplw EJaetonfca .
Wchanta _____
Titan .
Verdurae Ptam Group
Wtironptaa A Dudley Srsw. .
14
Dec. 22
Jan. B
Oac. 14
Dae. IS
Dec. 19
Dec. 12
Deo, 12
Oac. 12
Oac. 11
Oac. 11
Shares fall lOp in sector _hit by :
pessimistic CBI/FT retail sury?y :
GLIS in line with
expectations at
£ 166 . 2 m midway
By Maggie Uny
GREAT UNIVERSAL Stores,
the retail, finance and property
group, yesterday- reported
interim profits up 5 per cent
from gitabn to £i 6 fo 2 m, in line
with analysis’ expectations.
Sales in the six months to end
September rose by 3 par coat
from £I. 22 bn to £l- 26 bn.
Including realised property
profits of &L8m (£4Sm) pre-tax
profits rose to £171m (flBRM L
The interim dividend Is up 10
per cent at Up.
The shares fell lOp to dose
at ll08p, with retail shares
generally weak after a
mistic report from the ~
retail survey.
Mr Trevor Spittle, deputy
rlwliimm, imM fie thought the
results were good given the
more stringent climate for con-
sumer spending. He said the
group’s asset value bad risen
to around liOOp a share.
The company has been buy-
ing bade its own shares, some
675,000 have been acquired so
for, and Mr Spittle said it
would continue to review mak-
ing purchases if doing so
would enhance earnings per
share. At preesot purchases up
to around li50p would add to
earnings, analysts reckon.
The contribution from the
home shopping business to
group post-tax profits fell from
48.4 per coot to 41 per cent Hr
Richard Pugh, head of toe divi-
sion, said high interest rates
had affected spending. The
postal strike in September last
year was still having an effect
in that it had disrupted the
most important period for
recruiting agents. Mr Pugh
gain operations in Continental
Europe had feied batter.
The after-tax contribution
from GUS’s Burberry and other
retailing division fell from 12£
per cent to 1L6 per cent. Mr
Stanley ftacock. who runs the
division, said the . weaker
pound was hel ping Burberry’s
sales to tourists. The younger
ranges, under the Thomas Bur*
ous
Stare price (pence)
1730,
berry name , were s ellin g welL
Consumer and corporate''
financ e, business information
and investment income, was
the star performer, helped by
high interest rates on me cent
pony’s cash balances. Tfaedivi*
slon increased its contribution,
from 2SJL per cent to 3Z.4 per
cent However, demand tor^
consumer credit was beginning
to weaken, said JMr J ohn Har-
ris, head of tife dtorixm. :
Property rentals and dispos-
als accounted for 15 pea: chat dr
after-tax profits, up from £13.7
per cent Mr Erte Barnes, ih
charge of property, said the
group had very few vacant
properties at prese nt.
Earnings net Share froth
trading activities rose by 5.6
per cent to 4&4& and including
property disposals earnings
were up 4.7 per cent to 45p.
Avesco Bfits profits
Avesco, supplier of equipment
to the temvision and video
industries, announced pre-tax
profits 8 per cent ahead to
£2J38m for the half year to Sep-
tember 30, compared with a
previous S2J6QL
Turnover rose to £14.45m
UUSSmL An (L5p dividend is
THE GREAT
UNIVERSAL STORES
P.L.C.
Comparative Consolidated Profits
(unaudited)
H a ll year ended
30 September
Hanover
SM
1.29949
1988
EM
1 , 218.5
Profit before taxation
(inducing realised property profit £4Bm;
1988£4.9m)
171.0
162.9
Taxation
(1989 estimated effective rate for year;
1988 actual rate for year)
a
sat
54.9
Profit after taxation
Minority interests
1124
0.1
108.0
0.1
Profit after taxation
attributable to orcfinaryetockholders
112L8
107B
Extraordinary profit on disposals (after
provision for taxation)
9.1
30.0
Earrings par ordmery stock writ
(exducfing eortraorriinary profit)! -
Trading activities
«3-4p
41. Ip
Trading activities and reefeed property profits
4&0p
43.0p
Interim dividend
iljOp
loop
Interim dividend
The interim dividend amounts' to £275 mifion (last year £26.1 rrriBon)
and wA be paid on 27th March 1990 to Ordinary Stockholders an the
Registerat the dose of business on 22nd February -1990.
Post-tax analysis of comparable
divisional income
UK and overseas home shopping and
related activities
Burberry product* retail and marchanting
Consum er and corporate finance, business
infw matian services and investment income
Property renlals and reafised property profits
(1989 £45m; 1988 £4.9m)
1989
1988
K
%
48.4
V 11.B
12.6
32A
25. T
150
' ia7
100.0
100.0
Inconre analysis by geo gra p h i ca l i
United Kingdom
Wfestem Europe
North America
Far East and Africa
%
8M
7 sja
3.7
85
*'
869
. 7JI
2.7
4.2
IOOjO
100.0
Tfedmfl Review
Its ectmtes - Catalogue Home Shopping and related operations -
Ite activities - Catalogue Home Shopping and related operation* -
cwwumw and Corporate Finance and Business I nf ormatio n Servicee
- Pnwrtylnvestii^t and Redevelopment - Burberry Products**
their own management structures to
respond to the challenges of the market.
te ^ fh« tal^ tta cuirert year merchantfM sales have been affected
by the more stnngent climate for consumer purchasing, whilst itawosl
^ shown a further improvement ■ ’ : “
langWe worth a well balanced between net current assets and property
finance, business information services, ^property
.? roup conto,uad to generate a positive cash flow andnwte*
ton a virtually ungeared balance sheet
Thft fVm ir> wnnt iw . MM a.. i
ton a virtually ungeared balance sheet
asset value, minimise coste and invest In tha future. / :\
8th Decan*erT989-
*4
V
jVi,
y
\ s
S;.
Ss
h- :
.
Iv
Ip
V '
V
A
iS'*- c ’
v-
V
%
.V ••
iVi
.vrV3»
FINANCIAL TIMES FRIDAY
Order delays cut MS
profits 35% to £1.2m
By Andrew Bolger
US ■ ENGINEERING. ,tb*.
yesterday reported a 35 per '
cent decrease in pretax profits
to £1.2jB in the 'si x wwwtHt* to'.
October 3L T urn o ver rase to
S3 & fen (SlS.Tm).
Mr Michael Ml, chairman
and chief executive, blamed
the drop in profitability on
ddaswta the re^jt rf enters.
ment division, which had
tTiirrmpd mgrtHnn
Mr BOR sim 'the im pact on
profits bad been limited by cnt-
thtg the w orkfor ce by 10 per
cent to just over TOO people,
introducinz cost controls and
stPBnglbemng Tnanagemoiii. ‘
■ MS said £be comnanies in its
mechanical engineering divi-
sion performed reasonably
well, allowing this division to
become the group’s prime
source of profits in the half-
The company’s order books
were now healthier than a year
ago, with business spread
across b oth a ddons.
- A - restoration in voihnne of
orders for the defence-related
businesses had been supple*
mented by an order worth
more than £8m from the Boyal
Navy for 24 gun mn rmting K.
This single order would extend
delivery of the product throng
to the end of 1982.
MS stffl hopes to obtain a US
Interest charges reduce
Phoenix Timber profits
By Andrew HM
RISING INTEREST chargee
more than, halved faifawfm prof-
its at Phoenix Timber Group,
the Essex timber products and
property care sendees busi-
ness, which made £479,000
before tax In the sdbr months to
September 30, comparaLwith
£895,000. .
Mr Peter Quinn, t-hnrrmnTt
figfal that the rs s m nat pro-
ceeds from the sale of the
group's wharf stte .ot.Ramham
bad been nsed to rednee gnxzp
borrowings from about 80 per
cant nf ftwiila <n »
more comfortable 50 per;
cent.
The wharf sale - to Redr
land, flw building materials
group-:- came too late to
reduce the cost of bor r ow in g in
the first half, which Rise from
£714400 to £L36tn, pushed op
by higher interest rates. There
was an wlumnH wnT profit of'
£L5m on the deal.
Mr Quinn tlw la frnrf wte
would benefit the se cond half
and Phoenix was continuing to
improve efficiency to onset
inflationary pressure.
*T don’t think anyone Is
happy with the bunding mar-
ket at the mome nt - particu-
larly housebuilding - but I
think we have shown that we
have been aide to survive the
latest down tur n in activity ,"
Mr Q»tTTin mrifl yesterday.
garnfarea ner share in the
finut half slipped from 6.7p to
24p and the Interim dividend
was maintained at Lip per
share.
Group turnover rose to
£86.1m <£30-5m) with all operat-
ta p Sh rfiiinn tewpantwg Mto; , in
spite of pressure am the import-
ing and distribution activities
aim adverse c onditions in the
Navy order for jpyn
which could be worth about
£250m over a 15-year period.
Mr Bdl said that the current
level of activity across the
group, combined with cost
re ductio ns and stronger man-
agement, should allow the
group to look forward to the
traditionally stronger second
half with confidence.
Re added: “Although we
have experienced some
short-term difficulties, we
should achieve a reasonably
satisfactory outcome for the
Earnings per share fell 40
per cent to Z.6p (43p). The
interim dividend was increased
to lp (OJJp).
Drummond
falls to
irciK*um:
Drummond Group, with
principal activities of cloth
manufacture and property
management, reported reduced
profits and turnover for the
half year aided September 30.
Pre-tax profit was down from
£704400 to £609400 and turn-
over down from £ 15.88m to
£I3 - 0 2m, leaving earnings per
share reduced from 4.46p to
2.56p after tax of £207,000
(£203400).
Mir Stefan chair-
man, hhmwi the poor results
cm “the downturn in the High
Street with an Increase in pres-
sure on margins”.
The company does not
expect market conditions to
improve In the short term and
anticipates that the full year's
profits will be below those of
last year, but is maintaining
the interim dividend at lp as a
sign of confidence in its long
term prospects.
Metsa-Serla sees
20% downturn in
UK Paper results
By (Haggle Uny
A FORECAST fell of aver a
fifth- in wwmral pr ofits for UK
Paper was contained in yester-
day's document from Met-
sfi-Serla, the Finnish forest
products group which is mak-
ing an agreed £26Sm takeover
bid for the British paps com-
pany.
Combined with a valuation
OF UK Paper's surplus land, at a
level well below expectations,
analysts said the document
was an attempt to justify tire
target company’s assertion
thar the bid was at a fair and
reasonable price.
Some analysts believe that
UK Paper is selling out too
cheaply. One said, “we are
advising clients not to sell.
ah the merchant hanim are
looking for another buyer.”
Some arbitrageurs are believed
to have bought shares in UK
Paper in the hope of a higher
bid.
The offer document said UK
Paper’s pre-tax pro fi ts for 1989
would be around £15m, com-
pared to the £lSm made In
1988.
At the interim stage pre-tax
prefits were up by 94 per cent
at E9 _2m, and the forecast
implies a near hairing in prof-
its in the half of the
year.
Earnings per share are fore-
cast at I7.4p, giving a prospec-
tive p/e of 19 at the cash offer
price of 330p a share. UK
Paper’s shares, were up Ip at
333p.
The offer document put a
value on the 288 acres of sur-
plus land which UK Paper
owns around its Kemsley and
Sittingboume mnia in north
Kent. The group has applied
the land could be developed for
industrial residential use.
The land has been valued at
£l&9m without planning per-
mission, and £33.7m if it bad
outline planning permission.
These valuations are well
below some analysts’ esti-
mates.
The offer document points
out that if the land were mid
at these valuations capital
gains tax, of £5.2m or £iLlm
respectively, would be payable.
Mets-Serla is understood to
have bought more shares in
the market yesterday, at the
offer price, taking Us stake up
to 4 per cent UK Paper direc-
tors have 74 per cent and
intend to accept the bid.
Macdonald Martin nears £3m
MACDONALD Martin
Distilleries yesterday
announced a 68 per cent rise in
pre-tax profits from £1.72m to
£246m in the six months to
September 30. T he a dvance
was achieved on turnover up
24 per cent from £10.4m to
gfg-qgm
Mr DW Macdonald, chair-
man, attributed the progress to
th e stra tegy of develo ping dig -
ttnetive Quality brands interna-
tionally.
However, he warned that
growth in the second half was
not expected to be as hi g h , but
the foil year should show a sat-
isfactory increase over the fif-
teen months to March.
An Interim dividend of 8p
(6p) Is to be paid per ‘A’ share
and 4p (3p) per I B’ share from
earnings per ‘A’ share of 68.74p
(49.i4p) and per I B’ share of
3447p (2447p).
Dixons repeats its rejection of
Kingfisher’s unwanted bid
By Maggie Uny
DIXONS, the electrical retailer
which on Wednesday received
an unwanted £568m offer from
Kingfisher, the Woolworths,
B&Q, Comet and Superdrug
retell group, put out a further
rejection statement yesterday.
Dixons said “Kingfisher
clearly recognises Dixons’
potential as the world’s largest
specialist retailer of consumer
electronics and. the opportuni-
ties for future growth that this
brings."
Mr Stanley Kalms, Dixons’
rhaimmn , said "it 18 equally
clear, however, that Kingfisher
does not understand the*
changes that are being imple-
mented for the longer term
benefit of the business and Dix-
ons' shareholders, it is making
an opportunist bid during a
downturn in the economic
cycle.
"I am co nfident that we will
be able to demonstrate that the
Kingfisher offer seriously
undervalues the Dixons
shares,” he added.
Kingfisher responded to the
Dixons’ statement saying that
Dixons directors were deluding
themselves, and It would take
more than an upturn in the
electricals market for the
group to recover. "They
need strong management and
they need it now," said King-
fisher.
Dixons share price fell ap to
139p, which compares with the
cash offer of 120p a share.
Kingfisher's shares were 3p
down at 2S7p.
Baillie Gifford and Japanese
bank form investment company
By James Buxton, Scottish Correspondent
BAILLIE Gifford, the
Edinburgh fund management
company, is setting up a joint
investment management com-
pany with Toyo Trust & Bank-
ing Company, one of Japan's
tar gffi rt, trust hawk*
Under the 50-50 joint venture
Baillie Gifford will supply fund
management expertise while
Toyo Trust & Banking will pro-
vide funds. The new entity,
called Toyo Trust Baillie Gif-
ford, will invest mainly In UK
and continental stock
exchanges.
Toyo will Initially inject
between YlObn and Y20bn
<£88m) into the venture. In
addition Toyo will assign a
fund manager and a trainee to
work in the Scottish company's
Edinburgh office.
Mr Gavin Gemmell, Baillie
Gifford’s senior partner, said
the venture enabled Baillie Gif-
ford to enter the Japanese fond
management market without
haring to establish a presence
in Japan, while it enabled Toyo
to achieve more exposure in
European equity markets.
Toyo has up to now Invested
overseas mainly in dollar
stocks and bonds.
Toyo, with employable fhnds
Continued growth at In Shops
Growth continued at to Shops,
the retail centre group, in the
six months to the end of Sep-
tember, with pre-tax profits 52
per cent higher at £1.32m,
against £870,000.
Last year profits increased
by 73 per cent.
Turnover was up from
£4.73m to £8.68m, a rise of 84
per cent
Earnings per share were
3-4lp (2-48p) after a tax charge
of £465,000 (£308,000). The
interim dividend is being
raised from 04p to 0.6p.
of S63bn. is the 26th largest
banking institution in the
world. It docs commercial
banking and trust bonking,
which involves fund manage-
ment.
Baillie Gifford is by a narrow
margin the largest fond man-
ager in Edinburgh, currently
managing £3.250X1, of which
£14bn Is pension fund money.
More than two years ago.
Bailee's Edinburgh neighbour
Ivory & Store concluded a simi-
lar deal which created a Joint
venture with Sumitomo Trust
and Banking Company. The
venture, called Sumtitrust
Ivory & Sime, also Involves
Japanese staff from Sumitomo
working in Edinburgh.
Mr Gemmell dismissed the
possibility that Toyo would
rapidly acquire the Edinburgh
company's expertise and dis-
pense with the joint venture.
Baillie Gifford’s expertise was
very extensive, he said, and
both partners had long-term
strategies.
riariic
t? ■v'. tb,
‘VTSJfcv
spread
•-■iwttir
c uv.i.
ni sur-
^ C'jUU-
d - L'
iU-“t L'-f
BUILDING MATERIALS
AND AGGREGATES
TheFinanrial Times proposes to publish a Survey on the
.j. •••',.• ■ above on
^ 13ib February 1990
, . For; a full editorial synopsis and advertisement details,
wVsriaki ' l ?- - please contact: - \
‘Ktr-T-^SSS.* i. "
Ki ’ •'
ALISON BARNARD
on 01-873 4148
.... or write to her at
Number One, Southwark Bridge
London SE1 9HL.
Now Zealand
US$250000,000
Floating Rate Notes Due 1996
- In accordance wftti the terms and corafitfocis of the Notes,
notice is hereby given that for the interest period
from Decembers, 1989 to June 6, 1900
the Notes win cany an interest rate of a 188% put
The interest payabte on the refevant interest payment date,
Junes, 1 990 against coupon n° 8 will be
U3$. 413J95 per US* 10,000 nominal and
USX 4,1 39.49 per US$ 100,000 nominal.
The Reference Agent
KREDIETBANK
ANGLOVAAL GROUP
Declaration of Ordinary Dividends
- YEAR BDMQ 30 JUNE TOO
tu g u-~ i)nmon
38 , 1«S
ifefrifeaMatiMa •
■ASeadloraHoM ■ frttW ioi ort tonyfwM ,
syoniar Wife tow* . . a mropa— ™ .
Aagtomf Unhid - AntfVMlHow
r . , SSJiSlta-
--- 2 w» Jtwnmig
parEXUXQoidoii
angfe-TTOnttri
TmmIJbM
euffegmlSM
London WIRBST
FINLAND
The Financial Times
proposes to publish
this survey on:
18TH
DECEMBER 1989
For a foil editorial
synopsis and
advertisement details,
please contact:
SCHAANNING OR
GILLIAN KING
on 01-873 3428 or 4823
or write to her/him at
Number One
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In Finland: Peter
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Salomonkatu 17A21
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FINANCIAL TIMES FRIDAY DECEMBER S
UK COMPANY NEWS
Pilkington’s 6% lacks lustre
By Jam Fuller ■
THE DOWNTURN in the UK
building industry failed to
cloud the interim picture at
PilMngton, the glass manufac-
turer, which increased pre-tax
profits by 6 per cent to £147 Jm
in the six months to September
30.
Only 22 per c""* of the com-
pany’s EL43bn turnover lay in
the tttt where sales advanced
by 6 per cent compared with 16
per - cent for overseas
operations - although this
was inflated by accounting
flhang Ba a fT ortiwg transla-
tion of South American results.
Spending on new float glass
factories helped beef up inter-
est payments by more than
£6m to E39.fim. Hr Peter Gran-
well, finance director, said that
as these plants were starting to
generate cash, gearing would
come down over the year from
59 per cent to 50 per cent
The impact of overseas tax
rates contributed to a £50.5m
deduction, nearly £6m ahead of
the corresponding period last
year. Earnings per share were
Oat at 11 -5p.
The traditional flat and
safety glass activities contrib-
uted nearly 80 per cent of
turnover and nearly 90 per
cent of the £L68.7m operating
profit.
Mr Antony PHkmgton, chair-
man, said a particularly good
performance had come from
West Germany through strong
demand from the building and
automotive sectors.
' mgSli
Optronics, which does defence
work. Two-thirds of this was
caused by redundancy costs.
Mr Pffldngton said pikes had
been dragged down by United
Scientific Holdings, which has
announced large losses on two
contracts.
Insulation and reinforce-
ments, the glass fibre activi-
ties, had continued to trade
below capacity because of
weak UK demand. Operating
profit plummeted from £&5m
tt?£2.8m_
The interim dividend is
being raised by 10 per cent to
293p. The share price closed 3p
down at 236p.
Ashley Aafawood
Antony HHringtoxu warned about demand In the US where car
production schedules were 10% town
But the overseas progress by 17 per cent in North Amer-
But the overseas progress
was dimmed by a setback to
economic growt h in Australia
and hyper Inflation in Argen-
tina. The latter caused a £4.4m
reduction in the value of funds,
treated as an extraordinary
Hpm
Mr PilMngton sounded a
warning about demand in the
US where he said car produc-
tion schedules were 10 percent
down. The Libb ey-O wens-Ford
subsidiary was responding by
switching the emphasis to
auto-glass relacement and
building products.
Operating profits in flat and
safety glass increased by 7 per
cent in Europe to £75L6m, and
by 17 per cent m Norm Amer-
ica ana the rest cf the world to
£L7m ynd £57.6m respectively.
Vlsloncare, bought more
Hum two years ago fin: £360m
ami amalgamat ed with the
group’s other ophthalmic
operations, increased its oper-
ating profit by 34 per cent to
£l8JJm on turnover up by
13.7m to £L53Jfcn- However, Mr
Pifldngton said second-half
growth would be impeded by a
rmtat* fens scare in file US
(“people don’t stick to the
instructions”) and by cuts in
government subsidies for eye
care in both the UK and West
Germany.
A loss of £4£m was made at
So far Pflkington has proved
frilly resilient to UK difficul-
ties. Geographic spread has not
proved a panacea, however,
and it is disappointing that
Vlsloncare ’s long-awaited prog-
ress is being impeded in the
US. As one analyst said, the
jury is still out on whether tins
expensive purchase can deliver
the high growth, high marg in
business that is supposed to
inlect some excitement into a
business dominated by dull
prospects for glass. Full-year
forecasts have been revised
down to £340m, giving a pro-
spective multiple of about 9. It
Is hard to tell when profits will
regain the lustre they tempo-
rarily acquired w hen t he group
was beating off BTR in early
2967.
Sage set
for main
market via
£21m placing
By Clara Pearson
THE Sage Group, a business
softwa re company, is coming
to the main mar ket via a plac-
ing at I30p per share which
values it at £2Llm.
Of the 5.73m shares being
placed, repr esen ting 35 per
cent of the enlarged share cap-
ital, all but 769.231 are being
sold by existing share h o lde rs.
Net proceeds for the com-
pany will be £500,000.
The plaiting price represents'
a p/e multiple of 104!, based on
pretax profits of £24hn tor the
year to end-September.
On a notional net dividend
of 5.85p, the gross dividend
yield is 6 per cent.
Grosvenor Development
Capital, the venture capital
concern which is also floating
this week, is selling part of its
shareholding in the placing as
well as a number of the direc-
tors.
The Sage Group says it is
now established as a leading
UK supplier of accounting soft-
ware packages and network
starter kits for personal com-
puters.
Founded in 1980, the com-
pany last year achieved sales
worth £9.30m, compared with
£5 .24m in 1988.
Pre-tax profits moved np
from £l.04m.
Greycoat
down 17%
to £8.7m
Greycoat, the property investor
and developer, suffered a
downturn in pre-tax profits
from £10.49m to £&.71m in the
six months to September 30.
However, the company
stressed that last time's result
included profits of £3.45m firm
the sale of properties and that
this time's figure includes a
provision of eaisam against an
anticipated trading loss in the
US.
Net rental income rose to
£10.43m (£7.04m) and Interest
receivable and other income
advanced to £5.67 m. (ESLOTm.).
However both finance and
administration costs were up
at £2.09m (£L48m) and £2.1Zm
(£L34m) respectively.
Earnings per share declined
to 9p (10. 9p), though the
interim dividend is lifted to
2Jp(2p).
At the end of October Grey-
coat. with Park Tower Realty
of the US, paid an initial
£149 Jm for a fburacre site in
Paternoster Square, ECS, a
area of more thaw mmoj inter-
est due to its proximity to St
Paul’s Cathedral.
Channel Express
higher at £0.79m
Channel Express Group, distal-
Preliminary Announcement.
Y. J. Lovell (Holdings) pic results for the year
ended 30th September 1989.
Lovell
The record speaks for itself.
Profit before tax
+37%
Earnings per share 38.5p +38%
Dividend per share 8.75p +32%
Fifteenth successive year of increased
profits
Strong performance from all six Divisions
Record profit from Commercial
Developments and America
Copies of the 1989 Annual Report w9l bo posted to shareholders on 15th December and
wfll be available from the Secretary, Y J Lovell (Holdings) pic, Marsham House, Station
Road, Gerrards Cross, Buckinghamshire SL9 8ER.
-This advertisement is published on behalf of Y J Lovefl (Hokfings) pic and has been approved by Lazard
8rothere& Ca, Limited, a Member of The Securities Association, aoiely for the puposes of section 57 of the
Financial Services Act 1986.
The directors of Y J Lovell (Hokfings) pic accept responsibility for the information contained in this
advertisement and, to the best of their knowledge and belief (having taken all reasonable care to ensure thal
such is the case), the Information contained in this advertisement is hi accordance with the facts.
CONSTRUCTION
PRIVATE HOUSING.
PARTNERSHIP HOUSING
AND URBAN RENEWAL
COMMERCIAL DEVELOPMENTS
PLANT HIRE
OVERSEAS
_ ..
Lovell
CONSTRUCTIVE GROWTH
NEWS DIGEST
button company specialising In
flowers, reported interim pre*
tax profits 22 per cent ahead
from £650,000 to STSMMfc Mr
Phftfp Meesoo, ^buirman, said
t h»t the rampawy was operat-
ing in line with budget with
freighter aircraft showing par-
ticular strength.
Turnover : for the
USM-qooted company in six
mouths to September 30 was
£8.76m (£&24m), a rise of 40 per
cent Earnings per share came
out at 4£p (4.7p) after tax of
£246/700 (£183,000). The com-
pany is paying a first interim’
dividend of lp.
Mr Meeson said that the
company was seeking to
expand and several potential
acqui sitions had been evalu-
wereT
(18.7)i)
A 4 Ariher at *Mbi
j^ter interestcredtts
A j Archer Holdings, the
Lloyds managing agent,
achieved Increased pre-tax
profits of £fc3*w tartl* year to
September 30, compared
£SJ2m- TUs was after Interest
received of £40fcooo compared
with a net chattel MM-"
Turnover Bell to £?.49in'
(57.53m) and op erating praftts
came through at £5 .94m -
Clayhithe rises 13%
but dividend op 20%
Clayhithe, the property
finance, development and pro-
fessional services company,
has increased its pre-tax profits
by 13 per cent in the half-year
to September 80. The taxable
result moved ahead . from
£L83m to £247m, while turn-
over was marginally up from
£13-Glm to aa.22m.
Earnings workedthrough at
8JS5p (7.76p) per share at the
basic level and 7.98p (7.19p)
fully diluted. Despite the mod-
est level of the profits and
pnTtilwga increases, ton lwtBrim
dividend is lifted 20 per cent to
1.8p (L5p).
Mr John Jones, chairman,
said that the group had a
strong balance meet and was
well placed to take advantage
of o pp o rtu nities which might
occur as a result of high Inter-,
est rates and more difficult
trading conditions in soma sec-
tors of industry.
Trebled profits of
£039m at Feedback
Feedback, the USM-quotad
electronic equipment manufac-
turer. more than trebled pre-
tax p rofi te in the six months to
30 September.
On turnover only 6 per cent
ahead at £L86m (£L58m), tax-
able profits vaulted .front
£125,000 to £385400. Tax rose to
£148,000 (265A00) and earnings
to 2Jp (0.7lp) per share. The
cmnpany is to retnm to paying
interim dividends, allocating
0.75p per share this time.
Of the profits total. Feedback
Instruments returned to the
black and. with the present
rate of orders, it is expected
that profits in the second half
win exceed those of the lint.
Feedback Data produced sub-
stantially increased profits*
though toe second-hatf .result
was difficult to predict -flue to r
the tuning of an order and high
interest rates.
Feedback Inc profits came
out lower than last time, but
increased marketing invest-
ment is being made in the sec-
ond half to raise the volume of
business.
59% jump to £0.9m
at Graham Wood
Graham Wood, the structural
steel engineer which Joined the
main market in January,
Increased pretax profits 59 per -
cent from £555,000rto £885,000
in the six months to September
SO. Also the directors have
ifaclared a miriito i interim Hhrt-
dend of 3p-
Mr Tom Goldberg, chehman ,
sa id that all the group's compa-
nies contributed to the
increase with the exception of
the fire-proofing operation,
which was bit by industrial
action by other site ope rati ves
in the London area.
Turnover in the period rose
to £l&55m (fifl-gm). Adminis-
tration expenses climbed to
Eft - fim (£l-96m), leaving profits
at the operating level of
£984,000 (£746,000). Earnings
Directors p ro posed a- final
dividend of 5p(4J8Sp) making a
total of 8p (4^j»V Barntngs par
lp share amounted to HJp
CtS-fip). ■ ' - ■ ' ' -
Mr AJ. Archer, chairman,
said that toe difficult trading
conditions In 1988 had oontto-
ued daring 1988, partlcnlarty in
the aviation and marine mar-
kets. However, it was likely
that the effects of the* soft mar-
kets and recent kisses would
increase pressure for an
improvement luxates.
Carr’s WBOft tumbles
after food satires
Losses of more than £lm in its
chicken meat and oggs activi-
ties due to food scares left tax-
able profits down <S per cost at
Carrie Milling Indnatnes.in toe
year to September 2.
However the CarUsle-ibased -
company r which baa interests
in floor miffing, animal feed
making, baking agricultural
merchanting and engineering,
said that toe present year had
started weB. Co nt racts far the
supply of chicken had beam
won which should ensure a
return to profit for toe busi-
ness.
T urn over was- £9m higher at
£82j06m and the pretax figure ;
was sum n CQfi&n). After tax
of £833,000. (S46UM0), earnings
per share were ILlp (20.8p).
Directors are recommending a
maintained final dividend of
&75p tof dB ondwoged tepa of
7-5P-- t .
Enlarged GWR op
16%to£L66m
GWR, the USM-quoted West
Country radio station, yester-
day announced taxable profits
for the pear to September 30 up
16 per coot from £l.43m to
£L66m. Tornovor ro6e-20 per
cent from £8.aSm to £9.6 Sbl Mt
H ezuy Mwakin, riMrirnum, said
the difference reflected the ■
running costs of Brunei Radto
launched last Jfavember.
' In June, toe «lnnM«t .
its aire^ tbrongUamarger with
Cmiaolidated '-Radio Holdings. .
Mr Meakln said towt' the bene- .
fits were coming through In'
toms of revenue and operating '
e ffici e n cy.
Brunei Radib, a medium-
wave service, is aimed at the
overSSs. The directors said
that the combined audience of
Brunei and GWR FM showed a
21 per cent rise, despite compe-
tition from a new BBC local
radio
The final dividend of 9p
makes a total for the year of
ISp, from earnings per share of
Murray Enterprise
nay advances to 95p
Murray Enterprise, an invest-
ment company specialising in
hitdi technology, saw net asset
value rise to 95p at September
30, against 60Ap 14 months ear-
Hpt .
Fully diluted, net asset vahw ,
reached 98.70 share, compared
witonfl. •- .
Basic earnings per. Share for .
.the 14 months to the end of -
September stood at blip (0i7p
kms) or L04p Cnffi ftafly diiated.
There is no interim dividend
(OJZp)-
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FJ^ANCIAXTIMES FRIDAY DECEMBER 8 1989
FINANCIAL TIMES
H FF^ Poetical upheavals
§J d j and economic
reforms in Eastern
Europe have opened
_ up new opportunities
for trade with the West Yet the
severe economic problems of the
Comeconicouritries make it hard for
commerce to expand. A look at the
prospects by Anthony McDermott
Evolution, not
revolution
THE MOMENTOUS political
developments and upheavals in
Eastern Europe and file Soviet
Union have. Sir a while, over-
shadowed anw* all but' wm*r .
gency aid measures for the
Eart and trade relations.
However. thae is an hnpar-
tent difference between the
way in which political m enfa
have evolved and the path fat
lowed by. in particular, East-
West trade and investment.
The extent and swiftness of
priHHnwI rium p In fho Vw* — .
the opening of the Berlin Wall
hpypg rfwnmrfift t3GBB0Bb“-
pie - took many by surprise.
Speculation about European
jqlMafl a B gmnup ta has mm
an a new urgency. •
By contrast,, economic- links
ba liw e aH Bart and West have
been changing' ever since the
age of gladnost and pares- '
trofiut ParalM with this, sev-
eral Eastern- countries, led by'
Hungary, Poland and the
Soviet Unkm. have initiated
movea* to re str uc tu re - their
trade laws and organisations
by reducing the rate of the cen-
tral authorities. T hey have
aimed ‘at increasing enterprise
a utono my, ’ i mproved pricing
systems to c re ate .better link-
age with world market prices
amt ultimately, the generation
of much-needed hard currency .
But the Geneva 1 based UN'
Economic Cbmmissian for
Europe (ECS), in its most
recent report , sounds' a warn-
ing?-"Pie dHBcwft tesuefactag-
(Hungary and Boland) b how
to
centrSBy.pilalixied fb malfcet'
systems, and fids - especially
in Poland - in the face of
Sharply rftferl n niHwg ww niiiww
performance.” The response
from the West has been, fay
a nd laife measured and cau-
-tious - but not without
rBsmzs.
The fact that economic evo-
totkm in. the East preceded the
paBficaT crises" has given it a
momentu m w hich should
ensure its survival.
There are paraHelH between
the - economic and political
developments - in the patent
shortfalls in the systems. Cen-
tralised Bconomtes have failed
to produce much-needed con-
sumer goods and develop tech-
nology to match that of the
West
The Commit for Mutual Eco-
nomic Assistance (CMEA or
Comecon) has fatten far short
of the aims it set itself at its
foundation in. 1940. -Yet, even
as late as a Comecon meeting -
in 1988, there was agreement —
Rnmanta dimiMithig - cm the
“gradual creation of ctHufitkms
for ' the free movement of
goods, services and other
aspects of production _ with a
view to forming a unified mar-
ket in the long town " A Him.
prim Official rienerihorf such
an aspiration as a “pipe-,
dream”.
The features of Comecon
countries’ hwWWmrtoi during
the mid-1980s are well-estab-
lished. Economic growth
slowed. Wifi* -the- exception of
Romania,- the -Soviet i Mmuwi -
piy rtflwtu ’ iMWtii with
CONTENTS
East-West Trade
toe West They were unable to
generate hard c ur rency in suf-
ficient quantities mil iTip envi-
ronment was seriously abused.'
It is «iwn wonder tfw* Hniw
with the comparatively pros-'
perous and voluntary Euro-
pean Community (official
mutual recognition between
EC and Comecon came in a
declaration in June 1988), and
formerly reviled institutions
such as the World Bank, the
International Monetary Fund
(IMF) and the General Agree-
ment on Tariffs and Trade
(Gait) became mtiring . 'Ibese
aspirations have produced
thdr own pressures for nhang p
because full membership of
such organisations and incor-
poration into the global eco-
nomic system requires Anther
ahifta away from centralised
dariain w -wnilriTig and pHww set
by government flat.
ECE, in its report published
last month and compiled
before the most recent political
developments, concluded
broadly that East-West trade in
the first half of 1980 had con-
tinued to expand with a sub-
stantial quickening of the
imports of Eastern countries.
Eastern exports, however,
grew much mare slawiy and
the current account imlmow
of the Soviet Union and coun-
tries of Eastern Europe with
the West had deteriorated
sharply. -
The problem of statistical
sources is fflustrated by ECS
figures elsewhere in the report.
Ibis is because in same chap-
ters Eastern sources are used
and in others the reliance is on
the trade returns of individual ,
Western countries. A gains t
worid trade growth of &5 per
cent in 1988 and 7.5 per cent
estimated foe 1989, East Euro-
pean exports with developed
How the East Bloc’s trading framework is being reformed
is struck by
Perestroika
market economies grew in
value by 9.1 per cent in 1968
but fen to 3.4 per cent during
the first six months of 1989
(compared with a similar
period in the previous year).
Imports fell from 8J to ELI per
cent over the same periods.
By contrast, exports from
the Soviet Union rose from 7.8
to 9.4 per cent while the rate erf
import growth fell by more
than half from 22.6 to 109 per
cent (Latterly a Soviet official
has admitted that exports have
damped badly.)
At the same time, countries
of the East have a revived
appetite for recourse to raising
funds on the international
ftoanrfai markets. These hit a
peak in 1985 of 95.3bn and,
alter a dip, recovered to $A3bu
last year. In the first three
quarters of this year $3bn was
raised, compared with SLThn
in the same period of 1988.
The challenge to the West
has been finding ways of cop-
ing with chronic shortages of
hard currency in the Bast.
There is a reluctance to
embark on counter-trading, not
least because of the shortage -
with some exceptions - of
goods of world quality. (The
export of basic raw materials is
a separate issue.)
In the short term, there have
been aid progr ammes such as
that launched by the (froop of
24 in Paris last July. The tar-
W u MMC l wfl deals wttb East Bloc Pro®*: RwkXsrox 3
countrlas -
Fotors of Ceoom JoW renter* pco*p*ct»
ProfDs: LB4tdsmaHoasl 2 A BSW MwvtnU Plan for Bsstom
■■ Europe? 4
European Community rotations „ _ ; ■ —
wM rsefrn Europe iOustratktn Grab am Lever
gets for fife Jlhn (£64lm) pro-
gramme were Poland and Hun-
gary, countries which already
have Institutionalised trade
links with the EC. Last
month ’s ec summit endorsed a
Clbn stabilisation fund for
Poland and a 9ibn bridging
loan for Hungary.
But Western countries have
been trying to kick at longer*
term and more «pifanwitnhiiwg
programmes to counter the
hindrance Imposed on Eastern
countries by their lack of
understanding of how market
economies work. ECE has
listed soma 13 items of a pro-
gramme of commitments by
G-24 countries to Hungary and
Poland for 1990, amounting to
9782m. These put heavy
emphasis on technical and
managerial training and tfry
environment. In the same con-
text, the British Government
launched last month the first
Know-How Fund for Poland,
and a second is to come into
operation far Hungary next
April
Joint ventures have been
much promoted as the way to
promote East-West trade. But
these have suffered from low
levels of investment. According
to ECE. by the middle of Octo-
ber this year, 2,100 had been
established with well over 90
per cent as joint East-West pro-
jects. Hungary had concluded
about 600 and Poland 400, with
a combined total capitalisation
of over llbn. The Soviet Union
now has more than 1,000 joint
ventures registered, with capi-
talisation of around 94bn.
But speaking recently in
Oslo, Sir Dimitri K Protsenko,
a former Soviet finance Minis-
try official, said that only 40 of
the Soviet ventures remained
felly operational and only
three among the first 250 regis-
tered involved Western invest-
ment in excess of 920m. He
attributed this low level - and
most ventures tended to be in
the services sector - to West-
ern investors’ caution and the
problems of the repatriation of
profits, guarantees and the
non-c o nvertibility of the com-
mercial rouble.
In contrast with the compar-
atively stagnant experience of
joint ventures. General Electric
of the US is due to finalise this
month an audacious deal with
Tungsram, the Hungarian
li ghting manufacturers, which
amounts to the largest Inward
investment by a Western com-
pany in Eastern Europe. It
involves GE paying around
$150m to acquire a 50 per cent
stake in the Hungarian com-
pany with a view not just to
increasing its shard of the
European lighting market but
also to integrating its manage-
ment within Its global empire
of power generation, medical
systems and ftwnnrial services.
It presents something of a
dilemma for Western European
governments. On the one hand,
they are keen to support politi-
cal reform by encouraging eco-
nomic modernisation. On the
other, similar deals elsewhere
in Poland and East Germany
going beyond sales and distri-
bution into manufacturing at
low-cost production sites for
exports to Western markets,
might provide an unwelcome
trade challenge.
CoCom - the Paris-based
Co-ordinating Committee on
Multilateral Controls - which
monitors the export of prod-
ucts and technical strategic
value to the East bloc will have
to re-examine the strictness of
its controls. The prospects of
cuts in defence spending by
Washington and Moscow,
detente in Europe and appre-
hension by those Eastern coun-
tries not in Gatt at being
excluded from decisions
reached in the Uruguay Round
on liberalising trade have all
weakened Its role.
A recent report, accepted by
a committee of the Western
European Union (WEU),
described the CoCom curbs as
"a relic of the Cold War.” If
adopted at the ministerial
meeting of the WEU, the
defence and security organisa-
tion grouping nine EC
members minus Ireland,
Greece and Denmark, it will
Increase pressure on a cautious
US to reduce CoCom controls
and open the way to exports to
the East of much-needed high
technology.
The opportunities for the
West In the East in terms of
trade as much as of investment
and aid are as open as ever.
The risks for the countries of
the East in radical economic
and political reform remain.
But the virtue of economic
perestroika is that It was under
way, however hesitantly,
before the abrupt political
upheavals of the put month. It
Is fair to predict that these
upheavals may postpone the
economic and financial reform
process in some countries in
the Eastern bloc, but It is less
likely to halt reform
completely.
Take advantage of our pole position in East-West trade.
Bixrke:
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PRESIDENT jgkhall Gorbachev hastold
the countries of ~the East Hloc that they
can, travel their own -roads to ■ socialism. •
wm he now tell them to buy their own Ofi .
for the Journey? . - -
In recent- the Soviet leadership
has dramatically reduced its po l itical ties
with Eastern Europe's states. At the same
Hum the UBBR fa s uf fering a serious 'shorfe-
flnfl in ofl production, w hich la currently
running 12m tonnes below t ar get So, it is
no surprise to hear some members of the
country's Supreme Soviet demanding that
in 1990 the USSR abotdd cut its sales of oil
and natural gas to the East Bloc, which
are traditionally exchanged for Eastern
Europe’s rriativelylow-qujdity goods.
Such a move would drive a stake deep
into the heart of Comecon, which for three
duMawtow has bound a large part jof the
SorietTJukm’b trade to its fraternal Social-
Enterpriser dotted throughout :
the neighbouring countries
are becoming reluctant to
fulfil their side of the equation
and aelli to the Soviet Union
1st partner^. Two- thirds of the Soviet
Union’s experts to its CMEA partners are.
in the farm of energy, which is exchanged
- mainly da a . barter basis - for indus-
trial consumer goods. Now, Weston
and Soviet fanalysts are arguing: that the
Soviet Union 1ms no pofftfeal ohfi g a t fan to
sell oil cheaply to the East Bloc, and that
ttwfflsooq be eooponrfcaliy ration al to s ell
it on the worid market for hard currency.
Or, b e t ter stffl (as far as the Soviet citizens
are concerned), not to sell it at an.
The loosening political r elationship
between rmimb and its neighbours means
that - In fife long run - the CMEA trad-
ing rdatfonship will disintegrate. Indeed,
economic- reform in most of t he CM EA
eotmtrieshas already begun to disrupt the
' Even before Typhoon Perestroika had
struck E””* Germany and Czechoslovakia,
strains appeared in Comecon because
same c amt r fe j — . notably .Hungary and
P oland - had devolved trading decis io ns
downto.the producing enterprise. This has
serioudflntexxiipted tbetrading:arraQge-
mente fetWBemmim&er countries) most of
which bad traditionally been handled at
ministerial l&veL: ^ „
Npwrtbe size: of fife Soviet Tfaions ou
exports ' to 'each country b stOl agreed at
government level; hut the individual enter-
priseOotted throughout each o f the
Soviet Unfed's neighbouring countries are
hearting moreiaod more reluctant to ful-
fil tharstosof tbs equatiouand eeitt to the
USSR. Hungarian and Polish e nterpri s es
are keener to trade westwards. There can
be little doubt that Czechoslovak and East
German' enterprises wiQ soon be doing the
same thing, and further complicating the
Comecon juggling act.
The muddle la one of the factors contri-
buting to the huge trade imbalances bund-
ing up throughout the region. Hungary,
for example, has a large balance of pay-
ments snnrfUB with Rnswiw (amounting to
around ibn roubles in 1989). partly
because the fall in the world price of ofi.
has cut Moscow's earnings. The Budapest
Government - has therefore sought to
reduce t h is trade imbalance, and in July
1988 ft cut its subsidies to a number of
companies exporting to Russia because
their exports were deemed un p ro fi table.
Another associated pro blem is that the
endemic shortages of goods throughout
the region forces countries to restrict
exports to theft CMEA partners. In 1988,
consumer goods to the USSR to satisfy its
own markets. And traders in Czechoslo-
vakia, the GDR, Poland and the USSR
have all taken measures recently to
restrict goods: in short supply being
exported from theft countries to the rest of
Comecon. Governments and enterprises
are unwilling to export such goods abroad
in exchange for non-convertible currency
-that they do not want.
Ironically, the revotatiaos in Wwa* Ger-
many and Czechoslovak^ will bequeath a
new.mamentum to Comecon in the imme-
diate future. The first half of 1989 was
marked by squabbling over Comecon’s
structure between those states which had
already set out on the path of reform (the
Soviet Union, Poland and Hungary) and
the rest -of tire Woe, which retained its
hard-line leaderships, with theft commit-
ment to planned economies and barter
This resulted, in June, in the last-min-
ute cancellation of a Comecon summit at
prime ministerial level because, as Hun-
gary's Deputy Prime Minister put it,
“extensive debates” were still going on
about 'changes In Comecon’s working-
When a summit was, held last month at
economic minister level, the Hungarian
delegation of thr ee members took part
only as observers.
Today, however, Rnwumfo alone stands
in the camp of East Europe’s hardliners,
so that there should be gre ate r consensus
over a policy of trade refonn. This has so
fo r been pioneered by Hungary and
Poland, which have been keen to switch
more of their trade in the direction of the
West
Their aim is to reform the Comecon
trading framework in two ways: first, to
move aw£y from a planned and integrated
f rame work for the entire bloc towards (me
which stresses bilateral links both
between member countries themselves
and with individual western states; and
secondly, to move from a barter baste
within Comecon towards one based on cur-
rency payments. This will provide greater
flexibility and choice erf trading partners.
Some reforms along these lines have
already been Introduced, including the
enhanced use of the transferable rouble,
by which payments can be agreed in
national currencies at mutually agreed
prices and exchange rates.
Now Hungary, according to Mr Jan Vari-
ous, editor of the PlanEcon journal in
Wash in g ton, is tafiriny about trading with
the Soviet Union in hard currency from
1991, whan the new batch of trade agree-
ments will have to be drawn up by Corn-
econ countries.
According to Mr Venous, a move to dol-
Movlng from a barter basis
towards one based on
currency payments will
provide greater flexibility and
choice of trading partners
lar-based trade will mean that Comecon no
longer effectively exists: once countries
are trading in dollars there will be no bar
to them arbitrarily choosing to trade with
the West. That would appear to be Hun-
gary's long-term aim. However, the Hun-
garians are unlikely to win their indepen-
dence to trade easily because their huge
foreign debt will make it difficult to buy
oil at world market prices in hard cur-
rency. So, although Hungary has a trade
surplus with the Soviet Union in roubles,
it is now reported to be trying to negotiate
a five-year Soviet loan to cover the new
bard-currency debts that will accrue.
Whatever the outcome of such negotia-
tions, the new era of reform throughout
Eastern Europe must spell the demise of
Comecon as we know it Already, at the
earliest stage of the latest Hungarian and
Polish reforms, individual enterprises are
resisting the compulsion to trade with tire
East Bloc as much as passible. The next
stage will be more drastic the reform-
minded governments of the bloc will have
to wind down subsidies to many enter-
prises.
The de-monopolisation of business in
Eastern Europe implies that fewer and
fewer enterprises will be forced to trade in
non-convertible currency. This opens a
challenge to businesses throughout the
continent of Europe.
James Blitz
• • •;.! ".'ft '
. ;■ 'S< .. * ■*,. V •• % .
■ A r v ' '; 4 ■
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*■;: ! \S{- ^
Vienna is a traditional centre for East-Wsst trade: As a neutral state in the heart of frrope wo
have dose cultural and economic ties to East and West, )bu should take advantage of these
contacts if you want successful East-West transactions. GZB-Vienna is the bank that has dl
the necessary qualifications: along with its tracing house E J. Bsner & C o„ it offers
* cou nter tra ding transactions # dissolution erf counter-purchasing obligations
* mdrviduaJ trade financing, including riforfaitpurchase of receivables, as wefl
os tie speedy and smooth sottlement of payment transactions.
GZB-VIENNA i
GenossenschaftlidFie Zantralbank AG §
A-1010 Vienna, Herrengasse 1-3
TeL 71707-0*
Wen 136 989, SwiftrodcK ZENT AT WW
Representative offices in New VfaHc, Londorv
Hong Kong, Singapore MSan and Zurich.
Your Austrian partner in
East-West trade.
K/)
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FINANCIAL TIME'' FRIDAY DECEM8RR819W
( EAST-WEST TRADE 2^)
THE SHORTAGE of foreign
exchange in East Bloc conn-
tries and the changes wrought
by economic reform hare com-
bined to create new challenges
for hanlK seeking to WnaMing
Western project deals.
Though experience varies
from country to country -
some such as East Germany
still do not permit Joint ven-
tures while Romania has ban-
ned all forms of foreign bor-
rowing — it is no longer
automatically possible to
financ e deals with straightfor-
ward export credits.
. Increasingly, exporters and
their hankers, too, are having
to assume yniff of the risks
themselves.
The idea of limited recourse
financing is a novel one for
centrally-planned economies
which traditionally do not
acknowledge the Western con-
cept of bankruptcy.
In the old days, before peres-
troika, all that bankers
required was a centralised
state guarantee on their loans.
Now that the concept of the
market is creeping in to the
Soviet way of life, they fre-
quently also have to examine
the risk inherent In the project
Itself and sometimes have to
Financing deals with East Bloc countries
The lender gets a central role
structure the financing to
reduce the risk.
One of the latest examples of
this is the proposed loan pack-
age for the $2bn joint venture
led by Combustion Engineer-
ing of the US to develop a pet-
rochemicals complex at
Tobolsk in Western Siberia.
Fart of package will com-
prise a $250m to $300m com-
mercial loan whose terras will
require lenders to shoulder
some commercial risk.
The banks involved In the
transaction. Credit Lyonnais,
First Chicago and PostipaUkkl
of Finland are still working
out final details of the financ-
ing with the project adviser,
Morgan Grenfell, but it is
expected that the only Soviet
su p p o rt for the loan win come
in file form of completion and
delivery guarantees of final
product.
This wiQ taken up by Neste
of Finland, one of the venture
partners. Lenders will have to
rely on it fetching a price high
enough to cover debt servicing
requirements.
During the past year, sev-
eral transactions that have
surfaced further illustrate fids
principle and show how it is
The Soviet Union now
expects Its projects to
be self-funding In
foreign exchange
now h iring commonly applied
to Soviet project financings.
One of these was a loan pack-
age arranged by Moscow
Narodny, the London-based
Soviet bank, for a project in
Azerbaijan to produce light
commercial vehicles to stan-
dards that would allow
exports to the West
This included a £10Qm loan
tranche, bearing interest at
market rates and a flexible
m aturity schedule synchron-
ised with the projected cash-
flow from the plant There was
no underlying government
guarantee and lenders have to
rely on hard c u rre n cy earnings
from the plant for interest and
dividend payments.
Similarly, Morgan Grenfell
arranged a $3 40m trade
finance loan to finance mod-
ernisation of a polyethylene
plant at Buddy enovsk in the
South Russian projec t of Stav-
ropaL This loan, which took
several months to prepare,
also requires lenders to take a
rink in the commercial success
oT the project
The loan was made available
to Asetco, a joint venture
between John Brown Engi-
neers, Morgan Grenfell,
Moscow Narodny Bank, two
Soviet chemical enterprises
and Giproplast, the Soviet
design Institute. Together,
these institutions set ui
Asetco last. year as a
Islands company to handle
Soviet projects.
Asetco’s role Is to handle file
modernisation of the Buddyen-
ovsk plant and repay the loan,
out of the proceeds Cram the
sale of polyethylene produced
there. To facilitate this, it :
arately negotiated a
ene marketing agreement '
Union Carbide.
Under the loan contract the
plant has to make available a
maximum of only 100,000
tonnes of polyethylene over a
nine-year period to Asetco,
and lenders are taking the risk
that fixe proceeds will be suffi-
cient to meet debt service
needs. The Soviet Government
has agreed to compensate
t hf^p only if the plant fail* to
meet its delivery schedules but
not if the price of polyethylene
is too low to satisfy debt ser-
vice requirements.
Part of fixe loan, amounting
to around £80m, is also bached
by the Export Credits Guaran-
tee Department under its rules
for supporting private sector
projects. Its guarantee bads
up only the Soviet pledges on
supply, however, and, once
again, would not compensate
lenders tor a slump in the
price at poly e thyle n e.
ow of the thnwyif
that emerges from these deals
Is that the Soviet Union now
expects its projects to be self-
fending In foreign exchange.
That means lenders may have
to be prepared to analyse the
commercial risk and some-
times, by helping organise
marketing arrangements in
the West for the products that
result from the project, they
may even be expected to play a
central rote in malting a proj-
ect viable.
Jn short, the business of fin-
ancing trade with the Soviet
Union and other Bast Bloc
countries is beginning to
require a large measure of tra-
ditional merchant banking
skills. The days of plain
vanilla tending are drawing to
a dose.
Peter Montagnon
World Trade Editor
INTERNATIONAL
TRADE FINANCE
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essential global review that charts and analyses
the latest developments in trade and project
finance:
i intensive assessment of non-recourse
export and project funding
forfaiting, factoring and leasing
the emerging availability of aid funds -
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regular briefings on changing official and
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analysis of key countertrade and offset
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• in-depth analysis of country payments risk
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Tel: 01-240 9391 Telex: 296926 BUSINF G
THE EXTRAORDINARY pace of political
reform In Eastern Europe has placed a
question-mark over the usefulness of the
West’s controls on exports of strategic
technology to the region.
The Paris-based Co-ordinating Commit-
tee on Multilateral Export Controls
(CoCom), the 17-country organisation
devoted to stopping exports of militarily
useful technology to Communist coun-
tries, now feces the greatest pressure for
change since its creation 40 years ago. The
problem, argue its European members. Is
that secretive CoCom has not fully
adapted its old adversarial mentality to
the changes sweeping through the East.
The dismantling of the Berlin Wall and
the changes in Czechoslovakia have
brought the debate to the boiL CoCom’s
controls look like “a relic of the cold war”
and need complete review “to encourage
maximum opportunities for trade," says a
report debated this week at the as sembly
of the Western European Union (WEU),
the defence and security organisation
which groups nine member states of the
European Community, minns Greece, Den-
mark nwfl neutral Ireland.
However, any big reform in CoCom
rules is likely to be slow. For one thing, Us
decisions must be made unanimously,
with the agreement of the cautious US, the
organisation's unspoken, but increasingly
challenged, head.
CoCom’s flimnal high level meeting in
September, at winch officials aimed to set
policy for the year ahead, showed very
little consensus on the crucial details of
how and at what speed to reform its con-
trols. The best they could manage was
agreement that the organisation should
continue with its broad remit of control-
ling strategic exports and go on talking
about reducing export controls to Eastern
bLoc reformers like Poland and Hungary.
For another thing , the future of CoCom,
which groups fiie Nato countries minns
Iceland but plus Japan and Australia, is
bound up with that of Nato itself. Officials
say that CoCom is a kind of strategic trade
arm for Nato, Getting trade rules that sup-
port the Atlantic Alliance's military credi-
bility. So CoCom cannot consider a major
change in its role until Nato has reas-
sessed its own position in the light of the
upheavals in Eastern Europe, they argue.
AH the same, there are important practi-
cal issues on the table between now and
CoCom’s next high-level meeting next
July. The Europeans have long suspected
that Washington’s conservatism reflects a
tendency by US industry to view CoCom
as handy protection against European
competition, a convenient aide-effect of the
FUTURE OF COCOM
US backs
‘relic’ of
cold war
organisation's strategic job.
US officials strongly deny this. Mr
Reginald Bartholomew, the US under-sec-
retary of state for security assistance, sci-
ence and technology, who chaired the last
high-level mg5wm a maintained afterwards
that the US wanted to use the organisation
only for strategic, not trade, protection.
Everybody agrees that the priorities
should be to improve the enforcement of
CoCom controls and to reduce the number
of goods on its lists: to build higher fences
around fewer products, to use the organi-
sation's own jargon. The difference of
approach is that the Europeans, keen to
sell into the Eastern bloc's huge market,
want to streamline controls first and build
fences later, while the US wants the two to
proceed strictly in parallel
Most of the debate up until the next
meeting will take place bilaterally between
national capitals, for the tiny CoCom sec-
retariat, with its staff of 30, is only the
administrative centre of a bureaucratic
web that involves around 100 officials in
each participating country and far more
than that for tfie US- Tbe d e tail of the
igaiRg they are tuiTHrig about is as follows:
• Enforcement This has been an
issue by a growing number of recent
CoCom violations, such as the. sale of Jap-
anese milling technology to 'the Soviet
Union to help make ultra-silent submarine;
propellers. This has worried the US and
brought home to officials that the rules
must be seen to be effective if businesses
are to be expected to observe them.
Enforcement has also been pushed into
the limelight by tbe progress of the Euro-
nutty's internal market proj-
pean Commi
ect In theory, CoCom's 11 EC members
all but Ireland - will not be able to run.
border checks after 1992, by when they
aim to have scrapped their own Internal
frontiers. Internal checks between CoCom
members account for roughly 90 per cent
of all trade vetted under the organisation's
rules, estimate US officials. These are
needed to track down controlled goods
that might get a licence for export from a
security -conscious member like the US to
a less tightly-controlled country, for illicit
shipment to the Eastern bloc.
AH accept that CoCom members need to
observe common standards - though not
harmonised rules - of enforcement,
including a fast licensing system to help
legal trade take place more efficiently and
proper legal powers to expose and punish
cheats. A working group of national offi-
cials aims to produce a progress report on
this at the next high-level meeting
• St reamlining . CoCom's control lists
cover around 100 product hna<H™gg from
powerful lasers to missile guidance
systems and robots, broken down into sev-
eral thousand key components, each of
which also need export licences. There are
three lists, covering atomic energy, weap-
ons - about which there is little argu-
ment — plus so-called “dual use" goods,
with both Industrial »nif militar y us es.
This last list, under continuous review,
takes up the bulk of CoCom's time and is
the source of much controv e rs y . European
observers argue Communist countries can
increasingly shop outside CoCom for coo-
trolled goods - In south-east Asia, for
example - white consumer electronics te
gradually taking over from defence as the
driving force behind new technology.
West Germany, with the support of its
fellow Europeans, has long been urging a
reluctant US to agree to drop from the list
very high tolerance ma rhino tools, where
European producers have a broadly
accepted edge over American competition.
The West Germans find the US caution
an machine tools hard to accept In view of
Washington's support of a ruling last July
to lift controls on the export of 16-bit
microcomputers, another dual use prod-
uct, in which the US Js by contrast more
competitive than the Europeans.
• Political change. The E urope an s, again
ted by West Germany; are pushing for
CoCom to set lighter controls an exports
to Poland and Hungary in recognition of
the democratic progress there. CoCom
extended special treatment to China in
1985 for the same reason, but froze any
further developments after the June mas-
sacres in Peking. Washington's answer is
that special treatment for the East Bloc,
reformers should come only after all
CoCom’s members have shown real evi-
dence that they are implementing tougher
controls. In short, tire US wants tha.Emo-
peans to stand by their promises.
Profile: LB-INTERNATJONAL
from Vienna
from
now.
about
-TEN YEARS
trade." says Mr Thomas GiUes- market and develop export
pie, managing^ director of LB-
the East European partner te
able to w«r«M
on tbe home
William Dawkins
H U X G-A RIAN F D R t I G X T R A D £ B AX K L T D,
finding
ways
1. Fax': li T3I-2:
IN FROM THE COLD
Eastern Europe in the 1990s
TbeSaanoutl
The Economist I f ,Dufce ^
Intelligence Unit I th.- 01-493 6711 Trier 269353
216 Fink Aiem South, New Yorit, NY 10003, USA. Tfefc CUQ 4804)600 THce 175567.
A division of Business International
KqNKitd OBoe a » JmrtSm*. London sru IHLRiytamrf in Lada* no. 118207.
International Trade Services (ft
wholly-owned subsidiary of
Laud^barfic-Exportbank).
^International, based In
Vienna, specialises in barter
trading, compensation deals,
counter purchase and buy-
back. It has been active in
Eastern Europe for several
years and the company's loca-
tion in Vienna Is sera as a
trading strength — as it has
easy access to both Eastern
and Western markets.
Mr Gillespie’B involvement
with East European trading
began in the mid-1970s. He sees
file changes taking place in the
region as a stimulus for bust
ness, but explains that a new,
more flexible approach Is
needed. Traditional cash trans-
actions will become increas-
ingly difficult as the region
undergoes a transformation
into market economies, and
businessmen Interested in
doing business must find new'
ways to finance deals.
^International specialises
in countertrade- However, trad-
ing with Eastern Europe has
hwnmii complicated and sim-
ple barter trade has all but
ceased in the area. Instead,
says Mr GHllesple, traders need
to offer a range of services
Including compensation,
counter purchase, leasing end
buy-back options. Western
businessmen need to' find a
way round the shortage of
hard currency and Mr Gillespie
thinks raring forma of counter-
trade is one way.
More fteadbte and in no v a ti v e
methods, rather than a tradi-
tional cash buying and selling
approach, is needed in Easton
Europe, believes Mr Gilfespto.
This year LB-Intematlonal
began using leasing arrange-
ments to fund projects. In its
first teasing operation in East-
ern Europe, LB-Znternational
helped to fend the purchase of
equipment which was used to
develop production for export
to hard currency markets.
“We buy the equipment and
tease It to file East European
user," explains Mr Gillespie.
The enterprise pays for .the
new eqntipment in instalments
through a West European
trade company which sens on
the production to hard cur-
rency markets.
A variation cm this is btiy
back. Mr Gfllespfe says some
manufac ture rs are Anting pro*
duction out of Western Europe,
where costs are high, into East-
ern Europe where wage costs
are lower. Most of the prod ucts
are exported to hard currency
markets, but some are sold on
the domestic market.
In fids kind of deal, the pro-
duction arrangement eventu-
ally becomes a longterm sup-
ply contract once equipment
purchases are paid. Both these
forms of business are becoming
popular, as it helps the West-:
era partner sell goods and
receive quality products, white
“We give them dollars
to buy aqidpnHHit to
make wturt wa want"
he rays, vrffi he in belpfogTSast
European countries to raise
the quality of their production.
That includes packaging, sdor-
age. stocktaking procedures,
transport and marketing. -Mf-
GiBeapie argues that East
European countries need to
improve hi an these areas if
the potential of hard currency
exports fe to expand:
- “The tendency wfiX be for Mg
deals to become more difficult
te achieve - except perhaps in
the USSR. We are moving
towards 'combined business’.
We give them dollars to buy
equipment to make what we
want and part of the product
sates repays for the equipment
nUrchasecLThis is not counter-
trade, not cash upfront' bust
ness. These are the pattern of
business which. -ere becoming
crucial," says .Mr GUtespte.
In the 1960 b, he says; Aus-
tria's role will be changing.
“Vienna haste set more inter-
national, more m tooth with
markets. Jft is too East Euro-
pean oriented. We , should
became a turning disc between
European - Community coun-
tries and^Eastarn Europe/*-- In
the Suture Mr Gfltespte. thinks
Austria will “become- some- '
thing of a service industry cen-
tre-- including financial ser-
vices as well as traditional
trading ones.
“Something new is happen-
ing in trade,, with Eastern
Europe and brer the next cou-
ple of years we - as a com-
pany airt in Austria - need to
find a solution to this new rela-
tionship," he says.
Margie Lindsay
CONTRACTS
AVAILABLE
3
A SOVTET/ENGLXSH JOINT VENUTRE
has contracts available now for Western participants in
Constructi o n, Holds, Tourism, Transportation, Mining,
Technology. Petrol Stations. Health Care. Contact
CTCI
f%i,nWH| T W K w ji JB- Thtn-IUltlffllri
GoattanHonaq, Goonaa, WJt*hn»SNll 9IA
TcfeEfam: 0249 70454 Akeatthw 002*4 71 114
TetaFAX: 0249 76252 ASoo*tb« 062*4 7S74S
Highly qualified
person with more than 30
years expe ri e n ce in East-West
trade, with tpeoal-knovkdgs
of Hungary b offering bis
services to companies looking
for on the spot representation
or mmtating actmtjipg. Speaks
fluent Gbuxoau and -
Hu n ga ri a n . Temporary office
and eammiiTifeftf jtofl
in Hungary are available.
Write Box T6747,
Finan cial Timas,
One Soodrwaric Bridge,
Lohdon SEL 9HL
UNGARY
We will open up new
horizons for you!
aMiU i M hw r
KndHhmdrltntanlii^uU^.u,
fajalaid SntUlvMmfarjn.
Samhe&o* mo.KMdHvadkta*)
4
T wo-way accass
markets. - M . , -
Another idea from LB-intar-
nattanal Is te use raw materi-
als purchased through agree*
ments with . developing
countries, processed in Btetem
Europe Into semi- finished prod-
ucts. These goods e m then be
sold to Western Europe » a
countertrade product. For
example, explains MrOfitespta,
raw cotton frdra India can be
bleached and made into fabric
by the East European partner,
arid offered as a countertrade
product through a trading com-
pany in Western Europe.-
^Mr GLUeapi® agrees that
changes in Eastern Europe will
mnn different t radin g condi-
tions. There will be mure casts
Involved, as decentralised
trade means more trend and
time. Language will also be a
problem. Few people outside
major cities speak foreign la&
guages and interpreters are dif-
ficult to find. 7
The main problem, however.
.*■ -*
V.
I
EAST-WEST TRADE 3
er RANK XEROX
WastGwrmany*
11.181
9,904
9433
7.315
7.105
7.719
7,526
7,587
9,443
6/56
1/96
Japan
3i9Q5
&280
3.831
3,314
3JXJ7
3£64
4.472
4.012
3JS84
1/74
447
US
3,837
2,190
1,980 '
3*07
4,167
2,879
3£85
4*55
3/43
2,778
352
Italy
3*588
3J35
2*879
2,831
2,475
2.710
2,446
2.469
2,728
2.187
702
Finland
3.481
3^71
3,540
3,169
2.768
3,400
3.750
3,707
2/14
1/13
301
Frauen
3£54
3,089
2,751
2*»
2£S9
3,331
2£11
3,906
4/43
2,602
647
Austria
2,644
2.447
2.165
1,688
1,907
1.868
1,743
1.808
2.108
1/79
368
UK
•
2.126
1.831
1,706
1.527
1.747
1/34
1.505
2J28
2/28
1/93
SOB
8wttzHand
1,694
1.490
1,133
861
751
774
811
852
1,063
744
210
Netherlands
1.249
1.300
1,058
907
840
1078
994
1,386
1,420
793
210
. pjease check before acting
Poznan International Fair
uLGJogowska 14, 60-734 Pomah/Pofand
teL 69-25-92, tetese 413251 tug pi
fax: 048/61/66 58 27 targf pi
The Friendly way to fly.
Safia/Btilgaria
Telex 22193/23421
Telefax 65 81 47
sfisjji
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r ffifc SB
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race
* 1: bti&
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uiv K:M
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v.;r- t: ■!•
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y„. j.." I* «*
- - v '*
lisWyfl^
j-*** 1 ’,
The polMcal and economic
inMxrtafnties of t&e region may
■discourage some companies,
bqfc Wr Land, believes- Western
tag mesn a a which are In at the
beginning of the process stand
a better chance of keeping a
market share when better days
IXKIPP.
At thp game rim» t mm pB"iwy
should he cautious. He under-
stands why many are reluctant
to bebpme involved in some of
.these .-markets at this stage
“because of the investment
costs hi both time and money.’*
But he that “if they are
not in there now «nH in at the
changing time, someon e els e
will do. .There is opportunity
and risk, ^ companies must
accept this." - -
European Community relations with Eastern Europe
Groping for a new strategy
juedto get. c&itirio -the, field: —
to, be mcmemohOe. toget jmore
' « taffi-: Th!K is not an easy tran-
• • sftion tor axiyjcf . these -econo-
mics, and parttculady not. far
the Soviet Untoit.” ■ ■'
The move to a market econ-
omy wlU also be c ostly fbr
'Western busfneasmen frying to
•find a market ' .for goods. Mr
Tjinil thinks 1 "Western/ compa-
nies need td look at t&e pqssi-
- bnwaB of using agentt, distrib-
utors or opffldng lodxl offices ,
or -combinations of these
approadmf-
“Westerp imsmeeg needs to
j^hinkitspe^tete^ftneeds to
identify where the Jew oppar-
needs to
b' needs to'
ew oppor-
• Ralph Land of Rank Xerox
One way Western companies
.can help promote good rela-
tions as well as increase the
possibilities of trading with
.potential partners is by helping
-in managgTnpTrt training. At
present Bank Xerox has given
£50,000 - matdied far a Anther
£50/00 from the British Coun-
cil to the Soviet Union for a
variety, of managBimat train-
ing schemes.. These projects
jnr.Tiyte R ending Soviet manag-
ers to the London Business
School and helping to. send
Brttftfli trainers to the USSR.
Mr Land thliikn Western
rfimparilpg nm hwlp Soviet and
piper East European, partners
to/finprbve 'prbidpetr quality
, cpbtrbL , :an»ome£'apea. of majfrf
both' jsq t a
relatively ' small ' amount of
money, large improvements in
the. mulwnhinding and use .of
Western management tech-
niques and quality control
methods can be injected into
the East E u rope an system, he
says. .
In this period of dwtip* and
transition, Mr .Land, recom-
mends companies to become
involved, but warns that opti-
mism shouU' bo “tempered by
some caution. The only cer-
tainty to these markets at pres-
ent is uncertainty.’*
Margin Lindsay
AN INSTANCE of the way in
which the European Commu-
nity is scrambling to keep up
with events in Eastern Europe
came just .before the first trip
by Mr Jacques Delors, the
Commission president, to Hun-
gary in mid-November.
Startled to learn that,
- despite its appointed role to
co-ordinate Western aid to
TT nr u g flr y (and P oland a S well),
the Commission had no man-
on-the-spot in Budapest, the
Uelorian order came from on
high to a certain B ritish Euro-
crat that he was to set up an
nfficp in the Hungarian capital
by the week’s end. "But I’ve
got a wife, two childr en and a
■ cat," pleaded the Eurocrat.
“OK," came the great conces-
sion, “be there by mart Mon-
day."
-This sense of urgency
reflects a feeling in Brussels
. and elsewhere in the West of
. the need to support the historic
changes in Eastern Europe
quickly lest they degenerate
The taak fan« mafn]y on the
Community because it has the
big adjacent market and
. resources to help Eastern
Europe pull itself, by. aid ami
trade, out of its sorry economic
state. In recognition of this, the
seven big industrialised coun-
tries asked, at their July sum-
mit in Paris, the Brussels Com-
mission to co-ordinate all aid
from some 24 Western aid
donors to Poland and Hungary.
What is therefore emer g in g
is a package - no less compre-
hensive for larking the name
of Marshall - of trade conces-
sion, financial aid, macroeco-
nomic advice and technical
know-how.
So for, the frill benefits are
. directed only to Warsaw and
. Budapest, where nan-commu-
nist governments are either in
power or in prospect. But the
d ramatic events in East Ger-
many sustained, proba-
,h jy. move, tbet- country, to the ■■
front M the qbeuerftHf, Comma- ■
' nity trade and-aid.
In contrast to the Soviet.
Union «nd the rest of its East
European allies. East Germany
has yet to start negotiating
with Brussels for a trade agree-
ment But the EC Council of
Ministers is set to give the
green light to the trade bar-
gaining, and to the request by
Mr Hans Modrow, East Ger-
many’s new Premier, that the
negotiations should also
include economic co-operation
in a wide range of sectors.
Negotiations of the same
scope are well underway with
the Soviet Union, and amid be '
concluded early next year.
Because the bulk of its exports
to the EC are energy commodi-
ties t Twt bear few and
quotas, Moscow will reap the
benefits less in trade terms
than in enticing EC companies
to invest in joint ventures and
in Rcttine technoloev and man-
agement know-how from the
Community.
If reformers do replace the
repressors who have been in
power in Prague, Czechoslo-
vakia could expect an equally
broad arrangement with the
Community; its 1388 agreement
with Brussels only provides for'
a modest reduction in the
Twelve’s national quotas on
Czechoslovak industrial goods.
Ironically, despite a change
of Communist leadership for
the better in Sofia, trade/coop-
eration negotiations with Bul-
garia have been in suspense in
the second half of this year,
though expected* to resume
soon. Only with Romania -
the first Comecon country to
reach a trade agreement with
the EC (In 1980) - are rela-
tions at a total standstill.
hi groping for a new strategy
towards the fast-changing
East, the Community is going
to have make maj or changes.
One 8UCh ehang n was ri gnaTlpd
after the EC’s special Commu-
nity summit in Paris when it
was. agreed that the Twelve
should push for a major revi-
sion of Cocom export security
controls.
“How can- we help Eastern
Europe with major infrastruc-
ture projects?” asked Mrs
Edith Cresson, France’s Euro-
pean Affair s Minister, “when
Cocom forbids ns to export key
items like modem telecommu-
nications?” Hungary, for
instance, has been vainly seek-
ing for several yean to buy
CoCom-controlled telephone
gtrinmgaii.
The speed, too, of political
developments means that cer-
tain-trade- agreements are out
of date before the ink is dry. .
■ Take, for instance, negotia-'
tions with Poland this year.
The C om mu ni ty started off in
early spring by offering the
Poles reduction, not abolition,
of specific EC quotas on Polish
industrial goods. By April, it
was ready to phase out all such
quotas by 1994, and an agree-
ment to that effect was signed
in September. By early Novem-
ber. it was prepared to do away
with these quotas on January l
1990, increase the farm trade
concessions granted in the Sep-
tember accord, and to give
Poland preferential tariff sta-
tus normally awarded develop-
ing countries.
. The same revisions have
been proposed in Hungary's
1988 agreement, with the prac-
tical difference that agricultur-
ally competitive Hungary will
be able to exploit form trade
concessions from Brussels in a
way that food-short Poland will
not. In late November the Com-
mission proposed easing EC
restrictions on steel ami tex-
tiles, which is normally almost
as sensitive a Community
issue as import breaches in the
Common Agricultural Policy
walL
The EC executive body also
The Commission has
doled out hlghly-
politfcal financial
advice, with Delors
urging the Poles to go
lor monetary reform
suggested that Poland and
Hungary should be exempted
temporarily from general quota
restrictions imposed on a wide
range of goods, ranging from
mini-buses to shoes, to toys
from many countries, not just
from state-trading Comecon. If
this gets EC governments'
approval, it will give the Poles
and Hungarians a head-start in
the EC market not only over
their Comecon brethren but
aicn over many non-communist
exporters.
In the medium and long
term, these two countries
must, as Mrs Margaret
Thatcher said at the Paris
summit, “pull themselves up
by trading.” But the hard
currency trading accounts of
both countries appear this year
to be down from their 1968
surpluses of *700m (Hungary)
and 3960m (Poland). Their
■trade needs to be substantially
in the black if they are ever to
shoulder their debt burdens
which are now roughly equiva-
lent. given that Hungary Is one
third of Poland’s size but with
nearly half the amount of its
debt
Estimating the effect of
greater access to the EC mar-
ket is hard, given that EC
trade accords only put on
paper opportunities which
have to be exploited in prac-
tice. Earlier this year, Hungar-
ian national bank officials
were reckoning that their 1988
agreement would be worth an
extra JSOm a year in hard cur*
rency MrniwgR.
This estimate must now be
revised upwards in the light of
new concessions. The same
goes for Poland, though its
sicker economy is less well
placed than the Hungarian to
exploit the breaches in Com-
munity trade protection now
on effer to Eastern Europe’s
politically reformed.
But what has really drawn
Brussels into Eastern Europe
is the task the European Com-
mission has been given to co-
ordinate Western aid to Poland
and Hungary. This includes aid
from the Community collec-
tively (amounting so far to
some Ecus 700m, roughly half
in food aid and half in project
aid, the offer of Ecus lbn in
European Investment Bank
loans over the next three
years, and the likelihood of up
to Ecus 200m in infrastructure
loans from the European Coal
and Steel Community), and
bilateral aid being given by
individual EC and other West-
ern states. In the process at
overseeing this, the Commis-
sion is being sucked into a
pretty political role.
In toe political vacuum that
has developed in Budapest,
with a weak Communist cara-
JaequM Dolors: ksoptafg up with ovsnts
taker government sparring
with myriad non-communist
parties In advance of next
year’s planned elections, Mr
Delors has been seeking to get
all sides to agree to take out of
the political arena the argu-
ment over how to reach an
austerity programme with the
International Monetary Fund.
Ironically, this Involves asking
Hungarians to stop playing the
free party politics they have
not been at liberty to practise
for the past 40 years.
In Warsaw, as in Budapest,
the Commission has been dol-
ing out highiy-poiitical finan-
cial advice, with Mr Delors
urging the Poles to go for "a
big bang” monetary reform,
with a Slbn hard currency gift
from the West, swingeing
devaluation of the zloty, and
creation of a new, larger unit
zloty (as West Germany did
with the D-mark after the Sec-
ond World War), all designed
to find the zloty a stable and
convertible value.
The most lasting benefit
which the Community has to
offer Eastern Europe is access
to a West European single mar-
ket that may soon be extended
beyond the Twelve to embrace
the six Bfta countries. The
planned disappearance, post-
1992, of internal EC frontier
checks and therefore of the
means for individual EC states
to administer national quotas
on imports from Comecon
should be an advantage to East
European exporters.
It may, too, pose Brussels a
particular problem concerning
inner- German trade, and the.
possibility that East German
goods entering West German
under this special regime may.
in the absence of internal EC
checks, “leak" into the rest of
the Community.
Hitherto, such leakage has
not occurred to any significant
extent, because inncr-Gcrman
trade is tightly regulated by
Bonn and constrained by its
barter nature. But this con-
straint would disappear If the
East German Ostmark were to
become convertible, and regu-
lation could well become
harder if East Berlin were to
break up its industrial Kombi-
nate and de-monopolise its for-
eign trade.
For these special reasons,
there is particular urgency in
Community negotiation of a
general trade accord with East
Germany.
David Buchan
Brussels
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AUSTRIAN JUKUNES
FINANCIAL TIMES FRIDAY DECEMBER * 19*9
Margie Lindsay on joint venture prospects
Investors welcome
EAST-WEST TRADE 4
JOINT VENTURE INVESTMENT IN HUNGARY
Values la mffli o na of f orfa i t s
FOUR DECADES of limited
possibilities for capital invest-
ment in Eastern Europe, the
region now offers foreign
Investors an embarrassment of
choices. Privatisation pro-
grammes, the possibility of 100
per cent foreign ownership, co-
operation, leasing and joint
ve n tures are all possible.
Despite the new options,
joint ventures remain the most
common form of foreign invest-
ment in the region. Companies
- many of which prefer to
take majority control at joint
ve n t ur e s - like this form of
investment, rather than trust
to the uncertainties of other
options. For example, privati-
sation in Hungary has started,
but there are many questions
cm limits to direct investment
as well as some problems in
gaining approval for proposals.
In Poland, the privatisation
process is in an experimental
stage and only two deals are
expected to be completed by
the rad of March 1990.
Nevertheless, the new politi-
cal climate in these two coun-
tries has encouraged develop-
ment of Joint venture
businesses. While the political
and commercial risk may have
increased in both Hungary and
Poland, many companies con-
sider the developments there
to be positive.
This more active approach to
the market Is reflected In the
increase of foreign investment
through joint ventures in these
two countries so far this year.
In. the first batf of 1989, the
number of joint ventures in
Hungary more than doubled
compared with the period
between 1974 (when the first
joint venture law was brought
in) and 1988. Capital invest-
ment rose to Ft Ztbn ($355m)
from Ft 4-2hn at the end of
1988. A further 2S0 joint ven-
tures await registration: many
are likely to be completed
before the end of the year.
A ‘gfrniinr in Joint
venture activity has been seen
in Poland. Since regulations
changed In December 1988, lib-
eralising foreign investments
in the country, the number of
Joint ventures has increased.
By September 30 this year, a
total of 490 new joint ve ntur e s
had been approve d , with total
equity paid up by foreign part*
nets amounting to $7Q2m. By
t he end of the ye ar, total
investments in new ventures
may reach $90 Qql
The prospects far 1990 are
even better, according to Mr
Hubert Janiszewski, vicepresi-
dent of the Foreign Investment
Agency in Poland. He thinks
' “the atmosphere of today’s
Poland is very good for foreign
investors" and hopes that the
results of the earlier joint ven-
tures will encourage further
investments ft™ both outside
and inside the country.
The Soviet Union is another
Managing Director
Specialising in Soviet Union & Eastern
Europe for the past 5 years. Established
contacts at all levels, successful
achievement record in most business areas.
Can be of significant help to you in
developing your sales, joint ventures or
investment plan to an effective conclusion.
Telephone now for an appointment
051-339 2189/347 1559 - 7 days
country where joint venture
interest Is considerable. At the
end of October, total capital
jnuB w tment in joint ventures in
the country totalled &2.5bn
<$1.6bn), of which over half
consisted of hard currency con-
tributions by foreign investors.
There are over 600 joint ven-
tures set up in the Soviet
Union with foreign participa-
tion, but many of these are in
non-productive spheres and the
majority are still considered to
be clowr to buy-back and co-
operation arrangements rather
thaw real joint venture
arr angem^ ttLs.
Changes in the political
scene elsewhere in Eastern
Europe could also encourage
joint venture investment. In
particular, the leadership
change in Bulgaria could mean
a more liberal attitude towards
joint ventures and a bigger
push toward market reforms.
In January this year, Bulgaria
published new rales for foreign
participation in Bulgarian
enterprises which apply to the
foil range of business activities
in the country.
Under the new rules, set out
in Decree 56, foreign compa-
nies are allowed to set up in
partnership with Bulgarian
companies or indepradratly or
though a subsidiary. Majority
foreign ownership is allowed,
but state Demission is waaHarf
if the Bulgarian share drops
below 51 per cent. Tax rules
applied to profits of joint ven-
tures were also changed, giv-
ing more incentive to inves-
tors.
However, there was no rush
by Western companies to set
up new joint v e ntures in the
country. This may next
year if the country begins a
real economic r e f orm which
decentralises foreign trade
activity end makes operating
within the country easier for
foreig n ftimjiaiiifia.
Czechoslovakia, while one of
the last to begin significant
political reforms, is seen as one
of the most attractive coun-
Sector
1974-68 %
January-
Jon* 1989
%
Total
%
Industry
9.15
54£
1.076
39-4 10.834 514
Food industry
processing
1.074
6.4
0.15
3.5
5224
52
Communications
and transport
0.1 IB
0.7
0.094
2-2
021
1
Commerce ■
0.387
23
1.368
325
1.753
&3
Tourism
2.399
14.3
0.277
5.3
2628
125
Other
3.679
21.9
0-741
17.4
4.42
21
Toon
1&S13
4254
21.087
tries for joint venture invest-
ments. Under a new law which
came into force on January 1
1989, foreign participation in
joint ventures is unlimited,
although some level of Czecho-
slovak participation is neces-
sary. Joint ventures are
allowed to be set up in any
sector, including banking,
although different roles may
be applied to such joint compa-
nies.
This year there has been lit-
tle activity by foreign investors
in Czechoslovakia bat, with
promises of foster economic
reform, the country may
become more attractive. It
already has a highly skilled
labour force and a relatively
good industrial base on which
to build. However, most of its
once competitive industry is in
n nw > nfn mitem i pitinn and new
technologies, particularly in
the areas of conservation of
energy and raw materials and
environmental control.
East Germany still does not
allow joint ventures, but this
may change soon. Foreign
investors there will be eager to
fate advantage of the indus-
trial infrastructure a nd cHnprf
workforce. However, there has
been, no mention so for from
the East German authorities of
a utiwraU—tinti tn tbo foreign
investment area, although
some decentralisation of for-
eign trade is on the cards.
Romania’s growing isolation
within Eastern Europe and its
strained relations with the
West have been reflected In a
drop in joint venture forma-
tions this year. Unless the lead-
ership there undergoes a radi-
cal change, it is unlikely that
Western investors will look
favourably at the country
while the rest of Eastern
Europe offers for better pros-
METALLGESELLSCHAFT
RECLAIM
RECYCLE
REPLENISH
A new Marshall Plan
for Eastern Europe?
New Joint Venture*
In Poland
Dec 31 196&-Juty 1 1989 s
Jan 1 1989-FetJ 28 1989 t
March 1989 2'
April 4'
May 61
June T.
July 10!
August 9S
September 9(
October 11!
MS
pects in a mor e libe ralised eco-
nomic environment.
In general, foreign investors
still face the same old prob-
lems when trying to invest in
Eastern Europe: a non-market
economy where hard currency
is in short supply. There is also
a lade of infrastructure - tele-
communications, transport and ,
hanking. j
Opportunities are increasing
for joint venture activities in
almost all countries in the
region. The lack of hard cur-
rency may make the operat i on
of joint ventures more difficult,
but Western companies are
finding that East European
governments are becoming
more flexible, particularly on
repatriation of profits. Some
are also granting special privi-
leges to joint companies which
produce goods for the domestic
market which can be substi-
tuted for expensive, imported
items.
The writer is Editor. East Euro-
pean Markets, a Financial
Times newsletter.
THE PARALLEL between the
post-war rebuilding of West-
ern Europe and the post-Cold
War reconstruction of the
economies of Eastern. Europe
is frequently drawn. The ques-
tion which often follows Is
how today’s Western efforts to
help Eastern Europe compare
with the US Marshall Ficus
after the Second World War.
It is difficult to judge at this
early stage whether the hodge-
podge of help being offered to
restructuring economies
deserves to be called a plan.
Worries have subsided that a
lack of co-ordination could
dilute the value of the aid
since it became clear that the
European Commissi on would
co-ordinate the activities of
the 24 Western donors, but
they have not disappeared.
The EC does not have the
wherewithal to analyse and
prescribe for economic Ills, so
the International Monetary
Fund hw» httH to fate h«» lead-
ing role hi aawwhig fti» coun-
tries* wmiii problems ftwir
need far resources.
But while the first contend-
ers for this help - Poland and
Hungary, along with Yugo-
slavia - are members of the
Fund, the latecomers. Bast
Germany and Czechoslovakia
and their successors, are not.
Yet few Western officials are
keen to see another bureau-
cracy established to guida the
aid effort. The Organisation
for Economic Goopoatioa and
Development, set up to oversee
the Marshall Plan would seem
an obvious co n tender. But It
has little recent experience to
help It Implement such a plan,
having concentrated on
research and analysis, and
there is little discernible polit-
ical i M flltfn huw far ft to fate
cm the central role.
In one respect - the amount
of aid required by the econo-
mies as a proportion of their
gross domestic products - the
sums of money should have an
even larger impact than the
Marshall Plan, which provided
grant aid of about 3 per cent of
GDP. The flnanrial help teing
talked about for Poland, and
which it seems likely to
receive if it can put an IMF
economic programme into
place, for exceeds 8 pcsr cent of
its annual GDP of 5801m.
But in terms of op po r t un ity
cost of the aid to the donors, of
which there are many com-
pared with one, the numbers
seem unlikely to match those
of the Marshall Plan.
Forty years of sub-optimal
investment ott the economies
of Eastern Europe have cer-
tainly led to problems compa-
rable to the devastation
wreaked on Western Europe
by six years of war. Yet m
many areas, the problems are
more diffi cult. No country has
yet attempted, let alone
accomplished, the transforma-
tion of a rigid socialist system
to a market-based economy.
In a parallel with demobilis-
ation, tiie economies, although
ostensibly (dose to fall employ-
ment, will need to find jobs for
people laid off in the Inevita-
ble, drastic restructuring of
inefficient Indus try. Environ-
mental damara. which would
Inhibit future growth, will
have to be repaired.
A huge overhang of unspent
local currency faces all the _
economies opening - to the
West This risks an inflation-
ary surge of pent-up demand
for consumer goods. fodeed.
the risk of hyperinflation,
brightened by a budget deficit
that threatens to get out of
control, is the first which
Poland wwwt oiyir *—
Another significant problem
Stephen Fidler on the
urgency of the task,
facing the West .
is the remoteness of the mar-
ket after 40 years of central
control. Only the very old
have experience of markets.
“In Western Europe after the
war, people had had experi-
ence of derisions in a market
context only, six yean before,”
says one Western official. *Tn
Poland, It's been 50 veers.”
Market institutions are
undeveloped. The banking aye-
tarn has been largely a mecha-
nism through which the
s up po rt ed toss-making public
enterprises. As the World
Bank states of Poland: “It
lacks the kind of financial
intermediation system that
promotes sound Investment
selection and financial disci-
pline at the e nte r pri se lerri.”
Correcting these problems
means de vetoping banking and
entre p rene u rial s kills taken
for granted in the West
We ste r n offirisls say there
will be sufficient finance to
mw* thA imndww B nte of the
Poles and the Hungarians.
Poland's request for a $lbn
"stabilisation fond” of low
Interest
be met wtit th* Q5 pteftfor
33000 aztdf&jMti pSUttnfc .
Uniortmatety, most ef foe
countries vfaeady have bhavy ■
fewWdereSteefrAOtiy
to tafce on M W <Mrt o Mlpc
tions at mtfket fates** Mtea
is limited. Itefr approach wfll
probably dUfer Item ^country
to country, ftagrattedta-
slovakla «a Bast Germany
are among these with foeae
access to c om mer cia l bank bal-
ance of payment* flnaaoe.
They will taie to balance
their wish fat home xmellora-
tion of debt stating with the.
likelihood tbrithrir acce ss to
new funding toll dry up.
Poland Is mt worse state.
Its foreign debs are eqtflva-
lcutto half lta GDP, and tetrir
ring them wonB swalknr up
90 par cent of foe bard cur-
rency it earns bon trade.
Poland can expat to be the
first bcneCeterytatefe Eastern
Hoc from the lead? Man,
which seeks to retabe tte com-
mercial bank deb*; Bat Adds
to Western govennteut credi-
tors account for sost of it*,
foreign obllgations. and lhey
are not about to coinde debt’
forgiveness for flar other,
countries will daaand the
same. The expectatitola of an
indefinite' rescheduling of
interest amt prteftaal pay-
ments for Poland, fiom the
Paris dub.
Central to file b ag cr- to r ni
plan must be the moencage-
meat of inward priwte sector
equity investment, vHeh will -
encourage necessary . capital
flows but can ala deliver .
much needed skills sad -tecta
oology. Jndldons us of debt-
to-equity swaps wft be able
both to encourage sate Invest-
ment and reduce de btburds na*
The opening up of Western
markets then to thetUstam
hloc Is a central issue.
All parties now recognise
there Is a need to wm ahead
quickly. As Mr Lesak Satoep-
owicz. the Polish Fiaana Min-
ister, told US, offldu last
month, tie economic rooms
in Us country conM be jeop-
ardised without speedy Jetton
on Western jdd. * .
Political = and oconaaelc
reform have been awaited by
the West for 40 years] The
prospect far the people of East-
ern Europe is that theta kit’
will got worse. JmSot : it
intyrores, and it will be e sler
for now governments tfa act
while the euphoria rmtfaj*.
There is not much time;
How the integrated serrice system of theMetaO-
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in Europe and worldwide.
MetallgesellschafFs solution:
Berzelius Umwelt-Service GmbH (B.U.S).
The B.U.S procedure entails the following steps:
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again in metallic zinc and lead. E n vironm ental
problems do not arise. The remaining slag is
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Another example of B.U.S expertise: the prob-
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Although these recycling systems appear
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MG technicians possess the operational know-
how. The Group’s trading units have built up a
reclamation network targeted at industrial clients.
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The B.U.S recycling process is a typical example
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Nobody does more with raw materials.
-•v
t
FINANCIAL TIMES FRIDAY DECEMBERS 1989
FT LAW REPORTS
jiSW
L**l2£
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* ?«
sSS
?«■ >r p
■»
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nl I 3 (jui
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Arab Monetary Fund can sue for fraud
.•^ r,
1
.-^1
--1
<3
ARAB MONETARY FUND y
HASHIM
Chancery Division: Mr Justice
Hoffmann: Novemb er 141389 .
THE ARAB Monetary Fund
Ins capacity to ne for fraud
in the uk, not as an inter na *
t iiwa l entity non-existent in
Bfl g fltfh law, imt by virtue of
**» f** 4 ™ «* a legal entity cre-
ated by Aim Dhabi Ami wirip
law recognised under Rn gK»H
conflict of law wIwl
Mr Justice Ho fTmap n so >«**
when wftmtHg an . application
by Dr ‘ Jawad -- Mahmoud
Hashim, the First National
Bank of Chicago, its three sub*
g Mfa ri e a end other, defendants,
to strike out an «etb>n by the
Arab Monetary Fund; and ref-
. using the b»nw application to
stay the proceedings on the
ground that they should be
tried In Switzerland.
HES LORDSHIP «rid «m* the
Arab Monetary Fund was an
international banking organi-
aatfon with its headquarters in
AbnDhafaL
In the present proceedings it
alleged that Dr Hashim , its for-
mer Director^eneral, stole
about $50m of its money, mid
that the First National Bank of
Chicago and three subsidiaries
enabled hhn to launder a sub-
stantial part of it through num-
bered accounts in Geneva.
The banks and Dr Hashim
moved to strike out the action
on the ground that the Fund
did not exist in igw gmb jaw
and therefore could not m
The Fund- was created by the
Arab Monetary Fund Agree-
ment concluded at Rabat on
April 27 1976L The parties were
20 Arab states and the Pales-
tine liberation Organisation.
Article 2 of the agreement
provided that the Fund was to
have "independent juridical
personality and . . . fn. partic-
ular the right to own, contract
and litigate/*
As between the parties, that
con stitute d the Fond as a legal
entity in international law and
obliged them to accord it jurid-
ical personality in their domes-
tic systems.
The headquarters stats of
AbU : Dhabi complied with that
obligation by Federal Decree.
The effect was to give the
agreement the force of law in
the United Arab Emirates, and
to confer on the Fund legal
personality and capacity to sue
and be sued in UAE law.
Mr Pollock for the Fund
advanced two grounds on
which the Fund's existence
should be recognised. The first
was that English conflict of
laws rules recognised the exis-
tence of legal entities consti-
tuted under fwfpmytfyp ai law,
just at it recognised those con-
stituted under foreign systems
of domestic law.
He now conceded that foe
International Tin CbtmdZjudg-
ments (11989] 3 WLR 969 ) made
that submission untenable.
Until the Tm case there was
no authority for or against the
submission, although it had
the support of distinguished
writers on International law.
Extending the conflicts rule to
international organisations
seemed sensible and practical.
• The rule, as applied to enti-
tles created by foreign domes-
tic laws, was based on the
inconvenience of having legal
entities which existed in one
c o untry but not in another.
International nrgimigarHnn« get
UP by foreign states (fid exist
in fairly substantial numbers,
trading with fog uk »wH bank-
ing in London. They were
invariably recognised as juridi-
cal entities by the domestic
systems of parries to the treaty
as well as other countries:
The faternatirmal Tin Coun-
cil was created by a treaty to
winch the UK was a party, had
Its headquarters in London,
and was accorded the legal
capacities of a body corporate
in English domestic laws by
statutory instrument
On the other hand, the Fund
was created by treaty to winch
the UK was not a party, and
was not the subject of statu-
THE KOREA-EUROPE FUND LIMITED
UHTUSHAKY
MiVBCknWlkMCowinrgfNtwIMc
Mown Goan*? Wart oapy of Nw Vhde
1 Angel Cant
Iaado*KSB7AB DmitaUntwIUi
NOTICE TO THE WARRANTHOLDERS OF
Asahi
asahi breweries, ltd.
Warrants (the ’’’First Warrants'*)
to subscribe for shares of common stock
of Asahi Br e weri es, Ltd. issued with
ILS. $ 360,000,006
4% per cent Bonds due 1993
and
Warrants (the "Second Warrants”)
to subscribe for shares of common stock
of Asahi Breweries, Ltd. issued with
ILS. $ 1,006,006,000
351 per cent Bo nd s doe 1893
Pursuant to Clause 4(C) of the Instruments dated 23rd March,
1938 and 31st August, 1989 (the -Instruments”) and in accordan-
ce with Conditions 7 and 11 of the Terms and Conditions of foe
Warrants, Notice thereby given that:
On 4th December, 1989, the Board of Directors of Asahi Brewe-
ries, Ltd. (the "Coirqwny”) resolved to make a free distribution of
Shares of common stock of the Company to the shareholders on
record as of 31st December; 1989 at the rate of ten (10) per cent of
Shares t hen held by each of such shareholders. Consequently,
pursuantto Clause 3(vi) of the Instruments and Condition 7 of the
Ttenns and Conditions otf the Warrants the Subscription Price of
the Hist Warrants was adjusted from "Sm 1,776.40 t o~Sen 1.614-90
and the Subscription Price of the Second Warrants was adjusted
from Yen :2^ 50.00 to Ybn 2, 045.50, both become effective as from
1st January, 1990 (Japan time).
ASAHI BREWERIES, LTD.
by The Suudtmpo Bank. Limited and
Dai-fchi Kangyo Bank (Luxembourg) SJL
as Principal Paying Agents and
Warrant Ageits
Dated 8th, December; 1989
tory instrument or any other
UK legislation.
The Tin case raised a ques-
tion of construction of the stat-
utory fristramewt, whereas the
question in the present case
was as to the scope of the Com-
mon Law fym forts rule.
Nevertheless, the House of
Lords reasoning in the Tin
case was ineonsstent with Mr
Pollock's first submission.
Lord Oliver said that the
effect of the Order in Council
was “to create the 2TC (which
as an international legal per-
sona, had no status under the
laws of foe UK) a legal person
in its own right,” and that foe
international entity was not
foe entity which entered into
the relevant contracts. “Those
contracts were effected, by the
separate persona ficta which
was created by the Order in
CounriL”
Lord Oliver said: "Without
the Order in Council the ITC
had no existence in the law of
foe UK and no significance
save as the name of an interna-,
tional body created by a treaty
between sovereign states'
which was not justiciable by
municipal c ou rt s ."
Those passages destroyed
foe possibility of a Common
Law conflicts rule under which
the courts could recognise the
existence of an international
organisation as such.
Mr Pollock's second submis-
sion was that the Fund should
he recognised as an e ntity con-
stituted under Abu Dhabi
domestic law.
The consequence of the Tin
case was that the court should
ignore the treaty and regard
the Fund as constituted under
Abu Dhabi law as a separate
persona ficta. As such a was
entitled to recognition as a
rkwnx»H<- w n fo.y under ordinary
conflicts rules.
The court could reach font
conclusion because the UAE
happened to have passed legis-
lation conferring juridical per-
sonality on fo<* Fund. It might
not have been open to it if
there lwH Wn nn IpgigTntfrm
VENEZUELA
The Financial
Times proposes to
publish a Survey on
the above on
13TH FEBRUARY
1990
For a full editorial
synopsis and
advertisement
details, please
contact:
on 01-873 3000
or write to hhn at
Mr sumption for the banks
said that in foe case of an
intwwaWAnai organisation, leg-
islation «vmfwTing personality
under foe law of a me m b er
state should be regarded as
purely territorial in s cepe - its
purpose was solely to give
effect to rite treaty o bl iga t i on
to accord personality in its
domestic law, not to create a
separate entity capable of rec-
ognition abroad.
Otherwise, he said, an inters
national organisation would
fragment into at least as many
separate entities as there were
members.
Since foe international
entity bad no existence, the
court could not take it into
account as a ground for refus-
ing recognition to what was
plainly a legal entity under the
law of Abu Dhabi. It accepted
that a logical consequence was
the gri wtonre of other emana-
tions of Fund the
laws of other member states.
Accordingly, the Fund
existed in English law. The
motion to strike out foe action
was dismissed.
The banks also moved to
Stay fo* yftiiyn a pfagt them,
00 the ground that Sw i tzerl an d
was clearly and distinctly a
more ap p ropriate for am than
England, in which foe case
might be tried more suitably
for the inter ests of all the par-
ties and tirn ends of justice (tee
SpUiada [1987] AC 460).
The H wift of the «4»im
against First National Bank of
Phifg n was font rtw officials
of its Geneva branch must
have known that huge sums of
money paid in to Dr and Mrs
Haahlm's personal accounts
came from the Fund which,
with other gnspldons dream -
stances, put them on i w^ 1 *
that the money was stolen.
First National n»nit of Chi-
cago was therefore alleged to
have acted wrongfully in allow-
ing it to be pmd out on Dr
Hishim’s instructions.
Activities outside Geneva
were subsidiary to the case
against the Geneva branch. If
the action were solely against
the banks the court would be
inclined to accept the submis-
sion that Switzerland was the
more appropriate forum.
But the action was not solely
against the banks. It was prin-
cipally against Dr Hashim and
hu family who were resident
in the UK, one of his farmer
a ss ocia tes also resident in the
UK, and various companies
alleged to be their creatures.
The fraud was alleged to
have been committed in Abu
Dhabi, not Switzerland. The
UK action was begun at the
end of 1968. Dr Hashim denied
having done anything wrong
and the Fund would have to
prove its allegations of fraud.
Large quantities of document*
in Arabic had been brought to
London from the F und 's head-
quarters in Abu Dhabi and
translated into En glish for foe
purposes of the action.
Substantial Injustice would
be caused to the Fund if it now
had to commence separate pro-
ceedings against the Hantn? in
Switzerland. It would have to
prove the fraud in England and
as part of its case a gainst- the
banks in Switzerland, with the
possibility of conflicting
results. It would have to use
the same of documents in
Switzerland, t rans lated into
French.
_ It h ad not been shown that
Switzerland was a more appro-
priate forum. The banks’
motion to stay the proceedings
was dismissed.
For the Fund: Cordon Pollock
QC, Michael Burton QC and
Charles Flint (Freshfields).
For Dr Hashim and his family:
Hugo Page (Theodore God-
dard).
For JOJ Anstalt, a Liechten-
stein corporation: John Higham
and Mark Arnold ( Stephenson
Harwood).
For First National Bank of Chi-
cago and its subsidiaries : Jona-
than Sumption QC and One
Freedman (Allen & Orrery).
Rachel Davies
Barrister
NORDIC
COUNTRIES
+ 1992
Has Europe switched
to nuclear electricity?
France 70% Belgium 66%
* FI
■V li ®
The Financial
Tunes proposes to
publish a Survey on
the above on
25th January 1990
For a full editorial
synopsis and
advertisement
details, please
contact:
Chris S chaanaing or
Gillian King
on 01-873 3428 or
01-873 4823
or write to him/her
at:
Number One, South wark
Bridge
London SE1 9HL.
FINANCIAL TIMES
IMOri l MWNIll Nltntwii
Sweden 47% Switzerland 37%
, n
Spain 36% Germany 34%
nsarktr:
te cu the
osnsar r
Vsn.v.i,!
•.Tcuui.-
6 j*U J-
Jli RUT-
a '
if - -l:
lp.iL.i-.
of
F sji.f
iL-4,' c
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Views are often formed with little understanding or the
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To The Bnuth Nuclear Forum, 22 Buckingham Gbit, London SWIE OLB
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BRITISH NUCLEAR FORUM.
38
FINANCIAL TIMES FRIDAY DECEMBER S 1989
COMMODITIES AND AGRICULTURE
Tight supply and
cold weather lift
price of gas oil
By Steven Butler
GAS OIL prices yesterday took
another leap with December
futures on the International
Petroleum Exchange in Lon-
don closing $11.75 higher at
$220 a tonne. These are the
highest prices seen in four
years.
The rise was reflected on
physical spot markets where
traders said there was a tight-
ness in supplies. There was
alcn faille of a teohwiral squeeze
as the December contract posi-
tions expire today, although
traders stressed that this was
underpinned by the physical
market
January gas oil prices were
tiign strongly higher, breaking
$200 a tonne for the first time
this year, rinsing up $125 at
$20L2S.
Oil prices were lifted by the
buoyant demand for refined
products, with Brent crude for
January delivery rising 7.5
cents to $19.25 a barrel in Euro-
pean trading.
The rally in prices was
touched off by the onset of
unexpected cold weather
In northern Europe and the
US.
Reuter news agency quoted
the private US forecaster
Accu-Westher predicting that
temperatures in New York and
New England would be 22
degrees Fahrenheit below nor-
mal on Friday, that- that
abnormally cold weather
would remain next week.
Europe was expected to experi-
ence rfirriiar cold weather.
This would result In a rise in
energy use for space heating
requirements of 12.4 per
cent.
Traders also said that low
water levels on the Rhine that
impeded barge traffic also con-
tributed to tightness in the
market.
A modest reported rise in US
distillate, or partly refined
product, stocks was also seen
as a supportive factor.
The steep rise in gas oil has
created a sense of disbelief
srmemtr some traders, who say
prices are bound to come back
a gain
Gas oil prices since 1985
have been affected by low
underlying crude prices and
excess refining capacity.
Europe has also seen two
exceptionally warm winters,
although this year the weather
appears to be normal or colder
than average.
Settlement of ITC
dispute In sight
By Kenneth Gooding, Mining Correspondent
THE WAY seemed clear last
n igh t for an out-of-court settle-
ment of the long running dis-
pute arising from the 1985 col-
lapse of the International Tin
Connell's market support
scheme.
Manual Commodities , a
Malaysian trader which had
been reluctant to drop legal
action against the ITC, was
reported to be willing to accept
the te rms. These will will give
creditors, who claim they are
owned more than £500m, some
35p to 40p in the £.
Manual's past refusal to drop
its action threatened the inn-
posed arrangements which
would see crag-Sm to cred-
itor banks and brokers to settle
debts. The settlement was con-
ditional on all tin* primary
creditors being party to the
deaL
ITC representatives are
expected to adopt the settle-
ment scheme formally at a
meeting early next week.
Full details of how the
money wiH be raised have not
been disclosed, but ITC dele-
gates said that Japan and
Britain — the two biggest con-
tributors - have both agreed
to pay more than their fair
share. Analysts estimate
Japan will pay about £40m and
the UK £30m. Malaysia will
contribute about £33m. West
Germany more than £X7m and
Thailand Eft 3m
Greenland may mine gold
GREENLAND may become a
significant producer of gold fol-
lowing a find in east Greenland
in 1966 by Mr Kent Brooks, a
British geologist, writes Hilary
Barnes from Cop enhag en.
' Mr Brooks said Initial pro-
duction could amount to 12
tonnes of gold a year, worth
about KrL2bn (£104m), and in
add iti o n the re wou ld be an out-
put dfplatnmni and palladium.
The concession for explora-
tion and development of the
finds was awarded to the Cana-
dian company Platinova in
1987. Further work on the via-
bility of the finds is required
before derisions to mine the
ore are taken.
Exports of
sugar may
rise despite
shortage
By John Barham
in Sao Paulo
BRAZIL’S SUGAR exports may
rise in the first months of the
new year, despite a sharp drop
in sugar cane output and a
critical shortage of alcohol,
the alternative foel that is dis-
tilled from sugar cane.
Sugar exports for 1989 were
originally forecast at Urn
tonnes, but were subsequently
reduced to 645,000 tonnes.
The Sugar and Alcohol Insti-
tute (IAA), the government
agency that regulates the
industry, now says that sugar
exports should reach 732,000
tonnes in the year in
March 1990.
An IAA official said: “We
have authorised mills to pro-
duce, bat not ship, 76,752
tonnes of export quality sugar
once they have reached 35 per
cent of their alcohol output
targets." Furthermore, the
mills may receive authorisa-
tion to produce a further
10,248 tonnes of sugar for
export
The official said the sugar
can only be shipped once the
mills have attained 90 per wwf
Of their planned atmhn) pro-
duction, which should occur In
February next year. A sugar
trader said: “These figures are
being made up to justify a
decision that had already been
taken earlier. Nothing I have
seen can justify the exports at
a time of g ra ve shortage.”
An nfflriai of the National
Petroleum Council (CNP),
which regulates the alcohol
sector, said: “This is very odd.
We have been adring tor sugar
exports to be halted star* the
beginning of the year to
im p r ove aienhni supplies."
Brazil’s sugar and alcohol
policy is In deeper disarray
than osuaL It fares a shortage
of alcohol in 1990 of between
L7bn and 2bn litres and is try-
ing to tap foreign markets to
plug the gap.
However, on Tuesday, a
judge halted imports of metha-
nol ana last wmirth, the TAA
barely managed to scrape
together 317,000 tonnes of
sugar to imwt export commit-
ments to foreign trading
houses.
The 87,000 tonnes of addi-
tional sugar exports would
yield 6L5m litres of alcohol,
equivalent to fe w er than two
days’ supply. The IAA says it
would forbid the e x ports as
soon as it received an order
from the CNP. But the council
says only a ministerial order
can go grond ex ports.
• Cuban raw sugar exports
to the Soviet Union were
3,402,124 tonnes In the first
nine months of 1989, 1&5 per
cent above the 3,078,279
tonnes in the same period last
year, according to data
received by the International
Sugar Organisation.
Bleak future for commodity pacts
By David Blackwell
COFFEE and cocoa prices -
which have this year collapsed
along with their commodity
agreements - are set to fell
further in 1990, according to
the Economist Intelligence
Unit And a big question mark
remains over the possible
revival of the two commodity
agreements.
The rubber agreement is the
only international pact still
operating. But stabilising rub-
ber prices is made easier by
file presence of synthetic rub-
ber, which gains market share
if natural rubber pri ces move
too high, according to
the unit's latest report
on food, feedstufEs and bever-
The UK Is about to lose its
status as the world's largest
Importer of tea to the USSR,
according to the EIU. The
USSR’s growing demand
(imports could top 200,000
tonnes for 1989) has been a
big factor in the recent bull
market. “The balance of sup-
ply and demand is set to
remain tight in terms of
overall tonnage . . . better
grade teas are certain to
remain in short supply,
ensuring that prices remain
firm at the top end." Mean-
while there are signs that
the decline in UK tea drink-
ing may have halted,
although per capita con-
sumption has fallen fids year
to 3.4 caps a day, against 4JJ
cups in 1970.
The task of stabilising the
price of tree crops is inherently
difficult because smallholders
- who dominate both the cof-
fee and cocoa industries - are
all too likely to expand produc-
tion when prices are high, but
much less likely to cut produc-
tion when prices fan.
Once the cost of establishing
the crop has been borne, prices
have to "foil a very long way
indeed before they are lower
than the opportunity cost at
picking the crop with unpaid
family labour."
Therefore very strong agree-
ments are needed to keep
cocoa and coffee prices in an
agreed range. The EIU believes
the producers' inability to
agree on the distribution of
export quotas is the key to the
coffee agreement’s problems.
Brazil, the world’s biggest cat-
fee producer, was at least as
much to blame for the wiiiap^
of the pact as the US. the big-
gest consumer, which is gener-
ally hostile to all commodity
agreements.
“Unless the producers can
agree not only about controls
on the overall quantity of cof-
fee reaching the market, but
also on its division between
grades of coffee to line with
market requirements, there is
no good reason why consumers
should co-operate in polic-
ing what is in effect a
producers* cartel* says the
repart
The cocoa agreement, has
succumbed toa difficulty com'
men to a& cartels - the thrust-
ing newcomer who remains
outside, says the report
Malaysia, with its low pro-
duction costs and tenfold
Increase in output to 10 years,
hoc igd to a structural change
to the market, making suppHes
for less vulnerable to disrup-
tion in Africa and Brazil,
the two traditional growing
areas.
Malaysian producers' are
against their country’s mem-
bership of the International
Cocoa Organisation because it
could lead to rest ric te d exports
and threaten the financial
viability of their expansion
plans.
■ In the coffee raarfcet,"the out-
national Coffee Organisation.
The apparent shift to the atti-
tude of the new US administra-
tion towards the international
coffee agreement, as a remit of
concerns over the war against
- drugs in Coioznhia and other
Latin American countries can-
not be underestimated." says
the report - '
However, the EIU would be
surprised to see export quotas
reintroduced before O ctober l
next year. K aspects' average
coffee prices to be 854 cents a
lb next year, against this years
96.6 cents ft lb.
Average cocoa prices are put
at 52.5 cents « lb to 1990,
against this year's 58£ cants a
lb. Although consumption has
been growing hy between 3 aud
&5 par cents year ior the past
10 years, "the weight of evi-
dence points to world output
continuing to grow more
strongly than consumption
well into the 1990a."
World Commodity Outlook
1990 - Food. Feedstuff* A Be o*
erages. Economist Intelligence
Unit. 40 Duke Strict London
W1A lDW. m SL ;j /
There’s not an awful lot of coffee in Brazil
John Barham in Sao Paulo surveys the consequences of falling prices and a small crop
FOUR MONTHS ago, Mr Jose
Agudo Morales, a leading cof-
fee former, was preparing for a
war he was sure of winning:
"We win destroy our competi-
tors and take over Half the
market,” he said.
Today, Mr Morales is despon-
dent "Now the situation is the
opposite. We expected a large
harvest We were confident
But the harvest wQl be smal l
and prices are low. The situa-
tion is very difficult I would
like to appeal to the rich coun-
tries to pay a little more for
their coffee.”
The once cosy international
coffee market has become
viciously competitive. Prices
have halved since July, when
the international Coffee Agree-
ment's export quota system
collapsed. Producers are fight-
ing for survival in an unfet-
tered market glutted with cof-
fee and suffering a
long-running decline in
ripmawri
Brazil was convinced that its
significant cast adv antag es ann
its 30 per cent market share
guaranteed victory. Now form-
ers who once opposed the
quota system are beginning to
clamour for a new cartel to
raise stabilise prices.
However, the murderous
fai ip m aii nnai market is not the
Brazilians' most serious prob-
lem. The cou ntry ia goi ng
tiuougfi~a traumatic period of
accelerating inflation, eco-
nomic rfism-ganiRg tfffn and cha-
otic government.
Brazil has not seen a good
coffee harvest since 1986. It is
unlikely to reap a satisfactory
harvest for several years to
come because the delicate
bushes have suffered years at
neglect. Farm co-operatives
estimate that almost a hflHnn
coffee bushes have been
uprooted this year, reducing
the total number of bushes to
between 3.6bn and 3.4bn.
That need not cause an
immpdiafa» 20 per cent reduc-
tion in coffee production. Many
of the plants were old and
unproductive. Even so, the
trend is spreading to prime cof-
fee growing regions. In some
parts of Minas Gerais, which
produces 40 per cent of Brazil’s
coffee, fanners have uprooted
about 5 per cent of their plants.
Exporters and government
officials warn that these fig-
ures could be overstated.
Nobody, however, doubts the
farmers’ hardship, to Guaxupe,
in the heart cf Minas Gerais
coffee country, state govern-
ment agronomists say it costs
US$2£00 a month to farm one
hectare of coffee property. Yet
at present prices, farmers are
losing US$60 on every 60kg bag
of coffee they selL
Mr Joaqnim Andrade, an
agronomist, explained that
that fanners are cutting hark
on essential to survive,
but at the cost of locking them-
selves into a vicious circle of
foiling yields and declining
incomes. "The lower prices go,
tiie less farmers caq spend on
preparing far the next harvest,
so production falls and
incomes drop,” he said.
Nearly all farmers are in
debt and very many are in
default. Mr Isaac Ferreira
Leite, president of the local
farm co-operative, said: “It's
the indexation rate that’s kill-
ing us.” Farmers pay 1 per cent
Coffee
Indicator price (15 day average)
US cants perl)
140
120
Brazffian output
Mfiort baps (60 Kps each)
45
100
Jan
1989
1979 SI 83 95 - 17 49
DSC *0 <82 <84 I8B 788 <90
interest plus 40 per cent to
adjust their debts for infl»Hnn
every month. That works out
at a nominal interest rate cf
over 1 per cent a day.
Meanwhile, coffee prices are
stagnating at their lowest level
in 15 years and production
costs are often rising foster
than the general price index.
As losses mount, even large
est a t e s to the Guaxupe region
are having to scrimp on weed-
ing, fertilisers and pesticides.
As a result, the branches of
apparently handsome, full,
bushes are bare of mtfoa ber-
ries.
Not only are volumes declin-
ing, but quality is set to deteri-
orate. Mr Jochen Timm, a cof-
fee exporter said: "You need
very high productivity to break
even at these prices. The Bra-
zilian average is about 10 bags
per 1,000 bushes, but you need
to make about 30 bags per 1,000
bushes to break even. It’s a los-
ing proposition.”
That is why analysts believe
the upcoming harvest will
yield a mere 20m bags, half
earlier forecasts. More precise
forecasts will be available by
the end of the year. However,
Esoitorio SupHcy, a respected
export house, has forecast the
1989-90 harvest at 21.6m bags,
which could drive Brazilian
stocks down to a mere L8m
bags by June 1990.
If these forecasts axe proved
correct, Brazil would be unable
to benefit than the resulting
price rise for lack of sufficient
export volumes.
However, there are grounds
for optimism. Fanners believe
that, prices . could. begin: dun-
king, by .the end jtf the jea^_fts
the extent tit BrazB^ ld^es
sink to. That would-ease their
financial difficulties slightly
Farmers are rdytog less an
coffee by growing other crops
to diversify their risks. And
since most af their problems
are caused by misguided gov-
ernment policies, tiie new Gov-
ernment due to take over to
M m yh 1990 conkt si gnificantly
improve their tot by bringing
down inflation and adj ustin g
the overvalued exchange rate.
Mr Etotreira Leite said BrazU-
ian .coffee could compete at
present p ric es as tong as the
Government devalued the cur-
rency. stabilised the economy
and restructured formers’
debts. But the harvest to Col-
ombia and title Central Ameri-
can countries Is be ginning
now.
Mr Ferreira Leite aaid bit-
teriy: "Brazil ia one of tire few
countries to Store reaHy felt the
end the accent. Another low
Brazilian harvest will raise
prices and keep .marginal pro-
ducers In business-”
• The vexed question! of the
defunct International Coffee
Agreement still 1 overshadows
the coffee trade. Mr J6do Daus-
. ter; pnddat cf the Brazilian
Coffee institute <IBC), has
• ' repeated that Brazil will not
accept a reduction in its share
of the world, market The IBC
cut taxes 'and increased ship-
ments by 10 per' cent to the
July-October period to broaden
Brazil's maricwt share.
Brazilian formers are peto-
folly aware that their problems
are unUhaly to be frit directly
- in the rest of the country.
flnHke Colombia -and Central
:'A/gerfea L .Brazil _ does . not
‘dfepHtor'an^coiCfee for fte-sur-
• vtoal of its economy and politi-
cal system. ^And wUle the cri-
sis probably will not
substantially loosen Brazil's
domination 1 of the world
market, it ha s taught formers
that adjusting to free market
is a tot harder than they
thought
WORLD COMMODITIES PRICES
LONDON MARKETS
THE PREMIUM for cash zinc narrowed
sharply on the LME yesterday — at the
Bame time three-month prices broke
through the $1,385 a tonne resistance
level, which dealers said would be
bullish. Cash metal Ml $30 while
three-month added $20, narrowing the
premium to $112.50 from Wednesday's
S16Z50. Lead prices continued this
week's strong performance. Dealers
said European offtake had been
boosted by recant very cold weather
which has Increased battery demand.
Lead now aeems to have resumed the
uptrend which saw an eight-year peak
of £478 a tonne set nearly two months
ago, dealers said. Coca prices eased
- spot December continued to display
a small premium to March, reflecting
the net uncovered position, still
standing at over 4,000 lota. But the
market ia taking the view that enough
cocoa wilt be available for delivery.
SPOT MARKETS
Crude oB (per barrel FOB)
+ or-
Dubai
315504.65Z
+045
Brent Blond
SlflftOftftOa
+ 475
W.T.L (1 pm eel)
saasBftftBz
+0.14
00 products
(MIME prompt delivery per tonna OF)
+ or-
Premium OaaoUne
8190-192
Gaa Oil
8218-220
+ 11**
Heavy Fuel 06
*117-119
+3
Naphtha
8188-107
+2
Pmtrohum Arguo Eittwte
Other
+ or-
Gold (per iroy
3*0426
+fts
Silver (per tray ozkt
650c
+2
Platinum (per tray oz)
850540
+48
Palladium (per trey oz)
*14575
+ 1.16
Aluminium (tree market}
*1668
+ 10
Copper (US Producer)
1ta*s-H5e
-h
Lead (US Producer)
355c
packet (Tree market)
400c
Tin (Kuala Lumpur market) 17.71r
+ 48
Tin (Now York)
31 0a
+ 1
Zinc (US Prime Weetam)
73«*C
Conte (live wetgM)t
IlSftSp
1.47*
Sheep (deed welghQt
2114Qp
+534-
P)0S flJvo welghQf
04440
-«ftr
London deity sugar (raw)
83374k
+54
London dally sugar (white) 63774 k
+55
Tate and Lyle export puce
+30
Barley (English toad)
£1150
Man* (V» No. 3 yeikm)
£129
Wheat (US Dark Northern)
£129.25
+.75
Rubber (spot)?
KfOp
+.80
Rubber (Jan)fff
68-OOp
+ .75
Rubber (Fob)*
5&00p
+ 75
Rubber (KL RSS No 1 Jan) 2244m
Coconut oil (Phi DpptoeaM
$3974*
-24
Palm Oil (MaiayatamH
*255
-5
Copra (PhUIpptotwK
*270
Soyabeans (US)
Cotton “A" Index
071
+ 1
77.70c
+ft0
Wooitops (64s Super)
570p
£ a tonne unless otherwise Mated. p-penea/ftg.
ceansflb. r-rjnggfl/kg. y-OOL x-Dec/Jan. Wen/
Mar. vJleWDee. wOee. z-J*r tweet Commle-
Bfon Average fetetock prices. - change trom a
week as* Wtenden physical market. fiCIF Rot-
terdam. ♦ Button market okas, m M a la ysian
centa/kg.
OOOQA
- Lae*
kra rax
C/tonre
Close
Previous
Htgh/Low
Dee
880
688
868 888
Mar
843
B54
666 647
May
660
665
660 665
Jul
674
670
630 873
Sop
esa
6®
60S 690
Dec
718
718
718 713
Mar
738
738
738 733
(Prices auppBed by Amalgamated Metal Trading) US MARKETS
Close Previous
Hgh/Low AM Official Kerb does Open Interest
Otoe Atone. 95756 purity (8 per tonne)
fUng turnover 17.750 tonne
MSN GRADE COPPER 25,000 Iba; centeribs
1008-70
3 months 1870ft
1982-8
1087ft
1872/1605 1667ft
1673-6
33987 late
i A (2 par terns}
Ring benovar 44.726 towns
Turnover. 2781 (9093) Ms at 10 tomes
ICCO indicator prices (SORs par tonna}. Daffy
price for Dec 7 7544^7805^10 day average
Cash
a
1825ft
1840-1
IS
1641ft
1825/162* 158M6
1642/10909 ISSSft
1538-40
TSJSta Mi
Laed X par towns}
Ring benovar 17.200 tonne
kx Dec 8 754.73 (765.7
Ca ah
S months 444-5
461-8
472/486
470-1
451ft
lima km
com
SB - lew
Mow MX
C/tonne
Ctaaa'
Previous
Htgh/Low
Jan
660
684
688 855
Mar
684
668
670 860
May
080
685
687 677
Jul
700
703
70* 897
Sep
720
723
724 718
Nov
740
744
744 737
Jon
758
784
766 750
Hkfcal (S per tonne)
Ring turnover 1.306 tonna
3 months 8075-100
8100/7900
aeeofto
7975-8000
8O75-1Q0
7,883 km
Tin (S per tonna)
Ring turnover 840 tonna
8706-10
3 mo nt h s 6805-10
874080
6720/8700
6700-10
8700400
8.637 tota
I M0I ends <8 per tonna)
FUng turnover 18/475 toms
Turnover 8898 (2014) tots at 6 tonnes
ICO Indicator prices (US cants par poond)
Dac 6: Comp, dally 81.16 (6081}. 18 day
61.60 (8178)
3 months 1385ft
1615-35
1885ft
1515/1500
1400/1365
1515-7
It
1380ft
16.151 km
Ring turnover 2ft&0 tonne
SUOMI
- Load
an MX
(Spar tonne)
Hew
Close
Previous
Mgh/ldow
Mar
30540
30040
VMM TOM
May
30*40
30540
30940 30440
Aug
30240
30640
30840 302.60
Oct
294.80
2KL00
298.00 29340
Dec
292-40
298.00
29Q40
Mar
27580
28240
285.00 27500
Vfhlta
Close
Previous
MghfliOW
Mar
37500
377.00
37740 374.00
May
38240
38440
38440 38140
Aug
38940
38340
30340 38940
Oct
36240
38440
fiflttnn afp nn
Deo
34940
35240
35340 349-50
Mar
34940
38240
119 ro
Cash 148530
3 m o n th s 1335-00
1 SOS-25
1480
1480300
184836
1328 tots
SPOTS 1X778
Ui
3 months: 13831
6 months: 13256
& months: 13043
Turnover. Raw 3034 (444ft km at 50 tormae.
White T908 (1871)
Porie- White (FFr per tonne): Mar 2280. May
2330, Aug 2403k Oct 2230, Doe 220ft Mar 2200.
Ctoee
Previous
Mgh/Low
Apr
&
210ft
2854
113ft
2053
234ft
1104
2155 2057
234ft 2834
Turnover 261 (177] tote of 40 tomes.
SOYAI
■MM
at - am
S/tawt
Close
Previous
WghiLow
Feb
Jun
14440
14040
14440
13580
t44»0Q
OoU (One ca) S price
£ txjutvaJen*
Turnover 20 i
CftUMOa-M
S/barrel
Ctose
Prevtoua
Hlgh/Low
Jan
1525
1514
1541 1522
Feb
1583
1648
1848 1843
Mar
18.66
1842
1576 1846
Apr
18.42
1530
1545 1542
ipe Index
1507
1508
Turnover: 14093 (6061)
HAS OB. -
W
S/tonne
SIO/Mex point
Ctose
Rwlaa
Mgh/Low
Dee
1SB8
1604
1801 1690
Jan
1838 .
183a
1640 1838
Apr
1848
1665
1666 1646
Jto
1388
1390
1390
8FI
1606
1808
1605
Turnover 148 (282)
Close
Prevtoua
Hlgh/Low
Dec
22040
22240 21140
Jen
201.25
19740
20540 «9ftS
Feb
Uriftft
18740
IHftS 1*500
18040
177.00
18576 17940
Apr
17140
T657S
17500 171 ft6
***?
187.00
18440
17040 16500
Jun
18340
16140
16840 18500
Jul
16340
18140
18640 18340
White Ckise Previous Mgh/Low
Turnover 11226 (10673) tots o 1 100 tonnes
fnarsnomiui
Freeh Ocean Spray oanbanfas are picket
the week at E1.20-1.30 par I2az pack reedy
tor the festive season, report* FFVIB.
Bananas are good value at 38-68p ft ft as
are apples wHfi Cos's at MMflp (28-4SP).
and French Golden DeHclous at 384Sp.
Spanteh aatewms at 4g50p (30-40p) end
cle ma nth w a at 4S-B5p (33-SSp). Traditional
Christmas favourites Brussels Sprouts at
Z5-Q6p ore plenflJul as are English, Spanki,
KaHan. Jersey and Dutch broccoli at SS-7QP-
Tasiy English w a ter cr e ss at 3tMOp a bunch
and English. Irish. Italian and Spanish
celery at 25ft0p a howl are MR bast salad
buys.
Jen
11340
114.15
114.18 11340
Mar
11846
11748
11740 11576
May
12545
120.78
12046 125(0
Jun
iw nn
12240
12240 12140
Nov
wa*5
10560
10575
Barter
Ctoae
Prevtoua
HVVLoar
Jan
11040
11040
11040
Mar
112.70
11535
May
11510
114.70
11440
Turnover: Wheal 282 (410), Barley 88 (36).
Turnover km of 100 tonnes.
(Gash Setttemn m ) p/fcg
Ctoae Previous Mgh/Low
Feb 109ft 109ft
Apr 110.0 1108 1008
Jun 111ft 111ft 1108
Aug 1108 1108
Turnover 5 (10) lots 0< 52S0 kg
Ctoae 404-404
Opening 406!a-4l36
Morning fix 40575
Afternoon fbc 40500
Day’s high 40812-407
Day’s tow 403>9-404
266-256
2S7fe-25S
2S7-32S
257*402
Cotae
S price
£ eqidvalent
Map totes/
413-418
263-266
Britannia
413-418
262-285
US Eagto
413-418
263285
Anpel
418-421
264-287
Krugerrand
403-408
26612-25712
New 8ov.
06-97
6081
Old Sow,
8587
6081
Noble Plat
6054581740
3257582746
SAver to
p/flne oz
US eta equlv
8pot
3S4ftS
66580
3 months
38740
57525
6 months
38040
SBIftO
12 months
40640
00590
TRAMS OPIUMS
Atontotom (BS.7%) cafts
Pute
SOM price * tonne Jan
Mar Jan
Mar
1600
88
102 11
33
1700
28
so
60
79
1800
6
21
128
147
Copper (Grade A} Calta
Pule
2300
137
MB 22
04
2400
73
96
87
109
2500
33
67
116
169
Coffee
Jan
Mar Jsn
liar
600
SO
73
10
660
15
40
8
27
700
2
21
43
66
Caeca
Mar
May Mar
May
600
S3
78
16
ao
680
34
49
37
41
TOO
10
29
68
TO '
Braol Grade
Feb
Mar Feb
Mar
1800
103
S3
7
27
I860
66
64
20
49
1000
38
41
38
TO
IN Tl-E METALS, carryover buying
from Wednesday kept prices higher In
gold, silver and platinum, reports '
Drexel Burnham Lambert December
gold gained 5.10 as the day's most
active market. Copper trading was
uneventful, in the softs, profit taking
pared sugar’s recent gains. March
sugar lost 14c closing at 1374. Coffee
and cocoa were again both quiet- The
livestocks featured a limit down move
In Ihe pork bellies. Heavy fend
liquidation was noted. Uve hogs tell
due to spijiover selling from the
bellies. Cattle futures continued to
have sideways activity. The grains
were lower from some scattered
profit-faking. Lack of fresh tender newa
prevented further advances. Strong
commission house selling kept cotton
in Ns bearish trend. The energy
complex was alow with small ranges
seen In most markets. '
New York
Ctoae
Previous
MbMLqw
Dec
10580
104-75
10840
10575
Jan
106-40
10640
10540 ,
0
Feb
104.76
104.43
0 1
Mar
104.10
10345
10440
10500
Apr
10346
10S46
0
0
May
103.00
10243
10340
HttftO
Jun
10240
10238
0
0
Juf
102-00
M>145
wi.ro
10140
Aug
10140
101-36
0
0
CRUDE OS. (MOM) 42400 US galls SAarral
Latest
Prevtoua
HtoWLAw
Jan
2044
2047
2045
2048
Feb
2D.43
2a 28
2545
2041
Mar
?n or.
20.11
2526
2513
Apr
20.06
1944
2048
1045
May
1949
1579
1940
1940
Jun
1573
1943
19.74
1943
Jul
10-37
1547
1944
1B.47
Sap
1523
1518
18ft*
1520
Oct
19.12
1507
1516
1512
Chicago
SOVASEAMS 6,000 bu ndn; aenWffOlb bushel
Ctoae
Previous
High/Low
Jon
57B/4
8790
980/4
Mar
8B8M
69212
593/4
888/2
May
509/6
603/4
60510
«HU4
Jut
000/0
613/0
814/4
609/4
Aug
61170
8147+
814ft)
811ft)
Sep
606/D
609/4
611/4
GOBft)
Nov
60&/B
616/0
.fil&fl)
608ft)
Jan
618/4
825/8
624ft)
618/4
SOYABEAN 05 80000 tea: cemaflb
Ctaee
Previous
HigMLmr
Dac
Mfer
Jut
Aug
8ep
Oct
18A7
1994
19.48
19-88
20.08
aaoa
20.08
20.17
JKA1MS OB. 42900 US gaffe, eerae/us gene
1844 18.06
WAS 1525
1880 mss
1987 2504
2510 2527
20.10 2520
2508 2528
20.07 2535
1885
1501
1543
10ft2
2504
2508
2508
2517
Latest
Previous
Hlgh/Low
Jan
6570
6448'
8580
WOO
Feb
6378
8273
6390
832S
May
5390
5386
5486
5370
Jun
6265
5250
6320
6260
JU
S229
6195
5290
6210
AUfl
6270
WM
5800
6380
Sep
5346
5318
5385
5340
SOYABEAN HEAL 100 tom: Stem
6010 100 tray o*4 3/tray on
Ctoee
Prevtoua
Mgh/Low
Deo
410ft
4044
4105
403ft
Jen
4124
4074
0
0
Feb
415ft
410.1
4150
4074
Apr
<0.0
4150
4ZT4
4X54
Jun
4343
4194
4264
4174
Aug
429ft
424ft
jam
Oct
4344
429.0
0
0
Dec
4394
4344
4304
431ft
Feb
4444
4394
4404
4384
COCOA 10 tonmeft/tonma
Ctoee
Prevtoua
Hlgh/Low
Dec
160.1
1804
181.1
1794
Jan
180ft
181ft
181.6
180.1
Mar
1814
1824
IMK
J814 .
May
1814
1824
1824
181ft
Jid
1824
184.0
7844
1824
Aug
1833
1844
184,7
1853
Sep
1844
183,7
1884
1844
On
1855
1850
1850
1834
Ctoee
Prevtoua
Hlgh/Low
MAKE 5400 tot ndn: cents/SBto bushel
Deo.
966
933
966
968
Ctoae
Previous
Hlgh/Low
May
SS
987
942
Dec
236/2
238/0
23814
233ft!
Jul
948
960
965
845
341ft)
3*1/0
341/4
2om
Sep
981
888
872
3*5/4
345/4
344/0
Dec
98 7
988
994
986
348/2
348/4
248/4
247/0
Mar
1007
1000
1011
Sep
345/0
344JU
242ft)
May
1022
1023
0
0
— Mar
341/4
348/S
343/8
250/8
243/2
249/8
340ft)
247/8
COFREE “C" 378000m; eante/lbs
WAT 5000 bu artn; canto/SBO-teiUrt
PLATMUM SO tray ok S/tray oz.
Clem Preview Hlgh/Low
Jan 8158 5054 511ft 8050
Apr 815ft 511ft 515ft 6050
Jul 9253 6157 O O
Oct 628ft SBSft 5250 5230
Ctoee
. Previous
Htgh/Low
Mar
7578
7591
7790
7510
Dec
408ft)
■ 408 M
400ft)
408/8
May
79.26
7598
79ft8
7530
4090
400/4
407/0
Jul
81-60
8194
81.50
9561
May
385/0
387/Q
388/4
984ft)
Sep
8538
8536
6540
8290
357/2
357/0
364/2
Dec
&CL26
8533
86ftft
86.96 •
Sap
381/D
381/2
300/3
Mar
8513
89105
8090
8990
370/0
373/4
371/4
370/4
SUOAW WOf5P if 112000 tea; canta/lbs
85VER 6ft00 tray es oents/tray <
Close
Prevtoua
HkjfcftjOW
Doe
6853
635ft
5649
Will
Jsn
666ft
6653
0
0
Feb
5856
5650
o
0
Mar
5749
567ft
674ft
6855
May
£52.1
575ft
5829
6769
Jul
590ft
683ft
6650
5839
Sep
5956
581-0
SB50
5939
Dec
6109
603ft
8109
0049
Jan
614^
607ft
0
0
Mar
622ft
013ft
6189
617ft
|BRMC«t |
| KU1BIS (Baser September IS M81
-100) |
Dec 7
Dec 6
mnth ago yr ago j
1814.1
18057
1867ft
18757 ]
°Om JONES (toe: Dec. 31 1874 - 100 ) ]
Deo 6
DecS
mnth ago yr ago j
Spot
12781
127.10
13092
13513
1 Futures 12579
12515
13198
140.74
Ctoee
Prevtoua
Hlgh/Low
Jan
1585
14.00
1510
1390
Mar
1574
1392
1537
1570
May
1573
1397
1590
1570
Jul
1560
1583
1390
UftB
Oct
1518
1537
1536
1515
Mar
1584
1299
1299
12.83
COTTOH 50.000. certn/lbe
aose
Prevtoua
Hlgh/Low
USE WjUjjjM Iba; centa/IM
Mar 8741 88-16 8530 67.13
May 8576 7530 70.4S 6640
JUI 6847 70ftS 7040 6846
0« 6515 6646 6573 6500
DSC 6347 . 65.73 6440- 62.70
Mar 64.60 64.75 0 0
.May 6440 6545 6440. 6440
JUICE 15400 IN; eanw/Bia ^
Qoae Previous m^i/Low
Close
Prevtoua
High/Low
Deo
75,62
7542
7508
74ft7
74ft2
74.70.
74ft* .
Apr
7490
7497
754*.
7497
7192
7192
7190.
7196 •
Aug
70,12
7042
70.40
78X8
7047
TOft7 1
7098
me WOOS apftoo ib: wnbffta
Clc
Prw| w HlghAjow
S5 2 -5 Sifts
rob 4530 4586 B0.2Q
2 25
«h« 4575 48.47 4845
■* 70 22
4575
44.10 44.33 44J50
Dee 4540 43fts 4510
PORK BMJLB3 40400^.
JSn 12570 12510 127.78 .'
Mar 127,18 12540 127.70 -
May 1Z740 12880 1Z740 12&40
Jul 12590 12340 128.00 yeenn
Sap 12840 123.10 12500 12500
Nov 12590 13*40 0 0
Jan 12640 o o o
Cfe— P*frdom tftgh/Lnw
f* 1 3545. 654B . nn
8590 6840 • ’
■*9 55 B0 8340
«“ 89.18 Sia
L-H »*i SS •
55 5 Mr 0147 -
Mar 00.00 8200 0
5590
5590
8512
6tW
6597
6040 .
.
LONDON STOCK EXCHANGE
. r u> v V
£*0
r. - ‘-fr. >
• *;>4 V
>5SB
*-• . . -r* '
..SSJ?
*V • iVf-
■-•.r i- ' V.
,. U? V
r ; >-.*c5:
oral
^ ^sinaj
fi?***.
*$S
■|Vw ■*■.!
— ■ til*;..
r;-?s*
*5 ft*
• :; ^
;' J r^cv
. ‘-/Is?,
•^‘- as iri;
’■•*• Iie%
ir - *"■• a ks*
,^ v *n«ife
••“■ • “•! lp^
i; - •«7R3:g; :
- -^ri ^s
•• • r i '^-"»i :
■r^ lr/*_
-«*-.i,u
V-'.vi Ajfc
5- r
• • v wia
• iSn^;
;/.■••'* i, jj*.
t -^y«p
"7- * riSa?
■ -'* ■ 1 *" -hi
- ■ ■ W.i'flSS;
.".-.“tU'i
• "::? r: f-
*V ..*. i?Tii
r -;<*•*'’ •■•' ct&
, ••-.* ■•’t.r.-w
■;• ;*,••:•.» I
: . i : *ui : i I-
■ J -**. 1 ': tsl
♦go
, i • . 1**
Profit-takers bring modest setback
FINANCIAL TIMES STOCK INDICES
AN ACTCVR . If somewhat
switchback perionaanra hythft
UE equity market left share
prices with only modest. fibs
mat ched by investors buying
stock ahead of the new e quity
trading account which opens
this afternoon. - ■
T he two week account which
ends today has brought a gain
of arcnmd 5 per cent across toe
range of fegflfag equities, and
- substantially more In selected
sectors s acfa asftnancial and
property shares. • -
again at first as toe investment
mood coulinned to respcrid to
the evident success of the
£5^4bn flotation of Britain's
Welcome
for GMet
results
A 27 per cent I mprovem ent in
full-year profits from Grand
Metropolitan provided the
market wtfh the reassurance it
sought and hel ped the shares
put in the best performance of
the day among FT-SEL stocks.
There had been «**** uncer-
tainty ahead ctf the figures over
the net effect af a busy corpo-
rate period - the company
sold Intercontinental Hotels,
bou ght P xHsbnry (for £3-lbn)
and William HflL fr wild
last named in the cuzrexit year.
Analysts said the figures
were good and the chairman's
statement 'positive.. They, dn-
gtod out company's rapidly
falling paring m g p*w j ml wt- -
iwn tTiw aaTw of U/ ilHmw Will ]g
completed, gearing wflLbe'less
than 100 per cent compared ■
with 198 per cent at the interim
stage, accenting to Mr John
Dnnaniore at County KatWest
WoodMac. Organic growth was
particularly good too. he said,
with the wines and spirits side
scoring a -trading, profits
growth of 18 per cent — “not
bad for a supposedly ex-growth
market" •
County stayed with its prof-
its forecast forfhs current year
-of £895m» edgBdlts share earn-
ings estimate vp slightly site
stuck by its buy- recommenda-
tion. . Ur .Jonathan. Goble at
w/w rihHTi^rf hla rprnawnrwptto.
tkm from hold to a hoy in the
wake of the figures. He also
increased bis forecast! for the
. current year from 2889m to
2900m — saying- that the Ug
property, dement, in the fig*
tups, soggestfems of which had
lmit'tbe dwft-'fiufitf m tbtt
Week. Was n fjft t htf'Wrwittih. ,,
" a&.'G^and Met ctatbed IS -to -
580p Oh. good turnover of &6m
shares. u . . v ... , • •
Oflstocksbnsy
There was a fresh hurst of
activity among leading oil
stocks as international Amds
reassessed the rotative oufioak:
fin BP and Shall, which are
prominent in most institu-
tional portfolios. The eaiiy part
of the session saw significant
switching out of BP and into
Shell as Kletawort Benson
pointed to the one point yield
differential: in BP’S favour
against Shell. KUugat raised
its dividend forecast for BP,
predictingthrt the four t h quar-
ter payout will he increased to
a total of 1485P for the year.
County NatWast- WoodMac
was also cautious over the out- -
look for Shell, chiefly on
grounds of currency oncer- .
tahxty which could -affect the
price ratio between ‘Shell and
Royal Dutch.
Vw 4*teNi*» n w I *
DM * tMlMM 4h*> 4
water c ompan tes. The Footsie
Index rose by 12 prints within
ijs flrsthour of calculation, but
then ran into the prafittakers
who quickly reversed the trend
to bang a net foil of simitar
The appearance of some
"new. time buyers", wfiUog to
pay a pre mium for stock for
which they will not have to
sp**Tf> untu the end of the
trading account, inspired a
rally and equities closed
steadily despite a discouraging
I'lnTtfintorgrin fi rfi PyfHiiTi
try/Hnandal Times repact an
the UK dijrfrihnHv B trade.
The FT-SE Index closed 7
paints down at 2,346.7 with the
bTtpmaf . iymal Wqp rhi pn iwwtly
a ftanj t fl *. S iynw* traders
ex p ressed caution ahead of the
jmnnnmyniOTit today of the lat-
est employment data from
across the Atiantic. This could
have a bearing on the credit
policies of the US Federal
Reserve.
Seaq volume of 492.6m
shares yesterday compared
Pr op erl y
FT-Ac*Mrias Index
100
todw FT-A MhSham (nctox
Hie rise following fids week’s British Land re st ru ctur ing
was ana of the few bright spots for the sector in 1989.
BP shares closed 4 higher at
323p, with Siefl finally down 2
at 471p. The BP share price has
been, lagging Shell in. recent
weeks out sector analysts
behave that it will o utp e rform
now that afi prices have begun
.to Improve.
Insurances ran into profit
taking after several days of ris-
ing on a tide of bid speculation.
Guardian Royal Exchange, led
the sector lower, dropping 9 to
245p.
- Rival Bosk of Scotland ran
up briefly on talk that Basque
Paribas or Banque M«tTnmaT da
Paris might be about to bid.
Dealers were sceptical but one
thought an equity swap a more
likely possibility. Royal Bank
peaked at 212p before dosing a
net 7 better at 206pu
The formal offer fot Morgan
Grenfell by Deutsche Bank was
posted, turning dealers
thoughts to what Morgan
shareholders might do with
their cash. They settled on
Hambros, the only feature
aiwnwg merchant twwfai, »hw»
rose 9 to 275p.
Among otherwise qu iet
Insurance brokers, . Willis
Baber fed 8 tp27Ip as an eady
>fijW n terire t TDflis h
mWh ^rinA, * _ ~ . .
Wellcome had a good run
late in the. day on nevro that
tiie US Food and Drug Admin-
istration had set aside two
days at the end of January to
consider whether the compa-
ny’s Aids drug Retrovir should
. be approved for use by carriers
at the Aids virus who do not
exhibit symptoms. Mr Ian
Moore at UBS PhnHpsftBrew
said tint if the FDA gave the
goahead. ap proval could come
within weeks. WeOcame recov-
ered from an eariy low of 73ip
to end 14 up on the day at 754x
The p ropert y sector caught .
its' breath after two days of
frantic activity prompted by
the proposed reorganisation of
British Land. There was profit-
taking by investors, who have
aeea thrir p rop e rty shares rise
strongly since the of
the week.
Since last December, when
Rodamco launched its assault
on Hammezson, the sector
faifan 20 tier a&axnst ttw*
FT-A All-Share Index. Interest
rates are depressing demand
and observers are also worried
that there is going to be a prop-
erty glut. However, not even
the most bearish behave that
the financial rrfaltt of 3373 is
about to be repeated. "There
are structural problems rather
than a financial gists," said
one self-proclaimed bear. He
predicted that entrepreneurial
managers would still find ways
to thriv e, as Mr John Bftblatt
of British Land had demon-
strated on Wednesday.
The market’s pause yester-
day gave it a chance to digest
the implications of Mr Rjtbiafs
plan for Britteh TjttH HEFC,
fell 7 to 538p and Land Securi-
ties 11 to 43lp. British Land
closed 2 down at 401p.
IlMmiiwM n ‘A’ slipped 13 to
fSSW, partly anbrofif taking
- and partly qn fflsapnoiQtment
that of Holland, had
not commemorate the arndver^
wary nf ita initial hid hy Tarmch.
ing another attack.
Uncertainty about the future
management of Johnson
Matfhey, the precious metals
company, in the wake of the
resignation of the chief execu-
tive on Wednesday evening,
left the stock lower, as the
company reported Interim prof-
its in line with market expecta-
tions. Profits rose by 6A per
cent to 2 3& 5ID,
The shares retreated from a
high of 389p. Mr Bfflka Tampan
at Hoare Govett who is fme-
with 480.6m in the previous
session. The irregular pattern
traced by market indices
implied substantial activity by
both buyers and geRera.
The recent somewhat specu-
lative rises « yrwYrt g UK insur-
ance issues inevitably
attracted profit-taken, and
there was some selected seffing
in the property sector which
had performed strongly over
the two previous sessions, in
the wake of the proposals for a
substantial restructuring at
B i-ranti fifth largest com-
pany in the UK property sec-
tor.
While the UK equity market
performed wen yesterday,
there were a few words of can-
casting frill year profits of
£67m "On firad*wimnta1«
the share price is still too high
as there has been a certain
amount of bid speculation in
the last few months.” The
shares dosed 12 lower at 389p.
T rafalg ar House continued
to benefit from talk of a possi-
ble bid from Bouygues, the
French construction group,
and from buying ahead of the
shares going xd on Monday.
The shares added 5 to 368p on
steady turnover of 21m.
Profit taking after a good
run in the wake of the com-
DBQV w wi Bri ninp it nlannpd to
float its US subsidiary caused
BTR to ease. The shares gave
up 4 to close at 460p, on turn-
over of lAm.
A 6 per cent increase to
£147ui in interim profits from
PUktngton foiled to impress
the wwriirt BZW araiwi back
fan year expectations for the
year to Mwp Ji 1990 from wssm
to£340m. Mr Mark Stockdale
at BZW said "A lot of the
growth coming from interest
rate reductions."
FTA AB4Mwwi frtetox
1290
I {
I ■ '
Thmorar by volume ftndon)
laraMMaslOHawlii
800
■- ' - .v
NEW HIGHS AND LOWS FOR 1989
IIP
5E3E
tJSLm
m
tm ASO. Do- 8s Cv- Pt. Bmmmw.
BccnpCon, Co. 09 OntQTMn, Courtwy
Imwsarm Hooa Qnunptwr. Uoaka a C<« na. M
ptfan p> iLxrma w
Oct Nov Deo
Hie building sector was gen-
erally slow. Phoenix Timber
slipped 6 to 194p following the
announcement a£ reduced prof-
its. Mowlam rose 6 to 337p
of the antwH m **™**"* of
a £108m US digposaL
The ending of Stanley Lei-
sure's negotiatinnsfar the pos-
sible acquisition of Aspinall’s
n«dwn in London, poshed the
shares 9 better to 2I0p-
Carlton Communications
climbed 6 to 876p ahead of final
figures on December 11 whSe
Granada firmed 2 to 315p with
finals due the faDawing day.
The lat ter aian reshufiled its
top management, including
naming a a new
to take over from March I960.
A line of shares TV equip-
ment supplier Avesco was
turn from leading securities
houses.The strategy team at
KlfitUWOrt Ttenann mflfotajn ftd
a defensive stance, warning of
“our fear that the market could
see a setback".
The market feces a relatively
heavy c o rpor ate repo rting list
before the Oucistmas holiday
- a good start was m ad e yes-
terday with the trading state-
mart from Grand Metropolitan.
But there is cowcvrn that the
retail sector could bring some
unpleasant surprises; yester-
day's CBI/FT di s trib u tive retail
trades survey for November
confirmed the effects on over-
all consumer itonanH wrought
by high interest rates in the
UK-
offered, the day after the com-
pany's interim results, and
uncovered wall-to-wall bull
p o s iti ons. The price fell 11 to
101p as buyers failed to appear.
A 29 per cent profit setback,
to £3 & 5m , at De La Rue took
the floor from beneath the
shares. They bottomed at 310p
before finishing the day at 315,
a net faD of 22. Analysts cut
their forecasts across the board
— Mr John Kenny at BZW, for
example, reduced his forecast
for the current year from £52m
to £35m. He said that the
shares were stm trading with a
25 per cent bid premium.
"Even if there were a bid, we
would be surprised if it ram*
much above the current price,"
said Mr Kenny.
There was no stopping Reu-
ters which climbed to the third
all-time eUwriwg htoh fl037n. nn
19) in suSwTdi^ro^
again US buying, stimulated by
investor presentations early in
the week, was blamed.
Negative press ammwrt on
Wednesday's fun-year figures
from Saatehf & Saatchl under-
mined tiie shares which fell 18
to 26Sp. Wednesday's scepti-
cally received bid talk also
evaporated.
Periodical publisher Builder
continued to advance on the
back of Wednesday’s revelation
that it was in talks that might
lead to an offer for the com-
pany. The shares dosed 20
higher at 322p. EMAP, tipped
by many as a possible suitor,
on the basis of its ll per cent
stake, dosed unchanged at
227p.
News that an institution had
telnwi a 5J» pa cent stake in
packaging group Baud, and of
an $88m (£56m) disposal in the
US, steaded the shares after
s everal weeks of nervous trad-
Ordtawy Bun
OrtL OJv. YlaM 4.S1
Earning YW SffufT) 17J3
P/E ftmo(NMM'i>) TO- 76
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Equity TwiwwMfDn)r
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2346X1 (23407 2343.1
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i8<&i iraaa
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23429 4 2340.0
BUB 8283 1274 48.18
(BOj «4rt2) (871/38) [3/1/7a
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1 Eijudy Dwoama end Eqony Vania, m ate-
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DBS
<3
ing. Bunzl closed a penny bet-
ter at 105p.
Macarthy, the pharmaceuti-
cal group, continued its strong
advance which began the pre-
vious day on talk of a bid from
a West German compan y . The
shares were also helped by a
settlement with Unichem, with
whom the company has been
In dispute.
Mr James Dodwdl at BZW
said: "Bid speculation will
remain in the stock as the
wholesale side of the business
looks attractive as we
approach 1992. The retail ride,
its pharmacy rfialn , is fairly
attractive as well, particularly
with UK restrictions on open-
ing new pbarmarifta, pins tike
fact that the company has one
of tha hi ghpst yields in the sec-
tor.” The shares gained 22 to
close at 2Slp.
Trades of 1.1m Tesco and
750,000 Argyll overnight, said
to be part of a programme
tirade, lot the market short all
day. The shares bucked the
market trend, rising a penny to
197p and 2K to 224p respec-
tively.
Interim profits, up less than
5 per cent, from Great Univer-
sal Stores were in line with
forecasts and GUS “A" shares
slipped 10 with the market to
llOte. Gussies is a tightly held
stock at the best of times, exag-
gerating price movements.
Dealers said that the shares
had risen more than 20 in vol-
ume of only a flew thousand
shares before the market
opened officially. Volume by
the dose, of 410,000 was
described by marketmakers,
and well above average.
Volume, at 5.2m, was still
2» ~4fa Tut t lyta
«T» -1 late* * fcodre u -
n *7 Item
MB *4 1M0RNEU
2*0 -4 litetigarHMM _
3M -4 TntetiPU telaito -
l5 itaaua
BM -4 Uamnr — __
423 -1 IMudBlMaBl —
1337 tit IMHteW-
tte -Z HUCMB..
tea -3 VMfwd’A-
205 +7 WawnHOB* -
so* -1 Mkfte
2 ii -i aaw y/ —
m -a
n -3
332 -4
unta S pan.
good in Dixons in the wake of
Wednesday's bid for the com-
pany from Kingfisher. But
profit-takers outnumbered
arbitrageurs and Dixons
slipped 2 to 139p. Kingfisher
eased 3 to 28Tp.
Among food manufacturers.
Christian Salvesen continued
to benefit from Wednesday's
figures, rising 3 to 173p. Haxle-
wood Foods was in good form
for similar reasons and added 2
at 237p. A persistent buyer of
Booker on toe Interdealer bro-
ker screens pushed the shares
5 better to 415p. Talk of a bro-
kers’ downgradings for Geest
left tbe'ahflre 3 down at 2S2p.
■ Other market statistics,
includhig FT- Actuaries
Share Index and London
Traded Options, Page 28
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FT UNIT TRUST INFORMATION SERVICE
FINANCIAL TIMES FRIDAY DECEMBER S J989
1 Current Unit Trust Prices
Unit Trust Code Booklet ring me FT CityHn* <wp w yfwwm
AUTHORISED
UNIT TRUSTS
SS + -
FT UNIT TRUST INFORMATION SERVICE
Current Unit Trust Prices are available on FT Cityline. To obtain your tree
Unit Trust Coda Booklet rino the FT Cityime help desk on 01-325-2128
FT UNIT TRUST INFORMATION SERVICE
1 *rt5?w3K<SS
FINANCIAL TIMES FRIDAY DECEM BER 8 1999
FINANCIAL TIMES FRIDAY DECEMBER 8 1989
CURRENCIES, MONEY AND CAPITAL MARKETS
y
FOREIGN EXCHANGES
FINANCIAL FUTURES AND OPTIONS
Markets await US jobs data
UFTE URIG GOT PUnKS OFQDNS
f50#»HtfcifUa%
UFTE DS twauir IDKB FDIUBB onms
SUQJM0*41ta«fU0%
LUTZ two FUTURES flPTBtn
HBSO^MgtUitfUG*
4' .*
The currency markets were
stable but thinly traded yester-
day as dealers prepared for
today’s release of the US
November employment report.
The dollar was slightly higher
as traders bought the US unit
to take their holdings to a neu-
tral position before the data.
Its strength prompted profit-
taking in the D-Mark, while
sterling and the yen were
According to MMS Interna-
tional, the fman/nal research
company, non-farm payroll
employment is expected to rise
by 130,000, compared with the
233,00 increase in October,
while the unemployment rate
is forecast at 5.4 from 5J3 per
cent. If the employment report
does show a slower pace of
growth, the dollar could come
under pressure on speculation
that the Federal Reserve may
ease monetary policy.
The scene was set for the
employment report by the
release on Wednesday of the
Federal Reserve’s Tan Book
regional survey, which
reported weakness in manufac-
turing industry. The report did
not move the dollar but con-
firmed the market's perception
that the US economy is slow-
ing.
The dollar closed at
DM1.7725 from DM1.7650. It fin-
ished at Y144JJ0 from Y143J30;
at SFrl.5920 from SFrl.5870;
and at FFr6.0575 from
FFr6.0300. The Bank of
England’s dollar index dosed
at 6 8J3, up 0.2.
The dollar’s advance
prompted some weakness In
the D-Mark, though the con-
tinuing political upheaval in
Eastern Europe prevented it
sli p pin g against all major cur-
rencies. Traders said the
D-mark appeared to be pausing
for breath with some operators
adding that it could resume its
advance later in the month.
The D-mark was at Y8L40 from
Y8I.55 on Wednesday, but-
unchanged at FFr3.1450 and at
SFrO.8980.
After its recent losses, the
yen was steady to slightly
firmer though traders felt it
yet could come under further
pressure. Mr Mark Cliffe, chief
economist at the Nomura
Research Institute, said the
markets were concerned that
despite signs of inflation, the
Japanese authorities did not
seem as willing as the Bundes-
bank to raise Interest rates. He
said that because of seasonal
factors, Japanese money rates
could ease towards the end of
next week and this could
depress the yen.
Sterling was steady in the
face of the firmer dollar as
traders who had gone short
during the pound’s recent
w eakness covered their posi-
tions. Mr Nick Parsons of
Union Discount said: “With UK
interest rates so high, it's
expensive to short sterling,
unless the pound happens to
be failing . So with sterling hav-
ing stabilised this week, there
has been short-covering.”
Sterling closed at DM2.7925
from DM2.7825. It was at
$1.5750 from $1.5760; at
SFH2.5075 from SFr2.5000; at
7227.25 from Y226.50; and at
FFr9.5400 from FFz9£02S. The
sterling index dosed at 8fL5, up
0 SL
PtffrXttlSBBB
suite
CaHs-wJeiwntJ
tas-tettknats
Strife
Cilb-soteaHiB
PntMtUants
Rbr
Me
fife
Jn
Mtf
im
Prla
Jn
MV
Jn
4-06
0-24
840
96
3-12
442
838
1-02
8950
un
2.26
0J9
053
2-37
362
0-37
0-56
97
2-S6
3-23
842
1-23
9000
ISO
1.92
0.42
0.69
1-58
3-18
858
1-12
98
2-12
2-49
862
1-49
9050
L17
054
068
1-22
2-43
1-22
1-57
1-39
2-16
1-35
2-16
9100
8B
0.80
XJO
0-59
2-09
1-59
2-03
100
1-09
1-51
1-59
3-51
9150
065
L08
L07
US
n-w
1-44
2-39
2-38
101
0-50
1-26
2-36
826
9200
0.46
087
U8
L64
0-25
1-19
345
3-13
102
0-34
1-06
320
4-06
9250
0J2
0.69
1.74
L96
HOW
T 0
EftbnaM nhm uni. NSWNta
Piwtaaifaj-iMfl li*Cal»»*Pi«5OT
Estimated rolime uUL CilkSOl Wj! U
Rrcftaattr'ieswlet MB777 PwM
ISaXSE£UHsa
UFFC l/I OFTOTS
£25JM (cab pet £D
urn EDtODOLLAA OPTIONS
tla potab if 108%
LffFE SHORT STIILIHS OPTWO
BOO^Ot prtrts (f L8S%
PWMtakmHttt
CaUfrootUeniMti
PBtMeBtan«*
Suite
Cote-HtUanirti
Dec
Jon
Price
M m
Ok
Mjr
Woe
Dec
Mat
Dec
tear
1765
aoo
000
9100
059
103
000
004
0450
0.41
1.16
0.0
009
1265
12.65
0.00
00
9125
035
069
0.01
00
8475
0.19
a»
0.06
013
7.66
766
QOL
037
9158
013
067
004
one
850Q
003
a.75
045
ou
3.41
0.43
161
9175
0.02
0.47
018
013
025
0.01
066
0J8
0J4
U7
300
4J7
9200
061
052
0.42
023
8550
0.M
0.41
062
034
0.01
0J7
761
8.47
9225
DM
020
0.66
0J6
8575
QUO
0J4
047
0.47
000
12.60
—
9250
OM
031
0.91
052
8M0
OM
020
1.12
063
Estimated volume ttWLMB 0 PrtsQ
ftariOEsebVs opectftTCjdh 2U PM 16
latent icu!. Crih 10 Pro 100
Pmtaa dor's ceen to. Crib 5321 Pm 3265
Ewlrnwri vcfamv tatil. Crib IQU Pah ttD
Platan ifeta apm ho. Mb 6230 Ms 39139
STAY AHEAD
IN T H E
STOCK MARKET;
CHICAGO
ILS. TtUSUlY MHOS K>n VK.
UMJNB 32ak af 100%
JAMKBEYQfOHO
nzjfcs s tv vua
nnn-siraKKNi
US IflW Low
wn wb
9904 99-12 9-HQ
99-00 9905 96-31
96-23 98-38 98-23
96- 14 98-17 98-14
980b 9909 WX,
97- 30 97-30 97-30
97-24 97-30 97-30
06929 0699 06928 0ifl52
0.6962 06974 06961 0.6981
0.7800 a 7000 0.6996 0.7014
SM 1-riUL 3*n(b. (noth. 12flHL
13730 15667 LSm 23262 1.4863
DM-STOUNG Si part
Lata Hi* um Pits.
25746 1-5784 15730 13736
1.5500 1-5538 1.M84 1.5490
1.5274 15284 252*6 15252
DEUTSCHE HUSK (000
DM125JMSpnM
EURO-CURRENCY INTEREST RATES
Latest Hnc Low Pm.
05658 05668 05657 05670
05661 05670 05661 05671
05664 05664 05664 05666
LONDON CLIFFE)
tti Tvnsuiv beis rauo
Sim art* at 10%
C IN NEW YORK
SUrMg
HS Dollar
Caa. Dollar —
D. GoIMfr
Sw. Franc
D cus da m rt
ft. Franc _
HaUaaUra
B.Fr.lConl
Yen
D Krone
Asian King
15V-J5 14Vl*h
Utet
Hfo6
Lew
Pret
Dec
92.43
9250
92.43
92.43
9018
93.24
9317
93J3
93 J8
93.41
93 J7
93.41
Ste
93 J8
93 J8
93J6
9336
THKT-HONni EUUMOUM M0
Sin gatabal 100%
20-YEAS 9% MmOMAL GUT
CTI.WO 32ah ri IPt%
Ckw HMD Low Pm,
Dec 904b 9M3 89-2S 8M4
Mar 91-00 91-01 90-14 90-19
Jbo 92413
LaUtf HkjO Low
9158 4162 9158
9L08 9214 92.07
9222 9228 9221
9225 92.20 92.14
9L88 9194 9187
9175 91 El 9175
9162 4163 9162
9154 9160 9134
EstiraM volume 9940 064551 ,,
Pla tan days am W. 36*10 CS7767]
Instant access to
prices | and fin a nc ia l
US TSEASWY MMDS 1%
5104,000 32m at 100%
information. Straight from
£Spot 15670-15680 25760-25770
L month 084-083pni 0 85-0 Wen
SuKsafs 2J9-2J6ptn 2.48- 2.45pm
U mote .... 858-82800 8.92-&B6|m
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scan tar US Dollars aid J
vYrai; otters, boDdayY doUce.
swBsnniicaiflD
STr 125,009 3 per 3ft
POUND SPOT- FORWARD AGAINST THE POUND
Utet High Low Pret.
0.6296 0.63* 06295 0.6298
06302 0.6311 0.6300 0.6302
06308 06312 06308 06302
STM0JU0 A P0R3 500 WBB
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Utett
3*4 7D
HM
350.00
low
349.00
Pm.
>49 J5
Mar
3540
357.70
KS
353JO
357.70
353 JO
357.75
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Pterin i day's open ML 2842 (30251
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6% WnOHIU. GEMAM GOVT. MM
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for your owtt'portfbB© - J
STERUNG INDEX
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863
866
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865
864
4.M
pra
665
863
Demark
MM.
W.Genray
Portugal
Spain
Italy
CURRENCY RATES
Austria ,
Sriberland.
ECU
PH&AKLPMA SE US OPnONS
£31250 baft per £U
Strife
Price
Grib
Jn
ftb
Mv
Poa
Jan
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Mar
L5M
7.60
7 JO
7.60
761
012
085
135
1525
5.15
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3.69
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3.47
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2.2H
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486
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0.14
0.86
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0.04
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4.82
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to met high or knr abate price fimfts.
Eflltnaml TOtwne 22584 0*52 3)
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UM.S 1940T 103.96 104.19
FlMuqiuHidAn.
Bar* Spsial* Engni t
rate Drawing Cineaqi
% FBgtts Unit
Cannedal rate lafen lawans the tnd of Londna trading. Bdgtao rate h cooirertltde fraoo. Financial franc
58.60-58.70 StaniMth fonmd dollar 4.91-A86cpm 12 monlfei 8yB74J7Cpn
EUROPEAN OPTIONS EXCHANGE
EsHmaud Mime 440 CM
Pncfloai dayM open ML 736 <668}
U5DdfU"™
DOLLAR SPOT- FORWARD AGAINST THE DOLLAR
CaoadaoS 12.46
Austria! ScL?J 6%
Brigiao Franc J 10 V
“ M.
Danlsli Krone lfli>
Douche Mo*. 6.00
Hetli6ollder_. 7.00
French Frac~ 10W
KaliaiLIra 13>g
Japanese Y«._ 3V
Norway Krone. 8
UKt
Ireland}—..
Caada.
15715-15805
14870-14940
W.GraHv]
Portugal
SnedWKiaa.l 9V
Sirin Fm__ 1600
Greek Oradt._J 20 tj
Irish Pott J -
• Sterling quoted In imn of SDRad ffllw L
t European C o m iitB il oi i ftlndaM og.
" AD SDR rate are tar Dec6
(L85462cpn 656
0Jb4JUpm 261
S33dJ7cdH -3.61
0.034.01qm DJ2
2JKJ-500afls -113 i
L77-247eredb -356-
Frit
Vol
90
Last
Mar so
Vol Last
Aug. 90
Vol 1 List
335
14
3 2330 b
_
97
10
30 1930
32
»J0
80
-
-
7HHEE WHfm SfOUKG
(SaOJM* taMta M UO%
0134JIMpn 0.78
lOO-UDcdh: -8.93
11460-11525.
65-75ata -736
450-4.90Bredh -423
L75210MC* -3.41
0.75-065edb -159
L47-L72aradb -3.02
l2M25qo 216 «.u-vwh
U5pa»-0.40gdb -612 060-2-OOdta
0J37-SJWqmi 042 0JO-6O5pai
0J21420qpm 2.14 068466pm
EOEIndaC
EOE Index C
EOEInkxC
EOEIndaC
EOEIndaC
EOEhtdaC
EOE MaF
EOE Index P
EOE Index P
EOE Index P
CURRENCY MOVEMENTS
t taken Uwmdt the end o( London trxflre.t OK and I
I aro qooted h US ciau n cy. Forward
I dbcooU app|y to the US dour mat art ta Ike MArttkal carrenET. BfMHiaKkftrconntJHe
eU franc W1D-37J6
Dec
89
Ju. 90
Feb. 90
90
L510
_
_
_ _
214
LI 30
10
14.70
10 1730
130
6.70
158
1230
700
3 JO
139
7.90
_ —
214
230
60
5.60
— —
5
030
2D
370
— -
147
030
49
2.70 a
16 3.80
199
230
7
3.90
16 5-30
134
3
132
530
23
5 JO
47
8
— —
—
—
342
280
30 2-40
1071
LUO
47
3.40
51
5.40
17
7
_
385
10.70
— —
FI. 300.30
FI. 300 JO
FI. 300.30
FT. 300 JO
FL 300 JO
FL 30030
FI. 300 JO
FL 300 JO
FT. 300 JO
FI. 300 JO
FI. 200.08
FT. 20608
FI. 20608
FI. 200.08
Oust
HM
Lew
Pm.
8488
04.88
8482
84.85
8537
8538
8532
8555
6646
8646
8636
8641
87.08
87.08
6598
8703
8737
8730
87.46
8730
87.96
8787
8734
8709
88.14
8813
880
88.06
88.28
8820
8816
8818
EsL VW. Ete. flgi art shnad 15388 Q9387I
Pieriout tmfi open W. 146789 046693)
MEMBER AFBD
GOLD
Time to buy?
CaH tor our cwrapt v»e*s
GALFunucaLtd .
' Windsor House ,
» Vrctorir. Sdvqt
London- -
WIHONW .
"THr 01-799 2231
-Bug 01-799 15JT
UWg—TH EUR WU6 R
HmpeMtirt ZCB%
.oaakrt MonMn"* .
Engiaad Gorantr
tala 1 Otangcs %
EMS EUROPEAN CURRENCY UNIT RATES
Sterling ______
05 Dollar
Canadian Dollar
Austrian Sdifl ling™
Belgian Franc
Djotst Krone _____ 1
Deutsche Mar*
Swte Franc j
GoUdw 1
French Frarc
Lira
Yen
Morgan Guaranty chanpes; aierage 1980-
1982- BW. Bank ol EngLodlrtn (Ban Average
1985 =100mate me haUec6 .
Belgian Franc
D aWs li Krone
Goman D-thrfc._.
FteadiFm
DotdiGifUer
HthPOrt
RaHanUn
Spa nte Peset a
Eta
central
rate
Cwnncy
sgrimEco
Dee.7
% tenge
canal
nte
AM r
difuguce
Dtvcfwxe
llintt %
424582
427324
4035
4035
£25424
706212
709402
4033
4033
£26*19
205653
203397
-119
-219
£21019
690403
695074
40AB
4038
£13719
2.31943
229518
-2®
-20
£25019
0.768411
0771374
40J9
4flJ9
£26689
148338
150 LIB
4219
4219
±4.0815
133004
132264
-290
-290
-
are for Eai therefore posture cka
mt catadmd for FTtaacM Umo.
OTHER CURRENCIES
EXCHANGE CROSS RATES
DecJ
£
S
DM
Yen
F Fr.
Sft.
H FL
Lba
CS
8 ft.
£
1
1375
270
2Z7J
9340
2908
5148
2060
2823
5830
S
0335
1
2773
1443
607
2592
2999
1308
2157
5724
DM
0358
0364
1
8238
3.416
0898
2127
7373
n mi
20.95
YEM
4399
6929
1229
1000.
4297
120
13 m
9063
ano
257.4
F Ft.
um
1351
2988
2383
10. 1
2329
3J00
2199
2911
6232
S Ft.
0399
0328
2114
9033
3304
1
225S
8224
0.727
23J3
H FL
0 *18
0300
2 ®
7220
2030
0797
1
654.4
0379
1058
Ura
6*0
0.70
1103
+ 631
2217
2528
1000.
080
28.40
CS
0349
0.864
1332
124.7
5233
2376
1727
1130
1
32.09
B ft.
2709
2692
4.774
3883
1631
4287
5381
jsa
3216
100.
FI. 423
150
0.90
21
ABNP
a 4230
157
220
Aegon C
Fl. 113
209
3
219
Argon P
FI.115
13
2.80
36
AhoMC
Fl 1M»
5
16
100
AloaC
n.135
180
2.90
110
AlaoP
FL135
3
3J0
373
Am«C
n.6o
404
330
10
tonC
Fl. 85
—
—
427
AnraP
Fl.75
—
—
254
BUHRMANM-TC
a7o
25
210a
23
BUHRMAMN-TP
F1.60
—
—
mo
DAFM.V.P
FI.55
—
—
20
M.V.DSUC
a 120
590
290
230
N.V.DSMP
a 120
105
6
150
GtSt-Bsoc. C
a 35
22
0.70
63
Clst-Bic. P
a 38
79
2-30
3
HefortenC
a i2o
88
10
5
te«TBp
a uo
24
680
HoogoremC
a 90
204
3.90
90
mWWBBr
KLMC
an
a so
263
97
230
240
27
350
KLHP
Fl. 50
130
280
222
KNPC
a»
69
210b
82
KNPP
a ss
15
320
263
NEDLLOYDC
a 94
466
270
129
NEDUOYDP
a 90
75
330
204
HMBC
a %
217
230
NMBP
a 46
32
030
110
RaL fed. C
are
235
230
186
touted. P
a 70
10
1
10
nuipsc
a so
266
1
1162
Philips?
BOFUDatteC
FL475Q
221
260
113
a 150
429
220
462
Rural fetch P
a 140
227
1.40
9
UnitererC
a 170
132
030
239
Uni lever P
aiso
114
1
51
VanOaraWfaC
a 3230
117
230
10
VaaOnmaaP
a 30
34
030
3
WessanaC
a 70
135
120
35
■-90 - Jtrt.90-
2 I 28 1250
- 1024 250
6.70 20 750
4.70 - -
19 100 2150
6.60
480
550 10 7
250 10 3.60
L40 - —
3
1-10 - -
8 - -
560 - -
8 950
1.70
2.90 22 3.70
13#
750 32
4.80
140 55
3 16
2.70 7
520
580b
650
4.10 35
im
350 102
2 16
2-70 170
3.40
5 9
3
350 U
2L60 3
Mfl
150
3 17
FT. «L40
FI.4L40
FI. 12350
FI. 11350
FL 134.60
F). 133.20
FI. 13320
FI. 61.99!
n 79-40
FT. 79.40
FL 66.40
FL 66.40
FL 4640
FT. 115 JO
FI. 115 JO
FL 33.20
FL332C
R. 129 JO
FI. 129 JO
FI. 88.20
FI. 88.20
FL 49 JO
Ft. 49 JO
F1.5280
fl s zm
FL 90.2®
FL 90.20
Fl. 47 JO
FI. 47 JO
FL 72
Fl. 72
FL 47.90
Fl. 47.90
FJ.
Fl. 145.40
Fl. 159.20
FL 159 JO
FL 31-90
Fl. 31.90
Fl. 6550
Ckue Utah Low Prey.
Dec 9159 9162 9159 9167
Mm, .. 9209 • .9615 9208 92.23.
Jon 9223 «3l 9BJ2 923 6
, Sesr '*'- J ^9Z13^-‘92JO VJZD ' VZ26
Ok : 9131 _ -9L94- ..4LS3 9159.
Mar ’ 9L76 VLBO SL£9 9L85
Job 9162 9166 9166 9L71
Sqi 9152 9161
r.j«- t .■■I :<•
.is- :*■ •' ‘ .
Est W. flat, flgL art shown) 5984.01*5)
fterioasdaj'* open ML 45609 H309O
THREE MONTH EWMPWIK
MbnpaUb«lin%
JOTTER PAD
o ?
Close
^¥5
ura
• W.
9277
9276
9276
9280
9286
9278
9282
9298
9200
9293
92M
9298
9204
EKIawMd eatame 4792 U8M9
PitatatE tfq*s opea lot. 32965 03177)
CROSSWORD
No.7,1 10 Set. by VIXEN
ECU lm priata af 1W%
dose Htah Low (her.
89JM 39.W 89JJ8 8968
89.42 89.42 89.42 89.42
BUmated hAohc 43 OH
ftcrioB dVi opto htL 1091 0002)
ST-SE IBS m
Yn per LOGO: Freach Fr. per 1ft Ura per LOOT Belgtai ft. per URL
TOTAL VOLUME M
A- Art B-BW
COJfTHACIS : 34,886
C-Call P-Ptrl
£25 nr
Ml Mot rated
Dec
Ctae
23603
23SS
im
235L0
thr
2407JJ
24293
24023
Jn
24460
24630
2403
Estimated vohane 5008 C5299S
ntriaas (tar's open M. 32077 132489
MONEY MARKETS
FT LONDON INTERBANK FIXING
BASE LENDING RATES
Rates steady
□160 im. Ok 71 3 wauta US doHan
offBr Bh .
UK money market rates were
little changed yesterday as
sterling edged slightly higher
in thin dealing activity. The
key three-month interbank
rate was unchanged from
Wednesday at 15&-15K per
cent, while in the futures mar-
ket the March short storting
contract closed just 2 basis
points higher at 85.57.
Operators said dealing had
already begun to resemble "a
Christinas market” where a
shortage of business and lack
of market-moving news left
traders largely idle.
Analysts said the money
market still anticipated no
change in interest rates
UK dearbg baric base tending rate
15 per cert
from October 5
before the middle of next year.
Money rates up to six months
forward are bunched around
15ft per cent, and only nine
months money Is quoted below
15 per cent, the current level of
base rates.
Initially, the Bank of
England forecast a shortage of
CTOOm. though this was revised
to£750m at midday. During the
morning the Bank purchased
£424m of bank bills, of which
£59m were in band 1 at 14H
per cent and £365m were in
band 2 at 14% per cent
In the afternoon, the Bank
bought an additional £206m of
bills. This included £80m of
band 1 Treasury bills at 14%
per cent; £64m band 1 bank
bills at 14 ’A per cent; and £G 2 m
band 2 bank bills at 14% per
cent. Finally, the Bank
provided late assistance of
around £ 110 m.
In Frankfurt call money
rates eased again slightly to
7.55-7.65 from 7.65-7.75 per cent
as the market continued to
believe that the strength of the
D-Mark makes a rise in West
German interest rates unlikely
before the beginlng of next
year.
In Stockholm money market
rates were steady after the
Swedish central hawk said it
would raise the official
discount rate to 105 from 95
per cent today. Mr David
Bowers, European Economist
at BZW, said the Swedish
monetary authorities were
responding to money market
movements.
Over the past month, the
three-month rate had risen to
12.7 from 12.1 per cent on
worries about inflatio n and the
East pace of economic growth
whicn had put the Swedish
Krone under pressure, he said.
In New York tbe Federal
Reserve, as expected, did not
conduct open market
operations. Federal Funds were
trading at 8 ft per cent at tbe
usual time of the Fed’s daily
operations, unchanged from
Wednesday.
I tta Mari afford rate for SlOn
kc tarts an Krtloari Vtauntetar
GaaaaffTmL
MONEY RATES
NEW YORK
Traasaryfllllsand Bonds
Prime rate
Broker loan tea _____
Fed. food!
FaLfoatt a ManMtla_
Om monte
Trio mail —
Ufa nnemoote —
9b Sixmoteti —
Bi Oxjar ;
- fom
— 836 Iterator—
761 Fterior
7.92 Flaw —
7.77 Semraar
7.78 linear
784 SHe*
BwmteH
One
MontU
ne
Marita
m
Marita
Six
Mortta
760-7.0
733830
7.93820
7.95-820
8D88J0
9 via .
V
847-850
1D%-10I 2
w
847-850
iSh-UPi
m
lllt-11*
UA-UB
110^24
UBhUl,
LONDON MONEY RATES
°* nrfshl | mUct l Month I Monte I Maris
tateteuik Offer 15 U
tatarbaf* 8 M 14%
Sterling CDs
Local AntAorttj Heps. ... 15
Local Authority Bands ..1
in* fra Bam
Mkt Dtps, .
CLASSIFIED ADVERTISEMENT RATES
Finance Hoase Deposits
Trasnn Bills (Soy)
Bank Bills (Bin)
Fine Trade Bil&lBuy) ..
Dollar CDs.
SDR Linked Dtp. Offer .
SOR Linked Deo. BW ...
ECU Linked Dtp. Offer.
ECU Unfed Dep. Bid...
Treasary 8llb (sell); one-mouth 14H jpar csnW throe mantis
one- mouth 144 . pra cent three roomhs 14# per cant; Traasnry
(flscount 145739 px. ECGD Fixed Rate Sterling Export Finance.
cert; Bank Bills belD;
reran* tender rate of
up UY November JO
Ap pointments
Gomnwctal and industrtal Property
Residential Property
Buafnma Opportunfflea
Businesses For EtaWWantod
Personal
Travel
Cot ai arts 8 Tend era
.1969 . Agreed rates for oerton December J6 1989 to Januanr.23 , 1990, Schama 1: 15.87 p.c.,
Schema fl & III: 16.43 pjl Reference rate forperiod Nov. 1,1989 to NowmberJO , 1989,
Seha ne IWW: 15,148 p.c. Local Authority and Flunce Hoeses savm J * — -
days' fixed. Finance Homes Base Rite '
nice, othen som
Deposit Rates fa-
t . j J ™ H P" DB1L vwiKmaor iu uqmnuvnow, uqiwiii. uw.ww iWia
0 * nria under on* month lLfc per cent." oi Ml i rM montiE 13 per ctft; threMtt momte 13 pc
Far turOKr dauil* write b;
rtnsfe
Pur Bn
col cni
(rnlnj Ones)
(mtaLS ems)
143D
4800
12JSD
4800
1800
8860
MJ50
51.00
1330
4800
1800
3530
1800
3630
1330
4800
table
^Rta30an4
ACROSS
1 Not entirely honest about
nud-mandog rfrhiV (g)
4 The music men's calming,
influence? ( 8 )
9 Get run properly organised
- it's imperative ( 6 ) - -
10 Vnthoot ups and downs in
the main ( 8 )
12 Firm set against a good
man, a compulsive weaker
( 8 )
13 From the outset terriers
were the flavoured breed of
dog®
15 The ^oy taking the wrong
16 He French people put off
wm be most wretched (IX)}
19 State a uter should be used
for social events (3-7)
SO Poetry right far the river (4)
33 Scholars with nervous trou-
ble needed Bomething fining
„ <e>
25 A quarter saw just me way
of investigating ( 8 )
27 Privately, tbeyH make their
, 6 The page doesn’t Uke gs fc
ting tips!
7 The writer, put into the
street appears, .worn-out (5)
8 Spare book CO •
11 Neat ami ontatty, but rather
•; slow (7) ■ • .
14 Soldiers left, to relax whefct
■-free (7)
17 rStlck about five hun-
dred - a thousand .- iu.
being game.{ 9 >
1$ Race isn’t i n v o l ved in tide
case ( 8 )
19 “Try not the PSssP the old
man said; Dark lowers the
— overhead.?? Lont&flow
■'CO .
21 ' Back up -rebel leader,
way-out CO
22 Pat. one container . inside
another if not In use ( 6 )
24 Inflation is .fine for- the,
Americans (5) .
26 The monarch iu a foreign
' land (4) - “TT
Solution to Pnxrie Nh . IM "
28 Keep a pupil in class ( 6 )
29 Liberal constituents rattle
on ( 8 )
30 Weighty jewellery (5)
FINANCIAL TIMES
OM Sorthwifk Srtdoo. London SSI 8 ML
DOWN
1 A course to study Just a lit-
tle CO
2 Country hm - a great break
may be taken here! 0 )
8 Make fl and so get on. ta time
( 6 )
5 In bloom it’s lovely, though
the petals soon drop (4)
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gaasra EDaauuoLjS
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CANADA
Hn mmk M* W dwOwt
bb m i mbw nV ,
ItOBSpV ANSI W) *) ■%*>
ROCXMcoA 80) ®) »H- H
irr&oTCCBw wS ») u)- )
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HOOTntK A *»"*“>
miOTmtti 33 » »- *
nraTtawCor »w4 w) »)- )
MMTprOmM 81) «) *1)
ISO Tor Son 824) W 1 ! 34)
MOO Ttnkr ■ I (as) 8) 38)+ )
ISTbMPal WV 91) 91) ,
KnTmMBa O SMV W) Uh* )
43O0B TiCm PL SIB* W) W) + )
2M0l Trim A S2l) 21) 21)- )
IIOITriMC S3) 8) »)- )
2080 Time A I SX) 8) 8)- )
100 Trine B ET) 27) 27)- )
-houapa nun
3 WO unnm A SB 800 400
snoimoKoBi 400 «o *m+ i
XQUnCvWd n't W) *\* h
219MU£iR9riM 112 11) 12 * )
3744 Un Cora » X) X)- )
4428 wove W si M
XWd YtowAy R 400 4H 446- S
WOO VHM» I IIH «) OV- )
KOOMCBI *u) u) is)-)
tVWMtmd lift) It) l»- )
invmiME 8i) 21) «)* )
238 MM 8) ■) 0)
nQOWMAM XI) 41) 41)* )
MWHtoMA 290 330 2904 3
4000 Nam Caa IS 9 a
i-lli nftg ngw or mMMMWO
fMMrUfc
2736.77 274168 275363 274765 ^
Beat Bias
9364 9 X 57
9 X 59 9 X 41 1
Tiawnf
1213.73 1220 JM 121764 1202351
UtBOa
ZZ 76 B 22886
22 UB 2 Z 780
HK 3 H
LOW
AUSTRALIA
279141
4122
«H (hearts 0 / 1/80
16345
1699.6
1637.1
16464 1781809 / 8 )
man
onm
Ml MM* ( 10 / 80 )
8042
8 Q 2 J
8026
820.7 875 . 1 09 ®
iwtm
oat ttw ao/utse 45251 <J 7 . 9 z « 29 <J 42 x 20 1 szsovai/ia
6387 42 657549 666447 656018
5919 . 3014 / 1 )
36093 US I 2754900
1595.7 mm
3485
561601 / 10 )
1245
12210000
■Y 5 E Conposttt Ml® 19129 19487 19066
Ami MIL Utf* 57583 57488 57486 57558
UkSQAQ CMpotfe 456.67 45 BJB 457 JD
5 — 8 x 908 / 7/647 277000 275639 2764.44 2767.46
73484 CJUB 577.49
69550
139626 BOrU)
1445 J 4 ( 7/123
21658 ( 7 / 12 }
1
IBM
Em B
FMI
BOW
XJ 44 J 0 336951 336652 335751 3919.2 0/9
395186 393984 395266 39 S 865 40378 ( 6/10
3207 JO/1)
395050/1)
THALANO
BmBmIi SET 00/4/759
7725 1 8291
812350 828356 87 DU 5 866585
7 B 3 J 0 18540 (d 77028 I 79220 ( 21 / 11 )
557
84650
268.61
3333.9 0/1)
6135 O/l)
557.7 ( 7 / 12 ) I 487 b 03/61
TOKYO - Most Active Stocks
Thursday Daoember 7 1989
4H
Keep the world
in focus.
For many executives that could be a daunting
task were it not for the Financial Times. The FT has breadth
and depth of vision, an eye for events that are often in shadow and
the ability to provide sharply detailed analyses. In short- it keeps track
of a global economy that's in constant motion.
To order call 1-800-344-1144. In Canada 1-800-543-1007.
FINANCIAL TIMES
14 East 60th Street • New York, NY 10022 USA
airkrt
its sfa>
Cc-cuner-
vsr.TJii
•.Vt'-'-V;
t : f
i ■ JJbi
(lit SHT
< - c
pjrt vt
c:..-.:v
J'scr
-
48
• .-v
FINANCIAL TIMES FRIDAY DECEM BER 8 1W
CVM
UMntfe HBt OOMPTML
Lena Stack Otv.TKLE TDOeHJfJi Mam OxKtaOoee
22%AAR K 39% 35% 3 5%- %
a? WAdintm ii. in 8 > b%- i,
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49
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7 TO B%d 47
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50
WORLD STOCK MARKETS
Friday December 8 1989
AMERICA
Equities continue to drift sideways
FINANCI AL TIMES
US retail stocks prove mixed bag
Wall Street
THE AGONISING sideways
drift on stock exchanges con-
tinued yesterday, with leading
indices narrowly miwij at ndd-
session in low volume, writes
Janet Bush in New York.
At 2 pm, the Dow Jones
Industrial Average was 4.69
lower at 2,732.08 on volume of
93m shares. The Dow had lost
4 SI on Wednesday to 12,736.77.
At midsession, the broad-
based Standard & Poor’s 500
index and the Nasdaq Compos-
ite were marginally higher
while the American Stock
Exchange Index was a little
tower.
The almost exclusive focus
of the market remains the
debate about whether the US
Federal Reserve will lower
interest rates before the end of
the year. It has been a tumul-
tuous time for financial mar-
kets, which have been trying
to second-guess the Fed’s
intentions.
In late November, markets
rallied on the belief that the
Fed had lowered its target tor
the Fed Funds rate to 8 % per
cent from 8% per cent
The Fed then moved aggres-
sively to signal that it had not
eased policy, but markets
remained convinced that the
economy was soft enough for
an waging to he imminent
That conviction appeared to
dissolve on Wednesday when
the Tan Book of regional eco-
nomic reports from Federal
Reserve banks was slightly
more upbeat than expected on
prospects for the economy. The
MYSE volimia
Dafly (mffloo)
200
150
100
1989 Dec
publication of the Tan Book
coincided with remarks by an
unnamed senior Fed official
that he did not expect a reces-
sion next year and that the
prospects for manufacturing
were good.
The bond market continued
to fall yesterday, particularly
at the short end, as hopes of an
easing appeared to dissipate.
Today’s November employ-
ment report is crucial for the
markets, because it provides
another chunk of important
evidence of economic activity
which might make the Fed’s
stance clearer.
At the beginning of the
week, forecasts were for a
fairly limited increase in the
non-farm payroll of perhaps
130,000. However, some ana-
lysts revised upwards their
estimates of the gain in the
non-farm payroll after yester-
day’s news of a larger-than-ex-
pected drop in claims for
unemployment insurance in
the latest weekly figures.
Among featured stocks was
pinnacle West Capital, which
jumped S4% to $10 on news of
an agreement with federal reg-
ulators to pump $450m in cash
and securities the company's
troubled Merabank thrift sub-
sidiary.
Phelps Dodge fell $% to S58
after the company said that it
would take a fourth-quarter,
pre-tax charge of $375m to
reflect write-downs on several
closed mines.
Airborne Freight added $%
to $38% on news of joint ven-
tures with two Japanese com-
panies. Mitsui & Co and Ton-
ami Transportation will
provide $100m in aircraft finan-
cing and buy $40m of preferred
stock.
Champion fntnmatinrial fall
EUROPE
$1% to $30% after news that
the company is selling the
equivalent of an 8 per cent
stake to Berkshire Hathaway,
the company controlled by
Investor Mr Warren Buffett.
First Interstate Bancorp
slumped $3% to S48%. The
company said it was boosting
reserves by S400m in the fourth
quarter as part of plans to deal
with problem assets at its
Texas bank subsidiary.
Inland Steel Industries
dropped $2% to S31%. The
company ha* revised down-
wards its fourth-quarter earn-
ings forecast.
Canada
ADJUSTMENTS BY portfolio
managers to their accounts
before the end of the year
helped Toronto stocks to rally
in light volume by midday.
The composite index rose
18.8 to 3570.4 on volume erf 15m
shares. Advances led declines
by 285 to 21L
Bank stocks rose after the
last of the big six banks
reported fourth-quarter earn-
ings. Canadian Imperial Bank
of Commerce gained C$% to
C$33 % on news of a net loss of
C$I27m after a C$538m loan
toss provision.
Varity rose 4 cents to C$256
on plans to cat 1,000 jobs from
its Kelsey-Hayes oulL
ASIA PACIFIC
Karen Zagor on the prospect of a less cheery season than usual
T HE HALLS are decked
with tinsel, angels and
boughs of holly in
stores throughout the US, but
the retailers themselves are
not convinced that this Christ-
mas season is a jolly one -
particularly after another set
of mostly dull to declining
monthly sales figures for
November.
At Christmas, US stores gen-
erally record one third of their
total sales and make up to half
of their total earnings. But this
year may be different. Seasonal
mark-downs are greater and
more pervasive than in previ-
ous years. While overall sales
figures will probably improve
as a result, price cuts are likely
to cut into profits.
Furthermore, the spectre of
a softer economy and lower
iwnmnwr sp ending is haunting
the sector. Retail stocks tradi-
tionally decline before an eco-
nomic slowdown and, while
there may be exceptions, there
could be some stock market
casualties; ‘The strong will get
stronger and the weak
weaker," says Mr Jack Seibald,
a retail analyst at Salomon
Brothers in New York.
There have been successes.
They include Nordstrom, a
West Coast-based phenomenon
which, with a combination of
high-class merchandise, loca-
theFT-Actu-
Index for US
1989
Dee
tions and decor, has given the
lie to the perception that
department stores are dead.
Nordstrom’s shares have
been trading about 20 per cent
higher than a year ago, and its
prlce/eamings ratio has been
20 pins; this reflects a 17.8 per
cent advance in revenues in
the most recent quarter, com-
pared with 6.7 per cent in US
department stores overall.
At the opposite end of the
spectrum, and perhaps
reflecting caution at the con-
sumer end of the economy,
variety and discount stores
have performed well; their
average share price increase of
nearly a third over the past
year has
aries Worl
stocks.
Within that, the Arkansas-
hased Wal-Mart, which caters
for the bargain-hunter with its
range of discount stores, has
performed exceptionally welL
Sales in November jumped 27
per cent. Wal-Mart’s share
price is over 40 par cent ahead
eff last year, and Us pte ratio is
over 25 compared with about
19 for discount and variety
stores as a whole.
Not all US discount stores
are doing so weD. The share
price of K mart, the world’s
second largest retailer, is
slightly lower over a year,
although November sales on a
comparable store baais
advanced by 3.9 per cent,
respectable in the circum-
stances. These include
K mart’s transition to socalled
“every-day-low-pricing,* intro-
duced to lure customers into
the stores. Profits have suf-
fered somewhat and its jp/e of
about 10 is we& below average.
Traditional US retailing,
which probably needs its
Christmas bonus more than
newer styles of merchandising,
has been shaken by the liqui-
dation of the B Altman depart-
ment stores, and some other
fine old names have been prey
to lesser woes.
Sears, the world’s biggest
retailer of general merchan-
dise, recently reported Novem-
ber sales only 0.4 per coot up
on a year ago while its US mer-
chandising revenues, inducting
catalogue sales, fell L6 per cent
in the month. Its shares have
fallen about 5 per cent in th*
year to date, against a 16 per
cent rise in the US department
store sector. . '
Christmas sales are expected
to increase by between 4 and 5
per cent this year, slightly less A .
than last year’s 5.2. r
O nce, inflation Is.
included, however, real
growth is likely to be
only about 1 per cent “Clearly,
we’re seeing an acceleration of
promotional pressures and that
will translate Into tower gross
margins." says one analyst.
The proposed sale of Bloom-
ingdale’a by Canada's Caxn-
peau Corporation has also rat-
tled the sector. ESoomingdale's
is not an intrinsically weak
operation, but is suffering from
an over-leveraged parent com-
pany. It seems unlikely that
the new year will see many
highly leveraged buy-outs in
US retailing. The leverage has
lost its appeal, as its capacity ;
to exaggerate downswings in pj
corporate performance has <
bwwM* more evident
German volume at peak
as profit-taking resumes
N ikk ei advances despite fall in leading issues
THE spotlight was again on
Germany, although there was
excitement in the financial sec-
tor elsewhere, writes Our Mar-
kets St aff.
FRANKFURT tried hard far
another gloriously Technicolor
day, the DAX radar malting an
intraday high of 1,680.17, up
16.09, and holding it until the
last half hour. But then profit-
taking' came in, and it closed
with a rise of 5.73 to 1,664.08 -
still a record - after a 4.40
gain to 700.14 in the FAZ at
midsession.
However, one record was
comprehensively smashed as
volume rose from Wednesday’s
DM10-3bn peak to a new
DMll.lbn high- A farther rise
in band prices indicated the
fundamental strength of the
economy, and foreign buying
continued at a high level as
Deutsche Bank led the most-ac-
tives list, rising DM14 to
DM754 in turnover of UML8bn.
One target of profit- taking
was Mannesmann, -down
DM9.50 at DM330.50 after a
five-day rise of 27 per cent, on
.confirmation that its consor-
tium had won the Bundespast
cellular telephone licence.
However, Volkswagen contin-
ued to strengthen an its East
European prospects, climbing
DM550 to DM52L50.
In banks, Bayerische Ver-
einsbank shed 50 pfg to
DM386.50 after announcing
lower 10-month operating
pro fi t, a DM390m rights issue
and a co-operation agreement
with the Victoria insurance
group. In retailing, Kaufhof
jumped against the sector
trend, by DM1250 to DM659.50.
as analysts said that it was
undervalued compared with
other retailers.
The energy and chemical
group, Veba, firmed DM1 to
DM366.50 after predicting a 10
per cent rise in 1989 net
income. Veba also said Merrill
Lynch had offered it a 25 per
cent stake in Feidmuhle Nobel
above the market price, but
that Veba refused the offer as
too expensive. Feidmuhle fell
DML50 to DM52550.
PARIS continued to focus on
financials, as Suez took aver
from Paribas as the star of the
day. The latter saw further
sharp pfas before the profit-
takers moved in, leaving it still
FFr6 higher at FFr675.
Suez benefited from interest
in the sector, and from the
view of some brokers that It
was a better, or safer, bet than
Paribas, while the Navigation
Mixte saga drags on. it gained
FFr10.70 to FFr439.90.
Overall, volume was thought
to be around Wednesday’s
FFttJBm, or better. The OMF
50 radar ended off its Mgha at
538.48, up 1.28; the CAC 40
index was up 534 at 1,965.63.
One trader thought there
was little genuine buying, but
instead there was short-cover-
ing by professionals unwilling
to be left out, and business
from others taking . a pre-
Christmas punt. “Some people
are ar parting thin market to
reach 2^)00 on the CAC 40 by
tha anil of tha year,” he aaiH
STOCKHOLM welcomed
moves in the banking sector
and managed to take in its
stride aane-pointrise in 'the
discount rate to 105 per cent.
The Affdrsv&rlden General
index gained 105 to 14-75.2.
Nordbanken surged SKr98,
or 485 per cent, to SKr300 in
active trading after the bank
recommended the acceptance
of a SKrSOO-a-share hid by
PKbahksn, which added SKr5
to SKz95. Ostgota Enskilda
Bank gained SKrl2 to SKrl39
on faiV^ iv^r speculation-
AMSTERDAM featured Ned-
lloyd, the transport group,
which pleased the market with
its forecast on Wednesday
evening of a rise in profits this
year of 56 per cent or more,
above expectations. The stock
climbed FI 350 to FI 90-20.
DSM, the chemical group,
was iq) FI L10 at FI 115.10 after
news it expects an extraordi-
nary gain of FI 300m from the
sale of its 50 per cent holding
in LVM, its plastics joint ven-
ture, to the other partner, Tes-
SOUTH AFRICA
ANOTHER surge by gold
Issues and by industrials pol-
led J ohannes burg higher. Bar-
low Rand, the industrial,
gained R2 to R 44.25 after
reporting a profits rise.
senderlo of Belgium.
A kzo, which held a presenta-
tion in London and also
announced plana to invest
$30m in an Alabama rubber
plant, rose 20 cents to FI 13340.
Philips shed 10 cents to
1147.90 after news of its 60-cent
faitarhn dividend, in iftip with
expectations. The CBS ten-
dency index rose 0.4 to 1874.
MILAN welcomed the politi-
cal advance of a tax proposal
benefiting Montedison, which
rose another L7 to L2.002 as
Bnhnnnt gamed L30 to LI 570.
The Comil index rose 155 to
6^.22 in moderate trading,
b efore today’s holiday.
ZURICH saw steady buying
in swtArtffri blue chips moder-
ated by widespread unease
over domestic interest rates.
Bargain hunters with a taste
for Nestle, Alusnisse. Sandoz
and Roche left the Credit
Suisse index 35 higher at 628.6.
BRUSSELS closed ratrpri in
active trading, with tha rush
market index up 11.93' at
6,587.42. UCB, the chemicals
group, jumped BFrl^OO, or 9.7
per cent, to BFi21,475 as take-
over speculation continued
Socidtd Gdnerale de Belgi-
que, the holding company, rose
BFr30 to BFr3,500 after
announcing a merger of its
principal non-ferrous metals,
businesses.
MADRID came back from
one holiday and edged lower in
thin volume before another
holiday today. The general
index shed 059 to 30456, but
the food sector remained in
demand, with Tabacalera up 3
p oints to 827 per cent of par.
HELSINKI saw the Unitas
all-share i n dex ease 55 to 6215,
but free shares made good
gains. Seven of the 10 most
actives were free shares, with
Union itanit of Finland’s class
C gaining FM150 to FM31,
Nokia's preferred free adding
FM9 to FM97.50 and Amer’s
free As rising FM4 to FM159.
COPENHAGEN was mixed
again, with rises by some
industrials cancelled out by
further banking losses. FIS
Industries gained DKr46 to
DKi748 on news that its sub-
sidiary, cement machinery
maker FL Smidth, had bought
US rival Fuller Co.
CAUTION and profit-taking
took their toll of leading issues
yesterday, but arbitrage buy-
ing pushed the Nikkei to its
fourth consecutive high, writes
Michiyo Nakamoto in Tokyo.
After rising more than 100
points initially, the Nikkei
average fell hack by early
afternoon as investors looked
at and worried about the High
level of share prices. However,
several bouts of late a r bit r a ge
buying pushed the Nikkei up
by 20352 to another record of
37,85841, -which was also the
day’s high. The low was
3754953.
Volume slipped to 944m
shares from the L2bn traded
on Wednesday. Advances led
declines by 554 to 373 with 212
rmp.hawgpd The TopiX hidex of
all listed shares rose 1L70 to
2579.02 while, in London, the
ISE/Nikkei 50 index added 154
to 2,16834.
The strong gain in the Nik-
kei was not an accurate reflec-
tion of what happened yester-
day, said Mr Masami Oknma at
UBS Phillips & Drew. Although
the leading index was up
st r ongly, many of the issues
which have been leading the
market’s recent rise, such as
steels and real estates, took a
beating.
Among steels, Sumitomo
Metal Industries, most actively
traded, lost Y12 to Y918. Other
big companies on the retreat
included Mitsubishi Heavy
Industries, off Y4D at YI48O.
Kobe Steel, however, managed
to sustain its uptrend and
added Y7 to Y877 in active
trading:
The retail sector, which pro-
vided a bright spot in early
trading an consumer spending
data, saw losses later. So go
climbed Y70 to Y2.160, before
dosing unchanged at Y2.Q90.
Wednesday's interest in lag-
gards and low-priced Issues
suggests that the market has
come full circle, said Mr
Okuma. In a round of selective
buying, when everything that
needs to be bought has been,
investors begin looking at
those that have been left
behind. ■
Yesterday, buyers went for
the last of the laggards, Nippon
Telegraph and Telephone. NTT
has been shunned on worries
that the company could be
split, and its return to favour
suggests that investors are lost
FT-ACTUARIES WORLD INDICES
Jointly compiled by The Financial Times Limited, Goldman, Sachs & Co., and County NatWest/Wood
Mackenzie in conjunction with the institute of Actuaries and the Faculty of Actuaries
TUESDAY DECEMBER 8 HUS
DOLLAR INDEX
Figures In parentheses
show number of stocks
per grouping
US
Dollar
Index
Pay*"
Change
It
Pound
Sterling
Index
Local
Currency
Index
“•sar
currency
©CM
Dhr.
Yield
US
Dollar
Index
Pound
Sterling
Index
Local
Currency
Index
1888
High
1989
Low
(anmx)
148.74
+ 05
13952
12653
+0.1
5.38
148.29
139.99
12855
160.41
12858
144.67
Austria (19)
155.18
+ 25
146.92
14359
+ 15
1.70
15Z67
144.13
14154
17252
9254
97.04
Belgium (63)
+ 1.0
141.11
137.43
+05
lr Mg
148.57
14056
13751
150.00
125.58
131.17
Canada (122)
15043
+ 0.4
14151
126.47
+05
352
149.79
141.40
126,14
154.17
124.67
121.74
Denmark (36)
237.06
+ 1.0
223.01
+ 0.1
1.43
234.68
22154
220.63
237.06
16555
156.67
127.71
+0.7
120.14
111.63
+0.0
12656
119.76
111.63
159.16
11853
13651
147.05
+ 1.4
13853
130.09
+0.8
2-68
14458
136.88
137.33
147.05
11257
10950
L 1 - 1 ' - 1 1 1*1 it nW*
111.05
+25
K23
10150
+ 1.7
zos
10247
7958
86.78
115.91
-0.4
109.04
11859
-05
11853
109.81
116.60
140.33
86.41
111.44
Ireland (17)
171.45
+ 15
16159
+ 05
Z74
168.19
158.77
171.45
125.00
13151
Italy (97)
92.85
+ 05
8756
9058
-0.1
253
82.64
87.45
00.43
96.73
7457
83.71
japan (455) ..
197.73
+0.4
18851
170.73
+ 05
0.45
19658
18556
17854
mjjiau
16452
18959
Malaysia (36)-
211.27
+0.4
198.75
220.06
+ 0L4
Z41
210.35
19857
21952
211.27
14355
140.12
288.09
-05
271.01
83658
-1.1
0.62
290.67
274.40
84656
326.61
15352
171.76
138.91
gffgj il
12850
12458
-as
458
138.83
129.17
126.15
13651
110.63
109.62
New Zealand (18)
74.94
-15
7050
67.17
-15
55 2
7555
68.09
88.18
6254
87.40
Norway (24) —
18558
+25
174.40
17059
+ 15
1-60
181.46
187.73
198.38
13952
1275S
Singapore (26)..-
169.62
+ 0.4
15957
151.84
+ai
1.98
16857
1S9.51
15152
170.62
124.57
1 19.27
South Africa (60)
176.19
+ 15
165.75
1SZ53
+ 15
3.75
17358
163.86
16057
176.68
115.35
123.62
Spain (43)
+05
15059
138.74
+ 0.0
3.78
159.11
15050
138.74
169.75
143.14
14656
Sweden (35)
171.97
+ 15
181.78
16158
+a7
Z12
169.70
16050
160.15
18854
138.46
141.13
Switzerland (64)
9254
+ 0.1
8657
+ 0.0
Z08
9253
8757
9059
94,16
6751
77 9?
United Kingdom (304) —
15094
+ 1.4
142.00
+ 1.1
4.35
14850
140.47
168.41
13358
136.11
USA (544)
141.37
-05
13259
14157
-05
350
141.70
133.77
141.70
14659
112.13
11350
Europe (993)
13454
+ 15
128-29
12457
+05
357
13253
125.11
123.96
13454
11Z63
Nordic (121)
175.13
+ 15
164,75
15652
+0.5
1.81
17ZS7
16359
156.16
178.38
13755
Pacific Basin (668)
19Z71
+Z4
181.29
175.15
+ 0.5
0.69
191.93
181.19
174.34
194.72
160.44
189.43
+0.7
15959
+05
1.55
16856
158.84
15450
169.43
14158
j .|i i jWjj 1 1
141.81
133.41
140-43
-05
359
142.09
134.13
146.66
11Z79
12258
+ 15
115.60
11457
+0.6
2.71
121.43
114.84
11358
12258
96.30
=»»», Upi
13Z67
WI'I'W
124.80
118.72
-0.1
456
132.62
125.19
11858
14055
11153
i ffit [• 1 J JP k 1 1 ( ■*
16851
15850
16451
+0.6
187.75
15856
16851
141.49
World Ex. UK (2096)
158.72
+05
14958
150.71
+05
1.94
15654
14958
158.72
136.96
mlLM
14854
14955
+ 05
2.14
15758
148.47
14959
157.90
13657
139.10
+ 04
130.68
134.45
+ 05
359
138.58
13451
140.43
11451
The World Index (2400)...
158.00
+0.4
14854
14956
+ 05
Z15
15758
148.57
149.39
168.00
13658
11359
135.41
184.81
15656
113.64
9954
124.10
154.74
13955
138.87
114.17
138.77
Copyright, The. Financial Times Limited, Goldman. Sachs 6 Co-, and County NaiWeat Securities Limited. 1987
Latest prices were unavailable for this edition. Markets dosed December 6: Finland and Spain. .
for ideas. NTT rose Y70500 to
Y1.49m. Other laggards in
vogue included Nflckatsu, the
film producer, up Y17 at Y710
an d third in volume terms.
The more cautious analysts
are now pointing out that the
adverse factors which plagued
the mark et in the mtmwn were
stDl aro und. H w ranr-vat does
not want to recognise that
there is a huge disparity
between equities and bonds,
where yields are more than 55
per cent and moving upwards,
said Mr Jonathan McClure at
Schroder Securities. The yen
was also lower against the dol-
lar.
In addition, the discrepancy
between the Nikkei index and
the 25-day moving average,
where 4 per cent is considered
the Hangar zone, r eadie d 35
per cent on Wednesday, sug-
gesting that the index was
coming close to being over-
bought Yesterday, the gap
moved to 45 per cent
On the other hand, the 200-
day moving average, which
gives a longer term perspective
on tile index, was at a 1057 per
cent discount to the Nikkei,
still safely below the 12 per
cent level that is considered
high.
Osaka hit its 13th record yes-
terday, as the OSE average
rose 9759 to 38545.07. How-
ever, volume fell fr om 119m to
102m shares. Kobe Steel
showed strength with a Y19
gain to YB78 in heavy trading.
Roundup
A VARIED volume picture
presented itself across the
region, with Singapore very
busy while Australia end Hong
Kong suffered a continued
stomp in trailing . Manila’s two
stock exchanges are due to
reopen on Monday after a
week’s closure because of the
attempted coup. ~
SINGAPORE H*n an active
day, but the Straits Times
industrial Index ftnhthari little
rhanged as profit-taking set in
after 16 rising sessions and
took the edge off eariier gains.
The index closed 241 better
at 1,44554 as turnover rose to
129m shares worth S$284m,
from 94m and S$220m. Among
fast rises, Jurong Engineering
climbed 68 cents to S$4. '
KUALA LUMPUR was
pushed to a record cm after-
noon buying interest, the com-
posite index adding 3.40 to
52355 in active turnover. Senti-
ment was helped by Tokyo’s
susta ined rise.
AUSTRALIA saw interest
fade away, as the All Ordi-
naries index lost 54 to 1,6345.
Volume was still low at 104m
shares worth AH57m against
93m worth A$l69m the previ-
ous day.
There was a sparkle of life In
the gold sector, as Dominion
Mining rose 8 cents to A$L88
on rumours of a takeover by
Poseidon. up 2 cents at AS255.
Bond Cocp recovered 5 cents
to 20 cents and Bond Media
rose 5 cents to 17 cents after £
Wednesday's sharp fails. But
Bell Resources was off 5 emits
at 40 cents, raising speculation
that prospects of a takeover
bid had faded further.
HONG KONG had Its best
rise for two ami a half weeks,
with the Hang Seng index gain-
ing 13.61 to 2.770.00. Volume
remained thin at HK$560m,
compared with Wednesday's
HK$461m, which was the sec-
ond lowest this year.
TAIWAN pursued its down-
ward course, the weighted
index losing 16056 to 842350
in continued law volume.
These Securities having been sold, this announcement appears asa matter of record only.
PINAULT
FF 1,000,000,000
Issue of Bonds
with Redeemable Warrants attached
Issue by way of Rights to Existing Shareholders
FF 700,000,000
Banque Nationale de Paris
Caisse des Depots et Consignations
Credit Lyonnais
Barclays Bank SA
Banque lndosuez
Soci&te Generate
Banque Generate du Phenix
Banque de Gestion Privee-SIB
LazardRreresetCie
. Banque Pallas Ranee
Credit Agricole Credit Industriel de I'Ouest - C.I.O.
La Compagnie Finanriere Edmond de Rothschild, Banque
Banque Rnancaise du Commerce Exterieur Credit Chimique
International Placement
FF 300,000,000
Credit Lyonnais
UBS Phillips & Drew Securities Limited Enskilda Securities Skandinaviska Enswwa Limited
Amstetdam-RotLadam Bank NV. Banque lndosuez 8arclqys.de Zoete Wedd Limited
Bean Steams International Limited BNP Capital Markets Limited CtanrruirzbankA
Credit Suisse First Boston Limited Goldman Sachs International Limited Kteinwort Benson Limited
Merrill lynch International Limited
Credit Lyonnais Securities
•September 1989-
1
N
T.
,1>8S&
My
§|
;■■'■ iw<j
**4&
. : y ^;
'••>A
>giss
JOBS
Where the real need lies for counselling
By Michael Dixon
Change ten decimals
into a fraction.
Aaaaaaaaaaahhhhhtihhhhh!
is my reaction.
THAT VERSE by young 1
Deepak KaBia leapt to
the other day while the Jobs
column was paring over a
survey report* on the use of
oatplqnfimafli consultants.
It is true that there was
Tit tle to defrost let alone heat
the blood in the first few
pages- T hey just chronicled
companies* growing habit of
hiXtQg exte r na l «wwnltanH»x
to ease unwanted staff’s
departure and, hopefully,
speed their re-employment
by some other outfit.
Thentbere tottered forth
a sentence-, which set -the
corpuscles fawtumti y sdxdL It
said that over half of the
148 companies surveyed "call
in outplacement consultants
to counsel employees 1 In
situations . where work is
suffering because of personal
chemistry problems; and
nearly half of aZI- companies
using outplacement provide
counselling for employees
who have reached a career
plateau. 1 *
My reaction to that went
beyond the poet's to the
* Outplacement practices of
major companies in the UK.
Drake Beam Morin, 5 Arling-
ton St, London SW1A IRA.
somewhat loosely defined
problem of arithmetic.
«$*&■*¥$• •!”
I yelled, in ♦ redoubled -
and for two distinct reasons.
Jlhe first is what must be
the most inept use to date of
a piece of recruiters’ jargon:
“personal chemistry".
Not only do they bandy
the term about, but some
claim to understand what-
ever it stands for well
enough to gauge it As they
cannot state the formulae by
which they do so, they would
be fairer to call it “personal
alchemy” (“personal fit”
would he yet better). Even
so, I have hitherto let the
tow pm unhindered.
But the trenches most be
dug when it starts to appe ar
in phrases like: “work is
suffering because of personal
chemi stry pro blems ." In th at
case, if anybody needs to be
called in, it is not a ca reer
counsellor. If s a performer.
Worse stm. to my mind, is
the implication that such
counselling is needed by
people who have reached a
career p infawm.
On the face of it, that
would seem to mean they
have risen as high up the
ranks as their justify,
which in turn implies that
they are already doing- thu
best work of which they are
capable. If so, it surely ought
to be quite the reverse of a
problem.
After all, there are few
better states any of us might
hope to attain in a lifetime,
ideally we should strive not
only to reach it as early as
we can, but to carry on in it
as long as possible. What
better could companies hope
for, too, than to have all of
their employees operating for
the maximum ttm a at their
optimum productiveness?
Now I know that the ideal
just expressed is at odds with
what actually goes on in
organisations. But it is an
Ideal that is «ftgn less soft-
headed than the practice.
What is really meant
when people are said to be on
a career plateau is usually
that senior management not
only thiuka they are unfit to
rise farther up the pecking
order, but wants to appoint
anoth e r person to the perch
they occupy now. Hence the
implication is that their most
marked ach i e v emen t in their
present job is to block the
promotion of somebody else
thought worthier.
If that is true, then
(unless they have broken
down physically or mentally,
and so are in need not of
career counsel but remedial
treatment) it is unlikely that
they can be doing the best
work they are capable of.
Even if they were, the fault
would belong less to them
than to the bosses who
put them in their present job
in the first place.
Either way, the moral
seems plain. You show me an
organisation whic h calls In
outplacement consultants to
deal with personal-fit or
career-plateau problems, and
m show you a set of senior
managers who are fall fag to
make the best use of their
human resources. And it in
they r ather than people OQ
the lower pl «t ah™ who are
in need of counselling.
In many cases it might
most usefully be of the
psychiatric type. For the root
of the trouble seen s to be a
delusion on top executives’
part that an organisation’s
success depends more on folk
deemed fit to fly higher than
on those already fulfilling
their maximum potential on
Hip ground.
Space race
WWIT.R we’re on about high-
flyers, the announcement
that the hunt for Britain’s
first astronaut has been
na r ro w ed down to just two of
thft initial 13,000 applicants,
may have reminded some
readers of an objection this
column raised when * the
search began in July.
What miffed me was the
arbitrary rule that nobody
over 40 would be considered.
1 pinned the blame on the
Antequera company dealing
with the British end of the
UK-Soviet space project, and
its recruitment consultants
mst . international.
I have since learned from
Air Vice-Marshal Peter
Howard, who headed the
selection process, that
neither of th«»m was the main
culprit They were ready to
consider people aged up to
45, he said - which is at
feast a bit better. It was the
Russians who insisted that
the limit must be 40.
Perhaps, now Messrs Bush
and Gorbachev have agreed
that the cold war Is over,
the Soviets might wisely
follow the Americans in
banning peremptory age
discrimination. So, for that
matter, might the British
all the rest of the still
purblind nations.
As far as other sorts of
prejudice go, feminists can
hardly complain. The i-hntw*
of Miss Hel en shaman and
Major Timothy Mace as the
fin a l pair means women’s
representation has improved.
They made up barely a third
Of the Initial witwmK
Nevertheless there is a
factor which should cause
concern. Since in the first
instance applications were
made by telephone and the
recruiters asked only a few
questions about height and
education as well as age.
nothing is known about the
broader background of all
13^)00 who initially applied.
But far more data was
gathered an the nearly GJOOO
of them thought suitable to
go through to the second
stage of the process. And Air
Vice-Marshal Howard tells
me that not a stogie of
them was coloured.
Property
REGKUTFER Paul Werth of
Kay Executive Search seeks
a property investment and
development director for a
Londo n company be may not
name. He promises to honour
applicants' requests not to be
Identified as yet to his client.
With emphasis at first on
the investment side, the job
entails examining market
trends to find opportunities.
f raming prn pfwala nwl wriTing
them to likely joint-venture
partners, appointing project i
managers etc; and selling or ;
letting the aid results.
Candidates should have a
record of success In similar
work showing commercial
flair and acumen, and skill at
conceptual thinking.
Salary up to £80,000 plus
profit-linked bonus, and car.
Inquiries to 1 New Bond
St, London W1Y 9PE; tel
01-493 7232, fax 01-499 6015.
Senior FX
Dealer
lb £70,000
Our client, a leading European name, is seeking
to strengthen, its already substantial L ond o n
dealing presence.
Applicants, who are likely to be working Cor a
major bank, should be in their mid twenties to
early thirties and have a minimum of four years*
experience trading major currencies.
Bar the right candidate, this opportunity offers
excellent career pro sp ects and our client will
negotiate a very competitive remuneration
package.
Interested applicants should contact Arabella
Goodfbrd or Kate Griffiths on 01-831 2000.
or write to them at Michael Page City,
39-41 Parker Street, London WC2B 5LH.
Michael Page City
International Recruitment Consultants
London Paris Amsterdam Brussels Sydney
y/'f'/s 'M -'i ■' :%:•!?< rtf’ v&v iM
. ; y/.y //'//, ; */.' y. ; ' 'y/, />/. "'//"A s'/'y. y.v/ ,'///, ,\/y • •' 'S'/,, • 'y/s //'// '/>/,>
Scandinavian Research
Exciting opportunities in a growth area
Svenska International Equities is continuing its expansion in the
Nordic equity markets.
Sales and trading require first class research and we are looking
for experienced analysts to complement a young, growing team.
Two to three years' experience is seen as the minimum and
there are opportunities at varying levels within the department
Candidates with appropriate language skills wffl be of particular
Interest blit the most important criteria are the personal qualities
of enthusiasm and creativity coupled with the ability to work
within a close-knit team. The salary and benefits package has
been geared to attract the best
Please send fufl career derate (from principals only, please) to:-
' ' ^ifSik ■ Judy Welch •
M'JIHt- Senior Manager, Personnel
" " "V-” ' SvenskalntemationaJ pic
; Svenska House
3-5 Newgate Street
SVENSKA London EC1A7DA
Amember ofthe Svenska Handokb an kon Qmup
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JAPANESE EQUITY DERIVATIVES
' Sales Arbitrage
AAA Rated Attractive Package
Our dient^ the Securities Division of a AAA rated European bank, is currently
expanding Hs Japanese Equity Derivatives operation.
Based in London, with offices In Tokyo and New York, our client is servicing a
high quafity worldwide dient base with Japanese equity related products.
As part of their firm commitment to the Japanese equity market they intend
expanding theirteam considerably in the early part of next year. Our client is
interestedin meeting individuals with at feast 18 months safes experience in
Japanese equities or related products. As part of their strategy they are also
interested in meeting individuals with a sound understanding of arbitrage
The Securities Division services a demanding dient base. Hen ce our efient is
only interested in meeting individuals of the highest quality who have the
necessary attributes and characteristics to succeed in this stimulating and
a ggre ssive environment.
for a confidential discussion and farther details on this opportunity please
caff Michael Brennan or John faulknec.
FOREIGN EXCHANGE CHIEF rffiAnrp
SPOT DEALERS
DOES YOUR INCOME TRULY REFLECT YOUR
PROFITS 7
DO YOU SHARE Pf THE PROFITS YOU
generate ?
Our client, a major International financial
institution with a well established Interest in the
Middle and Far East, are expanding their
operations in Europe and the Middle East.
On their behalL we are seeking to recruit:
* an experienced CHIEF DEALER aged 30-40
currently employed by an International Bank, with
a profitable track record, ambitious, seeking
recognition and Substantial Reunmds for a better
and more secure future.
* SPOT DEALERS with a minimum 3 years
experience with an International Bank, trading in
major currencies, ambitious.. highly motivated and
demanding better rewards.
.Remuneration package Is highly' competitive a wl
wifi reflect your experience PLUS a unique pxafit-
shartng scheme baaed on you own profit*.
In pw mp irfw confidence
details toe
please. send piU c a reer
Box A1399, F i n a ncia l Times.
One Southwark Bridge. London SE1 9HL
EUROMONEY
4
Business Development Managers
Ear am on ey - the world’s l e a d in g fin a n cial publishing and
information company is seeking a number of executives who will
information company is seeking a number of executives who will
be e xp ected to develop and market some of their existing
products to Banks, Corporations and Financial Services
Organisations.
Candidates should ideally have worked in a financial
organisation and be familiar with modern firumeiwl disciplines.
They will be highly motivated, energetic and organised
individuals. The job involves overseas travel. An ability to speak
foreign languages will be an advantage. An attractive
commission remuneration packa g e in addition to salary is
available.
Applications in writing to:
Diamt! C hapB m, Director of Pentmmd
Earomomev PmbHeations PLC
Nator House, Playhouse Yard, loadon EC4V SEX
Head of Finance and Administration
Financial Services
c.&35,000 Package City
An exceptionally su ccessful Leasing and Corporate Finance
house, whose Directors concentrate on client related work, needs
a first ytow Adminis trator Accountant to handle all support
services with a high degree of au to no m y.
THE COMPANY
O En tre preneurial international trig ticket lease packaging and
corporate finance advisor with outstanding professional reputation.
O Highly profitable part of fast -growing, publicly quoted financial
services group.
O E ntr epreneurial, friendly, non -bureaucratic culture.
THE POSITION
O Finance and Administration Manager with full r esponsibility for
all financial and management accounting.
O Management responsibility for all support staff and all
administrative aspects of the business.
O The Job is to understand the Directors’ business and ensure that
they have every facility to transact it
QCALinCAnONS
O Bright, prefe r ably qualified Accountant, with several years
experience of financial administration.
O Strong commercial aw are ness and management skills.
O Presence and maturity to deal directiywith the dynamic Directors
of the business.
THE REWARDS
O An important management job paying an attractive base safer};
boons opp or tunity, car and private medical insurance.
Please reply In writing, enclosing full or.
Reference BH-4867
/v WtS, Cnnrt, A RrnnftW Hflt, Rlrmlnphani R2 AST.
. N-B \
LECTION
S. LTD /
BIRMINGHAM -02 1-233 4656
LONDON • 01-493 3383 - HOUGH - 0753694844
GLASGOW ■ M1-2M ■ HONG KONG ■ (HE) 5 2171 »
COMMODITY
K«TTDf7
Our dient, a major international London bused commod-
ity house, is seeking a trader for their oflseetb/vegc table
oOs division.
This posi t i o n, within ■ rapidly ex panding professional
team, offers ncellent prospects to someone with 2 or
more yean trading experience in these or other products.
Salary negotiable and comprehensive benefit package.
Please contact Ken Jacob, London.
TH. 44 - 1-439 1701 Fax. 44 - 1-734 0275
FX MONEY MARKET
Required for man/growing City
Commercial Bank. Minimum throe
year* experience in all aapecu of
%'ff h itfyy
Pf
m
at
: 0/>r
■t*<.
Where will you be m 1990?
Derivative Products Credit Analysis
c. £40,000 +. benefits To £25,000 + benefits
A number of our clients arc currently looking Are you young and ambitious, but feel that
for graduates in their mid 20’s to fill newly your potential is not being fully developed?
created positions within expanding areas of Our client, a major US investment bank, is
their capital markets divisions. At one end of looking for an analyst to provide back-up to
the spectrum a major UK player is looking for their Corporate Finance Department- You
an experienced individual to join their risk will be aged in your mid 20’s and have an
managemen t t eam. The successful candidate excellent degree. Added to which will be the
will have highly developed quantitative first class credit training you have received
analysis skills, excellent technical, product since graduating.
knowledge — swaps, swaptions and interest ^ rhfe stage in your career you will be
rate options — and in addi ti on a strong, reviewing the medium to large UK corporates
co nfiden t personality. and have the opportunity to hone your
At the other end, an American investment existing skills as wdl as develop new ones, as
house is looking for a dynamic young you provide total back-up to the deal
candidate, experienced in the whole range of originators from mandate right through to
capital markets products - with emphasis on completion. The ability to speak a European
der i vative s - to market their products to language is desirable but not essential,
corporate and financial institutions.
For details of these and other vacancies please contact Joe Rally or Jutie Byfoid on (01) 583 0073
(day) or (01) 540 9340 (evenings and weekends), or send your CV in complete confidence to:
16-18 New Bridge Street, London EC4V 6AU. Fax (01) 353 3908.
BADENOCH 8XLARK
recruitment specialists
FINANCIAL TIMES FRIDAY DECEMBER * 1989
ifplli
©
ms
SWAPS BOOK EXPERIENCE?
With substantial boxms + benefits
We have been instructed by a major UK
investment bank to recruit a young manager
to run their DM Swaps book, with the
probability of additional responsibilities in
tandem.
Although DM experience is preferred it is
not viewed as being absolutely essential.
However^ the individual will have gamed at
least two years direct experience in the
Swaps market and will be computer Hteratc.
The incumbent should have stron g personal
as well as technical skills as they will be
expected to drive the teanris direction and
expansion for the future. Equally important
is flexibility of approach, essential to ensure
a fast reaction to the changing n ee d s of the
marketplace.
For details of this opportun ity pleas e conta c t
Jnfie Byford or Joe Reilly on (01) 583 0073
(Day) or (01) 540 9340 (Evenings and
Weekends), or sendyuur CV incomplete
confidence to:
16-18 New Bridge Street, Bhckfriaza, London
EC4Y6AU. Fax (01) 353 3908.
BADENOCH &X2LARK
recruitment specialists
la a wA « am* \
«v T > f;VfJ
EDINBURGH EXCELLENT SALARY AND BENEFITS
Capita] House Investment Management Limited, the
International invest management arm of The Royal
Bank of Scotland Group, cmranfiy manage over £2 billion on
behalf of unit trust; institutional funds and private clients.
We widi to recruit an experienced Investment Manager to
join our private diem operation based in Edinburgh, to
manage existing discreti ona ry portfolios together with the
opp o rt uni ty to develop new private client business.
We are seeking applications from candidates with several
yean relevant investment experience with professional
qualifications.
As an expanding an ambitious company we o ff er excellent
opportunities for professional career development.
In addition, the successful candidate will enjoy the usual
benefits commensurate with working for a large financial
organisation.
Please write in confidence to:
Ian Mackenzie Director
Capital House Investment Management Ltd
Fo u r t h Floor, Capital House
2 Festival Square
Edinburgh EH3 9SU
CAPITAL
HOUSE
Tfcelaw minm mn n i gm i m nnoT
Tlx Boyd Bank of ScodaadGroop
Investment Consulting
O
Pension Fund Management
An Opportunity To Develop aNew Service
■ W perating In fifteen countries worldwide,
Hewitt Associates provide help and
advice to a wide range of clients in the design and
management of employee benefit, remuneration
and human resource programmes. Increasing
demand for their services has created an
outstanding opportunity for an exceptional young
and talented consultant to start and develop the
Investment Consulting function of their UJL.
office, based in St Albans.
Following an initial period with the investment
consulting group in Chicago, the role will be to
develop the firm's strategic consulting capability
in die U.K. This will include establishing
philosophies for comparative performance
measurement investment techniques and
investment manager selection. Working as a fee
earner m his ot her own right the person
appointed will be the leading influence in shaping
the required organisation, marketing its services
and, ultimately, determining its profitability.
In addition to having sound technical skills, a
good knowledge of thepensionsindustry aiidof - ’•
asset planning, the successful candidate will be ...
outgoing and an excellent communicator, with
the ability to provide and maintain the highest
standards of service. He or she will enjoy being
part of an intellectually challenging and
professionally stimulating organisation.
The culture of the firm is supportive and nan*
hierarchical, giving the highest priority to
cooperation and team effort This is complemented
by their attractive offices, located in an original
Georgian property in a local conservation area.
In return for ability and commitment, a highly
competitive salary will be negotiated. The
package includes a car and a non-contributory
pension, and allows for choice from a variety of
other benefits. A bonus and deferred compensation
scheme is also in operation. Future prospects are
assured; the firm is growing, additional offices are
planned and real opportunity exists to become a
Partner in due course.
For a confidential discussion concerning this
opportunity, telephone David Jones during office
hours on Windsor (0753) 857181; evenings and
weekends on Reading (0734) 482370.
Alternatively, write to him, ih confidence, at
Digby Moore Associates, Mountbatten House,
Victoria Street, Windsor, Berkshire SLA 1HE.
Fax: 0753 860696.
DIGBY MOORE ASSOCIATES
• SEARCH-SELECTION*
As one of the leading UK and International Banking Groups our dient is renowned tor the provision of corporate
financial services worldwide. The specialist Leasing Division concentrates on complex high value domestic and
international transactions with the flexfoility to act as both princpal and advisor. Committment to the development of
this innovative unit has resulted in the creation of two additional appointments:-
SENIOR MANAGER - INTERNATIONAL
c£45,000 plus bonus
The ability to identify cross border leasing opportunities
and the technical creativity to formulate complex financial
structures will enable the successful applicant to operate
as a senior member of this highly professional team. It is
envisaged that the ideal candidate will currently be
employed at senior level within a leading international/
merchant bank, packager or treasury division of a major
corporate.
Aged 30-42 years, he/she wffl possess proven negotiating
strengths and combine 4/5 years experience of domestic
and cross border activities with significant exposure to
complementary friandal products- namely cepteti markets,
project finance, export finance, etc.
MANAGER - RESEARCH & DEVELOPMENT
c£30,000 plus bonus
Toassistthe UK and International marketing teams an in-
house research and development unit has been
established. Ah^innovathreprofesstor^ issous^t
whose current involvement in financial p roduct
dowolopmont has resulted tigmasoundtBdrt^qmut^^
in asset finance. The role wffl encompass the provision
of related tacalion/accounting advice, and the devetopnent
of new big ticket products.
Applicants, aged 27 to 34* wffl have at least toree years
experience of structuring cxxnpleKtiareacAions, negotia^
contract terms and formulating toe associated
documerttatioaTocomptemerttoeairTentteam structure
a qualified lawyer would be preferred
For each position the package Encfudes performance related bonus and toll banking benefits.
Please contact Jill Backhouse, Director In strict confidence.
LONDON
HONGKONG
MIDDLE EAST
SINGAPORE
SYDNEY
Recruitment Consultants
No. 1 New Street, (off Bbhopsgatc), London EC2M 4TP
Telephone: 01*623 1266 Fax: 01-626 5258
,v .. i" .
Portfolio Strategist
London
Attractive Salary + Benefits
My client is responsible for marketing
sophisticated investment strategies to institutional
investors on a global basis.
In response to demand from institutional
inv esto r s worldwide, they seek a Fbrtfolio
Strategist for their London office to monitor
trends in financial markets and to develop and
refine portfolio strategies for i nvestor s in the UK,
Continental Europe and the Middle East. This
will involve giving presentations for the press and
for investors, defining alternative investment and
hrdgrng strategics and developing and
maintaining strong links with the
institutional investor community.
Candidates will be expected to demonstrate a
good understanding of modem portfolio theory
and financial economics and will hawe a
minimum of two years* experience as a corporate
economist, investment analyst or similar. Given
die pan-European nature of this challenging role a
second European language would be a distinct
advantage although is not essential.
Kyouwmuld.be interested in. pursuing fids unique
opportunity please contact Charies Ritchie on
01-831 2000 ot write enclosing a fiill •
curriculum vitae to Michael ftge City,
39-41 Parker Street, London
WC2B5LH.
Michael Page City
International Recruitment Consultants
RESEARCH ANALYST
Up to £40,000+Car+Bomis \^fest Midlands
Ourdiect is a dynamic and prq g »e ssi ve|>IcinflieBiiildiqg Mate ri al s Ind us tr y. Growth has been substantial,
rrrg-imiraUy nnri iHrrigh argil rehiri , Bnri a,* muring ptam* tr> nwtam flnri cnwmna thi* A* part rtf
these plans, they now seek to appoint a Research Analyst.
Reporting to fee Executive Chamnas, year brief wffl be to research, analyse and assess businesses and products
which are compatible with the company's easting portfolio and ugpld thereby contribute significantly to the
company's steaKgic growth plans. Writing closely with the Financial Director; yon win be responsible for
presenting this information » toe main board and assisting in estabtishmg the company’s blueprint for growth.
The successful applicant win have a proven trade record in acquisition analysis, possessing above average
research experience. A knowledge of 6* Building Materials Industry or related businesses is preferable.
Qualities of confidence, seif motivation, tenacity and good communic atioo skills are esse ntial .
The position oflers an eacitiqg oppo rtun ity for both personal career and company development and tire
imp ort an ce of this role is reflected by a hiffiy co mp et i t iv e salary and benefits package. Assistance with
relocation will be provided where necessary. Please apply, with fen career and sahny history details, quoting
reference B/247/89 to David Gibbs.
JyW^Peat Marwick McLintock
Executive Selection
Peat House, 2 Cornwall Street, Birmingham B3 2DL
«* r*': •:
M -..TV- m P&m®
soon
BR 0 WNRK 3 G
&RJRNER
PARTNERSHIP SECRETARY PESIGNATE)
Circa £22,000 + Car
Scott Brovmngg and Turner is a highly successful property matters, insurances, and management systems,
architecture plannui^ project management and interior Although working when required with minimum
design practice with i offices in the UK and Europe, and a supervision, you should enjoy operating as part of a
commitment to high quality work with attention to fine team. A Legal or chartered secretaiial^alifi^tlon would
det5 ir T1 . „ ... ... he an advantage, as would a legal or commercial
Following recent expansion through acquisition we background.
intend to maintain our competitive edge inthefield. Dueto Besides the prospects of a challenging professional
promotion we now require a Partnership Secretary, to environment and career advamenKmTW offer
? s i 1 1 _ penor stanck «i of administrative support, excdlentrewards package. This Indudes a generous salary
to be based m the exceptional surro un di ngs of our manor according to your experience 24 days' holidnv ru-h rail
house Head Office just outside Guildford. — „„ experience, x* days Hobday, private
Reporting to die Director of Client Services and
•cnir.
indude providing secretarial services to tolerating divisions
and support in the fields of contract administration.
telephone Lesley Kings on
, ■ , ■ — w iu jvuu aruwnnjsi
Sradstnne Brook, ShaKord, Guildford, Surrey
\jU4 oHT.
possibly stxxkbroklng, and must have a strong track record
demonstrating the abfflty to relate to clients and potential
efients at the highest level
Executive: Candidates wQ be graduate Chartered
Accountants wtth experience of relevant assignments wBfaoia
MANAGEMENT SELECTION
7m
MANAGER-
FUJI BANKI PROPERTY FINANCE
As a leading international bank involved in major property based finance we
are seeking a professionally qualified specialist with at least 1 0 years *
experience in both property development/construction and finance to lead a
small team in this important market a
The successful candidate will be self reliant, highly motivated and able to
evaluate and assess risk as part of the role. In return we offer a qenerous
remuneration and benefits package to match this key position.
FUJI BANK
Tokyo. Japan
Please write, with full CV to:
Mike Furlong, Assistant General Manager
The Fuji Bank Limited, River Plate House.
7-11 Finsbury Circus, London EC2M 7DH
i a ri t >T t V4 >) K*
S iHiiihi ilV; Tv il gy-ncinu
DIRECTOR OF FINANCE
£65,000 plus substantial bonus.
Our client Is the expanding leasing and financial services arm of a
dynamic European group. They seek to appoint a key individual to the
Board of the UK operation with responsMy for the development and
direction of the total European finance function. The role win also
encompass the negotiation and structuring of the group's funding
arrangements aid fuH ccmfrbl of cash and currency management,
Lffifeing the latest treasury techniques, in addition substantial involvement
in genera! management and strategic development is anticipated.
Applications are invited from Chartered Accountants, aged 35 to 45, with
a proven record of achievements the leasing industry, commerce or the
profession. The calfore of current senior management the continuing
growth of the company and the strength of the European parent group
combine to make this an exceptional career opportunity.
Please contact Peter Haynes or Jill Backhouse
LONDON HONG KONG MIDDLE EAST SINGAPORE SYDNEY
mm*
-
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INTI
EXECUTIVE
institution:
h achieve
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iUBB i H
P tcfftw»ii* Cossnitaots
No. 1 New Street, (ofTBfchopsgate), London EC2M 4TP
Telephone: 01-623 1266 Fax: 01-626 5258
; rvv -
Independent actuary with
18 years experience in
fixed interest markets,
domestic »«d international,
is available as specialist
fond manager or jpaoeral
inve s t m e n t advisor on full
or part time basis. Access
to latest research, proven
successful record, flexible .
working arrangement.
Write Box A1400,
F inancial Ti mes, One
So u t h w alk Bridge,
London SE1 9HL
Foreign Exchange
Corporate Dealers to £ 45,000
Marketing Officer
£ 25 - 35,000 + Benefits
A kading European bank with a growing presence in
London seeks id supplement its UK c o rporate s team
a ritk an atUtrinnal hwlrw . TVpnup maAttatnamir
nf witiMU ma A gf ^ifl UiwAy fimiipaniea and nffrn
a iw r irt ynfr mim i»itwll Mlmg pmdi»ea iMipng fr nm
tradrrimial ' limdfng and treasury tecflitief tn mote
sophisticated affibalanre sheet and structured
Ylfc invite apriBcadops from, bankers aged 25-35 widt
experience of covering the UK market. You may have a
r l w ring hsmlr hariegmimd rr mi gl it haa » jnmwl
an xntematiooial bank stra^xt from university.
fouvriSnowbe working with a commercial or
merchant bank and will have a sound track record of
successful deal origination and negotiation.
You must be a confident self-starter: you will take
immediate responsibility fa a client portfolio and will
be expected to attract new clients ana new business.
There is considerable potential for future development
within dm eje pandtng d ^fcir t m gnt. fi nmrfinn
are good and the remuneration parlmy attractive.
Interested applicants should contact
Mark Hartshorne or Charles Ritchie on
01-831 2000 or write to them at
Michael Page City, 39-41 Barker Str ee t,
London WC2B5LH.
Our client, die London branch of a major
European bank is looking to expand its
corporate dealing activities with the addition
of two experienced dealers.
Probably in their mid/late twenties,
candidates will have already gained at least 3
years’ corporate dealing experience in an
active bank, and have a comprehensive
understanding of treasury markets, including
interest rate products, futures and
options. Of graduate calibre, he/she
will ideally be fluent in a European language
Both these positions offer highly
competitive remuneration packages and
present excellent opportunities to join this
expanding team.
Interested applicants should contact
Arabella Goodford or Kate Griffiths on
01-831 2000 or write to them at
Michael Page City,
39-41 Parker Street,
London WC2B5LH.
Michael Page City
International Recruitment Consultants
I/niAm Pot: Am ster da m Brussels Sydney
• -Michael Page City
Tntwi ml h ffMil RfCruiliimiit CxHKLllldUtS
TiwAw Pans Amsterdam Brussds Sjyd u CT
i V . ; "• 17. . • *>'• ' -.7 *■? *7 ' *'•
M
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OVERSEAS CASH MANAGER
. British Air w a ys * vyuri dwitferdatc network gene-
rates eariringrm a wide range of fmrign rn . imrirs .
An *— rtriiig opportunity now exists within oar
Treasury Department do join a skilled team of
specialists charged with the management of cur-
xency balances a mi ron trolling overseas Kqnidiiy.
Wb are «**ing a.Heasory professional to
the field with a dearly demon s t rat e d control on
This will be achieved osmg the most efficient
methods and techniques; Additional rgqMmghiB-
ties inchide participation in our systems devdop-
'ment strategy for o v er sea s locations.
The successful candidate, probably a
graduate or ACT qualified, will have spent 2-3
yeatsin a Corporate Treasury or banking environ-
ment. Strong intellectual ability, numeracy and
compu t e r literacy, together with well developed
interpersonal Aills are viral to make a meaningful
contribution to oar corporate pe rformanc e.
In addition, to a competitive salary; our
benefits package inrlndcs per f o rmanc e bonus,
profit sharing, private health care^ holiday bonus
and holiday travel opportunities.
' Please write with a co mp rehensive CV
(indodxng details of canent earnings) to Selection
& Assessment, RefiRJ/1904, British Airways Pic,
■Meadawbank-.POBox59,HourdowTW59QX.
UK CORPORATE
TENDING EXECUTIVE
Will Samuel is the corporate bank of the TSB Group. With a substantial capital
bp a g and a continuing expansion of our business we now require an additional
executive to join the UK corporate team.
The current book encompasses the full range of UK manufacturing and service
companies with facilities granted in the range of £1 million-£100 million. The
P TPplmHin of the gr o up , is to use the Bank’s balance sheet to form long-term
relationships with dynamic co mp a ni es which will require innovative solutions
ti fi finanring pmhlarofi.
The individual appointed will be responsible for the analysis of a varied group
of existing accounts and hew bu si nesses id enti fi e d by the marketing officers.
In addition,- he or she will assist , the account officer with the day-to-day
running of -the accounts. Promotion possib i li ti es i ncl u de appointment to
aecoantoffififlrxn due cauzse.
Candidates ahonld be graduates in their twenties with an. excellent credit
background* 'The ability to work under pressme is a key requirement.
. Wears looJdngrfbr incfinduals wishing to build a long-term career with us and
for thosesdected there will be excellent opportunities for sustained advance-
ment In the first instance jplease send a full curriculum vitae to:
Mrs. Anne Dtmford,
Assistant Director, Personnel Department,
Hffl Samuel Bank Limited,
100 Wood Street,
London EC2P 2AJ.
HILL SAMUEL
R1E-BCHANT BANKERS
A member of the TS8 Group.
A member ofThe Securities Association.
APPOINTMENTS
ADVERTISING
Appears every
Wednesday
and
Thursday
For further
information
call
01-873 3000
Nicholas
Baker
ext 3351
Elizabeth
Arthur
ext 3694
Experienced Fund
Manager
required by the Investment Advisory
Division of a Major Japanese Bank. The
candidate should have at least 4-5 years
Fund Management experience and be
able to lead a small team of analysts.
Salary and conditions could be generous
for the right individual
Please reply to Box A1415, Financial limes.
One Southwark Bridge, London SE1 9HL.
|C1 CMv'P -1'.’/- ’ iCby »)irtc
American House require 2 Senior SWAPS Traders. 2/3
years experience on all SWAPS.
Salary ^negotiable + Package.
BOND/MONET MARKET SALES
2 Prime . fapa r OTi e House's seek Saiww-n Jq the above.
HEAD OF MONEY MARKET
SALES /TRADING
First Class J apa ne se House req uir es a Head for their M/M
team. You must have 5 years e xp et truc e In a senior role
with comprehensive ability in all products.
Salaiy ^Negotiable + Package.
NICHOLSON HOLMES associates
88 Cannon Street London EC4N 6HT
Telephone 01-929 1311 (Fax 01-621 1326}
Executive,
corporate
lending
Package cJ£ 17,000 + car
Leeds
Ybu have a professional qualification - AC A, AIB,
together with good corporate credit skills, 'four corporate
lending experience will have been gained within a banking
environment and you may have developed a particular
interest in specific industry sectors. As a ream member you
will be familiar with loan documentation, company analysis
and be comfortable talking to clients.
V&b are County NatVfest. Our Leeds office has an
established reputation for innovation and expertise in the
area. MCfe are playing an increasing role in providing equity,
debt and corporate advice to companies taking part in the
continued growth of the strong local economies in Yorkshire
and the North East.
Y5fe offer a key role to assist in the development of asset
based financing for companies operating in a wide range of
industries.
In ad di ti o n to an attractive remuneration package,
benefits include low interest mortgage facility,
nan-contributory pension and company cat.
If you share our commitment to play a significant part
in the industrial scene in Yorkshire and die North East send
a CV and current remnumerarion details to: Ian Carlron,
Director ffcrsonnel, County NatYXfesc Limited,
Drapers Gardens, 12 Throgmorton Avenue, London
EC2P 2ES.
County NatWest
A The NstWwt Investment Bank Group
PUBLIC LIMITED COMPANY
FUND MANAGER
INVESTMENT ANALYST
Adam & Company, a significant
The successful candidates will be
force in private banking with offices flexible, ambitious individuals who
in Edinburgh, Glasgow and London, have a wide experience of portfolio
requires an experienced Fund Manager management and UK company analysis
and an Investment Analyst for
its rapidly expanding investment
management company.
and will be able to communicate well
at all levels.
The salary and benefits packages
These key appointments, which will reflect the importance we attach to
will be hawd hi Edinburgh, wiU involve these positions.
immediate res ponsibility for internal
Please write, enclosing a detail ^
research, asset allocation, stock selection cv, to: Mr A M Heddcrwick, Adam &
and a dose working relationship with Company pic, 22 Charlotte Square,
c lien ts.
Edinburgh EH2 4DF.
*
_~'>w
Director
of
Compliance
UK Securities House
CJA
FINANCIAL TIMES FRIDAY DECEMBER * *
RECRUITMENT CONSULTANTS GROUP
3 London Wall Buildings, London Weil L London CC_tV> ».P>J
Tol: 01 - 5 B 8 3 S 8 B or DT -588 3 S 76
Telex Mo. 8 a 7374 FoK No. O 1 - 25 © aSO 1
A chaBenglna position - opportunity to fasoome Managing DhBclor of «n operalinfl company or
division wfthin the Group In 3-5 year*
rSt DIRECTOR
COMMERCIAL DEVELOPMEN T
SOUTHERN ENGLAND £4S^WWSg,W»
MAJOR INTERNATIONAL PRINTING COMPANY
This vacancy is open to candidates, aged 35-46. who will have acquired a minimum of 7 commercial
experience, part of which will have involved profit centre responsibility and at least 2 years
operations, or as the number two. Responsibilities wiH cover the efficient commercial d^eto^nent ofega^Js
companies, operating world-wide. Each company is trading with excellent profit margins;
centra on new ideas, new proposals and new products, and, as appropriate, they adoption and -
the identification and capturing of new markets. Up to 25% overseas traveiwBI.be necessary aro^nsequenOTi^rv
a European language wBl be an advantage. A. high level of commercial awareness, the abfflV to »w
contribute markedly to continued profitable growth is key to the success of this operation, sawyrwgoi^e,
£45 , 000 -E 60.000 +- car, contributory pension, free life assurance, free medical assurance, assistance wan removal
expenses if necessary. Applications in s trict confidence under reference DCD4691/FT, to the Managing mrecwtt
CAIOTEU-iOWgTCTASgeCUTBtllM UtaMarc BBauni^COgSUlTJUnSlUii roaU M
THB’HQlffi m -588 3588 or 01 -588 3578. TELEX: 887374. FAX: 01 -25B 8501.
We invite applications for the post of
Compliance Director with the
Equities Securities arm of one of the
leading UK investment banks, with a
firm commitment to the Compliance
function.
Reporting to the Group Compliance
Director, the successful candidate
will be responsible for developing the
profile of Compliance throughout
the Securities operation. Particular
importance will be attached to the
maintenance of dose links with
regulatory bodies arid advising
senior management on the
Compliance issues relating to new
product and business developments
and the effects of overseas
regulations on existing operations.
This position will be of special
interest to experienced securities
industry practitioners, ideally
with a sound background in
Compliance. Individuals with a
regulatory or professional
background may also be considered,
providing they have practical
experience of the securities industry.
Personal qualities, including
authority, presence and diplomacy,
are essential and candidates will be
expected to demonstrate a confident
and pro- active app roach relating
both to the surveillance and
educational aspects of the position.
Candidates should not consider their
current salary to be a limiting factor.
For a confidential discussion
regarding this appointment, please
contact Karin Clarke on
01-83 1 2000. Alternatively, write to
her, enclosing career details at
Michael Page City,
39-41 Parker Street,
London WC2B5LH.
Michael Page City
International Recruitment Consultants
London Paris Amsterdam Brussels Sydney
APPOINTMENTS
ADVERTISING
Appears every
Wednesday
and
Thursday
For further
information
cal!
01-873 3000
Nicholas
Baker
ext 3351
Elizabeth
Arthur
ext 3694
Jonathan\\^en^xecutive
HEAD OF RESEARCH
c£S0,000
Ourcliertisaixinapalira^opefa^ptacgs^ s opNgfcaiBdtfa fl^ a nftttl c mBnBg aroant
techniques within Jhe UK equ&y and derivative markets.
Candidates should have significant general research experience of FTSE IX stocks net
limited to a particular sector. They wi8 be able to provide research on tote over situations
together with trading derisions on price sensitive news relating to kvfividual stocks.
This is an exciting opportunity for a person of proven abffily to lead a smatf team that wflf
participate in trading opportunities revealed by their work.
Please contact Tim Sheffield on 0t423126&
HEAD OF TRUST ADMINISTRATION
£30,000 + benefits.
Senior individual required, at assistant director level, to be responsible tor 25 strong
department in leading investment management company, covering botii unit and investment
trust administration. The successfdcaxfidateiiwstlmseonginanagemerftarrimogvational
skBs as well as a sound technical accounting abffity.
Please contact Martin Symon on 01-623 1266L
■ * ' •• • 'i • "
LONDON HONGKONG MIDDLE EAST SINGAPORE SYDNEY
IS?
r
mil
1 K 1
Jonathan\\feiL
MARKETING MANAGERS - LEASING
£20,000 to £30,000 plus bonus plus benefits.
Substantial financial backing, and the combination of fractional and innovative
leasing products has enabled our efientto become a major player in the leasing
and asset finance industry.
Recent expansion has resulted in the creation of several challenging positions
for Leasing Executives.
Applicants will be assessed on the following criteria:-
O Graduate Calibre
O Detailed credit assessment experience of transactions in the £250,000
to £5 million range.
O Working knowledge of negotiating, structuring and dosing direct middle
ticket transactions or vendor programmes,
O Proven experience of new business development
O Currently writing in excess of £8 million of business p.a
Positions, existing in both London and foe North West offer excellent career
opportunities and financial rewards commensurate with performance.
Please contact Sarah Stone or Keith Snow.
LONDON HONG KONG MIDDLE EAST SINGAPORE SYDNEY
EMPLOY WITHOUT
LEAVING YOUR DESK
Our unique assessment process provides International
Companies the opp or t unity to recruit senior UJC personnel
direct
ORB'S specialist Consultants will undertake all assignments
in the following areas:
* Banking and Financial Services
* Legal Profession
* Engineering
* Computer Personnel
* Communications
* Sales and Marketing
Telephone: London 655 3775
OSBORNE RAMBERT & BRANDT
350 Lower Addisconibe Road
Croydon CR9 7AX
Invest In our experience
+
Legal
Appointments
Appears
Every
Monday
For more
information
please call
Elizabeth
Arthur
on 01^873 3351
TREVOR JAMES
CITY
HEAD OF RESEARCH C&40000+
CanMates should haw m in-depth tamMp dl the FTSE MO state. Hefei*
«ii have eceRertana^rtopaime and the ability la provide advice to deates
flS »tin^,{rraswsitraWatn«tinn.lAirtte
Jr? in a fast moving trading ^vironment RS^-
2 RISK MANAGER c£30.000 + BENEFITS
1hgr g wMBtttem a« gemertteM!LCaniMdBdiouldhaerf1tarttwoyBaB
Qpericoctrfyxfcated tans and orpty ate fransidM frc ajd be gbtetp deal wifli
companies d a wj senkr tad. R8/73S6.
UNIT TRUST DEALER £20,000+
AimjorlMTirt Manama* ComparyBO*iH(rl^^
■ to neon teteactirifes erf the* dra&goiMHitoaiCHdKUKRUtb* tote
to danonstate a prawn tack leant of success in this am. RB/7315 l
EURO CONVERTIBLES SALE £ Neg
This taxing and btshty prestigtan Merchant Bank Is «g»dto8 its Euro Corner
hHes ($, ton and European Carenctf Saks fan. CosaqoeaUf m n setting
. highflyingi«h«duafewtot>worej«rteg)erienceinthBiTad(ets8RnBtaCt»-
tincntaJ Etfope and UK instit u t i ons. SS/7SSL
CORPORATE DEALER £40,000
The AAA ratal Einpean Bank Nitft an active tnsaiyapertian is boosting ih Ckr-
poate desk and fequBesaoartrtous end wperienced Corporate Data: (deafly
jou vW be toycwlato Wsftsariy 3ffs, twe several ^ars aperient* and befuRj
coiw a nti^RRiiat,llongll la MadCffBtianMStodt»nfediS8flg6L
5 London tlfell BedZdings
Finsbury Uicns. London EC2M 5NT
Tel: 01-628 1727 Fax: 01-628 1392
!« il Ml il
INTERNATIONAL INVESTMENT MANAGERS
OPPORTUNITY AS DEALER
WITHIN FUND MANAGEMENT
Sataf According To Exportosoo Age n th
Whitttpgdale Is a successful and expanding independent fund
manager specialising in fixed-interest markets. We are seeking an
ambitious and highly numerate individual to join our Dealing
Department aa an Assistant Dealer. He/She will be trained to
execute dealing Instructions in a variety of flxad interest securities
and to develop switch ideas. Further pr o gre ss will lead to the
candidate being responsible for a» deals within a single cureney.
At this stage, they will provide the Department’s short term view
for that market.
The successful candidate will be a graduate and current
experience within the City would be beneficial.
Piommm applrtB*-
Jeremy Afiord
Wdtttegdai* United
2 Honey Lane, London -
EC 2 V 8 ST
CORPORATE 1
BUSINESS DEVELOPMENT
London : West End
International .bank requires an expen^H ^oofi^ oiat^
banker to increase, its business with medium sized
public and privately owned companies iri the U.K.-
The candidate should have a proven record in
successfully marketing a range of corporate banking
products (including credit, treasury forex, LCS, etc) for
this potential client base. In addition, the person
should be a self-starter, highly motivated and able to
manage their own activities in such a way that they will
meet the objectives set for the position. An attractive
remuneration package is offered, including the usual
banking benefits.
Applicants should write, enclosing detailed CV to: •
P O Box 4LS, London W1 A 4LS
UK EQUITY SALESPEOPLE
FOLLOWING A CHANGE OF OWNERSHIP, AND
DUE TO CONTINUED EXPANSION IN THE UK
EQUITIES MARKET WE ARE LOOKING TO
RECRUIT EXPERIENCED UK EQUITY
SALESPEOPLE. REMUNERATION WILL NOT BE
AN OBSTACLE FOR THE RIGHT PEOPLE.
SEND CV*S TO MARK JENNINGS,
DEALING MANAGER,
ALEXANDER SECURITIES LTD,
5 OLD QUEEN STREET,
LONDON SW1H 9JA.
— ' Members of flMBRA •
FI
IAJ 1
V]
H
□
BO
N
n
■H
Ideally, applicants will have experience of t^nVtaterest ? **
benveen 6 and 12 months expetence In off-batoro rims praiSL -
RISK MANAGEMENT To£42rtirt-m™...
barwbon into a trading or marketing position. S **“ enaWe ***
Ourdient,a Jea^Vimernational bank, is wodd renowned^te^SlS
of new products. The new otoduds aiEahninn^I^ *** 1,5 ""novation the field
part of fe expansion
* ded <***'***> wIB have
Your rote wfflbetoSL in thedevetoomem n ^Y.P roduct environment
mWto late 204 <od«nh.ln nW r
riKWegasm^ selection of the many n re ffiprM w ^ .
V
[
T
VI V
sSs
*2*6 !»r
&
tiom
-FINANCIAL TIMES TOTOAY DECEMBER $ 1989
C?0pnTW5liJER
CALS •
• £35*000
UK area pf npKSy expanding -Eragpero op c r g rira ■widi-
»de* m «a« of £100m *o ^ppoott a {rfmniqg and
p^w>rting»pec»ii^Qaf£fied«»gqattnr%ayd to $£,wast
possess lonljr dev el ope d b wirwai skxSs prerioos inter-
imtiflfMiT otpoacnor and/or a.E araoean An
FENAM^L CONTROLLER
ADVERTISINGS
COMMUNICATIONS
c£ 3 d, 900 pttdage +
A fa y pby ar in ajagfrly c ampttia vc industry, tte grwp of
fivecdmpyi^^.qaq w ve iiueCT^ im financ MPRaxid
advertising. It jam tfxjfoai a trouble iflwbtfog coa^^
to direct a department of twttoe and to wade doidywidx
the t cq »c o» atoning- ifiiTX^OT. ^lus appointment
soil § yoopg .qualified acoxmtam, who am expect
exceptional career devdopmem within die organisation.
ACCOUNTANTS & LAWYERS
CORPORATE FINANCE
To £30,000 -f
One of the UK’s newest and bur crating corp or at e
finance teams seeks to appoint several newly qualified
accountants and lawyers. Working on prefects as div e rse.
as m erg er s , acq nigtinns , raising finance, pr eparin g and
defending bed; etc* cjmdidste* require a first dass
educational background and some “City* exposure.
PiTTfU l^ n ? be n ef i t s p^td trRiXi ift y
For fortber detaSs of these or any of themnnetoas other vacancies
2325oc fix joor CV » Urn on 01-404 5773.
HUDSON SHRIBMAN
HSE3CUAMME4£NBBNWClA2QtHS.*1M-8312323
■
f C •-! -IS. II I (-.'ll M I
ACCOUNTANCY COLUMN
Setting a standard for the value of goodwill
By Graham Stacy nd Davkf TmfmkSa
COMPANY law and accounting
standards allow UK companies to
choose between two fundamentally
different methods off accounting for
goodwill the Accounting Standards
Committee (ASC) is considering pro-
posals that would ban one of the two
TWotTirvTg tTw ftrefam* write-off agahut
reserves, mandatp the other, the
systematic amortisation of goodwill
through profit and loss account. How-
ever. than is a third alternative.
The generally accepted definition of
goodwill is *the differ ence between
the value of a fr™*™** as a whale end
the gggrHgnfa* & the fair values of its
separable net assets.” There may be
different interpretations of some of
those words bat they dp not affect the
broader discussion of bow to account
_ jtseff.
ftfifipntfal feature about good-
will is that it is related to the value of
a business as a whole. It is not a
tangible asset that can be
from ft** business veined
natly fffcg h tiflifap OC ffawt
Tangflde fixed assets have a
cal substance that demonstrably
wears out and has to be replaced. But
the nine of a business, or its good-
will, does not necessarily wear out
and can be maintained or even
Enhanced by good business manage-
ment
Few would criticise the ASCs {no-
posed ban of the immediate mite-off
of goodwill against reserves. This
treatment leads to the wholly unreal-
istic position of the net assets of a
gZOUp Of cnwmnnte: falling hwwwH.
ately after an investment in a subsid-
iary baS b»En waA>
Despite the Eact that the investment
may be applauded in finan cial circles,
the accoun ts show that part of the
Bh*rphofrtera foods has vanished.
The alternative treatment of amor-
tising goodwill systematically
through the profit and loss account
has many supporters. It is the method
required in tfe _US and propose d in a
dnift ft* m p the Inlet Account-
ing Standards Committee.
The arguments in favour erf this
approach may appear at first sight to
be reasonable.
The goodwill element In a purchase
price represents the acquisition of
future profits and it is “used up” or
wean out as those profits are earned,
so it should be amortised and charged
against these profits.
But this argument does not stand
np to dose examination and certainly
does not result in a meaningful mea-
sure of profit. The investment by a
group holding company in a newly-ac-
quired subsidiary is normally
included in the holding company’s
balmyy at COSt
This cost nay well re fl ect an ele-
ment of goodwill in the underlying
subsidiary, supported by anticipated
future earnirag taken into account in
f tetwrm hitixg the purchase price of the
shares.
When subsequently dividends are
received these are not normally
regarded as a realisation of the origi-
nal investment but a confirmation 'of
Its wmHmrinf value.
The ASC is, quite rightly, not pro-
posing th " t ***** portion of a holding
company's inv e st ment in «ihaMiaH#»g
that reflects the goodwill element
should be systematically written
down as dividends are received.
But if goodwill is to be anwrttead In
the group accounts there will Die an
inconsistency of approach between
the holding company and the group.
Indeed, with theincreasfeg signifi-
cance of goodwill aa service-related
bnsfawssea become more common, we
coqld have many groups with a lower
net asset value than their group hold-
ing company as goodwill fe written
down in the group accounts but notin
the accounts of the holding company.
Apart from producing an Inconsis-
tency in the accounting 'treatment
The solution is that
goodwill should remain as
a permanent asset in the
balance sheet until its
value is seen to have per*
manently diminished
ture in the group profit and loss
account.
Those in favour of amortisation
may agree that the total value of
goodwill is not diminishing, but they
argue that what is happening is that
the goodwill capitalised at the date of
acquisition of a subsidiary does
diminish over time and is replaced by
self-generated goodwill.
As we do not recognise self-gener-
ated, as o p posed to purchased, good-
will it is argued that it Is wrong to
aflow the goodwill originally capital-
ised to remain on the balance sheet
because eventually it will be repre-
sented by self-generated goodwill
This theoretical argument results in
donhl&caunting in the profit end loss
account - is other words, two
charges: the amortisation of pur-
chased goodwill and the cost of repla-
cing it with self-generated goodwill.
The distinction between purchased
goodwill and self -generated goodwill
is an artificial one which makes no
sense to preparers or users of
accounts. If goodwill acquired is
nut in mined by the normal operation
of the business there Is no point in
amortising IL
The distorting effect of amortisation
onpriceearalngs ra ti os is clear. Sup-
pose a company A begins with capital
of £IS00 and with that capital boys a
business which owns £1/XX>- worth of
tangible assets and hm a profit of £90
per annum, ie a return of 6 per cant
and a p/e of 16.7. IT the goodwill of
£900 is written off aver 20 years, at £25
per annum, profit amounts to £6S per
annum.
How then should the user of the
parent company’s accounts value the
business now? If the p/e ratio of 16.7
were to be applied to SB5 the answer
is £1,083.
But if the business was thoutfit to
be worth £1,500 and no adverse
changes have occurred, surely the
user should not have to apply an
increased p/e of £9.1 to get the right
value.
The informed reader would add
back any charge for goodwill amorti-
sation before drawing any conclusions
about profitability or value.
Unfortunately not everyone realises
that the goodwill amortisation on
and loss accounts has such a
effect
The solution fa that goodwill should
remain as a permanent asset in the
balance sheet until its value is seen to
have permanently diminished. To do
otherwise would foil to reflect reality
in tHffTwbd statements and is leading
to accounting by rote rather than by
reason.
This approach would require the
exercise of Judgment when consider-
ing whether or not there has been
permanent impairment - but this
j u d g ment is no different from that
required by the amortisation
approach. Impairment may occur at
any time throughout the amortis atio n
period, which could be 20 years or
more.
The forthcoming Companies Act
will require consolidation goodwill to
be written off over a period not
exceeding its useful economic life.
This does not create on Impenetra-
ble legal barrier.
A reasonable interpretation of useful
economic life and- a proper recogni-
tion of residual values should enable
us to cany goodwill in balance sheets
without amortisation tor as long as
there is no permanent impairment in
ks value.
If tbe DTI and the ASC do not
accept this approach UK company
accounts will continue to. fail to
reflect the reality of a group’s financ-
ing position and performance.
Graham Steep is a partner in Price
Waterhouse and a member of the
Accounting Standards Committee.
David Tweed ie is a partner rit
RPBtG Peat Marwick McUntock,
chairman of the Auditing Practices
Committee and visiting Professor of
Accounting at the Umverstig cf BristoL
ACCOUNTANCY APPOINTMENTS
en«
M<Fr
)PMB
fr’iCGdtfP
-O'ciC Ep
$
....
.1 *,*b' y •
"*■ • >•
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41S
Divisional
This highly profitable British PLG with a £ Billion t u rno ver has
diverse manufacturing and engineering interests on a global
I, Thames Valley
2. Devon
Manufacturing And
Engineering
Sr'!
Outstanding or ganic growth coupled with a nmnber of strategic
acquisitions Han allowed it to compete in world markets at the
highest level.
A restructuring of two of the -International Divisions of the
company hag created a need for each Divisional President to be
s u pported by a Divisional Director of Finance.
The duties are wide ranging and call for an individual who can
gain a mwliw-Btwfiding of the businesses within the division
arid then implement monitor Head Office financial policy.
The ability ' to appraise each operation arid ascertain potential
problem a re as at an early stage is seen as paramount You can
expect to be instrumental in the rationalisation arid restructuring
p r ogr ammes that result.
There will be 'considerable involvement in strategic planning
and business development, mdnrffeg the identification ana
assessment of potential acquisitions.
A graduate, aged 32-40, you must be a qualified accountant with
at least five years experience in the manufacturing industry.
A successful record of controlling the financial arid commercial
aspects of a significant business is essential and should be
complemented by skills in planning and business organisation.
You can expect a highly cneHenguig and vailed nhwffliamph
scope for personal career development and conside ra ble overseas
travel*
Male or fema l e should submit in confidence a
iseuteqbndw c.v. or telephone for a Personal History Form to,
/- Gp B fibre, Sfoggett . ftpwer* pic, George. V Place ,
4 Thames Avenue, WINDSOR* SLA 1QP, 0753-850851,
Fax: 0753453339, quoting Ret W20018/FT - Thames Valley
W20Q1 9/FT— Devon.
GLASGOW. LEEDS. LONDON, MANCHESTER,
Group Financial Accountant
to £33,000 + benefits
London
Vith assets vriaed id severs! bSBon pounds spread throngboot
England andWries/this fa|^> capftti-iniensMs bustarss is now
entering a period of eakiliog and riwllfT^tng oonunerdal
devdopenent The Group Financial Acooonting fimotoq is
aarrently undergoing s^nifi ca nt dun^e and presents a unique
qi cg opportunity
Shotting to tteGriMq) Ghtef Axountant, yoite re^xmsMities
wifi Indnde: the ixqnrasion of Statutory Aupannts at both
Groap and subsidiary levels; the accdba ti a g for forrign
snbskDaries; compliance with US repo rti n g and Iff Stock
Exchange requirement s; and fte preparation of 4 monthly
fhianrialacooanting report for senior management. Tbe also
assist management withdecisioos on corporate str u cture.
You wffl be a qnrfified Accountant with good commercial
awareness and sound financial accounting experience, ideally
gained in a major, capital-intensive group. You wffl have strong
technical ability and good interpersonal skDk A flexiMe, positive
approach is essential.
Please send full personal and career details in strict
confidence to faqla Hanrzity, Executive Selection Group,
Deloftte Haskins A Sefis, PO Box 198, 26 Old Bailey, London
EGM7FL, quoting reference 5334/FTon both envelope and lettec
Detaitb
HasktosiSels
'EXECUTIVE SELECTION
A
Qualified Accountant
c Tb£ 28 jOQQ+ Benefits
Ourcfi^isafnqibrUi l H?tis^tefeuregrtKjpwlthalcH^histotyofsiJcoessftd
atxn^smptte- As a resutt ^of coiitinuiAg expansion, a new role has been created within their
Coirporate De^^knanrientdep^rtinertt. '
You wffl have dhtict hffiueiKQ on group strategy, assisting in the search for and
o v aluatten of jprj w thopportw ftfesworidw^. Reporting to tlw Head of Gorporate
▲ Competitor analysis
▲ liaison wtth banks a brokers
A quattlied accountant, aged under 30, your experience will have been gained In public
- - practice or a co mro ereiaf setting. The company is dedicated to developing It3 personnel and
AUamnrlr oflbre extensNe initial and ongoing trair^ tongterm career prospects, with promotiontoa
AMJerWlLJV subskSaiy company or group lew! are envisaged after 2 years.
ISPkacheil I^I^Htor cosdmekSaiy IOmsis on 01 ^ 404 M^A Ha roa t ^jw^to hwat
drAmimiTfi
Head of Thist Administration
Investment Management Group
Qty
Package £30,000 + , valuable mortgage subsidy,
quality car aid profit sharing
Onr dSonts are one of the brgsrt and
mbit snocenfid investment grou ps
in the UK with a partKnteriy isajaesave range
of unit, tnsts, offshore and
tnKtSi Their performance record, m ar k rting
strategy and superb ad nrinMrati o n have
enabled fltpm to nmtntam n strong profile in
the oouuuunity. Due to Internal
promotion a new Head of Thist
A d m inipi n i finn jg y*»glif (O inn 8 d ff JWT fnt CT tf
of 25 staff.
This impo rta nt post is at Aasfatant
Director lev^ to addition to overall
mnmyrii il aw! nr gan ioiHnnal (hifjp;, yOUT
brief wSl involve all aspects of trust accounting.
taxation, ftd i »h»i»M * Ali ii«i snd the preparation of
manag e m ent accponts and board papers.
The appointee wffl have strong leadership,
motivational and maniyc ie n t ability
prefera b ly gained in an myestment
environment Sound technical accounting
proficiency and computer fiteracy are voy
important. wi www iH m fm Aiiiy are
carentfel as the rote invoiveg cxyaderabte
interaction with sempr manq^emciit, fimd
ironm g et s, external uusteca, amfitars and
regulatory authorities.
Rar a strictly cortKclentiai dfacnarion please
t elep ho ne or write to Bona Law quoting
reference 1257.
HnaniLI Twaih - — m Tufa, i'i.w
rmu m u 3cum am ac i rcMm
KOU Bond Street Loodao WDC3DB
Iblepboae 01 491 3 Sil
!** j
4
.■■Z.y b
^TTHE INDEPENDENT
£*** fts lmmch in I9S6,T*e Independent
beoopto ejh cstafofisfaed,
and Independent idee in
Uiyina w »■■■■■■■ -
m«e of new ideas, , . -
m—ris age afaady fade pf prBnn .
Asares^firafitiaiM^Inndionnff
fo be sto e ng rirened by the Mods
1htfeeknm^i»mPhBb&^.
Accounts Controller
to £30,000 + benefits
TWs po si t i on calls fere a mature and
etepeliestoed qualified accountant who can
bring a combination of people-skills and
imagination to provide support mid guidance
to the functional departments within
finance. You wffl be responsible fora total of
fiaanimittedhaidi^^
Payable, Accounts Receivable, Payroll and
Iteaffsy^io wffl benefit from your ability to
optimise the effectiveness of systems,
j$3oedpres and internal controls along with
improved resource planning. VKTand RfiYE
expertise will be partiadariy advantageous.
Age vriB not be a limiting factor and the
position Is seen as offering scope for
considerable job satisfaction.
Reference E3587
Development Accountant
c. £30,000 + benefits
Ybu wffl be responsible for making financial
sense out of the many development Ideas
which will be proposed. This Is certainly not a
routine accounting position. It is a high
profile tde offering a young, qualified
accountant considerable contact with the
Editor and Chief Executive and will comprise
a raffing and varied portfolio of prefect based
work essential to the business. A particularly
important dement will be detailed analysis
of strategic plans.
The successful candidate wffl be an
energetic and ambitious person, probably
aged 28-30, who is looking to broaden out
from their excellent technical base.
Reference F386
Head of Audit
c. £33,000 + benefits
Your role wffl be to develop an effective
internal audit function from zero. Thus you
will define objectives, devise and initially
execute audit programmes and liaise with
the external auditors. As the Company grows^
It Js envisaged that you wffl need to construct
a sown team to support tins function.
The position requires a mature, qualified
aecmihtant with a sofid audit background
who can qitiddy establish credibility at all
levels. The successful candidate will be an
outlaid looking hdiyidual who can extend
the role of internal auefit to be an active part
of the business.
R efe re nc e F385
The co m p etitiv e remuneration packages
will each include a company car, profit
sharing scheme and low cost pension along
with the usual Large co mpan y bene fi t s .
Interested appficants should write
enclosing c.v. ami daytime tel e p h one
number, quoting the ap propriate
reference to Nigel Bates FCA, Whitehead
Rice United, 43 Wefbedc Street; London
W1M 7PG. Tel: 01-637 8736.
marker
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FINANCIAL TIMES FRIDAY DECEMBER 8 1989
FINANCIAL CONTROLLER
Northampton c. £30,000 pa + car
Cable Television Ltd- currently provides
cable TV and radio services to nearly
20,000 subscribers in Northampton. It has
recently been granted the franchise to
extend cable facilities to some 83,000 homes
in the town. The company is one of the
UK’s most experienced cable TV operators
and it has recently linked with a major
Canadian operator, to further strengthen
its position in a dynamic, fast growth
industry.
This exciting expansion of the Northampton
business has created this oppo rtun ity for a
commercially aware young accountant to
join the management team, which is led by
the MD and founder.
The Controller win inherit an accounting
team who handle the existing business
effectively using computerised systems on a
small network. However the primary focus
will be associated with die £20m investment
in expanding the operation over the next
.five years. Hie person appointed will play a
key part in controlling this development and
in its commercial exploitation.
Candidates, who must be qualified, should
have relevant project management
experience and be computer literate. There
are excellent long term prospects in this
lively, entrepreneurial company.
To apply, please write to Mike Smith,
enclosing full career Hg»=»iic and quoting
retGV/2.
wsia
Peat Marwick McLintock
Executive Selection and Search
Abbots House, Abbey Street, Reading, Berkshire RC1 3BD.
^■financial^H
CONTROL MANAGER
LONDON - Package not less than £30,000
You are a recently qualified “big eight™
accountant, and looking for a real challenge
on your way to becoming a F inan ce
Director.
Our client is a major and progressive legal
practice which has shown dramatic growth
over the last few years. Partners and staff
now number about 400.
You will report to the young; newly-
appointed Finance Director, and will have
total responsibility for the budgetary
process. You will set up the systems, control
die income and expenditure budgets, report
variances, and be responsible for cash-flow
forecasting.
The position will be very high profile ux the
practice at partner level, both in . the U-K*.
and abroad; you will therefore need, despite,
your youth, to display maturity and ’
diplomacy-coupled with tenacity. Experience
of computer modelling and the use of
computer graphics will be an advantage.
Please send a comprehensive c.v. including
salary history and day-time telephone
number, quoting ref. 3086* to Bruce McKay,
Executive Selection Division.
^ Touche Ross
5th Floor, 52/54 High HoKjota. London WC1V 6RL,
Telephone: 01-353 7361.
THE FALKLAND ISLANDS COMPANY LIMITED
CHIEF EXECUTIVE ifo^i
lb be resident in Stanley, Falkland Islands
c. £45/)00+Housiiig+Benefits Package
Rjflowing the acquisition of The Falkland Islands
Company limited (“FIC") by Anglo United pic in
Angust 1989, the management stru c ture of FIC is to be
strengthened by the appointment of a Chief Executive to
be resident in Stanley.
FIC was incorpo ra ted by Royal Charter in 1851 and is the
major trading force on die Islands. Together with
its turnover in 1988 was £lSm,
arising princqnlly from retailing, the fanning of 800000
acres, wool marketing, shipping and deep-sea fishery
services.
In recent years the FaDdand Islands have eqjcyed a period
of sobstmtial economic growth; Government revenues
n ow am ount to some £40m. a malted increase over less
thm am at the be gin n ing of the decade. Through
undertaking an active investment programme, the
meressfiil appl ieart far this very indep e nd ent taanmaii d
will leadFIC into the 1990s, so ensuring that the company
enraiwTies inpliy » major iwte within the Islands.
The selected candidate will be a first rate ent r eprene ur.
An innovative approach combined with strong manage'
men skills is of paramount i mp orta n ce. Though not
fawmf i al prior experience of the euu Uru L iiu ii/fcontracring
industry or of international trading may be prefe rred .
A trade record of success to date must be demonstrated.
The remunemtioD package (including share options,
edncatiop,honsng and taweQ win be constructed to meet
die req uirem ents of the s uccessful applicant, who will
enter into a contract fat an initial period of up to three
yean.
Applicants of either sex should send their CV, marked
“FlC-to be opened by addressee only” to
H S Mnizhead Esq., Company Secretary, .
Anglo United pic,
Newgate House,
Broomfaank Road. Cheste rfie ld
Derbyshire S419QJ
Financial Controller
High Technology Engineering
Gloucestershire , c £35,000, Car, Benefits
This organisation is a world leader in its field and a highly successful subsidiary of a major . .
international pic. With a turnover of £l7m and fast growth projected into the '90s, the company is . .
enhancing its position through dedicated policies aimed at Duilding on its outstanding reputation
for service and quality. Leading a department of 14 staff, this senior finance position has a key role -
in this growth, working closely with the executive team on commezciai and strategic decisions. You '
will be responsible for all aspects of finance and administration including- budgeting,- forecasting,.
co -or dinatio n of business plans and further development of iMfra r n nU f?" throughout the - L
company. Aged 28 or over and fully qualified, you will currentlybe occupying a sfeMi&^fibSnde ible, • fV ’- ; i 1
ideally in the manufacturing industry. Strong in character and intellect, you must he a tenacious and
self motivated individual, eager for change. To ensure that corporate objectives are secured your ■
interpersonal and communication skills must be erf the highest order. Prospects for career
dflV flTnpmwnt are excellent and a relocation package, together with other si gnificant hwnwftt*, fiirthra-
e nhances this writing opportunity.
AJ5. Philipps . Hoggett Bowers pic, 11-12 Queen Square.
BRISTOL. BSl 4NT, 0272-298433, Fax: 0272-279714. Re£ D15023/FT.
Finance Director
ANGLO UNITED pic
Outstanding Career Opportunity in the North West
Finance Director
l c£ 40,000 + Car J
I + Benefits 1
This fast growing subsidiary of
one of the UKs major retailers is
planning further expansion of its furni-
ture retail chain. Currently operating
from over 40 stores, situated
throughout the UK, the company is
undertaking a major Investment
programme in EPOS and other
computerised retailing systems.
Tb support this exciting pro-
gramme, our client wishes to appoint
a forward looking Finance Director
to provide the overall direction and
management of these plans.
In addition the Finance Director
wtt work dosefy with the other
members of the senior po6py making
team to develop further the corporate
strategy leading the company towards
stock market flotation.
Cancfidates must be experienced
senior accountants who have gained
substantial experience of controHng
the finance and rr functions in a fast
moving, market driven company
This is an outstandng career
opportunity for someone preferably
aged 30-45. Applicants should write
with career details, age and current
salary quoting reference MCS/8871
torJufieEnvin
Executive Selection Division
Price Waterhouse
Management Consultants
York House
York Street
Manchester
M24WS
Price Waterhouse
Southern Scotland, . - ,c£33lfi00,Cgr^
You will be fully responsible for the financial mid MIS fancti q nB erf this prestigious subsidiary of a
US owned, globally represented multinational. Engaged in the continuous process manufacture erf "
high technology products and materials, the organisation addresses the European market and your
brief will encompass the financial control of a number of European operations in this ^respect
Reporting to the managing director, you will be an integral part of a small, dynamic executive team
charged with the responsibility of strategically developing the European business into the next
decade and beyond. Both the financial reporting and forecasting s ystems axe sophisticated and
effective, and there is a strong interface with the US parent,, overseas travel being involved. -
Candidates, wed over 30, will be qualified accountants with a proven, senior level financial
management background which has been gained in the manufacturing sector. 'Experience in the .
Implementation and development of integrated computerised accounting systems is highly
desirable. We seek a mature committed professional who can gr a s p thfo outstanding opportu nity
where longer term career moves into general management are implied. _ .
KJL Thompson, Hoggett Bowers pic, 4 Moslev Street.
Finance Controller
Engineering ' 1 ..'
West Yorkshire, . c £24,000, Car
This £12m turnover private heavy engineering organisation based in West 'Yorkshire now have an
opportunity for a qualified individual to control the financial aspects of this business. Reporting to'
the board of directors, you will be responsible for management accounts, flnwnrrlpl accounts and the
cost accounting functions of this growing organisation. And 30-40 _years you will be ACMA
T M
New Strategic Role
OF OPERATIONS AUDIT
Mqjor UK Co ns tru c tion Gronp
Mid-Cheshire base £27-30,000 package + car + benefits
Having achieved rapid growth in the last fewyears, our dent
Group has an enviable reputation for s uccess hi a highly
comp e ti tive and commercial marketplace. They are now
pushing ahead strongly with a poBcy of eflve isiflcatiun into
new areas of activity. In order to exercise tkjhier control over
operati onal and^fcaarta l ^sy stems j a f
for an experie nced professional to^n foe to p financi a l team
at its rural Head Office.
In this inqxatant new role, you wffldesigiaod Implement a
strategic review programme to examine key operational
functions within the Group, highlighting major areas for
The scope ofthe role wfflnecessfiH t g travel primaril y In the
North West, but also bother afield within the UK.
The role de mands a dedicate d qualified accountant with
outstanding drive and determination. Sound technic al skJSs
and broad systems experience are import a nt, and may have
been gained within the profession i n the first i nstance. Above
youwifl be abfe to adopt a pragmatic and thoroughly
co mmer cial approach.
Hris is an exc ep t ional <
profes s i on a l expertise, in
within a substantial Group.
to e x er cise your
gfisattonal abffity,
T fcs wpw ft h iM aroopMtaiBAwhiialec awlhtaB sFbswMndiiT.retoiaphorafeaftmMiill^^ '
BIRMINGHAM, BRISTOL. CA MBR IDGE, CARDIFF, EDINBURGH, GLASGOW, LEEDS. LONDON. MA NCH E S T ER
NEWCASTLE, NOTTINGHAM, ST ALBANS, SHEFFIELD, WINDSOR and EUROPE
- .3* ■ r/. T t
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X
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FINANCIAL-TIMES FRIDAY DECEMBER 81989
%r{W.
fcKvrJ? b
r: .., * Ifif
v>
Berkshire
c£33,000 + Car
h^qgj^Ct3 »ymi» d ec« i Dia ;pR^Ktt«odwiAa«xoDg
. pi mfi ww 1 ilh'WV H 1 ^ 1 i rf TMTT ^ fwft m a rV rw> **’
tumo«rof£50miIBo&fe3ieUK-
JBfgpnipgto^wodaqgJ u^ywid idiaUKMinaging
PlieaDr > yoo^^as8anKf^n^xina b iEty focibc fTnaTKTal
control of the U
jyttUttdfiviiD|kcncnL
T^mnrwa^r TO <^iattyai niea >7ra^^ BS^S
acxx ni i a ^g( A CM A ,AC A > ACCAj df7nrBX g rari^ »|SP|
mnltinatkinal environment mxiM be preferred*
Candidates with Ac potential to succeedin thb dynamic
orKznisaticio wiB be offered »n attractive remuneration
padt^topA»TOthgpnemuag d n ea tip pwp»-n« M wii«<e
appropriate.
Applkznuviiobdicve they cm match oar client's
Am»m 4 ijv»iH «iJ»nitthriraitriailmn OTiii» w
P&ulBosrdmafiACMAazMichaedP^Berizutkce,
Windsor Bridge House,
1 Broca* Street , Eton ,
B® Berkshire SL4 6BW.
Michael Page Finance
In<—«minu1 PpfTTritTTMfrt' fYawa Awrt*
London Briitri Wfadwor St Afceoi Logfaerhead BtrrnnTgfmn Nnttin^ttm
Vfarii m n Lead* N w c wth n prW Ifrie C3a«gow& WbddwMe
International Auditor
South Hertfordshire
Dromey (Europe) Limited is the European subsidiary of
a major Canadian corporation with a turnover in excess of
$1 bifljan and is a worldwide supplier of cleaning syst em*
and products. Reporting directly to the Director of
Finance —Europe, based at ha European Hradquaneri in
Wltford, you will be responsible for:
* d w efo pm eatof the audit fimetiop
* special investigations (repott i ng systems, pricing,
treasury management, acquisitions, dc)
» aadaringwith the peep avati o n of fin anci a l and
budgets.
to £30,000 + Car
7ha!ughpn^lcroZe«rininvohvBai*CH^wit2isenkx-
manapanrotaod extensive travel- 50-7 5%, throughout
Europe (eg France, Spain, Italy). In additkn to good
incerp mon ri skills, Candida tea should be qualified AGA.
ACMA or ACCA. aged 25*35 and dblc to demonstrate a
proven track record of audit experience. Language skills,
particu la r ly French, although not a prerequisite would be
a considerable advantage.
I n terested ca nd i d at es should write, enclosing * full CV
to Helen Waffi« at Michael Page Finance,
9 Centurion House, 136*142 London Road,
Sc. Albans, Herts ALT tSA. Alternatively,
contact her on 0727 65813.
Michael Page Finance
Intem s ti o a i l Recrotenent CootuhanV:
London Bristol Wbdsor St Afcana L ra d mlm d EBruat gjban Noufaigl
Msncbesttr Leeds NeftCMdMpoo-Tpie Gfasgov & Woddwfde
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PROPERTY ENTERPRISE
MANAGERS LTD.
THE CREATORS OFTiiti PROPERTY ENTERPRISE TRUST
RECENTLY QUALIFIED
CHARTERED ACCOUNTANT
WITH MARKETING FLAIR
LONDON
/'30,000 + Bonus + Car
This unigtie opportunity is to work with the marketing team of this
multi-million pound faimrial services organisation, market leaders in
their fields renowned for The innovative development of tax effective
investment products.
Business growth opportunities are imm ense and the Executive
Directors are seeking to appoint another Chartered Accountant to pro-
vide advice and supppit services to Senior Advisors in Accountancy
firms. Directors of companies and independent advisors.
The successful candidate will probably be in their mid to late
twenties, either from practice or with commercial experience. The sole
will appeal to a person who would like to develop their marketing skills
and accordingly must have , good communication skills, personal
presentation and the confidence to handle high profile clients.
The rewards include a salary of £3Q£00phjs a performance related
bonus and can incl u de a car when required.
For further information in strict confidence, please contact
Raj Munde A.CA. oh 01-240 1040 or forward a detailed resum£ to
our London office quoting reference no. 9/722, Morgan and Banks
Search and Selection He,
114 St. Martin’s Lane,
London WC2N 4AZ.
Fax:01-2401052.
Mor g an 6 5^iKife
LON DON
A ASi i i NO TON SYDNEY AUCKLAND
If RrtaiteWmnitac
1st Row
a 2 JtoftBxUtoa&
OMtnGnm. •
iMtaitimm
DtDMSSttM
1 ■KNEVUJLE
1 ■RUSSELL
;rt Chartered Accountant*
NaffConbRnkHnas,
Stconfannknud.
Bant.
Essex £1«>Q
li: 01-478 7725
MANAGEMENT CONSULTANT
London N 10 c£ 25 flOO+Car+Beneffls
Ipd Coope’&ytorVUrihar is a Wghly successful subskS»y of Affied Breweries
Ud^thebiewinoendhMfflnariMribnofAWedHLyonBHaTheyarBeeeWngto
appoint a ktanageraeff Accountant to head up the management accounting
team-TheMani^iecnBntAccountarttorespcsw^hythofinancialwakjation
o(polentMacqiii8ition8,davelopnNnbBftdinaiorpfCfecXsasweBasfinancfaf
^anrtng, b ud geting »idproyWon of mont^Wgm w tion to the Bow^Tlite to
un oceBenl opportunity for a Qualified Accountant to join an expanding
STEP IN THE RIGHT DIRECTION
Essex to £2^000
Jf ” 68 * 3 k,oWnfl far 8 r0wartflng caraar wHta a
^histeading firm of accountants with offices throughout the country needs
fiwvte c omme ro te fly minded accountants teen folate rasporjs4rf/rty for an
grounding portfoio of new and developing companies. The caOs fa 1 a high
FINANCIAL
STRATEGY
Central London
c. £45,000
+ Substantial Benefits
TT2
Production-Accountant
This world markat leader with massive resources,
operational network and product base offers a
hands on role with a difference. Instead of
accountants, your key working colleagues wiU be
technical esqserts aid support staff of widely varying
seniority, and your Job satisfaction will come from
seeing end-products developed and distributed from
scratch. An excellent package is guaranteed. -
Ref: 61315
Contact the Manager: 28 Iflgh St,
Bromley 01-290 6688
Fhx: 01-464 6696
Our client, a major US corporation, operates worldwide in FMCG
and boasts revenues approaching $3 billion.
The corporation has taken a proactive stance to the formation of a
single European market and has made substantial funds available for
investment to expand this significant area of activity.
London will be the centre of all European business Initiation and
reporting directly to the Managing Director, the incumbent will
evaluate and investigate potential acquisition targets as port of a team
of business professionals committed to rapid growth in the next
two years. Other vital responsibilities will include business strategy,
new product evaluation, market! ng/advenising policy and
organisational issues.
This key role requires the intellectual and perceptive attributes of
an entrepreneur able to cut through normal reporting issues to
identify each target company's potential and the consequences of
instigating change: .
The successful candidate, aged to 40, will be a qualified accountant,
lawyer or MBA/management consultant with a broad range of
corporate finance experience gained in commerce, industry, banking
or practice: Other essential attributes include the personality to
negotiate with executives at the highest level, superb personal
presence and a sharp intellect
With the support of a small team, there will be significant European
travel. The position offers a first-rate performance-related package and
unique international exposure.
Interested candidates should write enclosing curriculum vitae ro
Mkbael Herst or Patrick farter quoting Rek MH8JQ
HARRISON ^WILLIS
Fl-N AN C I AL~~feECRUITMENT CONSULTANTS
Cardinal House, 39-40 Albemarle St, London WIX 3FD. Tel: 01-629 4461
Financial Accountant
This Pan-European financial services organisation,
whose client base is heavily blue chip, offers a
management opportunity that is a good medium term
career move. FuH control of financial accounting will be
supplemented by a significant contribution in the areas
of management reporting and analysis. Overall, a rare
chance to develop financial services expertise while
avoiding the drudge of dty commuting. Ref: 662311A6.
Contact the Manager: 9 Peascod Street,
Windsor 0753 851447
Fax: 0753 860899
financial briefs.
A steady props
the right peopto
career prospects are excellent for
Post Qualification Experience — send your CV or phone the
appropriate Manager or our Specialist PQE Career Advisers
on Ot 256 6496 (24 hour answering service)
^ . for an application form now.
^ Q I Reed actively promotes Equal Opportunities.
REED.,
accountancy
f U a
ACCOUNTING MANAGER
Greater Ipswich Area
Sys*eirea«iPioc«Juras,no^^
negto£25K + bonus
Salary negotiable to £2SK,
phis bonus. Ca£ Pension,
Medical insurance.
Relocation assistance.
For further datatM
TheauccessMcwxficWtewff be atpwWted a^putoit ^^ - pteeae write to
CCAorCMA)wtih«portatcedfroarad^^ Mra. Pat Berry, ^
kjeaitaof mecfiiOTWsizsdcoiTOani^ He or shews have 31 Consultants Lknited.
S»S£gui«uu
ccxMbsan i^a^ef move for a young accountant quoting ref: TS^87.
A WEALTH OF
EXPERIENCE
^Consultants Ltd
BUSINESS DEVELOPMENT EXECUTIVE
Midlands
ACA/AIB
c£3 0,000 + Benefits
Chtr ekenly amafor face tn Infemgrintial mt p ora te baiJdog. has been
dwAiping a shtwgdi^tliaijp in the MirWanda- With a aicmaiftil
track record and anAidotg grosvth plans tbc bank istookjogfoyan
{odividual to develop btnmcas and investviBEit opportunities within
the Midlands*
.< ^i»rif^lly tfvirit&win{nonli»*Ami^*ngatriCTQluatfngCOirmigDdal
Tht mosmbent is likely to be 27 to 35 yean old and have abockground
in investment or international corporate banking.oraltEmativriy
within a "big S'* firm of Chartered Accountants, preferably within
corporate finance. Ahhoujj^ a detailed knowledge of banking
instruments fe not a prerequisite, a desire to iindmbtpdanddewdky
business in the Midlands is essential.
The successful candidate will need to be a financially astute sdfetaiter
with the abflity to work under mfnimumsupaviaion. As negotiations
with senior man age m ent Is essential.
with an international bank. Rdocariop assistance will be available if
necessary.
Interested applicants should call Marie Gilbert ACA on 021-200 5800
(8am-8pm) or write, eadc ang details, to the address below.
ROBERT ♦ WALTERS ♦ ASSOCIATES
RECRUITMENT CONSULTANTS
Berwick House 35 Livery street Blrmlngliam 83 are
IbtephODC: 021.2005800
• r
r.-
FINANCIAL TIMES FRIDAY DECEMBER S 1989
Finance Director
Inter national Airline
c.<£75,000 package.
Financial Controller
Valuable options.
c.£42,000 package
East Midlands
Excepti'Mial potential for a tough financial professional to make
a substantial capital sum and shave in the success of a very fast
gt o wi Pig) strongly backed private airline.
THE COMPANY
O Y/Efell capitalised, privately held airline with substantial and growing
schedule, charter and ancillary services.
O Core passenger franchise with established and growing route
network.
O Tight Head Office team with long history of airline management.
TECE POSITION
O Responsible for all aspects of accounting policy, financial control
and Treasury, reporting to the Managin g Director.
O Management of a sizeable, qualified accounting team demanding
strong implementation of systems and accounting procedures.
O Close liaison with the group aircraft company and banks on the
funding and management of the aircraft fleet.
QUAuncmoNS
O Graduate Chartered Accountant, with successful track record in
the airline or tour operating industries.
O Strong financial and management skills backed by tough “no
nonsense'* approach. Age is open.
O Highly motivated manager looking for real capital accumulation
opportunity with short time horizon.
THE REWARDS
O Excellent package with options and foil executive benefits.
O Potential for real capital gain.
Please reply in writing, enclosing full cv.
Refe rence H-4765
54 Jermyn Street, London SW1Y 6LX.
Opportunity for dynamic qualified accountant to
implement change as head of finance function in a
significant division of a blue chip pic.
THE COMPANY
O Turnover approaching £80m. Successful division of leading pic
Profitable.
O Distributes wide range of products to well targeted specialist
markets from central warehouse. Smaller multi-site manufacturing
operations.
O Commitment to strengthen financial function and systems.
THE POSITION
O Report directly to MX). Lead 40+ strong team. Key member
of Management Board.
O Fully responsible for all financial budgeting, reporting,
control and analysis.
O Major challenge to enhance financial controls in recently
restructured operating units.
QUAUFICATTOZVS
O Qualified accounzant. Ideally aged mid- 30s to mid-405.
O Senior experience in distribution business essential.
Knowledge of manufacturing desirable.
O Tough manager of change. Good communicator Technically
excellent.
THE REWARDS
O Major career opportunity in key area of highly regarded pic.
O Very attractive salary, profit share and fringe benefits.
Please reply in writing, coclosing full cv.
Reference BH3082
NBS, Bezmens Court, 6 Bennetts R2U, Birmingham B2 5ST.
^ N*B\
LECTIQ>N
s. LTD /
X 1 —
LONDON -01-493 3383
BHOONGaU! • 021-233 4656 • GLUG0W- 041-304 4334
SLOUGH ■ 0753 694B94- KING KONG -(UK) 5217133
•" N-B \
LECTIQ>N
< LTD /
BIRMINGHAM -Q21-233 4656
LONDON -02-493 3383 -SLOUGH- 0753 6W844
GLASGOW -M1-2M«J34- HONGKONG -(UK) 5 217153
GROUP FINANCIAL 0
To retain a corporate perspective
on a complex divisional structure
c30,000, bonus + car Mkflands
Our client company: a hi^dyprofiiahfcesub^^of on^
of the UK’s better known mulu-nanon 4s, twns wct soine -
L30 million, In products which are cc* spinal nuh f ■
tangible We are looking for ah experie «ed I »ccRmunt to
shoulder corporate responsibility ford 1 iWg™
information and financial reponing-a rote which wui
become easier and will certainly be per formed mjc
effcaivdv if the appointee has a dcar-s ighrcd undersuncUng
of divisional issues: Ideal candidates. pnobaMy around diirty.
will have the qualification and experience which wiUenaWt
them uj make die basics simple-and t< > keep them mat way.
They will already have managed a finance function m a
servtre environment, aiid they wifi relish a culmrcwhrfi»
vibrant, intelligent and dedicated ra making th happen
The veiy best candidates will be disdnsuished by a hunger
for improvement and the determination to achi^ttby .
mnovadon-Please send full career details, quoong WE 92^0.
to Dave Denny. Ward Executive Limited. Academy House,
26/28 SackvlUe Street. London W1X 2QL
WARD EXECUTIVE
hm _ LIMITED U l
Executive Search &■ Selection J
APPOINTMENTS ADYEFOTSIN/G
Appears avary Monday, W adiwday
and Thursday -
for further Information calf O'! -873 3000
Nicholas Baker uxt 3351
Elizabeth Arthur ext 3594
Senior Tax & Legal Advisor
France
Based in Paris you’ll be working for a major
international banking group in their
investment banking division.
As part of a team of mergers/ acquisitions
specialists, responsible for providing a
transaction based service to corporate clients
based in France and worldwide, your role will
involve outlining proposals, structuring and
handling the tax and legal aspects concerning
cross-border transactio ns.
YouH need an imaginative and creative
approach to transactions, based on a
sound understanding of Anglo-Saxon
techniques.
Corporate Finance
Aged 30-35 , you’ll be a qualified lawyer with a
knowledge of tax and at least 5 years’ post-
qualification experience. Your background will
probably be with an investment bank, a multi-
national corporation, or an international law
firm.
This position requires an autonomous
approach as well as excellent inter-personal
skills. A good level of French is essential.
Please send CV and handwritten letter to
Fi£d£ric Foucard at
Michael Page International,
10, rue Jean Goujon- 75008 Paris.
Teh 010 331.42.8930.03.
Michael Page International
International Recruitment Consultants
Lon d o n Amsterdam Eindhoven Brussels Antwerp Paris Lyon Sydney Melbourne
* ■ :v 8S!K
FINANCIAL CONTROLLER
OPERATIONS
To £35,000 + bonus + car
Operations will be expected to work closely
with, line managers, facilitating their
evaluation of tactical and strategic business
options.
Candidates must be qualified accountants,
probably aged between 30 and 40. Yjut
experience should include exposure to large
company disciplines, ideally in a
m a nu f a c turing or a technology driven
envir onment. Hood r ntTimi iTiira tirifn skills, -
strategfo awareness and self motivation will
ensure success in the role.
Please reply in confidence, giving concise
career, personal ana salary details to Heather
Male, quoting Ref. L472.
THE CB1PH0NE NETWORK
London
CeUnet has become a household name in five
years, an achievement based on a compound
growth rate of 100% per annum. It operates
one of the world's most technologically
advanced mobile communications networks
1990s. Currently it is investing £4m per week
in the network in order to service its
expanding markets.
Reporting to the Finance Director, this new
technical functions. The priority is to assess
the information and control requirements of
the function in outer to develop appropriate
performance measures and provide an
integrated financial management and control
service. Supported by aseparate centralised
accounting group, the Financial Controller;
Egor Executive Selection.
58 SL James’s Street
Louden SWlA 1 LD { 01 - 629 8070 )
EXECUTIVE
SELECTION
United Kingdom ■ Belgium • Denmark • France - Germany- tely • Netherlands • Portugal • Spain • Sweden
ST HILDA’S
COLLEGE,
OXFORD
Appointment of
Treasurer
Applications are invited from men and
women with accountancy qualifications for
the full-time post of Treasurer in this
women’s college from 1st Februaiy (or as
soon after as possible) to be responsible to
the Governing Body for financial planning
and control. Full particulars should be
obtained from the Principal, St Hilda’s
College, Oxford OX4 1 1DY, to whom
applications (S copies) should be submitted by
5th January.
Int erval
INTERNATIONAL
The Owdltr HdUor Eajaiv Newwrt -
require a
. rj ■) LW i JA ' i r j i 1 1
btiwvcfl intanaflorxJ Ud ore the Wodcfa QuaHy Umnhare Bechance
Naturals provfcJng oubknftig service* to theTkrwhaw Industry and Ha
cierrtete. in keepfrtQ wfih the mosrfve growth of foe Hmeahaso Industry.
Inlwcd b abo rapkfly expandfog, Thui wsenintto process of
resteucfurlng ci of which h derigied to s tren g then our Manageme n t
T«otl Hence iwe requfce an cvnbMout commuted krrdMdud wfl
to develop hkmaxagafcdskBi In the future.
BwJatr
■ Preparation of flmrdal budgets end forecasts
• Control Sy*tam*Ftoy^
Office services • Rnandd propraefe for prefect*,
The Person;
1 hnowa8wB ‘ 2M5 ■ Managerial experience.
WBng to travel • QuaMcattan - ACA or ACMA
TheRa w ane bj
I ^S 5 * 000 °nd Bares * free Forty Private Hedth.
I Concessions " CPreer Development.
Interest-free Amud Season Tweet loan.
Flew send o fid CuriaAjm VBae kx<
Hector of Operation,
Mem* international LMted,
Agriculiiie House,
SS-81 KntQMsbifdge, LONDON 3W1X 7LY
Manufacturing
Accounting
Manager
Midlands,
Highly Attractive
Salary, Car, Benefits
This wholly owned subsidiary of a group witha
turnover of around £1 billion in the automotive industry'
is seekingto strengthen its finance team by recruiting an
accountant of the highest calibre. Reporting to the :
Financial Controller you will be managing a small team
with die main responsibility being .to understand and
work closely with manufacturing to generate and
improve solutions to meet accounting requirements.
Preferably aged 28-40 you will be qualified with at least
three years experience in a complex test moving
manufacturing environment. Candidates will need to
be able to demonstrate excellent leadership and
communication skills. This is a significant opportunity
to play an important role in the company that has
specific career plans. The benefits include a two litre car
and relocation assistance where appropriate.
Male or female candidates should submit in confidence
a comprehensive c.v. or telephone for a Personal History
Form to, G.J. Deakin, Hoggett Bowers pic, 13 Frederick
Road, Edgbaston, BIRMINGHAM, B15 1JD ,
021-455 7575, Fax: 021-454. 2338, quoting Ref:
B18115/FT.
BIRMINGHAM, BRISTOL, CAMBRIDGE, CARDIFF. HMNBURGH, (3JVSGOW, USDS, IX^D(>1,MAN(SESIEX,
NEVVCASTLE.NOTI3IVGHAM, ST ALBANS, SHEFFIELD, WIM3SOR and EUROPE
A Member of Bine Arrow pic
Audit St Compliance Manager
A route into Merchant Banking
£ 30 k -£35k + car + banking benefits
Our cheat is a prestigious UK merchant bank and a member
of a broadly based major European finan cial services group. As
part of their phmit to Strengthen their jmnagen W.H wgnrt t hey
Be bow VvJring for an ambitious occc u wi nmt \pbo gjQ initially
assnme respoosMity for foe Audit and Coc a pBance cole as a
inw merchant banking
Reporting to both the Finance Director and die
Compliance Director, your key tasks will be to review and
develop both die e a sting inwma l <nw4r» cole and the compliance
function to provide a sound basis for the Bank's planned
e xpansion . This will involve you across the full apcctnim of the
Banks in terests and will indude occasional overseas travel
A gratified accountant in your late 20^/eady 30's you axe
likely to be rather in a similar role in another financial
Austin
institution or a senior position within the . Profession. You must
be familiar with auditing s op histi cated compu t e r syst ems dad
have a sound knowledge of the FSA and TSA requirements.
You should be able to command respect at all levels, have
cs c eDent communi cati o n skills, an et«j»irfr>g mind, and the.
t6 xhfolc dearfy ntyf logically. ...
In add it i on to the above salary die position includes
substantial benefits such as a quality company car,
non-contributory pension and life assurance scheme and
family PPP.
In the first instance contact Bob Gunning, Senior
Consultant, at Austin Knight Selection on 01-439 5745
(01-494 1093 evenings/ weekends). Or write to him
endo wi ng your detailed CV, at Kmgjitway, House, 20 Soho
Square, London W1 A IDS, quoting refe rwiKe n nmiwt
2Q21/JRG/89.
New Appointment
Financial Controller
We are recruiting on behalf of
TaHbs Holdings, an entrepreneurial and
rapidly ©panc&ng pic, concentrati n g
mainly in the field of locomotive and
roBng stock manufachre for a variety of
industries, Mudng the Channel^ TUnneL
The gmto is beginning to diversify
strongly into other dearly defined areas.
Success can be gauged by the feet that
both turnover and profits rose by over
200% in the last completed financial
yea: Exceptional growth is being
maintained.
■ A Financial Controller is required to
lead a email team taking responsibility
1 LONDON W1 j
f c£35,000 + Car 1
for a8 statutory and management
accounts preparation, the consoBdation
of &oup budgets and the preparation of
board papers. The successful cancSdats
should also be prepared to undertake
ad hoc trouble shooting assignments at
short notice, probably in newly acquired
companies.
This is a new position which calls for
a young ACA, with an eye for detaB, a
competent self starter who probably
qualified around two years ago with a
major professional firm. An appreciation
of bu siness and a highly commercial
attitude are essential as the continued
growth of the group b ftvdy to open up
very much more senior opportunities
within feirty short timescales.
Candidates shoL*3 vwite inckx£ng
fua career and salary details quoting
Kfenxxe MCS/8872 to: Jm Mitehel
Management Consultants
Livery House
169 Edmund Street
Birmingham
B32JB
Price Waterhouse
I
A'
FINANCIAL TIMES FRIDAY DECEMBER & 1989
IX
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GROUP
TREASURER
North-West c£35.000+&omis+car
+ executive benefits
lids high-profile, fest-xnoving Group of co mpani es operates throughout the
UK. -with headqaartexs in file North-VfesLft manufactures far an impressive
range of "own tabeT customers, as well as having its own portfolio of leading
’ "brand names, and is pursuing an ambttkxs development progr am me to
increase efficiency andprofitabffity. The opportunity has now arisen for a high-
caKhre treasury pro fess i o nal to Join the small Head Office team.
Management of cash resources and of the Groups tncnmwJng foreign
exchange’ exposures are the hey areas. In both, there is scope fix' the
Introduction of more sophisticated control systems, which wffl indude Batson
and data exchange throughout a complex structure of business units. In
addition, theGroqp'EwisurerwfflbeiesponsIble for the fimc&ng arrangements
of the Group, inrJudh^ ff Tnrtntsrtnm g hanking rafatinns at SBfa jgmgfc
Cane fl dates must have sound experience in corporate treasury work,
su pported by a keen awareness of 'Txrttomjhie'’ fimcfamentob. An open and,.
'dxraaxadcativepetsonaL^tyiewffl be welcome, together with the confidence"
and external d mBngS- The GmMpTrgaswgr
wffl be wgdd ng side-byskle with Oie most senior executives within the
organisation and consequently wffl be closely involved in the planned
development of die Group.
Please apply to ear Mwafaa t u Oflfaa whaca yoor con tac t * axe Dudley
Banop and S h a w . HXltS
Amethyst]
Mwn /, * > — °^p i M 2 II
061-832 9123
ASBRECKUnMENTLID
Abo at: Bbnrtngbazn, Leeds. Umrpoal,
•’ J fotrtn g hit mandSwindoQ
Financial
Controller
London
c. £40,000 + bonus + car
Highly profitable pic with an i mp ressive growth record in the leasnre industry seeks a
Finanaal Controller with a wide ranging remit mdnding the treasury function. This
key role provides the o ppor tuni ty to play an active part in the development of the
Company’s business plans at a critical time. Preferred age 35 — 42.
Candidates will be qnabfied accountants with proven experience of hands on’ control,
or fmeg sectors. Highly developed technical, man-management and inter-personal skills
are required. The aM^y to adapt to change with enthusiasm and (Jetenmnation in an
informal, energetic, resultsbrientated environment
isalsoessehtiaL
For fuller details write in confidence to WT Agar
atJC^104MaiyidboneLane,LaidoaWlM5FU E *ni1f*r1Q
deinonstzHfing year relevance dearly and qnbtmg •
2309/fx ^Partners
Search and Selection 1
ibhn
IGH PROFILE CORPORATE
ACCOUNTANT
<£24,000 + CAR + EXCELLENT BENEFITS ESSEX
ESSEX WATER COMPANY, a .
privately owned molti-nrillion pound
enterprise, isownmined to posiiive
trMximtghng die exciting devdopments
occnrringwiflim die industry.
This newly created role will appeal
ip an enthusiastic, recently qualified
Accomtamwhowisbesto gain
exposure to the highest level of
management within an extremely
c nmmerri al frari iqivi mnnwn f.
The key objective wflt be to provide
foe Director General and senior level
management with the information,
advice and haerpretation required for
the new regulatory requirements.
Excellent communication skills and
foe vision to take a strategic view will
be essential, as is foe ability to develop
computerised planning models. A
generous remuneration package reflects
the importance of the role.
Write with toll C.V. quoting Ref.
FT/HA, to: CAROLYN CLARKE,
PER, 1 High Street, Chelmsford
CM1 IYN or phone (0245) 260234 to
discuss.
Chief
Accountant
London
c £20,000+bonus
Our client is foe International Operations of a Canadian
GroiyhnfoNcdmfoetoew h a n di M ngsideofihccoteflain-
ment industry. With a current turnover in excess of £18
minion, foe International Operations organisation now
requires a Chief Accountant,
Reporting directly to the Director of Finance and Admini-
stration, the successful candidate will have two accounting
clerks ami be responsible for the supervision and direction
of ail financial reporting for operations. Duties will include
main taining personnel records and preparing payrolls,
assisting in foe co-ordination of strategic plans and annual
business plans, and maintaining and implementing com-
puter systems.
Working in ft dynamic environment, this position offers an
exciting o p por t un ity for the right person to develop into a
more senior role. Ideally aged 23 - 28 and currently
studying for ACA /ACCA, the ideal candidate will have 3
- 5 years experience in a similar business environment.
If you believe you have the interest and the qualifications
to meet this exciting opportunity, please send your CY and
a covering teller (including day-time telephone number),
quoting ref: FT 1 27 lo: I. David Pres too
RO BSQNRHOD ES
Chartered Accountants
Financial Controller
Hampshire Coast -Leisure
c£28,000 + car
Out client ia a highly regarded major UK
leisure company and a quoted pte- As a
direct, mult of crpenaion and grorththia
ae« appointment te to be nude at the
centre of a key £200m tarns ver di virion.
Reporting to the Divisional Finance
Director the successful applicant win be
responsible for all matters relating to
finoTM-ifl l and management fn.
tbc division- The role will encompass the
review and analysis of data, the
im pro vem ent of quality and speed of
financial information and provide strong
support to the Finance Director in
determining future systems atategy and
bueuwes development oppartuninoe.
Candidates will be qualified accountant*,
age indicator 27-32, whs can bring sound
technical expertise to the division coupled
with a commercial outlook. Strong
communication skills ore essential aathia
new role will require considerable liaison
with the senior management of foe
Division and to contribute as a member of
that loam.
This is an excellent opportunity to join a
lively, expanding company and full
relocation to this attractive port of the
south coast will be provided where
appropriate.
Flense write or telephone enclosing a full
resume quoting ref. 350 to:
Philip Cartwright FCMA
97 Jenny n Street
London SW1Y6JK
Tbl: 01-S394572
Cartwright
■Hopkjns
FINANCIAL SELECTION AND SEARCH
FINANCIAL DIRECTOR
Our client part of a major international pic. is a successful and expanding
company manufacturing chemical and polymer products for the building
industry. Due to internal pr o mot i on an opportunity exists for a qualified
accountant to head up the accounting and administration functions based in
the Northern Home Counties.
FINANCE DIRECTOR
£24000-25000 pa pins car
The Shaftesbury Society is i Chrinisn oeg em ss ri on involved with
Horace Domaor has been crested ri the Head Office fc> Haynes Rufc. S W
London.
•p^! wwNwwfof hf • r^rmKf^rfatwmwittw^r tufth t-rpwiwifm in
— i w IWmiwtmI management. SS»o will have proven fctdenhip tmriitaa.
nutritive. deny ofmmd together with mobility to MSI some f m u t iu ps
with ■ VtTvk on* approach. The xbiEty to extend and enhance the
conquer synom would be in advantage.
Tte po« win be responailde to the Chief Exectfive sad win masage fi/7
Staff tmjpffing thf fttnwinw-
In the fim instance, applicant* should apply with * full CV to Peal
MachcD, S haiteab o r y Hoosb. 2s Amity Grove. Raynea Pile. London.
SW20 COL Tckpfcooe: 01 946 6635. Qoxiug dale 3T50. fettetview dale
2fi.L9a
me suoceseiw apputam mun nave wunu unanaiu
perience. Proven organisational and people management
Experience of the selection and application of mid range
: is niehlv desirable.
Probably aged 3045, the successful applicant must have sound financial
and commercial experience,
skills are essential. ExperJen
computing systems is highly desirable.
£35,000 + BONUS & CAR
In addition to a competitive salary, the company offers a performance
related bonus, family BUPA and an excellent pension scheme.
This is an outstanding opport u nity for the right person to make a
significan t contribution to the control and strategic direction of this successful
and profitable company, whilst developing their career with a highly
progressive group.
Write today with full career details to SycTHalstead at Handley-Walker
Group, 32A Weymouth Street, London WIN 3FA and tell him why you
should be considered for this challenging appointment.
□□
• THE
Shaftesbury
CARING IN THE
NAME OF CHRIST
HUMAN ■
R ESOU RCE ■
DEVELOPMENT
□□
A Member of tbe Handley-Walker Group ptc
A Finance Director who knows the answers
South Midlands
Our dient, established for over 100 years and a
leading supplier to the fast food and catering
trades, needs answers from an outstanding
Finance Director whose financial expertise
complements excellent personal skills and who
possesses that rare talent for identifying
imaginative, but practical solutions.
Consider what our dient offers.
Challenge, in a word. Under new ownership the past twelve
months has seen financial restructuring, substantial
expansion and the recruitment of a 'heavyweight'
management team.
Plans incorporate growth by acquisition and will
include you. They offer the opportunity to play a key role in
the Group Management Team as it manages the growth
and to help implement those'answers - by asking the right
questions. You'll investigate new acquisitions, analyse
company performance and present effective management
information.
Joining will not be easy. You'll need to be a qualified
accountant, probably aged between 30 and 40, with a high
flier's track record - ideally mduding a period in
consultancy - and excellent personal skills.
c£55,000 + car + benefits
An impressive background indeed,
but essential to cope with the demanding
work. That's why the remuneration package
is impressive (competitive salary,
relocation, bonus, BUPA, pension). Though
we know that the challenge of the position
will be your greatest reward.
if you’re ready to provide answers and
and enjoy asking questions write now to:
A JL Bott, Managing Director,
Anderson Smith Management
Rereoitnel Ltd .
Anderson House, 50 Bridge Street,
Northampton NNllfVL
Telephone 0604 34365
(24 hour answering service)
Anderson Smith
RECRUITMENT, SELECTION & SEARCH
LONDON, NOTTINGHAM, NORTHAMPTON
should start asking questions
FINANCIAL DIRECTOR
Rural Midlands
*
Hus acquisitive, expanding business is a leading player in
highly competitive consumer markets which it accesses
via the multiple retailers. Fait of a household name public
group, the division has a turnover of £120m and is made
up of several profit centres. Its organic growth and
acquisition plans ensure excellent short term
opportunities for additional responsibility and status.
The Financial Director is responsible fora centralised
accounting, control and financial management function
comprising 40 staff Apart from managing these activities,
the person appointed will work very closely with profit
centre managers, providing planning and analysis to focus
their attention on performance, customer profitability and
production efficiency. He or she will play a ksy partin
managing chan ge in this successful, dynamic business.
£40,000 + bonus + car
The person sought must be capable of developing quickly
into a larger role. Consequently, candidates must
demonstrate a track record of increasing responsibility
and a breadth of financial management experience
gained in blue chip, preferably FMCG, companies. You
must have good communications skills, commercial
judgement and a real commitment to your own and your
company's goals. A qualified accountant, you are likely
to be in your eariy/mid thirties.
Please reply in confidence, giving concise
careen personal and salary details to Kate Edwards,
quoting Ref. L470 at Gnwvenor Stewart Executive
Search, 58 St James’s Street, London SW1A1LD.
(TeEOl-493 1045).
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FINANCIAL TIMES FRIDA v PECEMftflR 8 >$8*
trn,.
ABU DHABI NATIONAL OIL COMPANY
ADNOC is one of tbe major oil companies in the World controlling the
Exploration, Production and Processing of Oil, Gas and Associated Products in Abu
Dhab i and the Marketing of ADNOC's hydrocarbon products.
The Company wishes to recruit suitably qualified candidates for the following
positions:
SENIOR SYSTEMS ANALYSTS (TWO POSITIONS)
Tax-Free Salary US$ 33,000 - $ 40,500 p.a + Benefits
To analyse and recommend unproved, simplified operating procedures, practices and
accounting policies. Formulates and documents financial policies and flow of information.
Develops guidelines and procedures for using financial systems. Develops forms in su ppo rt
of approved methods and procedures. Recommends and documents Management information
procedures and Financial Limits of Authorization.
SUBSTANTIAL ASSETS,
PHENOMENAL SALES - COULD YOUR
SKILLS MANAGE IT?
The candidate should have a University Degree ei ther in HnaiK%/Accountmg (preferably CPA,
ACA, ACCA) with a minimum of 8 years relevant working experience preferably with oil or
related industries. Excellent English Language skills is essential. Experience of co m put e rised
acotmting and information systems are preferable.
ADNOC's benefits include family accommodation, furniture allowance, medical care, 42
days annual leave, passage fen: eligible dependents, educational assistance for eligible children
anrl cay pnrc ftaxg tpan.
Interested candidates are invited to forward their detailed applications together with
photocopies of their education and experience certificates, within three weeks from the dare
hereof; to:
THE HUMAN RESOURCES DIVISION MANAGER
PERSONNEL DIRECTORATE
ABU DHABI NATIONAL OIL COMPANY (ADNOC)
P.O. BOX 898 - ABU DHABI - U.AJT.
Excellent salary + car 4- benefits
Motorola is one of the world's most successful and
fastest growing companies in the competitive cellular
communications industry. With an innovative high
technology product range, a p ro g r es s ive oudook and an
advanced business environment, the scope for future
development is truly unparalleled.
In recent months, our Ce llular Infrastructure Division
at Swindon has seen a substantial increase in assets and
significant growth. In fact, as part of our policy of organic
development, our current Financial Accounting Manager
has been promoted. 7b replace him, you’ll need to
demonstrate the technical abilities and innovative approach
necessary to further improve our outstanding business
record.
Your focus will be the management of our Financial
Accounting services team - key responsibilities will include
monthly ragnag <»nwir/fi nnngial accounting, preparation
Swindon
of reports for external bodies, internal control i procedures
and management of substantial fixed assets and treasury.
items. . . ’
To succeed, you will be a Chartered Accountant
with several years' post-qualification experience «
Accountant/Financial Manager level preferably within an
electronics environment. An established flair for man •
management and sotmd knowledge of US repofttegfonaati
will be essentiaL
In addition to an excellent remuneration package,
youTI benefit from the opportunity to play an Influe ntial I role
in the development and management of a i^»«Y ptitartftg
business. . • •
If you have the financial skills to make a success of this
challenge, please contact Tbc Personnel Deputmorf on
(0793) 541541 or write to them at Motorola Ltd, CcflnUr
Infr as tr uctur e Division, 16 Euro Way, BUgr ove, Swindon,
Wilts SN5 8YW Please quote ref. no. FT2I.
Management
Accountant
London,
c £30,000 inc 9
Bonus, Car
Our client is one of the UK's leading motor
vehicle retailing and distribution groups with
a turnover in excess of £220 million through
30 locations, encompassing 10 major quality
and volume franchises.
One of their premier Central London
dealerships holds a' major volume franchise
for a lull range of vehicles. Equally important
to the dealership in terms of both revenue and
profitability are the substantial Used Car,
Service ana Parts operations.
They are now seeking to appoint a
Management Accountant who will be
responsible for heading-up a small
Accounting Department. The successful
candidate will nave the ability to produce
timely financial and management
information on all aspects of the business and
will be a key member of the dealership
management team.
Applicants, aged between 25 and 32. should
be qualified Accountants with a minimum of
2 years post-qualification experience.
preteraoiy gained wi thin the motor industry
or allied trades. A working knowledge of
computer-based management systems would
be a distinct advantage.
The rewards package includes a profit-related
salary, the use of a company car, BUPA and a
contributory pension scheme.
Male or female candidates should submit
in confidence a comprehensive cv. or
telephone for a Persona! History Form to,
C Grant, Hnggett Bowers Advertising,
1/2 Hanover Street, LONDON, W1R 9WB,
01-485 4505, Fax: 01-495 1037.
Hoggett Bowers
BIKMJVGHAM. BRISTOL, CAMBRIDGE, CARDIFF. GLASGOW. EDINBURGH, LEEDS, LGNXJN. MANCHESTER.
NEWCASTLE, NOTTINGHAM. ST ALBANS. SHEFFIELD, WINDSOR and EUROPE
Financial
Controller
London -
Knightstoridge c£32,000 plus car
A highly successful financial services group with
and ambitious Financial Controller with Board
potential.
Reporting to the Managing Director the success-
ful candidate will be responsible for all statu tor y
accounting and management information, com-
pliance, taxa tion and business planning
Ap pl ica t io n s are invited from qualified accoun-
tants aged 27 to 32 who can demonstrate excellent
communication ririlta. the ability to thrive m an
informal hot hard working environment and who
have both a flexible and cre a ti v e approach to
Prospects are excellent and the remuneration
package can be adapted to suit individual
requirements.
Interested candidates should send a compre-
hensive curriculum vitae enclosing details of
c urre nt salary and a day time telephone number,
in the lafcric tef# to 8
HODGSON ^ GS ^ atefaaaB
IMPEYE^^
liUl ^ L ^ 50 PaDMaD, London SWiYMQ
REDUNDANT
EXECUTIVES ?
Call : Stephen Price
01-948 0666.
ACE 27-40
LONDON BUDGE
FINANCIAL CONTROLLER
(DIRECTOR DESIGNATE)
esjaaa + car
establkhed fim of Lloyds h a nma e c Brokers requires a Hnandjl
er/Rnaroc Director Designate.
Thesaaoenhil
reporting dire*
wi&h«*sataULy QiullBcd Accountant who wQL be
SCHOOL OF ORIENTAL AND
AFRICAN STUDIES
LECTURESHIP IN ECONOMICS
WITH REFERENCE TO AFRICA
Apptkauoos are Invited Train « rittbty
qu.hlied cudMiKf (ho old h»ve a
togEwf depte tn e ctmcmic i and a com-
«"*«"■« <a cnadto—a in maWng A
pro ten record in r ejauUj aa Africa,
nth preferably, an a p trin in noun
or Mtthent Africa t* w a aii ; compe-
tence in one of ibc bmjaaya of tbs
region fa deniable. The aaoocaaftil camS-
daie will be expected to teach
mafa gadnatc and naan ' comm on
the c Lumaniri of Africa, to wp e r v ia e
rese arch u nd ent* , and pai f fctp o tr n the
dfa cifjBim y leading of the Department.
Disciplinary teaching ipceiaHsation
fhonM mdnde the arcaa of Qoastanve
Methods and/or Ekmencuy and Inter-
media is fcnmle P rint ip l cs .
The xppocotmeeL «KQ dun (ram I Octo-
ber 1990. or as soon t her eafter as
possible. Depending on ipiaKiicarions
and experience, the appoi n tme nt wfl be
made on the Learner A scale ((IMS-
£15.772) or L ecturer B scale (£I6£I4-
£20.469), plus London Allowance of
£1.650. Membership of the UshmSks'
j| invited.
Application forms are available from
The Secretary, School oT Oriental and
African Studies, Ttuxnhnngh Street.
Rnssefl Square. London. WC1H OXG.
App Bcan a i c siii c m abroad am apply
direct m the Sc u e tat y la letter form
mpport e d by a faD anriailmu vitae and
the names mid addresses of three refer-
eea. All appfica t ioos should be sphagorri
by 28 Febraary 1990.
Financial
Controller
c £30,000 Package,
Car, Benefits
This highly successful company is part of a major Swedish
industrial multinational with a turnover bx excess of
£2biUion. Continued growth' and restructuring^
this exciting opportunity to join the senior management team
at our client's Hoad Office in Warwickshire.
The company itself has a turnover o££10m and Is involved in
the field of mineral processing. The post demands that you
to play an important management role m the future
development of the organisation.
You will be a qualified accountant with good commercial
skills. A practical approach to business problems together
with the enthusiasm and ability to contribute to a Highly
committed team are essential requirements. Your relaxed
management style will reflect your excellent interpersonal
skills.
Hie successful candidate will have every opportunity to
progress within the group, limited only by their awn ambition
and ability.
Male or female candidates should submit in confidence a
comprehensive c-v. or telephone foe a Personal-History Form
to, f. Jenkins, Hoggett Bowers pic, 13 Frederick ROtsd.
Edgbaston. BIRMINGHAM, BIS 1JD, 031-455 7575,
Fax: 021-454 2338, quoting Ref B23007/FT. _
BIRMINGHAM, BRISTOL, CAMBRIDGE, CARDIFF, EDINBU RGH, taLA SGCW.I£EDS > LONDCT^ MANCHESTER,
NEWCASTLE. NOTTINGHAM, ST AIJANS,SHEIVlELlLiWg3S0R arid EUROPE
Financial
Controller
Evesham
c £30,000+car
Our client is in the construction / leisure industry.
With a cui i e nl turnover in excess of £7 million, the com-
pany is rapidly growing and expanding and require* a
Financial Controller. This position is a key member of the
senior management team and reports directly to the Man-
aging Director.
The successful can d i d a te nmst be an expe ri enced qualified
accountant. Experience in the construction industry and
knowledge of computerised costing is essential. The posi-
tkm will have prime responsibility for: establishing and
maintaining effective and efficient accounting procedures;
preparing all management and statutory accounts; effec-
tively managing cash and forecasting cash requirements;
rmA advising management on strategic and operational fi-
nancial and treasury matters; establishing and developing
appropriate MIS and costing systems.
Ideally aged 27 - 35, the remuneration will include a car and
other benefits.
If you believe you have the interest and the qualifications
to meet this exciting opportunity, please send your CV and
a covering letter (including day-time telephone number),
quoting ref. FIT 28 to: J. David Preston
ROBSONRHODES
Financial Director
Southern Home Counties £35-38k + car
Rewarding role preparing for flotation
TWs highly successful service-sector organisation provides a professional service
to a prestigious private and pubficseoortferaEstfoocn some half-dozen offices.
Turnover grew by over 25% hi the last yea r aton e to' over £1 Imand with
the potential to grow even faster, the future c looking particularly bright
This new post has been created' to ensure that the organisation has the
administrative and fmandal foundations necessa r y to support growth so that
flotation within the short term is a dSstina possibffity.
For such a post; we are looking for a mature-minded qualified Accountant
whose experience has been gained in smafl to medium sized service-orientated
companies, possibly as a NoX and who has been exposed to the Introduction
of the cfisdpfines necessary to support growth and acquisition and prepare
for flotation.
Such a person, who wiH thrive on tovefvernent, can expea a salary around
£3 5k and an attractive benefits package including pension, -private heakh-
care and relocation assistance where appropriate in the short term and estcefient
prospects in the medium term.
Suitably qualified candidates who are interested in this kind of post should
in the first instance send fufl career details to;
MBte Sands, Menztos, Sandringham* Guildford Road. Woking.
Surrey GU 22 7QL Tefc (0483) 755000.
Chartered Accountants
Manageme nt Consultancy Division
186 City Road, London EC1V 2NU
Flense Write Box A.1436 Rnanrial TV®**,
One xooihvrark Bridge Loudon SE1 9HL
GROUP ACCOUNTANT c £27,000 p.a.
An independent retail bank based in Belgravia, requires an
Prevkns banking experience Is not essential but the applicant
should have a degree and an
Tbe position would suit a person with drive and Initiative^
experience d in th e preparation of group accounts and who wishes to
^^^^^P^yslpresadexopfoyliigH people but with plans
Please write with fid! CV.tao-
Finandal & General BankFLC
13 Lowndes Street
London SW1X9EX
Marked Siktiy Private sad Confidential
MENZIES
Chartered Accountants
SENIOR CREDIT ANALYST
{NEGOTIABLE + BANKING BENEEUS
Ota- efient Is a successful, International firm of Commodity Traders based in the West
End. They are offering a unique opportunity for a hlgh-cafibre inefividuai to join a small
Credit team.
Ybu wffl be involved in assessing risk and recommending credit Hnes, have direct
contact with senior management and work dosefy with trading, finance and support
staff on credit-related issues.
Tbu wffl be academically bright, articulate and motivated, with highly developed
communication skills. You wifl be a fast learner, persuasive, a lateral thinker yet able
to make sound commercial decisions quickly. A knowledge of financial
and documentary credits would help establish your credibility, as would an
appreciation of current affairs and international trade.
in return you will enjoy an exceptional opportunity to become efireetty involved in the
business, an exerting career path, a competitive range of benefits indudina a -
mortgage subsidy and luxurious Central London Offices.
Please write in confidence, sending full career details to Phiflpoa Gardiner or
can 01-588 0781. Quote Ref: PG412.
Banking Personnel, 41-42 London Wtill, London EC2M 5TB.
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