..AN.-00DGPB4AB7FT ..HL.- 930716FT 930716 Shipyard directors to be made redundant (254) ..BL.- By CHRIS TIGHE ..TX.- THE FOUR directors who led a management buy-out of Swan Hunter, the Tyneside shipbuilder, are among 143 employees to be made redundant by the receivers today, Chris Tighe writes. ..TX.- Mr Alex Marsh and Mr Roger Vaughan, joint group chief executives, Mr Vaughan's brother Peter, group commercial director, and Mr Ken Chapman, group marketing director, led the Pounds 5m buy-out in 1986 acquiring the company from state-owned British Shipbuilders. ..TX.- Swan Hunter went into receivership in May and Price Waterhouse, the receiver, said yesterday that the four directors would receive the same state minimum redundancy terms as the other 702 employees who will have left by the end of next week. ..TX.- Price Waterhouse said they might be asked to assist on an ad hoc paid consultancy basis but were not being retained on the payroll. They will remain directors of Swan Hunter. ..TX.- The four directors said: 'We are committed to assisting the receivers in selling the business and thereby retain on Tyneside the capability, spirit and team work that has led to Swan Hunter's reputation for the excellence of its product, workmanship and design.' ..TX.- They added: 'We have a great belief in the future of shipbuilding on Tyneside.' ..TX.- The latest redundancies cut the payroll to 1,700 and are understood to include six other directors, leaving only four at the yard. ..CO.- Companies: Swan Hunter Shipbuilders. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3731 Ship Building and Repairing. ..TP.- Types: PEOP Labour. ..IX.- P3731. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGPB4AB6FT ..HL.- 930716FT 930716 Assisted status 'sought for areas hit by defence cuts' (395) ..BL.- By CHRIS TIGHE ..TX.- THE GOVERNMENT is trying to gain assisted area status for parts of southern England affected by defence industry cuts in a last-minute addition to its proposed aid map, a leading Labour MEP said yesterday. ..TX.- Some coalfield closure areas in Nottinghamshire and South Yorkshire have also been proposed as additions following European Commission objections last week to 15 areas the British government wanted to include, said Mr Wayne David, MEP for south Wales. ..TX.- Mr David claimed parts of London and the south, including Great Yarmouth, Southend, Dover, the Isle of Wight and Torbay were among currently non-assisted places included on the draft map discussed last week by Mr Tim Sainsbury, trade minister, and Mr Karel Van Miert, EC competition commissioner. ..TX.- Mr David, who is also vice-chairman of the European Parliament's regional policy committee, said yesterday that he understood the government had since 'whittled down' the 15 to about six and added others. ..TX.- The map is based on travel-to-work areas. Mr David said the draft map also split up some of these areas - a precedent which is likely to be controversial in non-assisted areas where the overall jobless rate masks unemployment blackspots. ..TX.- The long-awaited map, which entitles companies in qualifying areas to grant aid, is expected to be made public next week. ..TX.- Mr David attacked the government's proposed inclusion of south-coast areas. He said: 'They are more concerned with the political nature of such actions than responding to economic necessity.' ..TX.- He claims that currently non-assisted areas that the government wanted switched to full or intermediate status are Mansfield, Thanet, Folkestone, Deal, Whitehaven, Ashfield, Isle of Wight, parts of London, Clacton, Southend, Chesterfield, Hastings, Torbay, Pontefract, Harwich, Ilfracombe, Great Yarmouth, Dover and Dewsbury. ..TX.- Areas suggested to be upgraded from intermediate to full development status are Fishguard, Forres, Haverfordwest, Kirkcaldy, Birmingham and Wolverhampton. ..TX.- Areas suggested to fall from full status to nothing are Corby, Lampeter and Aberaeron. ..TX.- Areas suggested to be downgraded from full status to intermediate are Dundee, Cardigan, Shotton, Dumbarton, Neath and Port Talbot, Wrexham, Pontypridd, Flint and Rhyl and Abergavenny. Areas suggested to fall from intermediate status to nothing are Darlington, Newport, Doncaster, north Cardiff, Telford and Bridgnorth, Rochdale. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9532 Urban and Community Development. ..TP.- Types: NEWS General News. ..IX.- P9532. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGPB4AB5FT ..HL.- 930716FT 930716 Schools to have performance pay (234) ..BL.- By JOHN AUTHERS ..TX.- MR JOHN PATTEN, the education secretary, will be allowed to designate schools in England and Wales as performance-related pay pilot schools, under the School Teachers' Pay and Conditions Document published yesterday. ..TX.- The paper confirmed government plans originally announced in April. The National Union of Teachers, the UK's largest teaching union, has already asked its members to boycott all appraisal interviews which form part of pilot schemes. ..TX.- The document also introduces a pay 'spine' for teachers in which points are awarded for experience, extra responsibilities and 'excellence in classroom teaching'. However, the government's intention to keep within the 1.5 per cent public-sector pay norm is also confirmed. ..TX.- The Association of Teachers and Lecturers said: 'The government in practice is not prepared to reward excellence. It says it wants to, but fails to deliver the financing.' ..TX.- Both the association and the NAS/UWT teachers' union complained that the late publication of the document, just as the summer term ends, placed an unfair burden on schools' administration. ..TX.- Mr Peter Smith, ATL general-secretary, said: 'The lateness of this report presents real problems for schools. Severe difficulties could result. Assimilation of teachers on to the new pay spine presents a particular challenge for management in these rushed circumstances.' ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9411 Administration of Educational Programs. ..TP.- Types: NEWS General News. ..IX.- P9411. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGPB4AB4FT ..HL.- 930716FT 930716 MPs attack canteen arm of Treasury (467) ..BL.- By RACHEL JOHNSON ..TX.- THE TREASURY was yester-day attacked by MPs over irregularities in its catering arm, ranging from mismanagement to fraud. ..TX.- The breakdown of control and management of Forward Civil Service Catering - which runs about 175 Whitehall canteens and restaurants - is estimated to have cost the taxpayer between Pounds 500,000 and Pounds 1m. The organisation is part of the Treasury, but run on commercial lines. ..TX.- A report from the Commons public accounts committee yesterday declared the case 'a serious failure in the proper conduct of public business in what is - or should have been - a straightforward trading operation'. ..TX.- The fact that the 'shambles' - as one MP put it - was the responsibility of the institution charged with monitoring financial control both in Whitehall and nationwide made it 'particularly unsatisfactory'. ..TX.- One MP said: 'You can understand why a taxpayer would wonder why we would think the Treasury could manage the British economy when they cannot run a tea shop.' ..TX.- Forward, which is the in-house caterer to the bulk of Whitehall, has a turnover of about Pounds 30m a year. It has its own chief executive and management board. Its accounts for 1991-92 were qualified after a large number of long-running irregularities came to light. ..TX.- The latest report says the full financial consequences of such failures have yet to be established. ..TX.- To date the consequences comprise Pounds 400,000 lost due to failures in cash handling, up to Pounds 450,000 liability for tax and national insurance, and a Pounds 110,000 fee from accountants Ernst and Young. ..TX.- The main weaknesses and irregularities found were: ..TX.- Failures in cash handling and documentation systems. ..TX.- Fictitious employees entered on the payroll. ..TX.- Payments to casual employees made without deductions for PAYE and national insurance. ..TX.- Failures to comply with purchasing procedures since 1988 - 39 out of 43 contracts were rolled forward without re-tender or a search for alternatives. ..TX.- The person who placed Pounds 5m of contracts discussed with the companies that benefited the financing of his private company. ..TX.- Account records destroyed at four restaurants. ..TX.- The Treasury admitted that it had failed to carry out a 10-year-old recommendation to furnish Forward with proper commercial accounts. ..TX.- MPs did not accept the Treasury's argument that uncertainties over Forward's status and its possible privatisation were reasons for not equipping it with efficient and effective financial systems and controls. ..TX.- The committee demanded that the Treasury pursue 'vigorous' disciplinary action against staff responsible for Forward's lapses. The report says action has been taken against 15 Forward staff, but 'notes' the Treasury's view that action against its own headquarters staff is not appropriate. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5812 Eating Places. P9611 Administration of General Economic Programs. ..TP.- Types: NEWS General News. ..IX.- P5812, P9611. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGPB4AB3FT ..HL.- 930716FT 930716 Big fall expected in BR pension surplus (365) ..BL.- By NORMA COHEN, Investments Correspondent ..TX.- THE SURPLUS in British Rail's pension scheme is expected to have shrunk dramatically when its actuarial valuation is completed this autumn, raising questions about whether the scheme will be able to pay full pensions indefinitely after privatisation. ..TX.- The Pounds 8.5bn pool with about 130,000 contributing members was said to have had a surplus of about Pounds 1bn at the time of its last valuation in 1990. ..TX.- That surplus is expected to have shrunk by nearly two-thirds, reflecting the effects of contributions holidays for BR, benefit enhancements for scheme members, lower than expected dividend income, a switch into lower-risk investments and the effects of the actuarial treatment of overseas investments and agricultural properties. ..TX.- Because of BR's redundancy programme, the scheme's investment managers have been forced to switch to lower yielding but less risky instruments. The scheme has moved roughly Pounds 1bn out of equities into fixed-interest securities within the past year. ..TX.- The government has proposed the scheme should operate for all BR employees left in the industry after privatisation, with existing assets used to pay their pensions and those of future pensioners. But trustees fear that without a single employer behind the scheme, it will be necessary for the government to provide a 'solvency' guarantee, to ensure benefits are paid. ..TX.- Mr John MacGregor, transport secretary, has promised the trustees of the BR scheme, who include BR management and employees, that he will study their solvency guarantee proposals. ..TX.- Many UK pension schemes undergoing a triennial valuation this year are reporting shrinkages in surpluses. Most actuaries have assumed dividend growth of between 4 per cent and 5 per cent for the period just passed, and dividend growth has been flat for the past 18 months. ..TX.- British Telecommunications earlier this year reported that lower than expected dividend growth and changes in the rate at which pension schemes can reclaim advance corporation tax on dividends had cut its surplus this year by nearly Pounds 1bn. ..CO.- Companies: British Rail. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6371 Pension, Health, and Welfare Funds. P4011 Railroads, Line-Haul Operating. ..TP.- Types: COMP Company News. ..IX.- P6371, P4011. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGPB4AB2FT ..HL.- 930716FT 930716 Government stops ferry merger (285) ..BL.- By RICHARD TOMKINS, Transport Correspondent ..TX.- BRITAIN'S TWO biggest ferry operators, P&O European Ferries and Stena Sealink, were yesterday refused government permission to merge their cross-Channel services in a bid to fight competition from the Channel tunnel. ..TX.- The two had planned to merge their car ferry services on the Dover to Calais route into a single, high-frequency operation in readiness for the expected opening of the tunnel next summer. ..TX.- Mr Tim Sainsbury, minister of state for industry, said the government was not prepared to contemplate a merger before the tunnel opened because this would reduce competition. ..TX.- He added that a fresh approach to the director-general of fair trading at a later date would be welcome, but he would expect any application to depend on new information such as traffic data. 'I would not expect such information to become available before autumn 1994,' he said. ..TX.- The ferry companies, which face a slump in business on the Dover-Calais route when the Channel tunnel opens, believe their best chance of surviving the competition is to co-ordinate timetables, prices and booking systems and to rationalise capacity on the ferry route. ..TX.- This is the third time since 1989 that the companies have been refused permission to pool their services. They said they were bitterly disappointed at the decision. ..TX.- Mr Sainsbury said yesterday that he would ask the director-general of fair trading if there was scope for restricted collaboration on interchangeable tickets, timetabling or capacity reduction. ..TX.- But Lord Sterling, chairman of P&O, said the decision 'defied rational explanation'. ..CO.- Companies: P and O European Ferries. Stena Sealink. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4482 Ferries. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P4482. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGPB4AB1FT ..HL.- 930716FT 930716 Students get more time to respond (92) ..TX.- STUDENTS have been given an extra month to respond to the government's proposals on student unions. These prescribe a list of activities for which public funds will be available. ..TX.- Students had complained that the original consultation period, set to end on October 1, began at the start of the summer vacation, and ended before the next term started. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8631 Labor Organizations. P9411 Administration of Educational Programs. ..TP.- Types: NEWS General News. ..IX.- P8631, P9411. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGPB4AB0FT ..HL.- 930716FT 930716 Birt admits BBC morale is low (103) ..TX.- MR JOHN BIRT, BBC director-general, admitted yesterday that staff morale was low. The most difficult task management faced was to unite staff behind the painful structural reforms being pushed through, he said. ..TX.- Mr Birt has said that he expects staff questionnaires, published today, to make painful reading. It is believed the questionnaires show considerable staff loyalty to the BBC, but much greater criticism of senior management. ..CO.- Companies: British Broadcasting Corp. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4832 Radio Broadcasting Stations. P4833 Television Broadcasting Stations. ..TP.- Types: PEOP Labour. ..IX.- P4832, P4833. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGPB4ABZFT ..HL.- 930716FT 930716 Chevron to cut N Sea exploring (185) ..TX.- CHEVRON, one of the leading US operators in the North Sea, will cut its exploration budget by 30 per cent over the rest of this year because of the effects of proposed changes to the petroleum revenue tax. ..TX.- Mr Charles Smith, managing director of Chevron UK, yesterday said the company's annual budget for North Sea exploration was between Pounds 50m and Pounds 100m. 'We'll have to slow it down to meet our cash flow targets,' he said. ..TX.- The changes to the tax, proposed in the March Budget, give oil companies greater incentives to invest in existing fields, but they reduce tax allowances for exploration. ..TX.- Chevron also said yesterday that it would shortly be entering final negotiations to sell gas from its new Britannia field, the largest of its kind in the North Sea. The likely purchasers are either British Gas or Wintershall of Germany. Delivery will start in October 1997. ..CO.- Companies: Chevron Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. ..TP.- Types: RES Capital expenditures. ..IX.- P1311. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGPB4ABYFT ..HL.- 930716FT 930716 Civil Service unions strike (102) ..TX.- THE TWO biggest Civil Service unions, the CPSA and NUCPS will today hold their first ever Home-Office-wide one-day strike against what they see as the threat to services and jobs by market testing and the lack of assurances for the future of staff. ..TX.- Ballot results showed a 2:1 majority in favour of the one-day strike by both unions' members. ..TX.- The strike will involve immigration staff at airports and ports, some prison workers and passport office workers. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9199 General Government, NEC. ..TP.- Types: PEOP Labour. ..IX.- P9199. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGPB4ABXFT ..HL.- 930716FT 930716 North sees continued increase in sales (248) ..BL.- By IAN HAMILTON FAZEY ..TX.- TWO OF the biggest regional economic surveys carried out by chambers of commerce - covering more than 2,000 companies in north-west England and the Yorkshire and Humberside region - have given further evidence of economic recovery, Ian Hamilton Fazey writes. ..TX.- Both reported that domestic and export sales had continued to rise after 'more tenuous' increases in January and March. ..TX.- The nine north-west chambers said domestic sales and orders, especially for smaller companies, had strengthened further. Yet they cautioned that orders from mainland Europe were slowing, although exports generally remained 'quite buoyant'. ..TX.- Companies in north-west England, however, are still reporting little pressure on capacity, which remains under-utilised. This is contributing to continuing caution on new investment. ..TX.- There also appears to be continuing disparity in job markets, with small- and medium-sized companies responding quickly to the upturn by increasing recruitment, while larger manufacturers are continuing to shed labour. ..TX.- In Yorkshire and Humberside, 47 per cent of manufacturers are attempting to recruit, compared with 39 per cent in the first quarter. The respective figures in the service sector are 42 per cent and 36 per cent. ..TX.- Confidence on both sides of the Pennines was reported at its highest for two years. Yet companies are worried about financial stability and any tightening of conditions as sterling appreciates. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9611 Administration of General Economic Programs. ..TP.- Types: ECON Economic Indicators. ..IX.- P9611. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGPB4ABWFT ..HL.- 930716FT 930716 Employment Service threat to bonuses denied: Hunt dismisses union allegations (335) ..BL.- By LISA WOOD, Labour Staff ..TX.- MR DAVID HUNT, employ-ment secretary, yesterday denied claims by Civil Service unions that the Employment Service, a government agency, was threatening to withhold bonuses from staff if they did not meet targets for reducing unemployment totals. ..TX.- Among reasons suggested for the fall in unemployment during the past five months is that the government has fiddled the figures through the service, which runs Jobcentres and Unemployment Benefit Offices. ..TX.- Mr John Hickey, national secretary of the CPSA, one of the two main civil service unions, suggested on Wednesday that new pay arrangements were forcing staff to cut corners to achieve national targets, which include ensuring that 9 per cent of initial claim inquiries should not be pursued as new claims. ..TX.- Mr Ian Taylor, national officer at the NUCPS, the other civil main service union, denied that his members were fiddling the system, but said the new pay system, which includes performance pay, put pressure on staff to achieve what he believed to be 'unrealistic and unnecessary targets'. ..TX.- Mr Hunt said: 'The Employment Service has targets to help people out of unemployment. That means helping them to find jobs, helping them on to training courses or, in some cases, helping them on to a more appropriate benefit. There is nothing wrong in that. ..TX.- 'Like other parts of the Civil Service, the ES rewards its staff for overall performance - everything from good timekeeping to accuracy. It is plain wrong to suggest this means showing unemployed people the door.' ..TX.- The ES said there was no specific linkage between achievement of a specific target and the judgment for overall performance, which included the quality of handling clients and understanding the labour market. ..TX.- The only point at which bonuses were paid was when people hit the top of their pay scale. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9441 Administration of Social and Manpower Programs. ..TP.- Types: PEOP Labour. ..IX.- P9441. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGPB4ABVFT ..HL.- 930716FT 930716 Pay rises at lowest level for 26 years: Average earnings up 3.75% (363) ..BL.- By PETER MARSH ..TX.- AVERAGE earnings across the economy rose an underlying 3.75 per cent in the year to May, the lowest figure for 26 years. ..TX.- In a further sign of low inflation, wages per unit of output in manufacturing in the three months to May declined 3.6 per cent compared with the same period last year. This is the biggest year-on-year fall since the Department of Employment started records in 1970. ..TX.- Due to low wage increases and substantial rises in output, production per employee in manufacturing increased 8.7 per cent between March and May on the same period last year. The employee production figure was last bettered at the end of 1986. ..TX.- The year-on-year rise in the index of earnings for all economic sectors has come down substantially from 7 per cent in April last year. The figures are seasonally adjusted and also take out erratic influences such as delays in the payment of wages. ..TX.- In November the rise in the index was 5 per cent, while in April it was 4 per cent. ..TX.- Average earnings have fallen particularly sharply in service industries, for which the year-on-year increase was 3 per cent in May, after a revised 3.25 per cent the previous month. In manufacturing the equivalent figure was 5 per cent in both months. ..TX.- In June last year, average earnings in both sectors rose 6.25 per cent compared with the equivalent month a year previously. ..TX.- In a sign of improved demand in manufacturing, an average of 9.75m hours per week of overtime were worked in May, an increase of 1.45m hours on April. This was the highest overtime figure since July last year. ..TX.- New job vacancies recorded at government Jobcentres rose a seasonally adjusted 183,900 in June, the highest monthly rise for 2 1/2 years. ..TX.- This may be a sign that employers are trying harder to recruit people. Jobcentres are thought to be notified of about a third of all job openings. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Inflation. ECON Employment & unemployment. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGPB4ABUFT ..HL.- 930716FT 930716 Builders squeezed on both sides: Construction groups which bid low for tenders now face higher material costs (996) ..BL.- By ANDREW TAYLOR ..TX.- THE CHAIRMAN of a publicly quoted British construction group with a turnover of several hundred million pounds has this week explained why his company is prepared to take contracts for no profit or even at a loss. ..TX.- The aim, he says, is to uncover projects with ill-defined designs which could require changes to plans and specification before work is completed. The company bidding for such a contract could put in an exceedingly low tender to win the job, confident that it would be able to charge extra and make a profit from the variations. ..TX.- The practice is not uncommon in the construction industry, but has become more widespread, says the contractor, as hard-pressed businesses have sought to boost declining order books and generate cash from contract progress payments to reduce large property borrowings. ..TX.- The practice has not prevented many contractors and sub-contractors from going out of business - indeed tender prices have tumbled to their lowest level since 1986. ..TX.- Contractors are now facing a double squeeze. Building material prices, which fell steeply during the early 1990s, have recently begun to rise again. ..TX.- And construction companies which have won long-term contracts at fixed prices will have to meet the extra costs out of contract prices which already assume little or no margin for profit. ..TX.- The building cost information service of the Royal Institution of Chartered Surveyors revealed this week that contractors' tender prices, which have fallen by a quarter since 1989 and are at their lowest level since 1986, have declined by a further 3 per cent in the first three months of this year. ..TX.- It says cut-throat competition among builders is forcing prices down to suicidal levels. 'Work levels will not allow tender prices to rise until late 1994 and, with pressure on supply and sub-contract costs, it is difficult to see how some companies will cope,' the institution warns. ..TX.- Even contracts which have arrangements to compensate builders for higher material prices may not provide an adequate safety net, says EC Harris, international construction cost consultants. ..TX.- This is because most agreements are based on suppliers' list prices and take no account of discounts and special deals which may be offered to contractors, depending on their purchasing power and payment record. ..TX.- Client payments might take account of increases in list prices but do not compensate for loss of discounts which may have been eroded as material producers seek to regain lost margins, according to EC Harris. ..TX.- A study by the consultants of 'real' price increases by material producers, including reduction in discounts, reveals immense differences in prices offered to contractors. As a basis for the study the consultants considered the construction of a modest 20,000 sq ft office block in central London costing about Pounds 2m. ..TX.- Results show that material prices for an equivalent development would have risen on average by 5.2 per cent in the past 12 months. ..TX.- This increase, however, disguises the diversity of prices offered to contractors for the same building material. Prices for 32mm steel reinforcement, according to the EC Harris sample, have varied recently from Pounds 295 a tonne to Pounds 460 a tonne, the difference between a standstill in price since June last year and a 38 per cent increase. The average increase in reinforcement over the same period has been 24 per cent. ..TX.- Increases in 12.7mm plasterboard, after discounts, have ranged between 7.1 per cent and 26.2 per cent - a difference in price of Pounds 1.15 per sq m and Pounds 1.75 per sq m. ..TX.- The average price increase for plasterboard has been 13.7 per cent. ..TX.- Average ready-mix concrete prices for a central London development (prices vary regionally as well as from customer to customer) have risen by 5.8 per cent since June last year say the consultants; structural steelwork prices have risen by 10.5 per cent; clay bricks 7 per cent; concrete blocks 6.1 per cent and copper pipe 10 per cent. ..TX.- By comparison, prices of aluminium curtain walling, a common cladding around office buildings, and air conditioning prices have remained unchanged from the low level of 12 months ago. ..TX.- The reasons why building material producers are able to raise prices while contractors are implementing reductions reflects the great difference between two sectors. ..TX.- Contracting is a low capital intensive business relying on the skills of its people rather than its assets. It remains a highly fragmented, competitive industry. ..TX.- But the capital investment to produce building material is far higher - a new cement works can cost more than Pounds 100m. The number of competing players in production also tends to be smaller, making it easier to hike prices. ..TX.- The devaluation of sterling has also made it more difficult for overseas competitors to undercut UK prices. ..TX.- Contractors bearing the brunt of increases will have to suffer until they are able to raise customer prices or pass the pain on to subcontractors. ..TX.- Specialist subcontractors are already complaining that the main contractors, instead of passing on progress payments to subcontractors, are hanging on to the money for as long as possible. ..TX.- Most contracts, they say, require subcontractors to be paid within 28 days of submitting an invoice. According to one structural steel supplier, its average waiting period for payment has been 50 days after submitting invoices. It adds that a wait of several months for payments is not uncommon and during this time there is always the risk that the main contractor or final client might go out of business. ..TX.- Main contractors and sub-contractors also complain about abuse of contract clauses which allow clients to retain some of the money owed to contractors, sometimes for several years, as insurance against defects emerging once work is completed. ..TX.- Construction remains a very tough business. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1611 Highway and Street Construction. P1542 Nonresidential Construction, NEC. ..TP.- Types: NEWS General News. ..IX.- P1611, P1542. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGPB4ABTFT ..HL.- 930716FT 930716 Hard labour in Bridgend to get people into jobs: Staff at a south Wales Jobcentre assure Lisa Wood that the figures are not being fiddled - it is their efforts that are producing results (731) ..BL.- By LISA WOOD ..TX.- UNEMPLOYMENT is falling and it is not as a result of the figures being fiddled, says Jobcentre manager Mrs Fay Evans. ..TX.- Mrs Evans, who works in Bridgend, south Wales, says hard work by her staff is helping to get more people into jobs. ..TX.- 'We are not fiddling any figures,' she says. 'We are doing our job better.' ..TX.- The Jobcentre and its sister organisation the Unemployment Benefits Office - where unemployed people sign on - must meet strict national targets. ..TX.- At local level they replicate the targets agreed between the Employment Service - which runs Jobcentres and Unemployment Benefit Offices - and the government. ..TX.- The targets, which have become more ambitious in the past two years, include placing 1.47m people into jobs this year, of which 27 per cent must be long-term unemployed. ..TX.- Staff must also weed out benefit fraud and check that people are entitled to unemployment benefit. Nationally, the government wants the Employment Service to refuse 9 per cent of applications. ..TX.- Bridgend Jobcentre recommends that the benefits of a small number of people be suspended because these individuals are not prepared to consider jobs which do not pay enough. ..TX.- Mrs Evans says: 'Ministers are very keen that we apply the rules, such as whether people are actively seeking work. That can include widening job searches and lowering expectations.' ..TX.- Last year Bridgend met some ..TX.- of its targets. This year some are tougher, which concerns Mrs Evans because her performance will be partly judged on meeting them. ..TX.- Her area manager, Mr Dewi Miles, will be one of her assessors. Mr Miles, however, says it would be over-simplistic if staff recommended particular actions, such as suspending benefit, because there was a financial incentive. ..TX.- 'We do not show people the door because we are afraid that bonuses may be withheld,' says Mr Miles. 'A manager is judged on the ability to do a whole job effectively.' Performance pay is awarded on overall performance. But failure to achieve one of a number of objectives would not necessarily affect performance pay. ..TX.- Mrs Evans says there are several reasons why unemployment has fallen in Bridgend. ..TX.- 'There are lots of reasons for the trend, such as companies in our area not laying people off any more and a few, very cautiously, recruiting again.' ..TX.- But she adds that her Jobcentre and the nearby Unemployment Benefit Office play an important part. ..TX.- She gives other reasons for the improved outlook for jobs in Bridgend. Her centre now attracts more vacancies from local employers than in the past. ..TX.- It also matches local unemployed people more quickly into jobs, particularly those aged 18 to 24 for whom it has a drop-in counselling service. Last year the centre aimed to place 570 long-term unemployed adults in work. It exceeded the target and this year the aim is 787 placements. ..TX.- So how are Employment Service staff more effectively removing people from the unemployment total and into jobs or training? ..TX.- Structural changes: Jobcentres and Unemployment Benefit Offices are moving to single sites, which helps staff direct those signing on to work opportunities. Policy shifts: Until recently Jobcentres were discouraged from actively seeking vacancies from employers because this brought them into competition with private job agencies. They are now allowed to do this, although ministers are reluctant to let them advertise their services for the recruitment of unemployed executives and professionals. Mrs Evans says she had received no complaints from local private agencies, and had directed some unemployed people in their direction. ..TX.- Jobcentres, which offer free services, can also arrange tailor-made training for businesses coming into an area, and draw up short lists of suitable applicants for employers. ..TX.- Changes in the law: Legislation introduced in 1989 requires the unemployed to be 'actively seeking' work. After 13 weeks an unemployed person can be called into a Jobcentre and asked to consider other types of job. Improved staff recruitment and training: Staff used to be recruited on academic ability. They are now taken on for their competence to do the job, including good communication skills. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9441 Administration of Social and Manpower Programs. ..TP.- Types: ECON Employment & unemployment. ..IX.- P9441. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGPB4ABSFT ..HL.- 930716FT 930716 Strangeways team beats private-sector bids (461) ..BL.- By ALAN PIKE, Social Affairs Correspondent ..TX.- THE REBUILT Strangeways Prison in Manchester will be managed by a public-sector in-house team that yesterday beat six private-sector companies in competitive tendering to run the jail. ..TX.- Strangeways - seriously damaged in Britain's worst prison riots three years ago - was the first example of public and private sectors competing for a prison management contract. ..TX.- Mr Derek Lewis, director-general of the Prison Service, announced yesterday that the Pounds 79m five-year contract would go to the in-house team led by Mr Robin Halward, the governor. The public-sector bid, said Mr Lewis, was a 'strong and imaginative proposal which offered the best overall value for money'. ..TX.- All seven bids were scrutinised by an evaluation panel chaired by Mr Peter Chapman, a Home Office official. Four were rejected - one on cost grounds and three because of doubts about ability to deliver the contract. Mr Chapman said the decision to recommend acceptance of the in-house bid from the shortlisted three was reached by a majority vote. ..TX.- Ministers are pledged to developing private-sector involvement in the criminal justice system, but will not be unhappy about the outcome at Strangeways. ..TX.- In order to win the bid Strangeways staff have made a variety of concessions on working arrangements, including accepting a procedural agreement that restricts their right to take industrial action. ..TX.- Such developments at local level will be seen as a means of eroding the traditionally tough industrial relations stance taken nationally by the Prison Officers' Association, the service's main union. ..TX.- One of the final three bidders was Group 4, the private security company that runs Wolds Remand Prison, Humberside, and prisoner escort services in the east Midlands and Yorkshire region. Mr Jim Harrower, its managing director, said: 'I am delighted that the public sector has won - that is what competition is about. I welcome the POA to the prison privatisation programme.' ..TX.- Mr Lewis said the spur of competition had generated bids which represented levels of performance and value for money not previously seen. The outcome provided proof of the capability of the Prison Service. He added that the private sector should not be discouraged, as it had been a close-run thing. The public-sector bid is based on staffing levels of 450 - compared with 523 under the old regime - although the new Strangeways will house fewer prisoners. ..TX.- Financially, the bid envisages a cost structure of Pounds 350 per prisoner week, compared with a national average of Pounds 437 in 1991-92. It provides for prisoners spending up to 14 hours a day out of their cells with full-time work, education and training programmes. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9223 Correctional Institutions. ..TP.- Types: MKTS Contracts. ..IX.- P9223. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGPB4ABRFT ..HL.- 930716FT 930716 South-east jobless reap rewards of recovery: Unemployment falls in most regions (414) ..BL.- By PETER MARSH, Economics Correspondent ..TX.- SOUTH-EAST England exclu-ding London has been the greatest beneficiary of the fall in unemployment since January - supporting indications that the region, one of those hit hardest by the recession, has been among the first to experience recovery. ..TX.- Unemployment in the south-east outside London dropped 4.6 per cent in the five months to June - well above the overall fall for the UK of 2.8 per cent. ..TX.- The south-west experienced the next biggest fall in seasonally adjusted unemployment over this period with a drop of 4.3 per cent. ..TX.- Last month was the fifth in succession to record a fall in the number of people out of work and claiming benefit for the UK as a whole. The figure fell 7,600 to 2,909,200, after a drop of 23,100 in May. ..TX.- Joblessness as a proportion of the available workforce stood at 10.4 per cent in June. Unadjusted for seasonal variations, unemployment fell 51,600 in June to 2,865,000. ..TX.- Most regions recorded falls in unemployment last month, with the exceptions being East Anglia, northern England, Wales and Northern Ireland. ..TX.- Of the 7,600 reduction in total unemployment nearly half was accounted for by the south-east, including London, where the figure fell by 3,700 to 927,800. ..TX.- In contrast, more people in northern England were out of work last month than in May, with the figure rising 1,700 to 169,900. ..TX.- The region has an unemployment rate of 12.2 per cent, the highest for the UK apart from Northern Ireland, which has a comparable figure of 13.9 per cent. ..TX.- Out of the cumulative 83,100 fall in UK unemployment since January, the figure for the south-east excluding London has dropped 22,300 to 457,500. In the south-west, the number out of work has fallen 9,800 to 217,200. ..TX.- Other regions that have seen falls in unemployment of 3 per cent or more over the period are the east and west Midlands, north-west England, Yorkshire and Humberside, East Anglia and Wales. ..TX.- Regions with a fall below this figure include London with a muted fall of 0.3 per cent between January and June, while northern England bucked the trend with a 1.1 per cent rise in the numbers without jobs. Scotland and Northern Ireland recorded falls in unemployment of just over 2 per cent. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9441 Administration of Social and Manpower Programs. ..TP.- Types: ECON Employment & unemployment. ..IX.- P9441. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGPB4ABQFT ..HL.- 930716FT 930716 Election likely as Bhutto calls off protest (324) ..BL.- By FARHAN BOKHARI ..DL.- ISLAMABAD ..TX.- PAKISTAN'S opposition parties last night called off a planned 'long march' today against Prime Minister Nawaz Sharif's government, giving rise to speculation that an early election will be called. ..TX.- Ms Benazir Bhutto, the opposition leader, had planned to lead tens of thousands of supporters on the march to Islamabad to try to force Mr Sharif to call the poll. ..TX.- The plan for the demonstration had set the two sides on a collision course and paramilitary police were on standby in the capital. ..TX.- The decision to call off the march was apparently made as part of an army-backed package, senior aides to Ms Bhutto said. It came after she flew to Islamabad from Lahore yesterday to meet General Abdul Waheed Kakar, Pakistan's chief of army staff. ..TX.- Ms Bhutto said she had 'postponed' the march at the army's request in the national interest. ..TX.- Pakistan's political crisis was triggered in April when Mr Sharif's government was sacked by President Ghulam Ishaq Khan. With the government then returned by order of a court, there has been intensifying political confrontation. ..TX.- The opposition parties were widely believed to have gathered around Mr Khan in his tussle with Mr Sharif. ..TX.- In the past few days, Gen Kakar is understood to have been involved in hectic efforts to negotiate a settlement. ..TX.- Although no details of the formula were available last night, a government minister conceded that an early election was part of the deal. ..TX.- However, Mr Khan's future was not clear. Mr Sharif has insisted repeatedly Mr Khan must quit before an election to ensure the poll is not rigged. ..TX.- Last night's developments appeared to have created a new opportunity for politicians to prevent a total collapse of negotiations, which could have given way to street violence involving opposite groups. ..CN.- Countries: PK Pakistan, Asia. ..IN.- Industry: P8651 Political Organizations. ..TP.- Types: NEWS General News. ..IX.- P8651. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGPB4ABPFT ..HL.- 930716FT 930716 UN threat of Unita arms ban (149) ..BL.- By MICHAEL LITTLEJOHNS ..TX.- THE UN Security Council last night threatened comprehensive sanctions, including an arms embargo, against Unita rebels in Angola unless they lay down their arms within two months and abide by a peace accord. ..TX.- The unanimous resolution was the first such measure against an insurgent movement seeking by force to topple the government of a UN member state. ..TX.- South Africa and Zaire have both been accused of backing Unita, which is led by Mr Jonas Savimbi. ..TX.- The Security Council reiterated its demand that Unita accept unreservedly the results of last year's UN-supervised elections, rejected as fraudulent by Mr Savimbi. It also renewed until September 15 the mandate of the small UN observer force. ..CN.- Countries: AO Angola, Africa. ..IN.- Industry: P9229 Public Order and Safety, NEC. P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9229, P9721. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGPB4ABOFT ..HL.- 930716FT 930716 UN holds out hope for Iraqi weapons backdown (408) ..BL.- By MARK NICHOLSON and DEBORAH HARGREAVES ..TX.- A SENIOR United Nations diplomat arrived in Baghdad for talks with Iraqi officials yesterday, holding out the prospect of lifting crippling economic sanctions if Iraq accepts long-term monitoring of its weapons programmes. ..TX.- Mr Rolf Ekeus, head of the UN special commission into Iraq's weapons of mass destruction, went into a two-hour meeting at the foreign ministry and later said talks would continue today. ..TX.- He is expected to spend four days in Baghdad trying to resolve the stand-off between the UN and Iraq over installation of monitoring cameras at two missile test sites. Two teams of UN inspectors have failed to persuade Iraq to mount cameras at the sites, or seal monitoring equipment there as an interim measure. ..TX.- Failure to defuse the crisis would re-open the possibility of a UN-backed military strike against the sites. ..TX.- But Mr Ekeus' visit comes amid signs that Iraq is anxious to win an easing of economic sanctions, which have prevented Iraqi export sales, particularly of oil, for almost four years. ..TX.- Mr Ekeus and fellow diplomats at the UN believe Iraq's pressing economic needs could force authorities in Baghdad to back down in the present confrontation. 'The major carrot (for Iraqi compliance) is the ongoing sanctions and the oil embargo,' Mr Ekeus said before arriving in Baghdad. ..TX.- Parallel talks in New York between Iraqi Oil Ministry officials and UN legal experts on a special six-month sale of oil worth Dollars 1.6bn (Pounds 1.06bn) were suspended on Wednesday as Iraqi officials considered a possible draft agreement on the sale. Confidentiality surrounding the market-sensitive talks has made it difficult to assess their success, but UN diplomats said agreement might be close. ..TX.- About 60 per cent of the revenues from the oil sale, which would add about 500,000 barrels of crude a day to the market, would be set aside for food and medicines in Iraq, distributed and monitored by the UN. The rest would help pay for UN activities in Iraq. ..TX.- Deborah Hargreaves adds: Oil prices dropped to a three-year low in London and New York as traders fear the resumption of even limited Iraqi oil exports could add to the surplus on world markets, leading to a collapse in prices. ..TX.- Oil prices plunge, Page 24 ..CN.- Countries: IQ Iraq, Middle East. ..IN.- Industry: P9711 National Security. P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9711, P9721. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGPB4ABNFT ..HL.- 930716FT 930716 Italians calm row over role in Somalia (354) ..BL.- By ROBERT GRAHAM and MICHAEL LITTLEJOHNS at the UN ..DL.- ROME, NEW YORK ..TX.- THE Italian government yesterday sought to calm the row over the role of its 2,600-strong peacekeeping contingent with the United Nations in Somalia. ..TX.- In an effort to restore a dialogue, Italian diplomats will meet representatives of the UN and the US State Department in Mogadishu, the Somali capital, today. A senior official will also go to New York in the next few days. ..TX.- 'We must try to lower the temperature of the argument as soon as possible,' Mr Beniamino Andreatta, the Italian foreign minister, told parliament. ..TX.- He said he had been in close contact with Mr Warren Christopher, his US opposite number, in an attempt to defuse tension over Italy's criticism of US military tactics in Somalia. ..TX.- 'We are in Somalia and wish to remain there,' Mr Andreatta added. 'We are well aware that one has to shoot and use force. But it is still the sovereign right of a government to have differences of view on these issues.' ..TX.- It is the first time in recent years Italy has been in such open disagreement with allies and an international body such as the UN. The row led Mr Kofi Annan, in charge of all UN peacekeeping operations, to call for removal of General Bruno Loi, the Italian commander, for defying UN orders. ..TX.- The Italian government replied by giving full backing to Gen Loi and threatening to pull out of Somalia. ..TX.- As a gesture of support for Gen Loi, it was announced yesterday he would be visited by Gen Mario Buscemi, deputy chief of staff. ..TX.- The UN yesterday sought to patch up its strained relations with Italy but still insisted on the removal of Gen Loi. Mr Joe Sills, a UN spokesman said that he understood Gen Loi would leave 'fairly quickly'. ..TX.- Mr Sills also confirmed that the Italian peacekeepers could be redeployed away from Mogadishu as soon as replacements were assembled. ..CN.- Countries: IT Italy, EC. SO Somalia, Africa. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGPB4ABMFT ..HL.- 930716FT 930716 Japanese Elections: A son of Tokyo appeals to voters' sympathy - Family reputation may not be enough to save Ishihara junior (1040) ..BL.- By MICHIYO NAKAMOTO ..TX.- NOBUTERU Ishihara, a young candidate from the Liberal Democratic party, is appealing to to voters' compassion rather than convictions in the last days of his campaign to allow him to remain a member of the House of Representatives. ..TX.- At 36 - he is the youngest running on the LDP ticket in Tokyo - Mr Ishihara has more going for him than most of his rivals when it comes to appealing to the hearts of the electorate. Yet he is struggling. ..TX.- He is the son of a famous and popular politician, Mr Shintaro Ishihara, a former transport minister. Mr Ishihara senior shocked the world but enthused Japanese with his outspoken views in The Japan That Can Say No, a book co-authored with Mr Akio Morita, the founder-chairman of Sony. ..TX.- Just as important in winning the sympathy vote, perhaps, is the memory of his late uncle, Mr Yujiro Ishihara, a legendary actor whose movies still regularly draw the crowds. ..TX.- As the general election on Sunday draws near, Mr Ishihara, who is battling for political survival in one of the country's most hotly-contested constituencies, is making a final plea to voters to let him keep his seat. ..TX.- 'There are only three days left, and I need your help,' he called out to the small but enthusiastic audience that has gathered in front of Eifuku-cho station, a residential district in western Tokyo. ..TX.- His desperation is palpable. Although he was elected 3 1/2 years ago with the highest number of votes in the district, the polls say Mr Ishihara is running sixth out of 12 candidates competing for five seats. Among those ahead of him are an older LDP candidate who has a popular following, a candidate in the Komeito who has the support of Soka Gakkai, a religious order, and a 35-year-old member of the Japan New Party. ..TX.- His actor uncle passed away seven years ago, but Mr Ishihara was able to enlist the support of his aunt, Yujiro's wife Mie Takahara, herself once a famous actress. ..TX.- 'My husband loved Nobuteru as if he were his own son,' Ms Takahara reminisced through the microphone as elderly women nodded in approval. 'Nobuteru's mother calls me every day and asks me to support him because he is in trouble. Please call your friends, anyone you meet on the street. We need your help,' she pleaded. ..TX.- That Mr Ishihara is having to rely on such emotional appeals is a sign of his plight in spite of a record which shows that he is just the kind of new conservative many voters are looking for. ..TX.- With a 10-year career as a television journalist, and an ostensibly faultless track record as a member of the Diet, Mr Ishihara speaks the voice of the politically informed, urban middle class. ..TX.- His views on political and tax reform, his calls for the need to deregulate Japan's markets and to debate openly the liberalisation of the rice market strike a markedly different chord from the traditional rhetoric of LDP diehards who have either opposed any change or shied away from facing those issues and clung to power on a cosy votes-for-favours arrangement with their constituencies in rural Japan. ..TX.- On political reform, the issue highest on voters minds, he reminds his audience that the aim of reform is to do away with money politics and not just to revise the electoral system. ..TX.- 'Everyone talks about political reform but what do they mean? Politics should not be based on a mood,' Mr Ishihara says, suggesting that his rival candidates from the new parties are merely riding on a wave of enthusiasm for political reform. ..TX.- He accuses them of having no political ideology to support their claims of being the country's best chance to reform a political system that breeds corruption. ..TX.- Neither is Mr Ishihara shy to criticise the LDP, the party to which he has chosen to belong. 'The LDP may be bad. Mr (Kiichi) Miyazawa (the prime minister) may be a liar, but now is the time to reform politics from within,' he says. ..TX.- Mr Ishihara's outspoken views on the need to reduce the tax burden on those who work the hardest and pay the most, his call for a change in policies to enable a lifestyle that reflects the economic status of Japan, and his flexible view on rice liberalisation should be attractive to the people of Suginami, Nakano and Shibuya, the three wards which comprise the constituency. ..TX.- The district has a relatively young population, with about 20 per cent of residents in their 20s, and is known to be one of the more politically aware constituencies in the country. ..TX.- Many residents are salaried workers, living in rented accommodation. ..TX.- So in theory, Mr Ishihara's calls for tax reform and for market deregulation to bring down Tokyo's prices - the highest in the world - should win the minds, of many. ..TX.- 'Unlike most politicians he has been willing to spell out what his policies are and that is rare. I hope he wins,' said a young housewife listening to Mr Ishihara. ..TX.- The difficulty Mr Ishihara faces is that the constituency is also known for being fickle in its political choices. The young population means that voter turnover is relatively high and the district tends to vote in line with the prevailing trend of the day. ..TX.- In the elections for the Tokyo metropolitan assembly earlier this month, for example, Suginami ward alone voted in two candidates from the increasingly popular Japan New party. ..TX.- In the last general election, when the popularity of the Social Democratic party was riding high as voters turned against the LDP in anger over the introduction of a consumption tax, the district sent two SDP members to the Lower House. ..TX.- Mr Ishihara is counting on this to reverse his fortunes. But his decision to stay in the LDP, on the grounds that reform is now possible from within and that to splinter off as some former LDP members have done is irresponsible, is his biggest gamble. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P8651 Political Organizations. ..TP.- Types: NEWS General News. ..IX.- P8651. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGPB4ABLFT ..HL.- 930716FT 930716 Italians calm row over role in Somalia (446) ..BL.- By ROBERT GRAHAM ..DL.- ROME ..TX.- THE Italian government yesterday sought to calm the row over the role of its 2,600-strong peacekeeping contingent with the United Nations in Somalia. ..TX.- In an effort to restore a dialogue, Italian diplomats will meet representatives of the UN and the US State Department in Mogadishu, the Somali capital, today. 'We must try to lower the temperature of the argument as soon as possible,' Mr Beniamino Andreatta, the Italian foreign minister, told parliament. ..TX.- Mr Andreatta disclosed he had been in close contact with Mr Warren Christopher, his US opposite number, in an attempt to defuse tension over Italy's criticism of US military 'enforcement' tactics in Somalia. He said Mr Christopher had written him a 'friendly' letter yesterday. ..TX.- 'We are in Somalia and wish to remain there,' Mr Andreatta added. 'We are well aware that one has to shoot and use force. But it is still the sovereign right of a government to have differences of view on these issues.' ..TX.- It is the first time in recent years Italy has been in such open disagreement with allies and an international body such as the UN. The Mogadishu meeting follows two days of increasing tension between Italy and other members of the UN force in Somalia, headed by General Civek Bir, the Turkish commander, over the way the peacekeeping operation has moved towards peace enforcement. ..TX.- The row led Mr Kofi Annan, in charge of all UN peacekeeping operations, to call for removal of General Bruno Loi, the Italian commander, for defying UN orders. The Italian government replied by giving full backing to Gen Loi and threatening to pull out of Somalia. ..TX.- As a gesture of support for Gen Loi, it was announced yesterday he would be visited by Gen Mario Buscemi, deputy chief of staff. This suggests the Italian government will strongly resist the UN call for Gen Loi's early removal. Italian officials insisted such a decision anyway rested with them, not the UN. ..TX.- Despite the effort to improve relations, there was little evidence that differences between Italy and the UN had narrowed. ..TX.- The Italian military in Mogadishu and the Italian government believe the UN mission in Somalia has moved down a dangerous path, by relying on military muscle and by shedding impartiality to brand Gen Mohamed Farah Aideed, the main Somali warlord, as an outlaw. ..TX.- Mr Andreatta said sending in US helicopter gunships to attack and perhaps capture the warlord was the equivalent of the British bombarding Belfast to arrest an IRA leader. ..CN.- Countries: IT Italy, EC. SO Somalia, Africa. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGPB4ABKFT ..HL.- 930716FT 930716 Japanese slowdown fuels trade surplus (464) ..BL.- By ROBERT THOMSON ..DL.- TOKYO ..TX.- JAPAN'S trade surplus for the first half of the year rose 17.6 per cent to Dollars 57.3bn (Pounds 38.7bn) from a year earlier, as the yen's appreciation pushed export prices higher and the domestic economic slowdown blunted import demand. ..TX.- There are signs the yen's rapid appreciation has begun to influence trade patterns. ..TX.- The volume of exports rose only 1.2 per cent in June, although the value of the trade surplus for the month rose 11.3 per cent compared with last year, to Dollars 9.97bn. ..TX.- The politically sensitive bilateral surplus with the US is still rising. ..TX.- For the first half, exports to the US were 10.6 per cent higher at Dollars 49.5bn, while imports rose 5.9 per cent to Dollars 27.9bn. Japanese motorcycle exports to the US increased 36 per cent, and semiconductor exports were 28 per cent higher, reflecting growth in demand from the US computer industry. ..TX.- Exports to the US in June rose 10.5 per cent to Dollars 8.4bn, while imports were 13.1 per cent higher at Dollars 5.0bn. ..TX.- During the first half, Japan's exports to the EC fell 8 per cent, while imports slipped 5.1 per cent. There was a 51.2 per cent increase in exports to China during the period; China is now Japan's second largest trading partner, surpassing South Korea and Taiwan. ..TX.- Exports during June rose 8.4 per cent to Dollars 28.1bn, while imports during the month were 7 per cent higher at Dollars 19.2bn. The seasonally adjusted surplus for the month was Dollars 8.69bn, down from Dollars 10.09bn in May. ..TX.- Electric machinery exports rose 14.5 per cent during June and ordinary machinery by 11.1 per cent. Imports of foodstuffs climbed by 9.2 per cent and those of materials by 12.6 per cent. Machinery imports rose 11.8 per cent. ..TX.- Japan's reliance on Asian markets is continuing to grow. Mr Kenneth Courtis, senior economist at Deutsche Bank Capital Markets Asia, said the Asian share of Japan's exports rose from 22 per cent in 1985 to 40 per cent this year and is likely to be close to 45 per cent by 1995. ..TX.- Trade with South Korea, Hong Kong, Taiwan and Singapore during the half totalled Dollars 51.6bn, while that with the EC was Dollars 44.3bn. Exports and imports to the UK were down 4.4 and 2.7 per cent respectively. ..TX.- Fluctuations in Japan's trade with most of its partners are dwarfed by those with an overheated China. ..TX.- Exports of cars to China rose six times during the half, television camera exports increased more than fourfold, steel exports doubled, as did those of communic-ations equipment, motor-cycles, and construction materials. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Balance of trade. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGPB4ABJFT ..HL.- 930716FT 930716 Polls say 43% of voters undecided (379) ..BL.- By ROBERT THOMSON ..DL.- TOKYO ..TX.- THE most striking characteristic of Japanese public opinion polls is an unusually high percentage of respondents who either 'don't know' or 'cannot say', a pattern repeated in the final flurry of pre-election polls conducted by Japanese newspapers, Robert Thomson reports from Tokyo. ..TX.- By the reckoning of one newspaper, the Asahi Shimbun, 43 per cent of voters are still undecided, creating great potential for deviation from the generally consistent findings that the ruling Liberal Democratic party will take 220 to 230 of the 511 seats and that the Social Democratic party, the largest opposition party, will be decimated. ..TX.- It appears from opinion poll results that two of the relatively new parties, the Japan Renewal party, formed by Mr Tsutomu Hata, the former finance minister, and the Japan New Party of Mr Morihiro Hosokawa, a former provincial governor, have the longer-term potential to provide competition to the LDP. ..TX.- However, this time round, both parties, particularly the JNP, are stealing opinion poll percentage from the SDP, which has traditionally received the protest vote from disgruntled Japanese. ..TX.- One point of discussion among Japanese political analysts is whether the SDP does better than predicted by the polls, as its forecast fall from the present 134 seats to as few as 60 seats, may prompt some sympathetic voters to come to its rescue on Sunday. ..TX.- The greatest obstacle faced by the new parties has not been convincing voters that they are an alternative, at least to the SDP if not the LDP, but in mustering enough candidates for the election. ..TX.- The JNP has only 57, the JRP 69, and the New Party Harbinger, another LDP splinter group, a mere 16. ..TX.- Rising reformers, Page 15 ..TX.- ----------------------------------------- HATA: FAVOURED AS PM ----------------------------------------- Who should be the next prime minister? ----------------------------------------- Per cent of all respondents ----------------------------------------- Tsutomu Hata (JRP) 20.6 Toshiki Kaifu (LDP) 16.4 Ryutaro Hashimoto (LDP) 10.5 Morihiro Hosokawa (JNP) 6.3 Masaharu Gotoda (LDP) 5.4 Michio Watanabe (LDP) 3.0 Kiichi Miyazawa (LDP) 2.5 Sadao Yamahana (SDP) 2.1 Masayoshi Takemura (NHP) 1.5 Hiroshi Mitsuzuka (LDP) 0.5 Other 4.6 Don't know 26.7 ----------------------------------------- ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P8651 Political Organizations. P9111 Executive Offices. ..TP.- Types: NEWS General News. ..IX.- P8651, P9111. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGPB4ABIFT ..HL.- 930716FT 930716 Store sales highlight declining consumption (308) ..BL.- By ROBERT THOMSON ..TX.- DEPARTMENT store sales in Tokyo fell by a record 13.4 per cent in June, against a year earlier, highlighting the continuing decline in personal consumption that is dragging down the Japanese economy. ..TX.- The fall was the largest since the Japan Department Stores' Association began compiling monthly figures. ..TX.- It partly reflected cost-cutting at Japanese companies, which traditionally buy presents for clients at this time of year. ..TX.- Clothing sales were down 11.6 per cent, while household goods slipped by 14.7 per cent, personal accessories by 9.4 per cent, and food by 8.1 per cent. ..TX.- The decline in personal spending has prompted calls from business leaders for a cut in official interest rates or income tax. ..TX.- Japanese companies are still under pressure. Corporate bankruptcies rose 3.7 per cent in the first half, with bankruptcies linked to the eco-nomic downturn rising 40 per cent during the period, according to Teikoku Data Bank, a credit research agency. ..TX.- Failures linked to speculative excess during the late 1980s are in decline, which is one reason for an 11.1 per cent fall in the amount of liabilities left by bankrupt companies. ..TX.- In June the number of failures fell 2.6 per cent to 1,140, while liabilities rose 23.8 per cent. ..TX.- Wholesale prices in June were 0.5 per cent lower than in the previous month, with import prices down 2.4 per cent. ..TX.- The Bank of Japan said this was a direct result of the yen's appreciation in recent months. ..TX.- The wholesale price index was 3.2 per cent lower, compared to a year earlier. The export price index fell 10.6 per cent and the import price index was down 10.5 per cent. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P5311 Department Stores. P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: MKTS Sales. ECON Inflation. ..IX.- P5311, P9311. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGPB4ABHFT ..HL.- 930716FT 930716 US lodges protest over Indian factory attack (175) ..BL.- By SHIRAZ SIDHVA ..DL.- NEW DELHI ..TX.- THE US embassy in New Delhi has asked the Karnataka state government to take 'swift and expedient action' against farmers who attacked the Cargill Seeds factory in the state on Monday. ..TX.- Embassy officials believe the attack against the US multinational, the second this year, could have ominous consequences for foreign investment in India. ..TX.- The American Business Council, to which all the leading US companies in India belong, has also expressed 'great concern' about the security of foreign investors in India. ..TX.- Mr Veerappa Moily, the Karnataka chief minister, has condemned the attack. The farmers fear multinationals may try to patent traditional seeds and enforce the patents under the rules of the General Agreement on Tariffs and Trade. ..TX.- Mr Moily said his state's industrial liberalisation policy had been welcomed by investors and would create 20m jobs in the next seven years. ..CN.- Countries: IN India, Asia. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: NEWS General News. ..IX.- P9229. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGPB4ABGFT ..HL.- 930716FT 930716 Troops on standby in Islamabad (221) ..BL.- By FARHAN BOKHARI ..DL.- ISLAMABAD ..TX.- PARAMILITARY troops were on standby in Islamabad, the Pakistani capital, yesterday, as the government of Prime Minister Nawaz Sharif prepared for a 'long march' by the opposition today which is aimed at forcing him to call fresh elections, writes Farhan Bokhari in Islamabad. ..TX.- At least 60 police trucks and buses carrying riot policemen wearing helmets and armed with tear gas and batons, drove past the parliament building in a show of force. ..TX.- Some officials said the government had plans to erect a barbed wire fence around the city as part of its preparations. ..TX.- Troops were also on standby near the city, ready to be called to protect important government buildings and diplomatic missions, officials added. ..TX.- The security build-up appeared to have dashed the few remaining hopes that Mr Sharif and Ms Benazir Bhutto, the opposition leader, could avert today's expected government-opposition clash. ..TX.- Although Mr Sharif has become increasingly willing to hold early elections, he is demanding that President Ghulam Ishaq Khan must first step down before his term of office ends in November. ..TX.- However, Mr Khan and many of his supporters, including opposition leaders, do not want to wait beyond October. ..CN.- Countries: PK Pakistan, Asia. ..IN.- Industry: P8651 Political Organizations. ..TP.- Types: NEWS General News. ..IX.- P8651. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGPB4ABFFT ..HL.- 930716FT 930716 UN holds out hope for Iraqi weapons backdown (578) ..BL.- By MARK NICHOLSON and DEBORAH HARGREAVES ..DL.- AMMAN ..TX.- A SENIOR United Nations diplomat, holding out the prospect of lifting crippling economic sanctions against Iraq if it accepts long-term monitoring of its weapons programmes, arrived in Baghdad yesterday for talks with Iraqi officials. ..TX.- Mr Rolf Ekeus, head of the UN special commission into Iraq's weapons of mass destruction, is expected to spend four days in Baghdad trying to resolve the stand-off between UN weapons inspectors and Iraqi officials over the installation of monitoring cameras at two missile test sites. ..TX.- Two teams of UN inspectors have failed to persuade Iraq to mount cameras at the site, or seal monitoring equipment there as an interim measure. ..TX.- Failure to defuse the crisis would reopen the possibility of a UN-backed military strike against the sites - a threat which has been raised particularly by the US administration over the past week. ..TX.- But Mr Ekeus' visit comes amid signs that Iraq is increasingly anxious to win whatever easing it can of economic sanctions which have prevented Iraqi export sales, particularly of oil, for almost four years. ..TX.- Mr Ekeus and fellow diplomats at the UN believe Iraq's pressing economic needs could force authorities in Baghdad to back down in the present confrontation. ..TX.- 'The major carrot (for Iraqi compliance) is the ongoing sanctions and the oil embargo,' Mr Ekeus said before arriving in Baghdad. ..TX.- Parallel talks in New York between Iraqi Oil Ministry officials and UN legal experts on a special six-month sale of oil worth Dollars 1.6bn (Pounds 1.06bn) were suspended on Wednesday as Iraqi officials considered a possible draft agreement on the sale. ..TX.- Confidentiality surrounding the market-sensitive talks have made it difficult to assess their success, but UN diplomats said yesterday there were indications an agreement might be close. ..TX.- About 60 per cent of the revenues from the oil sale, which would add about 500,000 barrels of crude a day to the market, would be set aside for food and medicines in Iraq, to be distributed and monitored by the UN. ..TX.- The remainder would go towards paying for UN activities in Iraq. ..TX.- But the scale of Iraq's economic problems was underlined by a UN Food and Agriculture Organisation report, pointedly quoted in the official Observer newspaper in Iraq, which warned of a 'grave human tragedy' unless food supplies were augmented. The report said Iraq needed to import 5.4m tonnes of food before July next year at an estimated cost of Dollars 2.5bn. ..TX.- Mr Ekeus emphasised before leaving for Iraq that he would also be discussing more broadly the principle of long-term monitoring of Iraq's weapons programmes, called for under UN Resolution 715. ..TX.- 'We will try to address some more important issues this time that I hope should clarify some points which are creating problems for us,' he said later in Baghdad. ..TX.- His first meeting last night was to be with Mr Mohammed Saeed al-Sahaf, Iraq's foreign minister. ..TX.- Deborah Hargreaves adds: Oil prices dropped to a three-year low in London and New York as traders fear the resumption of even limited Iraqi oil exports could add to the surplus on world markets, leading to a collapse in prices. ..TX.- The price for North Sea Brent crude oil in London slipped another 30 cents yesterday to Dollars 16.45 a barrel. ..TX.- Oil prices, Page 24 ..CN.- Countries: IQ Iraq, Middle East. ..IN.- Industry: P9711 National Security. P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9711, P9721. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGPB4ABEFT ..HL.- 930716FT 930716 Top US team to press Hanoi over MIAs (474) ..BL.- By IAIN SIMPSON and GEORGE GRAHAM ..DL.- HANOI, WASHINGTON ..TX.- MR Winston Lord, US assistant secretary of state, arrived in Hanoi yesterday to press for greater co-operation from the government on American servicemen unaccounted for since the Vietnam war. ..TX.- The delegation, the most senior from the US since the war, was dispatched by President Bill Clinton after he decided earlier this month to stop blocking Hanoi's access to loans from the International Monetary Fund and other multilateral financing institutions. He demanded more progress on the 'missing-in-action' (MIA) issue before he could end a US trade embargo. ..TX.- In Washington it emerged that Vietnam could start borrowing from the IMF as early as October, after a review by the fund's board this week. Hanoi has been ineligible for IMF loans since 1985 after falling into arrears on debt. ..TX.- The IMF said the board meeting produced 'an international consensus that would allow full-fledged co-operation between Vietnam and the IMF to develop'. ..TX.- Vietnam's programme of macroeconomic and structural adjustment had made considerable progress, an IMF spokesperson said, and Mr Michel Camdessus, the fund's managing director, had expressed 'deep satisfaction' at the prospects of renewed co-operation. ..TX.- The next step is for Vietnam to clear arrears of about SDR100m (Pounds 92.9m) with the help of a support group led by France and Japan. The IMF could then restore its eligibility for loans and negotiate an economic adjustment programme. The first drawing of up to SDR120m on a standby facility could be made soon after the IMF's annual meeting at the end of September. ..TX.- Once the IMF and the multilateral development banks have resumed lending, pressure from US companies to be allowed to trade and invest is expected to grow. Mr Clinton must decide by September 14 whether to renew the trade embargo for another year. ..TX.- However, Mr David Givans, of Disabled American Veterans, one of four veterans' groups represented in Mr Lord's delegation, said Mr Clinton had made clear that his decision on IMF lending 'was not a precursor to any other economic outcome (and) that this trip would in fact decide how the US proceeds from here on in'. ..TX.- The Vietnamese government says it is doing all it can to help account for missing Americans and has opened archives, allowed investigators access to closed areas and hosted numerous American visitors. It says it has returned all 591 Americans it was holding in 1973 when US forces withdrew. ..TX.- Mr Allen Kent, of Veterans of Foreign Wars, said the veterans wanted to obtain a guarantee from Hanoi that it would give full co-operation and assistance to US investigators tracing the 2,253 Americans officially missing in Vietnam, Laos and Cambodia. ..CN.- Countries: US United States of America. VN Vietnam, Asia. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGPB4ABDFT ..HL.- 930716FT 930716 World Trade News: EC delays tariff-cutting talks - Embarrassment for Brussels officials unready to negotiate (344) ..BL.- By DAVID DODWELL ..DL.- EUROPEAN Community trade negotiators faced serious embarrassment ..TX.- and accusations of bad faith - in Geneva yesterday as they revealed that they will not be ready to negotiate bilateral tariff-cutting deals until the last week of this month. ..TX.- The EC delay is contrasted with a US decision to begin bilateral tariff negotiations immediately, aimed at paving the way to a worldwide trade liberalising agreement before the end of this year, as part of the Uruguay Round of trade reform negotiations. ..TX.- Negotiators from the other 96 countries involved in multilateralising a widely acclaimed tariff-cutting agreement, reached in Tokyo last week by leading industrial countries at the Group of Seven summit, were perplexed and angered yesterday by European Community delays. ..TX.- The delay is due to an apparent need to carry out a detailed audit of the trade-generating impact of the Tokyo agreement. Responsible commissioners and trade officials say they are unable to meet to complete the audit until July 22. ..TX.- Their embarrassment has been made more acute by the decision by Mr Peter Sutherland, the new director-general of the General Agreement on Tariffs and Trade, to call a top-level meeting of trade negotiators on July 28 to review progress. ..TX.- This will give European Community negotiators just three working days to hold bilateral discussions. ..TX.- 'This is certainly somewhat awkward for us,' an EC official admitted. 'We see the two weeks ahead as a clarification stage, rather than a negotiating stage. ..TX.- 'No real negotiating will be practicable in July.' ..TX.- Following the Tokyo breakthrough, which has raised hopes that a Uruguay Round settlement can be reached in spite of more than two years of often acrimonious delay, negotiators have been under extreme pressure to make significant headway in tabling packages of tariff cuts across manufactures and agriculture, and in opening their markets to trade in service. ..CN.- Countries: QR European Economic Community (EC). ..IN.- Industry: P9611 Administration of General Economic Programs. ..TP.- Types: NEWS General News. ..IX.- P9611. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGPB4ABCFT ..HL.- 930716FT 930716 World Trade News: Japan hints at cut in car exports (370) ..BL.- By MICHIYO NAKAMOTO and JOHN GRIFFITHS ..DL.- TOKYO, LONDON ..TX.- JAPAN indicated yesterday it was likely to agree to a furtherreduction in its car exports to the European Community, as a result of a fall in EC new car sales which has proved much steeper than expected. ..TX.- 'We have not refused (the EC approach); we are listening to it. We have not closed our ears,' an official at the Ministry of International Trade and Industry said, following three days of talks in Brussels which ended without formal agreement. ..TX.- During the talks, the European Commission asked the Japanese delegation to reduce the 1.09m exports envisaged for this year in the 'understanding' governing access to the EC market during the Community's transition to an open market in new cars by the end of the decade. ..TX.- Japan agreed in April to reduce its car exports by 9.4 per cent on the basis of forecasts that the EC market would decline by 6.5 per cent to around 13m units this year. ..TX.- The Commission now expects a fall of between 11 and 16 per cent. New car sales in western Europe as a whole were already down 17.2 per cent between January and June and, in its latest forecast, the European Automobile Manufacturers' Association predicts that demand will be down by 15.8 per cent for the year as a whole. ..TX.- Without further reductions, Japan's market share would rise to 'substantially' more than 13 per cent this year, compared with less than 11 per cent in 1992, the EAMA warned yesterday. ..TX.- The Japanese position has been that, while Japan recognised the fall in demand in the EC car market, revising a formally agreed quota after only three months would undermine the credibility of the bilateral agreement. It was only agreed in April after months of wrangling. ..TX.- Japanese car exports to the Community, however, have already fallen sharply, according to Mr Robert Verrue, chief EC delegate to the talks - down in the April-June period by about 30 per cent. ..CN.- Countries: JP Japan, Asia. QR European Economic Community (EC). ..IN.- Industry: P3711 Motor Vehicles and Car Bodies. ..TP.- Types: MKTS Foreign trade. ..IX.- P3711. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGPB4ABBFT ..HL.- 930716FT 930716 World Trade News: Japanese prepare ction on fabrics (200) ..BL.- By ROBERT THOMSON ..DL.- TOKYO ..TX.- JAPANESE cotton spinners have begun to collect information for an anti-dumping action against Chinese cotton fabric exporters, creating potential embarrassment for the Japanese government, which has condemned the use of anti-dumping measures to protect markets. ..TX.- The Japan Spinners' Association indicated yesterday that a formal complaint will be filed with the Tokyo government within months, as Chinese makers are selling fabrics for shirts and sheets at 30-40 per cent less than the Japanese-made product. ..TX.- Japanese spinners say the cheap materials are damaging their industry, but they have not yet shown evidence that Chinese producers are doing more than take advantage of cheaper raw materials and production facilities. ..TX.- In January the Japanese government imposed anti-dumping duties on Chinese exporters of ferrosilicon manganese, used by the steel industry. ..TX.- Japan's imports of clothing from China rose 17.5 per cent in the first half, compared to the equivalent period of 1992, but one cause of the greater penetration is a flurry of Japanese joint ventures in China. ..CN.- Countries: JP Japan, Asia. CN China, Asia. ..IN.- Industry: P2211 Broadwoven Fabric Mills, Cotton. ..TP.- Types: MKTS Foreign trade. ..IX.- P2211. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGPB4ABAFT ..HL.- 930716FT 930716 Red faces at World Bank as HQ costs break budget (487) ..BL.- By GEORGE GRAHAM ..TX.- THE World Bank has sent three managers on administrative leave after 'loose project management' pushed the cost of its new headquarters building in Washington Dollars 83.5m over budget. ..TX.- The the building was now expected to cost around Dollars 290m, compared with a 1990 budget of Dollars 206.5m, the bank said. However, an internal inquiry had concluded that most of the overrun was due to unrealistically low initial estimates. ..TX.- 'Cost overruns for large buildings are not uncommon, but in this case, much of the problem could have been avoided if realistic estimates had been presented at the outset,' said Mr Ernest Stern, who is acting as president while Mr Lewis Preston recovers from surgery. ..TX.- 'This was compounded by loose management and a failure to bring problems to the attention of the bank's senior managers on a timely basis.' ..TX.- A bank statement said the inquiry had found that 'all funds committed to the project had been spent on essential components of what remains a strictly functional building and there is no suggestion of financial impropriety of any kind'. ..TX.- However, Mr Sven Sandstrom, the World Bank managing director appointed to head the inquiry, found that project managers had failed to inform either senior management or board of the cost overruns. They had also spent Dollars 22m without authorisation on two buildings which are to be refurbished as part of the overall headquarters project. ..TX.- A second phase inquiry will begin immediately to assess the actions of the managers and 'appropriate disciplinary measures, if any'. ..TX.- The World Bank's construction problems are particularly embarrassing, coming as they do on the heels of the furore over the lavish London headquarters built for the European Bank for Reconstruction and Development. ..TX.- Even critics of the World Bank's operating expenses, however, acknowledge that the new headquarters, whose Dollars 123 per square foot construction cost falls within central Washington norms, includes none of the expensive marble or frills of the EBRD building. ..TX.- 'This is home grown incompetence, not imperial arrogance,' commented one person familiar with the project. ..TX.- In another sense, however, the bank's failure to oversee its own project adequately is even more embarrassing, because of the institution's long experience of advising borrowers in the developing world on project management and supervision. ..TX.- The preliminary budget, submitted to the board in February 1989, was set at Dollars 186m. After a design competition and negotiations with the winning architect, the budget was revised the following August to Dollars 206.5m. ..TX.- The bank said yesterday it had ignored independent consultant engineers' estimates that the building would cost Dollars 250m, in the expectation that low demand in the construction sector and cost-saving measures would allow it to stick to the approved budget. ..CN.- Countries: US United States of America. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: RES Capital expenditures. RES Facilities. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGPB4AA9FT ..HL.- 930716FT 930716 World Trade News: Sutherland names deputies (152) ..BL.- By FRANCES WILLIAMS ..DL.- GENEVA ..TX.- Mr Peter Sutherland yesterday announced the appointment of his three deputies, Frances Williams reports from Geneva. They are Mr Warren Lavorel, former US chief negotiator for the Uruguay Round, Mr Anwarul Hoda, special secretary for trade policy in the Indian Commerce Ministry, and Mr Jesus Seade, Mexico's ambassador to Gatt. ..TX.- Mr Sutherland had said on Wednesday the appointments would be based 'fundamentally on merit', but the need for balance between regions and between industrialised and developing countries would be heeded. One deputy has traditionally been a US national, the second an Indian. The new third post was widely expected to go to a Latin American, as part of the horse-trading over the appointment of the Irish Mr Sutherland. ..CN.- Countries: CH Switzerland, West Europe. ..IN.- Industry: P9611 Administration of General Economic Programs. ..TP.- Types: PEOP Appointments. ..IX.- P9611. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGPB4AA8FT ..HL.- 930716FT 930716 Last nail put in coffin of Star Wars (302) ..BL.- By GEORGE GRAHAM ..DL.- WASHINGTON ..TX.- THE US has placed a legal full stop at the end of a 10-year chapter of efforts to develop a 'Star Wars' anti-missile defence system by now declaring its full adherence to the traditional, narrow interpretation of the 1972 Anti-Ballistic Missile Treaty. ..TX.- The Clinton administration, by formally announcing its adherence to this interpretation, renounced efforts to develop, test or deploy sea-based, air-based, space-based or mobile land-based ABM systems. ..TX.- The treaty was designed to prevent nuclear escalation by denying the US or the Soviet Union the temptation to launch a first strike in the belief that it could survive retaliation. ..TX.- President Ronald Reagan's administration in the 1980s had sought to argue that the ABM treaty did not prohibit development of space-based defences, a key component of Mr Reagan's 'Star Wars' strategic defence initiative. ..TX.- Mr Thomas Graham, acting director of the Arms Control and Disarmament Agency, announced the position in a letter to Senator Claiborne Pell, chairman of the Senate Foreign Relations Committee, who welcomed the return to the traditional interpretation. ..TX.- 'This wise decision closes, on a high note, a sad chapter in US arms control treaty relationships and in the relationship between the US Senate and the executive branch,' said Mr Pell. He added that strict adherence to the treaty would help persuade Ukraine to eliminate its nuclear weapons, and to ensure Russian ratification of the Start II missile reduction treaty. ..TX.- The Clinton administration has already renamed the SDI programme the ballistic missile defence organisation. Funding has remained relatively high but has been shifted away from programmes designed to defend against strategic nuclear missiles, and towards tactical defences. ..CN.- Countries: US United States of America. ..IN.- Industry: P9711 National Security. ..TP.- Types: NEWS General News. ..IX.- P9711. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGPB4AA7FT ..HL.- 930716FT 930716 Bomb suspects plead innocent (148) ..BL.- By AP ..DL.- NEW YORK ..TX.- Ten suspects accused of plotting to bomb the United Nations headquarters and other targets around New York pleaded innocent yesterday at their arraignment in a federal court, AP reports from New York. ..TX.- Assistant US Attorney Andrew C. McCarthy said another indictment would be filed in the case within three weeks. ..TX.- He also said the government had more than 150 hours of audio and video tapes - obtained through the Foreign Intelligence Surveillance Act - on which, so it is alleged, the defendants discuss the bomb plot. ..TX.- On Wednesday, federal authorities disclosed that the government informant who helped foil the alleged bomb plot last month had infiltrated the suspected terrorist ring as early as 1991. ..CN.- Countries: US United States of America. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: NEWS General News. ..IX.- P9229. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGPB4AA6FT ..HL.- 930716FT 930716 Clinton sees loans for poor areas (180) ..BL.- By REUTER ..DL.- WASHINGTON ..TX.- PRESIDENT Bill Clinton yesterday proposed giving US community financial institutions Dollars 382m (Pounds 254.6m) in seed money over four years, to encourage lending in devastated inner cities and poor rural areas, Reuter reports from Washington. ..TX.- 'Millions of Americans in low- and moderate-income neighbourhoods have no bank where they can cash a cheque, borrow money to buy a home, or get a small loan to start a business or keep one going,' the White House said. ..TX.- Under the proposal, Mr Clinton would try to meet his 1992 campaign pledge of creating a network of 100 community development banks and financial institutions. ..TX.- The Dollars 382m in seed money would stimulate private lending in many rural and urban communities starved of affordable credit, capital and basic banking services. ..TX.- Also, his plan would require regulators to reduce paperwork at banks, in return for an increase in lending to low-income borrowers. ..CN.- Countries: US United States of America. ..IN.- Industry: P9532 Urban and Community Development. ..TP.- Types: RES Capital expenditures. ..IX.- P9532. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGPB4AA5FT ..HL.- 930716FT 930716 World Trade News: Uruguay Round negotiators peer through the Tokyo fog - The 'breakthrough' at last week's G7 summit appears somewhat different back in Geneva (862) ..BL.- By DAVID DODWELL, World Trade Editor ..TX.- FOR almost 18 months the fate of the Uruguay Round of global trade liberalisation has been in the hands of the US and the European Community. With the breakthrough in trade negotiations in Tokyo last week, talks have now reverted to Geneva and the General Agreement on Tariffs and Trade. At last, others among the 116 countries involved in the round now have a say. ..TX.- But if Sir Leon Brittan, the EC's trade commissioner, hoped when he briefed Uruguay Round trade negotiators in Geneva early this week that the Tokyo breakthrough shifted the onus for progress on to others, then he will need to think again. ..TX.- Negotiators who have been forced to sit on the sidelines in recent months are unanimous: 'We are cautiously optimistic about the outcome in Tokyo. But there is ambiguity, and a total absence of detail,' one said: 'Until we see the detail, we cannot move any further.' ..TX.- Another developing country negotiator added: 'The major problems have been left unsettled by Tokyo, and have been delivered back to Geneva in the same state they were in before.' ..TX.- This applies to disputes over the liberalisation of trade in textiles, to trade in services, to plans for liberalising maritime services, to international trade in films and television programmes, as well as many others. ..TX.- Demands from developing countries, and countries like Australia, for tariff cuts on trade in non-ferrous metals and in wood, paper and pulp products, also remain unresolved. ..TX.- This reality sits uncomfortably with Sir Leon's exhortations on Monday to Gatt negotiators that, following the deal reached by the 'quad' countries (Japan, Canada, the US and the EC) in Tokyo, the time had come for other countries to do their bit - to improve offers made over the past year on tariff cuts. ..TX.- The call was disingenuous at least. Many developing countries note that the US and the EC have yet to make even a first tariff-cutting offer in many areas of critical interest to them. Even Community officials now admit that the Tokyo deal was more an agreement over a formula by which to achieve a deal, rather than a specific set of tariff cuts. They say they are doing the sums now, and will have no offer to present to trading partners until July 23. ..TX.- Even then, critical areas like market opening for farm products, or tariff cuts across the thousands of categories of traded textiles and garments, are unlikely to be on the table. ..TX.- 'While I am cautiously optimistic, I don't think much will get done before the autumn,' said Mr Balkrishan Zutchi, India's veteran Gatt ambassador. This confirms comments from an EC official that the two weeks now remaining before Geneva winds down for the August holidays will provide 'a clarification stage rather than a negotiating stage'. ..TX.- If non-quad countries are to be coaxed forward to improve market access and tariff cutting offers, then the US and the EC will need to address specifically a number of their concerns. These are: ..TX.- Farm trade: farm exporters from Cairns group countries like Australia, Argentina and Thailand are adamant that the EC in particular must make a significant market access offer. If they are to open their markets further to manufactured exports from the US or the EC, then greater opportunities to sell farm products to Europe must be made available. Textiles: Mr Jesus Seade, Mexico's Gatt ambassador, describes this as a 'highly unstable dossier'. Many developing countries - prominently India - need better export opportunities to the US and the Community if they are to bow to pressure to open their markets to services, and tighten enforcement of intellectual property protection. ..TX.- Special and differential treatment: many developing countries have been alarmed by western demands that they make marketing opening offers comparable to those made by the quad countries in Tokyo. ..TX.- They emphasise that the Gatt has always asserted the right of countries to make commitments that match their financial and economic capacities. ..TX.- Tariffication without exception: this is the demand that importers remove all non-tariff barriers, and replace them with tariffs which are more transparent, and more easily reduced over time. It is a demand particularly precious to farm exporters. ..TX.- It has been resisted fiercely by countries like Japan and South Korea, which block all imports of rice on food security grounds, and Canada, which has for decades maintained a supply management system in dairy products which limits imports. ..TX.- Amendments to the draft final act: this draft Uruguay Round agreement, completed in December 1991, may not be carved in stone, but most countries insist that the minimum of changes should be allowed, for fear that the entire balanced package of commitments embodied by it will crumble. ..TX.- Washington caused consternation late last year by calling for extensive changes, linked with concern to protect its sovereign discretion to apply unilateral trade sanctions where it deemed them necessary. ..CN.- Countries: XA World. ..IN.- Industry: P9611 Administration of General Economic Programs. ..TP.- Types: NEWS General News. ..IX.- P9611. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGPB4AA4FT ..HL.- 930716FT 930716 World Trade News: Far Eastern power ventures agreed (215) ..BL.- By ANDREW BAXTER ..TX.- POWER generating equipment suppliers Toshiba and Westinghouse Electric have announced agreements to reinforce positions in the Asian market. ..TX.- Westinghouse is forming a joint venture in China to modernise steam turbine generators. Toshiba has reached a technology transfer agreement with Samsung Heavy Industries of South Korea. ..TX.- Pittsburgh-based Westinghouse said its 50/50 joint venture with Longyuan Power Technology Exploitation Corporation would initially focus on 150 steam turbine-generators, each rated at 200MW. ..TX.- Ultimately, a base will be established to provide technology and advanced field service for more than 400 power stations in China. ..TX.- Toshiba's 10-year deal with Samsung covers supercritical 500MW-class steam power plants. It calls for the Japanese company to transfer design, manufacturing and inspection technologies for the condensers, feedwater heaters and de-aerators that make up the heat exchangers. ..TX.- The deal is expected to reinforce Samsung's position in Korea for heavy electrical apparatus, while enhancing Toshiba's strength in a key area of power generation. ..CO.- Companies: Toshiba. Westinghouse Electric Corp. Samsung Heavy Industries. Longyuan Power Technology Exploitation Corp. ..CN.- Countries: US United States of America. CN China, Asia. JP Japan, Asia. KR South Korea, Asia. ..IN.- Industry: P3511 Turbines and Turbine Generator Sets. ..TP.- Types: COMP Strategic links & Joint venture. ..IX.- P3511. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGPB4AA3FT ..HL.- 930716FT 930716 No respite in sight for flooded Midwest (163) ..BL.- By REUTER ..DL.- DES MOINES ..TX.- MORE rain threatened the US Midwest yesterday after two weeks of floods that have cost up to 25 lives and submerged some of the world's richest farmland, Reuter reports from Des Moines. ..TX.- Storms again lashed the Mississippi River valley, adding to the misery of farmers and increasing pressure on earthwork and sandbag levees. ..TX.- President Bill Clinton was due to meet congressional leaders yesterday to agree emergency relief. ..TX.- Rain drenched southern Iowa and parts of northern Missouri and Illinois early yesterday as people struggled to hold back the vast river. ..TX.- The National Weather Service said it expected no major shift in rain patterns over the next month. Officals at the Federal Emergency Management Agency said applications for loans were pouring into recently opened offices in the area. ..CN.- Countries: US United States of America. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: RES Natural resources. ..IX.- P9229. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGPB4AA2FT ..HL.- 930716FT 930716 Special bank may help Nafta win approval (422) ..BL.- By NANCY DUNNE ..DL.- WASHINGTON ..TX.- THE CHANCES of the US Congress approving the North American Free Trade Agreement have been enhanced by growing support for a proposal to create a North American Development Bank. ..TX.- A bill to establish the so-called Nadbank - to fund infrastructure and environmental projects, and to aid communities hurt by the Nafta - attracted 25 co-sponsors on Wednesday, the day of its introduction in the US House of Representatives. It was submitted by Congressman Esteban Torres, long a Nafta foe. Twenty of the 25 have been critics of the Nafta. ..TX.- 'Nadbank can change the dynamic of the Nafta debate. Nadbank is a vehicle to go beyond the divisive debate,' said Mr Torres. He has yet to commit himself to supporting the Nafta - the free trade pact by the US, Mexico and Canada - asserting that he will first study the supplemental agreements being negotiated on the environment and labour. ..TX.- Mr Mickey Kantor, US trade representative, expects the negotiations to end by July 31. ..TX.- Mr Torres said he doubted the side agreements alone would gain the support needed for approval of the Nafta in the House. However, 'a growing coalition of labour, environmental, Latin and community leaders' could be brought on board by 'an alternative comprehensive approach to sustainable trade and development' with Nadbank as its central component. ..TX.- The development bank proposal is also being considered by the Clinton administration, which on Wednesday discussed the appointment of a 'Nafta Tsar' to shepherd the pact through Congress. ..TX.- A new report by the US council of the Mexico-US Business Committee says the two countries will need Dollars 6.5bn (Pounds 4.33bn) over the next 10 years just to bring the water supply, wastewater treatment and solid and hazardous waste disposal at their border to internationally acceptable levels. Billions more will be needed for roads, retraining programmes and compensation for lost tariff revenues. ..TX.- The bill introduced by Congressman Torres would give a Nadbank Dollars 5bn in authorised capital over the next decade, with the aim to issue loans totalling up to Dollars 20bn. The US would provide two-thirds of the paid-in capital, with Mexico and Canada investing the rest. ..TX.- Mr Raul Hinojosa Ojeda, a Californian professor and the chief proponent of the Nadbank, said the institution might be attached to the Inter-American Development Bank, but with its own directors. ..CN.- Countries: US United States of America. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: NEWS General News. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGPB4AA1FT ..HL.- 930716FT 930716 Campbell's support on the slide (182) ..BL.- By REUTER ..DL.- OTTAWA ..TX.- SUPPORT for Canada's governing Conservative party has slipped since Ms Kim Campbell became prime minister, according to a poll by Gallup Canada, Reuter reports from Ottawa. ..TX.- The Conservatives' popularity declined to 33 per cent in July after rising marginally to 36 per cent after the party's leadership convention. ..TX.- Some 43 per cent of decided voters said they would support the opposition Liberals if an election were held immediately, up from 41 per cent in June. A general election must be held within four months. ..TX.- Ms Campbell was elected party leader, and and therefore prime minister, last month. ..TX.- Support for the opposition New Democratic party fell to 8 per cent in July, its lowest standing since July 1961. ..TX.- The right-wing Reform party received support from 7 per cent of decided voters; the Bloc Quebecois, which seeks autonomy for the province of Quebec, received 8 per cent. Twenty-five per cent of the 1,010 voters polled were undecided. ..CN.- Countries: CA Canada. ..IN.- Industry: P9111 Executive Offices. ..TP.- Types: PEOP People. ..IX.- P9111. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGPB4AA0FT ..HL.- 930716FT 930716 Quotas for diamond and gold industries (249) ..BL.- By JOHN LLOYD ..TX.- THE Russian parliament yesterday approved a law on precious metals and gems which confirms the growing power of the regions by giving them joint control of gold and diamond production and sales, and bans foreigners from production. ..TX.- The law passed its second reading yesterday, and is expected to win final approval today. ..TX.- The law shares the state monopoly of precious metals and gems with the republics and regions in which they are produced, and allows production quotas to be determined between the federal and regional authorities. It limits the extraction of precious metals and gems to companies and citizens of Russia. ..TX.- Mr Igor Ivanov, the parliamentary deputy who drafted the law, said yesterday the export of gold, diamonds and other gems accounted for 15 per cent of Russia's hard currency income. ..TX.- Mr Ivanov said that 'in the past no one knew how much was sold to whom and for how much - apart from a narrow circle in the government'. ..TX.- The Committee on Precious Metals must report to parliament each year. The law has been framed so that only the regions, and not the committee itself, can engage in the extraction and production of the precious materials. ..TX.- Russia's gold reserves are officially estimated at 330 tonnes. ..CN.- Countries: RU Russia, East Europe. ..IN.- Industry: P1041 Gold Ores. P1499 Miscellaneous Nonmetallic Minerals. P9611 Administration of General Economic Programs. ..TP.- Types: GOVT Government News. ..IX.- P1041, P1499, P9611. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGPB4AAZFT ..HL.- 930716FT 930716 Poland ready for deal on Dollars 12bn commercial debt: Both sides are keen to settle (810) ..BL.- By ANTHONY ROBINSON ..TX.- POLAND and its London Club commercial bank creditors are to meet in London on Monday with high hopes of a breakthrough in their long-stalled negotiations over a debt reduction and rescheduling agreement. ..TX.- Mr Krzysztof Krowacki, the Polish government's chief debt negotiator, believes the time is now ripe to settle with the banks over the country's Dollars 12.1bn (Pounds 8bn) debt. ..TX.- He points to Poland's recently approved Dollars 660m standby loan with the International Monetary Fund, loan commitments of Dollars 3.8bn from the World Bank and a growing influx of foreign equity capital in evidence of this. ..TX.- At the same, he says, 'this is possibly the last time that we can explain to the Polish electorate that it is in Poland's interest to make a reasonable deal, even though it will cost Poland a lot of money.' ..TX.- The 300 creditor banks represented in the negotiations are also anxious to make a deal which would close a painful chapter in their relations with Poland. ..TX.- The communist authorities, who borrowed Dollars 17bn in the 1970s to prop up their regime by grafting western factories on to an unreformed system, defaulted on Poland's foreign debt in March 1981. ..TX.- Arrears on the official debt accumulated throughout the period of martial law from December 1981, but Warsaw resumed the servicing of its commercial bank debt in 1983. ..TX.- The arrangement lasted until the fourth quarter of 1989, when the first post-communist government stopped payments. Since then the original Dollars 9bn commercial debt has swollen to Dollars 12.1bn, mainly through the addition of capitalised interest. ..TX.- Both sides now want an agreement, but not at any price. Many banks remain angry about the terms agreed by the Paris Club of official creditors in April 1991. The centrepiece was a two-stage, 50 per cent reduction of the outstanding Dollars 33bn debt to governmental export credit and official lenders. The agreement, which was concluded mainly on political grounds to ease Poland's transition from communism to a market economy, includes a clause obliging Poland to seek similar terms from the commercial banks. ..TX.- But the banks, painfully recovering from their exposure to Latin American, Asian and African defaulters, are refusing to be put in the Paris club straitjacket. They are seeking a deal based on the assessment of their own economic sub-committee, despatched to Poland last month, of what the country can afford to pay. ..TX.- Poland's position in the heart of Europe, its commitment to market reforms, support from the IMF and World Bank, basic political stability and an educated population of nearly 40m make its prospects good, the bankers believe. ..TX.- But the Polish team will argue that Poland will only be able to service its debts over 30 years if it is left with sufficient resources to finance the necessary economic growth. Even without a London Club agreement Poland is faced with a serious bunching of debt repayments around the middle of the first decade of the next century, both to the Paris Club and to the international institutions which have been the main source of fresh capital since 1989. ..TX.- A further complication is that nearly 60 per cent of Poland's bank debt is denominated in D-Marks, where interest rates have remained high, in contrast to the decline in dollar interest rates in recent years. ..TX.- Resistance to concessions is expected to be strongest from the German banks, the biggest single creditors, who are also heavily involved in the Russian market and fear that concessions to the Poles now will be seized on by the Russians and other debtors, later. ..TX.- But the British banks, with less at stake, are also reluctant to agree a Paris Club style capital write-off, or allow Poland to retire up to a third of its debt by buying it from the secondary market, as the Poles have suggested. ..TX.- Over 160 smaller creditor banks have dropped out of the picture by selling their Polish debt on the secondary market where Polish paper has risen from its floor, several years ago, of around 18 per cent of face value, to around 33 per cent, in expectation of an agreement. ..TX.- Some tough bargaining lies ahead. But bankers believe that up to Dollars 2bn in foreign investment is just waiting for a debt agreement. This gives an incentive for Warsaw to settle. At the same time, many western banks are anxious to move into what is expected to become a profitable, fast growing market over the next decade and beyond. With a certain degree of flexibility on both sides, the prospects for agreement on the major components of a deal before the end of the summer look promising. ..CN.- Countries: PL Poland, East Europe. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Balance of payments. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGPB4AAYFT ..HL.- 930716FT 930716 Western bankers hail doubling of Russian interest rates (543) ..BL.- By JOHN LLOYD ..DL.- MOSCOW ..TX.- RUSSIA'S central bank has raised its interest rates to 170 per cent this week, double the level of a month ago, in what is being hailed as a breakthrough in the bank's acceptance of market principles. ..TX.- The rate represents a much higher real annual rate, because of its method of calculation. Russian banks grant credits on a monthly basis, at one twelfth of the annual rate, or just over 14 per cent a month. this is equivalent to around 400 per cent a year, not far short of the inflation rate, now running at 15 per cent a month. ..TX.- One western expert in Moscow said yesterday that this was a real step forward by the bank, not just because interest rates had gone up, but because there was 'now an intellectual acceptance that interest rates should reflect the real cost of money, and that these should be borne by the borrower.' ..TX.- The move, coupled with decisions by the government to liberalise coal prices, slash budget expenditures by 20 per cent and limit credits to other members of the Commonwealth of Independent States to Rbs800bn this year, is seen by the world financial institutions as the most convincing promise of tough financial discipline for many months. ..TX.- Such promise has also been accompanied by some economic gain, with the rouble stabilising at around 1,050 to the dollar, and production falls slowing. ..TX.- However, Mr Boris Fyodorov, the deputy prime minister for finance, is now under intense pressure from industry to relax his policy. The IMF and the World Bank, in charge of disbursing the assistance to Russia agreed at the US-Russian summit in Vancouver in April and the Group of Seven industrialised countries' Tokyo summit in July, see the next two to three months as critical. ..TX.- There is now intense debate within the financial institutions and G7 governments on when the second Dollars 1.5bn tranche of the 'systemic transformation facility' should be awarded. Senior officials in the US administration believe there is sufficient proof of Russian good intentions to pay it now, but the IMF remains more cautious. ..TX.- The coal price liberalisation is particularly controversial in Russia, since coal producers are claiming they will need to raise coal prices by four or five times to compensate for the loss of government subsidies. Steel and other metal producers argue that the higher prices will lose them the price advantage they enjoy over western producers - a price advantage which has triggered accusations of dumping, especially of aluminium. ..TX.- Mr Boris Yeltsin, the Russian president, will come under intense pressure when he returns from holiday in late July from industry groups and the regions to loosen the constraints. The pressure will come at a time when he is attempting to keep regional support for a new constitution. ..TX.- 'We have at last reached the point where we are hitting the real issue,' said the western expert yesterday. 'Will they be able to hold the line which they have been able to establish, or not. The next two to three months will be decisive.' ..CN.- Countries: RU Russia, East Europe. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGPB4AAXFT ..HL.- 930716FT 930716 Turkey outlaws pro-Kurds party: Prospects shrink of negotiations with rebels (233) ..BL.- By JOHN MURRAY BROWN ..DL.- ANKARA ..TX.- TURKEY'S constitutional court has outlawed the Kurdish-backed People's Labour party (HEP), ending the possibility of informal dialogue with the rebel Kurdish Workers party (PKK). ..TX.- The court move came at the end of a week of intense consultations between the government and political parties to find a common stance on the Kurdish rebellion. ..TX.- The judgment coincides with violent clashes in the Kurdish south-east where security forces are stepping up operations against PKK rebels fighting a nine-year campaign for Kurdish independence. ..TX.- The 18 HEP deputies elected in 1991 formed a new party last week, pre-empting the court decision. Nonetheless, the court move also calls for the withdrawal of parliamentary immunity for Mr Fehmi Isiklar, the respected former chairman of HEP who could now face serious charges related to party activities. ..TX.- The HEP is the nearest thing to an explicitly Kurdish nationalist party and is popularly seen as a PKK front - a charge some HEP deputies have not been too anxious to contest. ..TX.- The ruling is likely to be exploited by Kurdish hardliners as well as politicians and those in the Turkish military who view any lifting of restrictions on Kurdish television and newspapers as concessions to terrorism. ..CN.- Countries: TR Turkey, Middle East. ..IN.- Industry: P8651 Political Organizations. ..TP.- Types: NEWS General News. ..IX.- P8651. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGPB4AAWFT ..HL.- 930716FT 930716 Lech Walesa launches call for solidarity without Solidarity (493) ..BL.- By CHRISTOPHER BOBINSKI ..DL.- WARSAW ..TX.- MR Lech Walesa, the shipyard electrician who came to embody the struggle by the Solidarity trade union against communism and who is now Poland's president, says he wants a new kind of solidarity. ..TX.- He has formed a new political grouping to challenge Poland's fractured political parties in September's general election. ..TX.- In a nationwide address on Monday, the president described existing parties as weak and fractious, and warned of unstable future governments. He urged voters back a 'non party bloc for supporting reform', or BBWR in its Polish acronym. 'It's an attempt to recreate the Solidarity movement without Solidarity,' said sociologist Mr Andrzej Rychard. ..TX.- Mr Walesa, elected president in December 1990, is hoping to capitalise on voter discontent with existing parties. ..TX.- The president, an intuitive politician with his roots deep in working class, catholic Poland, has been promoting his new party since parliament was dissolved at the end of May. He decided to go for new elections rather than patch up a new coalition after Ms Hanna Suchocka, prime minister for 11 months, failed by one vote to survive a no-confidence motion put by Solidarity trade union deputies pressing for public sector wage rises. ..TX.- Since then politicians on the fractured nationalist right in particular have engaged in a bewildering and largely unsuccessful effort to establish a united front. A new electoral law states that only parties which gain 5 per cent of the vote, or 8 per cent as a coalition, can enter the new parliament. ..TX.- The new law is intended to reduce the fragmentation of parties and stabilise future coalitions. But the nationalist and liberal conservative parties, which have played an important role in pushing for privatisation and market reforms, are also threatened by the new rules. ..TX.- Opinion polls meanwhile given the BBWR 11 per cent of the vote, although the party has only just unveiled its programme and has yet to select candidates. ..TX.- However, this level of support will leave President Walesa's short of his primary aim, which is to have the next parliament pass a new constitution shifting the balance of power from parliament to the president. For this he needs to control two thirds of the seats in parliament. ..TX.- The BBWR is unlikely to make inroads into the countryside where the PSL, the farmers' party formerly allied with the communists, is expected to re-enter parliament with around 15 per cent of the vote. ..TX.- Mrs Suchocka's Democratic Union, which remains the largest party, is accepting that picking an open fight with the BBWR in the run up to the election is pointless since the two groups are likely to end up forming a coalition. That could mean a period of stable government but not the political re-ordering which Mr Walesa wants before he faces re-election in 1995. ..CN.- Countries: PL Poland, East Europe. ..IN.- Industry: P8651 Political Organizations. ..TP.- Types: NEWS General News. ..IX.- P8651. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGPB4AAVFT ..HL.- 930716FT 930716 Aspin orders military support to the Adriatic (135) ..BL.- By GEORGE GRAHAM ..DL.- WASHINGTON ..TX.- Mr Les Aspin, US defence secretary, has ordered 30 ground attack and 10 support aircraft to the Adriatic to spearhead Nato's plan to provide aerial protection for United Nations peacekeepers in Bosnia, writes George Graham in Washington. According to the Pentagon they will include A-10 ground attack aircraft, F/A-18 Hornet jet fighters and AC-130s, a gunship version of the C-130 transport. ..TX.- France, the Netherlands and Britain are also sending aircraft to take part in the Nato air umbrella. Nato this week approved the mission from July 22, but plans have been referred to the UN for approval and a decision on timing. ..CN.- Countries: BA Bosnia-Hercegovina, East Europe. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AAUFT ..HL.- 930716FT 930716 EC bank 'will go to Frankfurt' (369) ..BL.- By QUENTIN PEEL, LIONEL BARBER and RALPH ATKINS ..DL.- BONN, BRUSSELS, LONDON ..TX.- EUROPEAN Community heads of government have agreed to locate the proposed European central bank in Frankfurt, according to the German business newspaper, Handelsblatt. ..TX.- A formal decision will be taken at an EC summit in Brussels in the autumn, the newspaper says in a report today, quoting government sources in Bonn. The central bank, the European Monetary Institute, will begin operating in Frankfurt from the beginning of next year, it says. ..TX.- The newspaper claims Mr John Major, UK prime minister, has asked other government heads to delay an announcement until after Britain has ratified the Maastricht treaty on European economic and monetary union. ..TX.- In Bonn, the general view is that Britain has for the past 12 months been the only EC member state fiercely resisting Frankfurt as the best site for the European central bank. The German government has argued that it needs Frankfurt to be the site to overcome public doubts in Germany about the wisdom of creating a single European currency, eclipsing the D-Mark, and a single central bank replacing the Frankfurt-based Bundesbank. ..TX.- But, in Brussels, EC officials last night expressed doubt about the reported understanding between EC heads of government. They pointed out that member states were finding it difficult to agree on a successor to Mr Jacques Attali as head of the European Bank for Reconstruction and Development. The site of the EMI was even more controversial, they said. Choosing Frankfurt would boost its standing considerably as a financial centre to rival Paris and London. ..TX.- EC leaders have agreed informally to try to strike a deal on the bank's site and its president before the end of the year. ..TX.- In London, Whitehall officials dismissed suggestions that EC leaders had already agreed on a location and disputed that a majority favoured Frankfurt. Mr Major is determined to resist the bank going to Frankfurt, largely because of the impact on London as a financial centre. He believes other EC leaders are also worried about furthering Germany's economic dominance. ..CN.- Countries: QR European Economic Community (EC). ..IN.- Industry: P6011 Federal Reserve Banks. ..TP.- Types: RES Facilities. ..IX.- P6011. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AATFT ..HL.- 930716FT 930716 Big shake-up in motor racing (340) ..BL.- By JOHN GRIFFITHS ..TX.- GRAND PRIX motor racing, its prestige already damaged by internal political squabbles and the absence of world champion Nigel Mansell, faces a fundamental change as a result of a decision yesterday by its governing body. ..TX.- The Paris-based Federation Internationale du Sport Automobile (Fisa) declared illegal two of the key elements of the Formula One cars which have helped justify grand prix's claim to be at the 'cutting edge' of motor industry technology. ..TX.- It banned electronic traction control and 'active' suspension systems with immediate effect - to the chagrin of such leading teams as Williams and McLaren, which have spent a fortune developing them, and the quiet delight of less financially secure teams who believe they will become more competitive. ..TX.- If supported to the letter by Fisa, this year's championship could have been turned upside down, with leading teams' points being invalidated. ..TX.- But Fisa yesterday decided to ignore the logical consequences of a ruling by stewards at last month's Canadian grand prix that leading cars were already illegal because they had been using the systems for a year or more. The results of all races to date will not be affected. ..TX.- Nevertheless, a crisis atmosphere ruled last night. Williams, world championship leader, has threatened to withdraw from the German grand prix on July 25, and possibly from subsequent races, if its active suspension system - one of its biggest advantages - is banned. The team was meeting in Paris last night to consider its response. ..TX.- The decision could change the shape of grand prix racing, with unpredictable consequences for the vehicle makers and independent commercial sponsors who pour millions of dollars into a global business still described as sport. ..TX.- Mr Max Mosley, Fisa's president, is concerned about falling gates and fading media interest. He wants races to become much closer and more entertaining and thinks the technology ban will help. ..CN.- Countries: FR France, EC. ..IN.- Industry: P7948 Racing, Including Track Operation. ..TP.- Types: NEWS General News. ..IX.- P7948. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AASFT ..HL.- 930716FT 930716 Garofano agrees to extradition to Italy (280) ..BL.- By HAIG SIMONIAN and REUTER ..DL.- MILAN, ROME ..TX.- MR Giuseppe Garofano, the former senior executive of Italy's troubled Ferruzzi group arrested in Geneva this week, yesterday agreed to his extradition to Italy, writes Haig Simonian in Milan. ..TX.- 72 hours. ..TX.- Mr Garofano, in hiding for the past five months, has been sought in connection with a L250m (Pounds 107,000) political contribution to the Christian Democrat party. Mr Garofano claims the money was a personal gift, but magistrates investigating political corruption issued an international arrest warrant on suspicion it came from Ferruzzi. ..TX.- Italy's Consob stock market and companies watchdog this week took legal action over alleged irregularities in the accounts of Ferruzzi and Montedison, its main operating subsidiary. Mr Garofano was Montedison's managing director for a number of years and also held senior positions in Ferruzzi. ..TX.- A Naples judge has authorised sequestration of expensive paintings, silver and jewellery given by a leading drugs company executive to Mr Francesco De Lorenzo, the former health minister. ..TX.- According to leaked testimony, Mr Giampaolo Zambeletti, the executive, regularly gave gifts, totalling about L300m, to Mr De Lorenzo, and Mr Paolo Cirino Pomicino, a senior Christian Democrat ex-minister, and their families. ..TX.- Electoral reform crusader Mario Segni launched a new Italian centrist party yesterday to take on the powerful Northern League at national elections expected early next year, Reuter reports from Rome. ..TX.- Alleanza Democratica (Democratic Alliance) groups breakaway elements of the beleaguered Italian Socialist party (PSI) plus the small Republican and Green parties. ..CO.- Companies: Ferruzzi Finanziaria. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P9211 Courts. P6719 Holding Companies, NEC. ..TP.- Types: PEOP People. NEWS General News. ..IX.- P9211, P6719. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AARFT ..HL.- 930716FT 930716 Danes pledge to defend the krone (426) ..BL.- By HILARY BARNES ..DL.- COPENHAGEN ..TX.- AS THE krone came under pressure in the foreign exchange markets yesterday, Danish monetary authorities insisted that the currency would not be devalued. ..TX.- Mrs Marianne Jelved, Denmark's economy minister, reiterated that no devaluation was planned while Mrs Kirsten Mordhorst, head of the National Bank's (central bank) secretariat, denounced as 'crazy' market rumours that the krone would leave the EMS. ..TX.- Mrs Mordhorst said that the speculation could not have arisen among people who knew anything about the situation in Denmark. ..TX.- At the same time, however, the bank raised a key short-term interest rate, the repo rate, from 7.8 to 9 per cent yesterday morning. It also imposed a limit of 30 per cent of assets on access for the commercial banks to repurchase certificates of deposit. ..TX.- This tightened liquidity, sending the one-month Cibor (Copenhagen inter-bank offer rate) from 8.87 per cent on Wednesday to 12.29 per cent yesterday, its highest since March, when the krone was last under significant pressure. ..TX.- The central bank's measures initially firmed the currency but, in the absence of a reduction in German interest rates or a rise in French rates, the krone weakened again. ..TX.- At the end of the day the rate against the D-Mark was 3.8960, slightly weaker than when trading opened. ..TX.- A statement yesterday by Mr Erik Hoffmeyer, governor of the National Bank, implied a further rise in short-term rates was possible. Describing the rise in the repo rate as a natural reaction to the weakening krone, he added 'time will tell' whether the measure was sufficient. ..TX.- According to Mr Hardy Larsen, head of arbitrage at Unibank, as long as the franc remains weak, so will the krone. 'Unemployment is very high, and outsiders think we must be interested in leaving the EMS system in order to be able to lower interest rates,' he said. ..TX.- The krone's weakness has also hit the bond market, where the yield gap between Danish and German 10-year treasury bonds has widened from 0.21 percentage points at the beginning of last week to about 0.51 points yesterday. ..TX.- The Danish economy has been hit by the devaluation of sterling, the Swedish krona and several other currencies last year, leading to a trade-weighted appreciation of the krone and a 7 per cent drop in the value of exports for the first four months of this year compared with the same period last year. ..CN.- Countries: DK Denmark, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AAQFT ..HL.- 930716FT 930716 Bundesbank key interest rates unchanged (93) ..BL.- By DAVID WALLER ..DL.- FRANKFURT ..TX.- The Bundesbank left its key interest rates unchanged yesterday as its policy-making council met for the first time since announcing cuts in official interest rates on July 1, writes David Waller in Frankfurt. ..TX.- The markets had not been expecting reductions so soon after the Bundesbank's last moves. The discount and Lombard rates remain at 6.75 and 8.25 per cent respectively. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AAPFT ..HL.- 930716FT 930716 Slovakia gets Ecu40m from EC (89) ..BL.- By REUTER ..DL.- BRATISLAVA ..TX.- Slovakia will receive Ecu40m (Pounds 30m) in aid from the EC's eastern and central European PHARE assistance programme for 1993, EC and Slovak officials said yesterday, Reuter reports from Bratislava. ..TX.- The aid will be used to develop the private sector, human resources, infrastructure, development of energy efficiency and environmentally sound projects, and technical assistance programmes. ..CN.- Countries: SK Slovakia, East Europe. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Balance of payments. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AAOFT ..HL.- 930716FT 930716 Europe company chiefs optimistic (187) ..BL.- By REUTER ..DL.- BRUSSELS ..TX.- Chief executives of west European companies are more optimistic than their US counterparts about economic prospects on both sides of the Atlantic, according to a survey by Conference Board Europe, Reuter reports from Brussels. ..TX.- The Board, part of an organisation linking companies worldwide, said yesterday that 54 per cent of European executives believed economic conditions would improve over the next four years in western Europe and 74 per cent thought the outlook would get better in the US. ..TX.- US executives were less optimistic on both counts, 48 per cent seeing an improvement in western Europe and 56 per cent forecasting better conditions in the US. ..TX.- Less than half US and EC executives were seriously concerned about competition from each other but a majority were worried about competitive threats from Asia over the next four years. ..TX.- National budget deficits and spiralling health care costs topped both the European and American worry lists. ..CN.- Countries: US United States of America. XJ West Europe. ..IN.- Industry: P9611 Administration of General Economic Programs. ..TP.- Types: NEWS General News. ..IX.- P9611. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AANFT ..HL.- 930716FT 930716 Berlin shuns visit by Le Pen (132) ..BL.- By REUTER ..DL.- BERLIN ..TX.- Berlin yesterday became the third European city to declare opposition to hosting a conference called by French far-right politician Jean-Marie Le Pen, Reuter reports from Berlin. A city spokesman said the city was doing all it could legally to prevent the conference from taking place in Berlin. Mr Le Pen, who failed in efforts to hold conferences in Edinburgh and Dublin, wants to hold a three-day meeting of 14 extreme right-wing members of the European parliament in Berlin, perhaps in the Reichstag, from November 8, the 55th anniversary of the Kristallnacht, the Nazis' night of mass attacks on Jews and their property. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P8651 Political Organizations. ..TP.- Types: NEWS General News. ..IX.- P8651. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AAMFT ..HL.- 930716FT 930716 German towns warn of waste crisis (290) ..BL.- By ARIANE GENILLARD ..DL.- BONN ..TX.- THE Association of German Towns, which comprises 7,000 towns and cities with 51m inhabitants, yesterday warned of an imminent waste crisis on German streets due to the mounting problems faced by Duales System Deutschland (DSD), the national waste management scheme, writes Ariane Genillard in Bonn. ..TX.- Meeting Mr Klaus Topfer, the environment minister and chief architect of Germany's recycling laws, the association said urgent new measures were needed to ensure that municipalities were not faced with the costs of a collapsing DSD. ..TX.- DSD, which collects packaging waste from households in Germany, faced near-bankruptcy last month before being partially rescued at the last minute by funds from industry. ..TX.- The company recently announced it will cut by 20 per cent the price it pays to municipal waste management companies for the waste it collects and cannot recycle. ..TX.- DSD has been overwhelmed by the mounting flow of plastics it collects and for which Germany has no recycling facilities. The company announced that it will from now on only recycle plastics bottles under five litres and large plastics. It also said it will stick to the legal recycling requirement, which stands at 100,000 tonnes of plastics for 1993 and 1994. ..TX.- The new measures will place severe burdens on municipal waste management companies who must collect and dispose of all the waste not taken care of by DSD. Cash-straped municipalities already face a shortage of landfill space and limited incineration possibilities. Just over 40 per cent of waste management companies in Germany are run by municipalities and are not private enterprises. ..CO.- Companies: Duales System Deutschland. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P4953 Refuse Systems. ..TP.- Types: NEWS General News. ..IX.- P4953. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AALFT ..HL.- 930716FT 930716 Brussels postpones action on energy monopoly (419) ..BL.- By LUCY PLASKETT ..DL.- BRUSSELS ..TX.- THE European Commission has delayed plans to take six EC countries to the European court over their respective energy monopolies, Mr Karel Van Miert, EC competition commissioner, said yesterday. ..TX.- The Commission decided to postpone its court action after two of the countries, France and the Netherlands, said they would review their national legislation. ..TX.- The proposed court action was a significant step for the Commission towards opening the EC energy market to competition. In May, Mr Van Miert challenged entrenched monopolies in some countries for the import and export of electricity and gas. ..TX.- The Commission planned to take the six countries to court, alleging that, under EC law, statutory monopolies over the import and export of electricity in France, the Netherlands, Italy, Ireland and Spain, and for gas in Denmark and France were illegal. ..TX.- The Commission had previously asked for more information on the monopolies and given warnings they could be illegal, but had been strongly opposed by the six countries. Previous charges against three further member states have since been dropped. ..TX.- In an interview with the FT newsletter EC Energy Monthly, Mr Van Miert said the Netherlands and France have confirmed their willingness to move on the issue. ..TX.- After a heated national debate, the Dutch announced that Article 34 of the Electricity Act which grants monopoly import and export rights to the SEP, the central power board, will be removed. ..TX.- France, under the new conservative government of prime minister Edouard Balladur, has now said it intends to review the monopoly powers of state-owned Electricite de France and Gaz de France. ..TX.- Welcoming this movement, Mr Van Miert said: 'Since this is such a touchy issue in some member states I think the willingness, confirmed in writing, to change things is really a considerable step.' ..TX.- The hope is now that the other four countries will also decide to re-examine their positions, making court action unnecessary. But he warned: 'If it appears that this is just a time-gaining device this will not stop the Commission from then taking action.' ..TX.- The whole issue of energy market liberalisation will be the subject of intense debate later in the year, when the Commission hopes to reach agreement on a proposal to further open up the energy sector to competition. ..CN.- Countries: QR European Economic Community (EC). ..IN.- Industry: P4911 Electric Services. P4923 Gas Transmission and Distribution. P9651 Regulation of Miscellaneous Commercial Sectors. ..TP.- Types: MKTS Foreign trade. ..IX.- P4911, P4923, P9651. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AAKFT ..HL.- 930716FT 930716 French Privatisation: French look for the strong, silent type - Government seeks supportive investors in sell-off (747) ..BL.- By ALICE RAWSTHORN ..TX.- WANTED: Long-term investors willing to take minority holdings in privatised companies. Any nationality accepted. Deep pockets and strong nerves essential. ..TX.- The French government is searching for noyaux durs, 'hard core' investors, to participate in its privatisation programme. These are companies which take minority stakes in another and then act as a stable, supportive shareholder to shelter it against the storms of the private sector. ..TX.- Noyaux durs played a prominent part in the last French privatisation drive in 1986 and 1987. However, those sales took place at a time when the Paris stock market was soaring and corporate profits were rising. ..TX.- It may be more difficult for the present government to unearth loyal investors in the current climate when many companies are strapped for cash and the stock market is sluggish. ..TX.- The concept of noyaux durs is indicative of France's ambivalent attitude to capitalism. Although these shareholders act as strategic partners for the company, they are alsoexpected to serve as a source of support for the board in the event of a hostile takeover. ..TX.- This contradicts of the prevailing Anglo-Saxon view that the threat of takeovers makes senior management more efficient. 'What is it that you French have got against takeovers?' asked an incredulous American banker at a privatisation conference in Paris last week. ..TX.- The answer is that the French have nothing against takeovers per se, but prefer continuity of ownership. ..TX.- This is understandable in a country such as France where many large companies are controlled either by the state or by their founding families. ..TX.- The few that fall outside those categories tend to be protected by complex webs of cross-shareholdings and sweetheart deals. ..TX.- Against this backdrop it is scarcely surprising that when the new French government started to plan its privatisation drive it resurrected the concept of noyaux durs as a way of offering some protection to the companies on its hit list. ..TX.- In theory the government faces a tougher task in rustling up compliant investors in the present unfavourable economic environment. And some French companies may be wary of alienating the US and UK shareholders that have in recent years invsted heavily in the Paris stock market. ..TX.- In addition, the performance of some of the 1986 and 1987 privatisation candidates has been poor. For example, the share price of Suez, the industrial and financial group, is now trading below the offer price ..TX.- But in practice there seems to be no shortage of prospective noyaux durs for the next round of privatisations. ..TX.- Some groups have expressed interest in investing in companies with which they have strategic links. Matra-Hachette, the defence electronics group, has declared its interest in Renault, the motor group with which it produces the successful Espace van in a joint venture, and Aerospatiale, the aerospace concern. ..TX.- Alcatel-Alsthom, the electronics company, has said that it would be prepared to invest in France Telecom, even though it is not on the privatisation list. ..TX.- Other would-be noyaux durs have different motives. Societe Generale, the banking group, has said that it plans to participate in the privatisations as 'advisor, vendor and investor'. Its rivals interpret this as a thinly-disguised bid for lucrative advisorships from the French government. ..TX.- There are even signs of interest from foreign investors. IFIL, an Agnelli family holding company, has said it sees the French privatisation programme as a way of expanding beyond its native Italy. ..TX.- There are also hopes of investment from Japan, where the concept of a long term, silent-partner investment seems far less foreign than in the US or UK. ..TX.- The critical question is whether the concept will still work in the modern Paris stock market. It did in 1988 when the recently privatised Societe Generale rallied its noyaux durs to stave off a raid by Mr Georges Pebereau, the French financier. ..TX.- But last year's drama when Nestle, the Swiss food group, succeeded in taking over Perrier mineral water after a long and complex battle, showed that such boardroom allies do not make companies invulnerable. ..TX.- Meanwhile the recent row between Suez and Union des Assurances de Paris over the former's refusal to cede control of Colonia, one of its German insurance subsidiaries, illustrates that noyaux durs are not always as mutually supportive as the French government would like to think. ..CN.- Countries: FR France, EC. ..IN.- Industry: P9611 Administration of General Economic Programs. ..TP.- Types: NEWS General News. ..IX.- P9611. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AAJFT ..HL.- 930716FT 930716 French Foreign Ministry's 'preferences' for Bosnia (127) ..BL.- By DAVID BUCHAN ..DL.- PARIS ..TX.- The French Foreign Ministry yesterday expressed its 'preference' for the United Nations to draw peacekeeping troops for Bosnia from countries 'which already have experience of this kind of mission,' a definition that would exclude Iran and some other Islamic states that have offered troops to protect Moslems in the Balkan republic, writes David Buchan in Paris. ..TX.- France yesterday also dispatched eight Jaguar ground attack jets to Italy, where it has already based 10 air defence Mirages and five reconnaissance Mirages for possible use in protecting French and other UN troops in Bosnia. ..CN.- Countries: FR France, EC. BA Bosnia-Hercegovina, East Europe. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AAIFT ..HL.- 930716FT 930716 Key interest rates unchanged at The Bundesbank (145) ..BL.- By DAVID WALLER ..DL.- FRANKFURT ..TX.- The Bundesbank left its key interest rates unchanged yesterday as its policy-making council met for the first time since announcing cuts in official interest rates on July 1, writes David Waller in Frankfurt. ..TX.- The markets had not been expecting reductions so soon after the Bundesbank's last moves. The discount and Lombard rates remain at 6.75 and 8.25 per cent respectively. ..TX.- At the same time, the bank reaffirmed that there would be no change in its target range for growth in broad money supply, so-called M3. The range will remain at 4.5 to 6.5 per cent for the year, although the annualised rate was running at 6.9 per cent in May. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AAHFT ..HL.- 930716FT 930716 Employers 'may offer unequal pensions' (367) ..BL.- By NORMA COHEN, Investments Correspondent ..TX.- THE European Court of Justice has received advice from its own Advocate General that employers may offer unequal pensions to men and women if the purpose is to offset inequalities in the state pension scheme. ..TX.- The advice has particular significance for UK and Dutch employers who frequently pay so-called 'bridging pensions' to those of their employees who are eligible for occupational pension for several years before meeting the minimum age for state pension benefits. ..TX.- It means that British employers who gave more generous bridging pensions to men or Dutch employers who gave them to women will not be required to provide the same benefits for members of the opposite sex, saving considerable costs to occupational schemes. ..TX.- 'From the employers' point of view this is good news,' said Mr John Cunliffe, partner at solicitors McKenna and Co and an expert in pensions law. 'But from the point of view of jurisprudence, its a nonsense,' he said. ..TX.- While it is not certain that the ECJ will accept the advice of its Advocate General, it is considered unusual for it not to do so. ..TX.- ECJ Advocate General Mr Walter van Gervan, gave his opinion in the case of Roberts v Birds Eye Walls, a case which originated in Britain on behalf of Mrs Roberts, a 60-year old pensioner. In that case, Birds Eye Walls, the ice-cream maker, paid so-called bridging pensions to those who retired before reaching state retirement age. But because British women are eligible to receive state pensions from age 60 while men must wait until 65, she obtained a smaller bridging pension than a man in similar circumstances. ..TX.- The UK government had surprised solicitors for all parties in the case by intervening at the last moment. The UK government had argued that if the EC were to agree that inequality in pension benefits is acceptable under some circumstances, it would pave the way for applicants seeking exemptions on a wide variety of grounds. ..CN.- Countries: QR European Economic Community (EC). ..IN.- Industry: P6371 Pension, Health, and Welfare Funds. P9441 Administration of Social and Manpower Programs. ..TP.- Types: NEWS General News. ..IX.- P6371, P9441. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AAGFT ..HL.- 930716FT 930716 Draskovic leaves hospital (138) ..BL.- By LAURA SILBER ..TX.- Vuk Draskovic, leader of the largest Serbian opposition group, leaves hospital yesterday and immediately vowed to oust Serbian President Slobodan Milosevic and restore democracy in Serbia, which he called a dictatorship, writes Laura Silber. Mr Draskovic under Mr Milosevic. He said he would obey medical orders to avoid political engagement for the next two months. Mr Draskovic appeared wan after ending an eight-day hunger strike in protest against his detention. In apparent fear of mass unrest, Mr Milosevic last Friday issued a pardon for the opposition leader after Mr Draskovic was reported to be near death after a hunger strike. He had been jailed since June 1 after anti-government demonstrations ..CN.- Countries: YU Yugoslavia, East Europe. ..IN.- Industry: P8651 Political Organizations. ..TP.- Types: NEWS General News. ..IX.- P8651. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AAFFT ..HL.- 930716FT 930716 Croatia presses on with bridge plan (418) ..BL.- By LAURA SILBER ..DL.- BELGRADE ..TX.- CROATIA yesterday pressed ahead with plans to rebuild a strategic bridge to link the main coastal motorway with central Croatia, and the nearby Zemunik airport. ..TX.- Serb forces from the self-styled state of Krajina, which cuts Croatia in half, warned they would bombard the bridge and yesterday they resumed bombardments of Karlovac, a garrison town 30 miles southwest of Zagreb. ..TX.- It was the first attack on Karlovac since the 1991 war in Croatia and raised fears that the Serbo-Croat war could re-ignite. ..TX.- Mr Cedric Thornberry, the deputy chief of the UN mission in former Yugoslavia, repeated warnings of renewed violence in Croatia. ..TX.- 'Both sides are completely ready for an extremely bloody and destructive war,' he told UN radio. ..TX.- Ignoring warnings from the UN and the Serbs, Croat authorities have decided to re-build the Maslenica bridge, joining central Croatia with the southern Dalmatian coast. Serb rebels have constantly delayed the reopening of the only overland route to southern Dalmatia which is not under Serbian control. ..TX.- Three out of five barges set sail from Trogir, the Croatian port city, carrying materials for the 279-metre pontoon bridge planned to replace the destroyed bridge, reported Tanjug, the Belgrade news agency. ..TX.- Mr Dusan Starcevic, a Krajina official, yesterday lambasted Zagreb authorities for their 'unilateral' action, dismissing it as the 'continuation of Croatian aggression since January 22.' ..TX.- Fighting continued in Mostar, the southwestern city on the River Neretva, where Moslem and Croat forces fought hand-to-hand battles. ..TX.- Croatian radio said the Moslem-led Bosnian army had launched an all-out attack on Mostar. Bosnian radio also reported heavy clashes and said the Croatian army (HV) and its Bosnian sister Croatian Defence Units (HVO) had launched a joint attack on the town. ..TX.- Commander Barry Frewer, spokesman for the UN Protection Force (Unprofor) in Sarajevo, confirmed the Moslem-Croat clashes in Mostar. UN peacekeepers earlier this month withdrew from Mostar after warnings from local HVO commanders. ..TX.- Cmdr Frewer yesterday confirmed Moslem allegations that regular Croatian army units were crossing into Bosnia to support the HVO. Croatia has repeatedly denied that its army has been despatched to Bosnia. 'We have seen signs of HV members supporting the HVO. I have no numbers and I cannot confirm whether the Croatians are advisers or combat troops,' he told reporters in Sarajevo. ..CN.- Countries: HR Croatia, East Europe. BA Bosnia-Hercegovina, East Europe. ..IN.- Industry: P9229 Public Order and Safety, NEC. P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9229, P9721. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGPB4AAEFT ..HL.- 930716FT 930716 GUS extends voting rights beyond 2% of shareholders (446) ..BL.- By MAGGIE URRY ..TX.- GREAT Universal Stores, a Pounds 4.7bn retail, property and finance company controlled by only 2.2 per cent of its shareholders, is to join the modern corporate world. ..TX.- GUS said yesterday it would give votes to the 97.8 per cent of shareholders who do not have them under its two-tier capital structure. The move will end the Wolfson family's effective control over the company, which owns Burberrys, The Scotch House and the Kays mail order catalogue. ..TX.- Half the voting shares are held by the Wolfson family, the Wolfson Foundation and other connected charitable trusts. GUS's chairman is Lord Wolfson of Marylebone, the son of Sir Isaac Wolfson who took control of the company in the 1930s. ..TX.- GUS also appointed four new non-executive directors in a step designed to bring it closer in line with the recommendations of the Cadbury committee on corporate governance. ..TX.- One banker said the combination of the enfranchisement and the appointments would 'put GUS more on a par with modern companies'. He described the present share structure as 'extraordinary'. ..TX.- With Savoy Hotel, GUS has been perhaps the most famous example of a large UK quoted company maintaining non-voting shares. ..TX.- Investors generally shun non-voting or limited voting shares, and although the GUS shares receive the same dividends, the share prices of the two classes have diverged widely. ..TX.- Mr Richard Pugh, deputy chairman of GUS, said the company had been thinking about enfranchisement for a long time and there was 'no significance as such' in the timing of the news. 'We always had the intention to do it sometime,' he said. ..TX.- Holders of the voting shares will be compensated with extra shares. Anticipation of the announcement had already driven both classes of shares higher. Yesterday the price of voting shares rose 100p to Pounds 34.38p and non-voting shares rose 110p to Pounds 18.75p. ..TX.- One of the four new non-executives is Mr Jonathan Charkham, who was a member of the Cadbury committee. ..TX.- Another is Lord Wolfson of Sunningdale, who was a director of GUS in the 1970s and is the chairman of Next, the retail group. He is a first cousin of Lord Wolfson of Marylebone. ..TX.- GUS also announced that pre-tax profits rose from Pounds 443.6m to Pounds 475m in the year to March 31, its 45th consecutive year of profits growth. ..TX.- Observer, Page 15 ..TX.- Lex, Page 16 ..TX.- Glimpse of freedom, Page 17 ..TX.- Others may follow, Page 18 ..TX.- London shares, Page 34 ..CO.- Companies: Great Universal Stores. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5961 Catalog and Mail-Order Houses. ..TP.- Types: MGMT Management & Marketing. PEOP Appointments. FIN Annual report. ..IX.- P5961. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGPB4AADFT ..HL.- 930716FT 930716 Stock & Currency Markets (239) ..TX.- ------------------------------------------------------------------- STOCK MARKET INDICES ------------------------------------------------------------------- FT-SE 100: 2831.7 (-0.6) Yield 4.04 FT-SE Eurotrack 100 1229.70 (-7.44) FT-A All-Share 1406.1 (+0.0%) FT-A World Index 160.31 (-0.4%) Nikkei 20,158.02 (+18.91) New York: Dow Jones Ind Ave 3550.93 (+8.38) S&P Composite 449.22 (-0.86) ------------------------------------------------------------------- US CLOSING RATES ------------------------------------------------------------------- Federal Funds: 3 1/8% (2 15/16%) 3-mo Treas Bills: Yld 3.065% (3.055%) Long Bond 107 11/32 (107 5/16) Yield 6.557% (6.559%) ------------------------------------------------------------------- LONDON MONEY ------------------------------------------------------------------- ..TX.- 3-mo Interbank 6% (Same) Liffe long gilt future: Sep 109 (Sep 108 29/32) ------------------------------------------------------------------- NORTH SEA OIL (Argus) ------------------------------------------------------------------- Brent 15-day (Sep) Dollars 16.66 (16.675) ------------------------------------------------------------------- Gold ------------------------------------------------------------------- New York Comex (Aug) Dollars 393.9 (391.4) London Dollars 394.0 (392.25) ------------------------------------------------------------------- STERLING ------------------------------------------------------------------- New York: Dollars 1.4905 (1.5035) London: Dollars 1.488 (1.5025) DM 2.565 (2.5775) FFr 8.7675 (8.805) SFr 2.2575 (2.27) Y 161 (161.25) Pounds Index 81.3 (81.7) ------------------------------------------------------------------- DOLLAR ------------------------------------------------------------------- ..TX.- New York: DM 1.721 (1.71605) FFr 5.8815 (5.8595) SFr 1.5167 (1.511) Y 108.03 (107.125) London: DM 1.7245 (1.7155) FFr 5.8925 (5.86) SFr 1.5165 (1.5105) Y 108.2 (107.35) Dollars Index 66.2 (66.0) Tokyo open Y 108.26 ------------------------------------------------------------------- ..CN.- Countries: US United States of America. DE Germany, EC. FR France, EC. CH Switzerland, West Europe. JP Japan, Asia. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. P1041 Gold Ores. P6231 Security and Commodity Exchanges. P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: COSTS Commodity prices. COSTS Equity prices. ..IX.- P1311, P1041, P6231, P9311. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGPB4AACFT ..HL.- 930716FT 930716 Report on EBRD puts final cost of refit at Pounds 66m (605) ..BL.- By ROBERT PESTON, Banking Editor ..TX.- AN OFFICIAL report into the European Bank for Reconstruction and Development's London headquarters rejects the bank's original justification for the cost of fitting out the offices and says the final figure will be Pounds 66.2m compared with the original budget of Pounds 53m. ..TX.- The bank had said the expenditure was in line with comparable City office projects. But according to the report, prepared by accountants Coopers and Lybrand, the bank spent more than Pounds 1,000 per square metre for fitting out the building compared with an average of more than Pounds 900 for a typical 'prestige' specification building and Pounds 700 for a 'high' specification building. ..TX.- The report also says the architects who worked on the building at One Exchange Square were appointed without competitive tender and details a number of new examples of lavish spending. ..TX.- The report will be presented at a news conference today given by Mr Claes de Neergaard, chairman of the EBRD's audit committee. ..TX.- EBRD executives said they expected Mr Jacques Attali, the bank's president, to leave the bank today, two months earlier than expected, despite his intention to stay on until a permanent successor was in place. ..TX.- Mr Neergaard will also present a 30-page commentary on the report written by the EBRD's audit committee which is expected to be critical of Mr Attali, Mr Anders Ljungh, vice-president of finance, and Mr Pierre Pissaloux, the cabinet director. Coopers also looked at Mr Attali's use of private jets, fees he received for speeches and his slowness in repaying personal expenses initially charged to the bank. ..TX.- Bank executives who have seen the report say it highlights a number of costly items including: ..TX.- Pounds 1.3m, or Pounds 44 per square foot, for specially coloured carpet designed to appear 'shadowless'; ..TX.- Pounds 250,000 for metallic aerofoil-shaped column casings, each of which cost Pounds 4,000; ..TX.- Meeting room chairs at a cost of Pounds 1,000 each; ..TX.- Marble cladding and flooring which cost more than Pounds 1.6m, including Pounds 845,000 spent on replacing existing new marble in the lift areas; ..TX.- Curved doors, which cost Pounds 1,700 each, about Pounds 600 more than a typical high-specification door; ..TX.- Almost Pounds 6m for a high-tech system of suspended ceilings. ..TX.- The executives say it examines the performance of the project architect, Anglo-French partnership Berthet Pochy Siddell Gibson, and the relationship between Mr Jean Louis Berthet of BPSG and Mr Attali. ..TX.- The report says the French side of the partnership, Berthet et Pochy, 'appears to have been appointed' to do some initial work for the bank at its previous headquarters on Mr Attali's recommendation. BPSG was subsequently appointed to work on the Exchange Square project without competitive tender. ..TX.- BPSG's work was supposed to be managed by the main contractor, Bovis. The report, however, cites a UK government memo which quotes Mr Berthet as saying he received design instructions from Mr Attali, 'often, over the weekend, in Paris'. BPSG's fees and expenses from the project have totalled more than Pounds 3m, though the report says these are reasonable. However, Berthet et Pochy is gaining additional royalties because it designed chairs, some desks and work stations for the project. ..TX.- The report criticises Berthet et Pochy for not declaring in advance that it would make royalties from the furniture. It is also critical of the EBRD for not giving overall management responsibility for the project to a single individual. ..CO.- Companies: Berthet Pochy Siddell Gibson. ..CN.- Countries: LU Luxembourg, EC. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: RES Capital expenditures. RES Facilities. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGPB4AABFT ..HL.- 930716FT 930716 Productivity up 10.5% as jobless total falls again: New Jobcentre vacancies at highest level for 2 1/2 years (567) ..BL.- By PETER MARSH, Economics Correspondent ..TX.- A SHARP rise in UK manufac-turing productivity, a squeeze on earnings throughout the economy and the fifth successive monthly fall in unemployment yesterday boosted hopes that Britain has a substantial platform for non-inflationary growth. ..TX.- Production per manufacturing employee was 10.5 per cent higher in May than 12 months previously, the biggest year-on-year rise for more than 13 years, suggesting that this sector is leading the recovery. ..TX.- While average earnings across the economy rose 3.75 per cent in the 12 months to May, the lowest year-on-year rise for 26 years, optimism about an upturn was further buoyed by another decline in unemployment. The number of people without jobs and claiming benefit fell by a seasonally-adjusted 7,600 last month to 2.91m, the lowest level for eight months. The unadjusted figure dropped 51,600 to 2.865m. ..TX.- The economic indicators were hailed by Mr John Major, the prime minister, as 'very good news indeed'. He told the House of Commons: 'It is entirely clear that we are coming out of recession and into recovery, and equally clear that we are leading Europe into recovery.' ..TX.- Opposition politicians voiced disappointment that the fall in unemployment was no greater, pointing to the more substantial declines of more than 25,000 in both February and March. Mr Alex Carlile, Liberal Democrat employment spokesman, said the June reduction would 'make little impression' on unemployment of nearly 3m. ..TX.- In further indications that employers are starting to step up recruitment efforts in the wake of lower interest rates and the devaluation of the pound last autumn, new vacancies notified to government Jobcentres have climbed to their highest level for two-and-a-half years. ..TX.- Overtime working in factories was at its highest point in May for nearly 12 months, a sign that manufacturers are expanding production to try to take advantage of greater competitiveness and a sharp fall in wage costs per unit of factory output. In the three months to May, these costs were 3.6 per cent lower than in the same period of 1992, the biggest fall since the Department of Employment started records in 1970. ..TX.- Since numbers out of work started to drop in January, the total has shrunk by 83,100. The fall has particularly benefited south-east England excluding London - a region hard hit by the recession. Unemployment there dropped 4.6 per cent in the five months to June, well above the overall fall for the UK of 2.8 per cent. The south west also saw a relatively big reduction in joblessness, while northern England bucked the trend and recorded a rise in unemployment over the same period. ..TX.- In June, most regions saw a fall in unemployment, with the south west, the west Midlands and Yorkshire and Humberside registering significant net flows of people into jobs. ..TX.- The pound lost 1 1/4 pfennig against the D-Mark to close in London at DM2.565 while it fell nearly 1 1/2 cents against the dollar to close at Dollars 1.488. ..TX.- South-east jobless reap rewards of recovery Page 6 ..TX.- Major and Clarke hail recovery Page 8 ..TX.- Jobs for the men Page 11 ..TX.- Lex Page 16 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9441 Administration of Social and Manpower Programs. P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Employment & unemployment. ECON Inflation. ..IX.- P9441, P9311. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGPB4AAAFT ..HL.- 930716FT 930716 World News in Brief: European central bank (59) ..TX.- EC heads of government have decided to locate the European central bank in Frankfurt, German business newspaper Handelsblatt reported. The UK Treasury said that no decision had been made. ..CN.- Countries: QR European Economic Community (EC). ..IN.- Industry: P6011 Federal Reserve Banks. ..TP.- Types: RES Facilities. ..IX.- P6011. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGPB4AH3FT ..HL.- 930715FT 930716 International Company News: BPI makes defensive stock sale (209) ..BL.- By PETER WISE ..DL.- LISBON ..TX.- BANCO Portugues de Investimento (BPI) has reinforced its central core of shareholders by selling 7 per cent of its Treasury stock to Itausa, the Brazilian group. ..TX.- The sale is seen as a defensive move against Banco Santander of Spain, which has been buying BPI shares for the past three months. Santander, with its partner, the Royal Bank of Scotland, bought out Portugal's Banco Comercio e Industria three years ago. ..TX.- BPI is using the Itausa group as a white knight. As part of the deal, BPI purchased the Brazilian group's 12 per cent holding in another Portuguese bank, Banco Fonsecas e Burnay (BFB) for Es7.1bn (Dollars 44m) and at the same time sold the Brazilians 7 per cent of its own Treasury stock to strengthen its position against Santander's approach. ..TX.- The company has a widely dispersed spread of shares among many relatively small shareholders. But there is a core of investors who have signed a pact to sell to each other if they plan to quit the bank. ..CO.- Companies: Banco Portugues de Investimento. Itausa. ..CN.- Countries: PT Portugal, EC. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: COMP Shareholding. ..IX.- P6081. ..DS.- The Financial Times ..XP.- International Page 14 ***************************************************************** ..AN.-00DGPB4AH2FT ..HL.- 930715FT 930716 International Company News: Thyssen Industrie divisions see return to black in next two years (332) ..BL.- By REUTER ..DL.- ESSEN ..TX.- THYSSEN Industrie, the capital goods division of Thyssen, hopes to bring all of its divisions back into the black in the next two years, according to Mr Eckhard Rohkamm, management board chairman, Reuter reports from Essen. ..TX.- Mr Rohkamm said that if all divisions were able to remain profitable under difficult economic conditions, the company would be able to boost lift its sales to earnings ratio. ..TX.- 'Thyssen Industrie as a whole is still profitable and will remain so to the end of the year. But unfortunately we have some areas that are making losses,' Mr Rohkamm said. ..TX.- He declined to say which companies would post a loss in the current year but said automotive supply and engineering were hit hardest by the slump in car and steel industries. ..TX.- 'When a big customer such as the car industry and a second large customer such as the steel industry are having massive problems . . . then, of course, areas that are dependent on steel and cars are massively affected,' he said. ..TX.- He said there were no signs yet of a recovery of group plant and equipment orders. ..TX.- Orders on hand were about DM9bn (Dollars 5.6bn) but group incoming orders would be down 10 per cent from DM8.4bn a year earlier. ..TX.- Thyssen Machinenbau, the engineering division, was up to 90 per cent dependent on orders from the car industry, he said. The automotive industry accounted for 28 per cent of Thyssen Industrie's total sales. ..TX.- While continental European carmakers were gripped by recession, Thyssen Industrie operations in the US and UK had benefited from rising car sales. Tallent Engineering, its UK unit, was working at high capacity and showing a very satisfactory development, he said. ..CO.- Companies: Thyssen Industrie. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P3312 Blast Furnaces and Steel Mills. P3714 Motor Vehicle Parts and Accessories. ..TP.- Types: COMP Company News. ..IX.- P3312, P3714. ..DS.- The Financial Times ..XP.- International Page 14 ***************************************************************** ..AN.-00DGPB4AH1FT ..HL.- 930715FT 930716 International Company News: Court puts off decision on Ciga (209) ..BL.- By HAIG SIMONIAN ..DL.- MILAN ..TX.- A MILAN court yesterday postponed for the second time a decision on the future of the controlling stake in the Ciga luxury hotels chain, held by Fimpar, the holding company controlled by the Aga Khan. ..TX.- The postponement means trading in Ciga and Fimpar shares, suspended seven weeks ago, is unlikely to resume soon. The court put off a decision until October 5. ..TX.- The stake has been frozen since a German arm of the IMI financial services group, which led a Dollars 100m credit to Fimpar, sought court approval for a freeze on Fimpar's assets. The credit, which matured earlier this year, has not been repaid, nor has it been renewed. ..TX.- The court's decision to freeze Fimpar's assets pending a decision on the legality of IMI's claim prompted the suspension of trading in Fimpar and Ciga shares. IMI turned to the courts in an indirect attempt to gain representation for Fimpar's foreign bank creditors in the restructuring plan for Ciga being prepared by Mediobanca, the Milan merchant bank. ..CO.- Companies: Cigar. Fimpar. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P6719 Holding Companies, NEC. P7011 Hotels and Motels. ..TP.- Types: COMP Shareholding. ..IX.- P6719, P7011. ..DS.- The Financial Times ..XP.- International Page 14 ***************************************************************** ..AN.-00DGPB4AH0FT ..HL.- 930715FT 930716 Dell warns of loss and revises lending (393) ..BL.- By LOUISE KEHOE ..DL.- SAN FRANCISCO ..TX.- DELL Computer's share price fell sharply yesterday when the US personal computer manufacturer warned of a second-quarter loss after writedowns and restructuring charges. ..TX.- Dell said the losses would be between Dollars 1.65 and Dollars 1.85 per share and pre-tax charges would amount to Dollars 75m to Dollars 85m for the quarter to August 1. ..TX.- The projected loss might place the company in default of the terms of its credit facilities, it said. It was working with its lenders to revise the terms. 'I am confident that we will be able to secure alternative financing or obtain a waiver,' said Mr Thomas Meredith, chief financial officer. ..TX.- A long-time favourite among Wall Street investors, Dell has become the fifth largest PC company in the world by pioneering direct marketing of PCs through mail and telephone sales. Its sales tripled to Dollars 2bn in the past two years. ..TX.- Yesterday, however, Dell's share price dropped to Dollars 13 7/8 , a 2 1/2 -year low, before regaining some ground to trade at Dollars 16 1/4 at midday, down Dollars 3 from Tuesday's close and 67 per cent below its high of Dollars 49 7/8 in January. ..TX.- Dell expected to report second-quarter revenues of Dollars 710m to Dollars 730m, a 55-60 per cent advance on the corresponding period. Total revenues for fiscal 1993 would be about Dollars 3bn. ..TX.- 'Hypergrowth' was at the root of its problems, it said. Management controls had not kept pace with the rapid expansion of sales. ..TX.- According to analysts, it also faces 'credibility problems'. In May, Dell reported a sharp drop in first-quarter earnings, which it blamed on delays and cancellation of notebook computer products. ..TX.- Analysts then expressed concern that Dell's problems appeared to go beyond notebook computers. Yesterday, their fears were confirmed. ..TX.- Dell said that in addition to costs associated with the delayed and cancelled notebook products, it would incur restructuring charges. ..TX.- It expected to resume earnings growth by the fourth quarter of the fiscal year. 'While the loss is certainly disappointing, we are determined to take the steps necessary to strengthen Dell for the future,' said Mr Michael Dell, chairman and chief executive. ..CO.- Companies: Dell Computer Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P9711 National Security. ..TP.- Types: NEWS General News. ..IX.- P9711. ..DS.- The Financial Times ..XP.- International Page 13 ***************************************************************** ..AN.-00DGPB4AHZFT ..HL.- 930715FT 930716 Seoul sacks generals over arms accusations (137) ..BL.- By REUTER ..DL.- SEOUL ..TX.- PRESIDENT Kim Young-sam of South Korea yesterday sacked two top generals allegedly linked to corrupt arms purchases, a defence ministry spokesman said, Reuter reports from Seoul. ..TX.- General Cho Nam-pung, commander of the country's three field armies, and Lt-General Park Woong, the assistant defence minister, would be replaced, the spokesman said. ..TX.- The two were among 34 defence officials and military officers accused last week by the Board of Audit and Inspection of being involved in irregular deals and bribe-taking. ..TX.- Under Mr Kim's orders the board investigated recent military hardware purchases, including a Dollars 5bn air force modernisation plan, which opposition politicians say were secured through corrupt means. ..CN.- Countries: KR South Korea, Asia. ..IN.- Industry: P9711 National Security. ..TP.- Types: NEWS General News. ..IX.- P9711. ..DS.- The Financial Times ..XP.- International Page 4 ***************************************************************** ..AN.-00DGPB4AHYFT ..HL.- 930715FT 930716 Flood damage feared in Pakistan (83) ..BL.- By FARHAN BOKHARI ..DL.- ISLAMABAD ..TX.- Widespread flood damage was feared in Pakistan last night as another 100 villages were flooded in the province of Punjab by the rivers Ravi and Chenab, adding to the 250 already affected, Farhan Bokhari reports from Islamabad. ..TX.- The floods have again raised fears of large-scale destruction to crops and property. ..CN.- Countries: PK Pakistan, Asia. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: RES Natural resources. ..IX.- P9229. ..DS.- The Financial Times ..XP.- International Page 4 ***************************************************************** ..AN.-00DGPB4AHXFT ..HL.- 930715FT 930716 US and N Korea say nuclear row talks 'useful' (320) ..BL.- By FRANCES WILLIAMS ..DL.- GENEVA ..TX.- SENIOR US and North Korean officials held seven hours of talks in Geneva yesterday in a second attempt to head off confrontation over Pyongyang's refusal to allow international inspection of suspect nuclear sites. ..TX.- Mr Robert Gallucci, US assistant secretary of state, called the talks 'useful'. Mr Kang Sok-ju, North Korea's first vice-minister for foreign affairs, said they had been 'intensive, productive and useful.' The two sides meet again tomorrow. ..TX.- Yesterday's was the second encounter over the issue following Pyongyang's decision in March to withdraw from the 1968 nuclear non-proliferation treaty. At talks in New York in June, North Korea agreed to suspend its decision but refuses to give International Atomic Energy Agency inspectors access to the suspect sites. ..TX.- The IAEA believes that North Korea may be storing plutonium that could be used to make nuclear weapons without declaring it to the agency as required by the non-proliferation treaty rules. ..TX.- North Korea denies this but has refused access to two buildings close to its nuclear reactor at Yongbyon, 95km north of Pyongyang, where the IAEA believes the plutonium may be stored. ..TX.- The US and North Korea last month pledged not to start nuclear war and voiced support for a nuclear-free Korean peninsular, impartial application of IAEA safeguards, non-interference in each other's internal affairs and the peaceful reunification of Korea. ..TX.- This week's talks centre on what would constitute 'impartial' inspections. North Korea has claimed that the IAEA is biased in favour of the western powers, and the US has threatened to seek United Nations sanctions against North Korea if the talks fail. President Bill Clinton warned last weekend that, if North Korea ever used nuclear arms, it 'would be the end of their country'. ..CN.- Countries: KP North Korea, Asia. ..IN.- Industry: P9711 National Security. P9721 International Affairs. ..TP.- Types: RES Facilities. ..IX.- P9711, P9721. ..DS.- The Financial Times ..XP.- International Page 4 ***************************************************************** ..AN.-00DGPB4AHWFT ..HL.- 930715FT 930716 Haitian protesters support Aristide (214) ..BL.- By AP ..DL.- PORT-AU-PRINCE ..TX.- HAITIAN soldiers fired in the air yesterday to break up a protest by scores of youths urging the immediate resignation of military rulers and the return of exiled President Jean-Bertrand Aristide, AP reports from Port-au-Prince. ..TX.- No arrests or casualties were reported from the confrontation, which took place in the vast Port-au-Prince slum of Cite Soleil, where troops massacred scores of Aristide supporters after a military coup in September 1991. ..TX.- The protesters, most of them teenagers or younger, carried photographs of the deposed president and chanted: 'Aristide, the country is for you]' ..TX.- The protest came as Haitian politicians from across the political spectrum were gathering in New York for UN-brokered talks on setting up a democratic government. ..TX.- The talks, which opened yesterday, will address how to bring peace to Haiti, contain political strife, and get parliament back on track so President Aristide can return to power on October 30. ..TX.- The talks, which are expected to last three or four days, are the second stage in a UN-sponsored process outlined under a July 3 agreement signed by Mr Aristide and military chief General Raoul Cedras. ..CN.- Countries: HT Haiti, Caribbean. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: NEWS General News. ..IX.- P9229. ..DS.- The Financial Times ..XP.- International Page 3 ***************************************************************** ..AN.-00DGPB4AHVFT ..HL.- 930715FT 930716 Estonia's hunt for identity alarms Russians: Matthew Kaminski, recently in Narva, on a new aliens law (484) ..BL.- By MATTHEW KAMINSKI ..TX.- IN 1944, Stalin's troops pushed out or deported 30,000 Estonians from Narva. The Russians who took their place now fear a similar fate. ..TX.- The peaceful appearance of the industrial town belies a deep anxiety among its residents who, at least under the law, are now strangers in a foreign country. ..TX.- Earlier this week, President Lennart Meri signed an aliens law that discriminates against the Russian minority, which constitutes around 40 per cent of the population. ..TX.- The law results from Estonia's efforts to assert a national identity after 50 years of Soviet rule and although the new statute was amended to adopt some suggestions made by the Council of Europe and the CSCE, it falls far short of mollifying ethnic Russians or Moscow. ..TX.- Russians must now pass a language test for Estonian citizenship or apply for residence and work permits. Neither is guaranteed. ..TX.- 'I guess I'll have to go back to Russia,' says Valia Solovyova, 21, who sells flowers near the Lenin statue that stands in the town square. ..TX.- Such sentiment has spawned a crisis in Estonia's north-east corner. The cities of Narva and nearby Sillamae, where the Russian population exceeds 95 per cent, will vote on regional autonomy this weekend. ..TX.- 'We'll never agree to alien status in our own country, no matter what it costs or what it takes,' says Vladimir Aleksyev, Narva's trade union leader. ..TX.- 'They want us to leave Estonia,' says Tatyana Yanchenko, 31, who, like many members of her generation, was born in the country. 'When Estonia was destroyed during the war and Russia rebuilt it, nobody called us occupiers like they do now.' ..TX.- Young people, whose parents came to work in Soviet factories after the war, worry their children will not learn Russian in school. Among the older generation, the aliens law only exacerbates the shock they have felt at the collapse of the Soviet Union. ..TX.- Mr Vladimir Chuikin, the town council chairman, is leading the referendum drive with help from Moscow. At his office, which he also used as the local Communist party chief, Mr Chuikin warns ominously of 'another Ulster' if Estonia tries to stop a vote it considers illegal. ..TX.- Ants Liiments, an Estonian who is Narva's assistant mayor, calls Mr Chuikin a dangerous populist who exploits the people's ignorance of the law. But Mr Liiments admits the law is flawed: 'People should be granted Estonian citizenship in a simplified way because it's not their fault they were born here or that their mothers or fathers came here.' ..TX.- The crisis threatens stability across the region. President Boris Yeltsin last week hinged a troop withdrawal timetable from all three Baltic states on improved treatment of the Russian minority. ..CN.- Countries: EE Estonia, East Europe. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- International Page 2 ***************************************************************** ..AN.-00DGPB4AHUFT ..HL.- 930715FT 930716 Ogata meets Bosnian President in bid to raise dollars 200m relief (119) ..TX.- In a bid to raise Dollars 200m, the mininum amount needed to keep the relief operation going, Mrs Sadako Ogata, UN High Commissioner for Refugees, met Bosnian President Alija Izetbegovic to discuss the plight of 380,000 people trapped in the Bosnian capital and the possible reopening of the airport at Tuzla, north-east Bosnia. ..TX.- UN officials have criticised all three sides, especially the Serbs, for blocking the delivery of aid. ..TX.- About 2.3m people, more than half of Bosnia's 4.3 population, depend on UN emergency relief for survival. ..CN.- Countries: BA Bosnia-Hercegovina, East Europe. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- International Page 2 ***************************************************************** ..AN.-00DGPB4AG0FT ..HL.- 930715FT 930716 International Company News: GM to restrict price increases (301) ..BL.- By MARTIN DICKSON ..DL.- NEW YORK ..TX.- GENERAL Motors plans to hold back US price increases in the 1994 model year in an attempt to win back market share. ..TX.- The company, in the throes of a restructuring to return loss-making North American operations to profit, said that in the model year starting in October, it would expand the 'value pricing' marketing idea it initiated in 1993. ..TX.- This involves dropping the price of certain models of vehicles equipped with popular levels of optional equipment. The idea is to lift sales and run GM's factories closer to capacity, to raise profits. ..TX.- Mr Michael Losh, a GM vice-president, said value pricing had been a factor behind the resurgence of GM's North American sales this year. ..TX.- The company's share of the US passenger car market fell sharply late last calendar year, to less than 31 per cent, when it cut back sharply on unprofitable sales to fleet buyers. ..TX.- It has recovered this year and for June totalled 37.1 per cent, compared with 36.7 per cent a year earlier, but for the first half of 1993 it was down a point on 1992, at 35.3 per cent. ..TX.- The recovery has been due to value pricing and because Japanese competitors, hurt by a strong yen, have been increasing their prices further. ..TX.- Mr Losh said that in the 1994 model year, GM's prices would rise by 1.5 per cent, even though they were fitted with additional equipment. ..TX.- Truck prices would rise by 2.2 per cent and the average price for GM vehicles would go up about 1.8 per cent. ..CO.- Companies: General Motors Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P3711 Motor Vehicles and Car Bodies. ..TP.- Types: COSTS Product costs & Product prices. ..IX.- P3711. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGPB4AGZFT ..HL.- 930715FT 930716 International Company News: Hilton hit by lack of 'high rollers' (316) ..BL.- By RICHARD WATERS ..DL.- NEW YORK ..TX.- A SHORTAGE of 'high rollers' - gamblers willing to bet the largest stakes - at the Las Vegas Hilton contributed to a second-quarter decline in net income for Hilton, the hotels and gaming group, to Dollars 26.8m, or Dollars 0.56 a share, from Dollars 32.4m, or Dollars 0.68 a share, in the same period in 1992. ..TX.- A strong rise in operating income from gaming had helped Hilton to shrug off flat operating revenues from its hotels division in 1992 and the first quarter of 1993. ..TX.- In the three months to June 30, however, operating income from gaming fell slightly, to Dollars 37.4m from Dollars 37.5m. ..TX.- The company blamed the result on a lack of gamblers placing large stakes at the tables in the Las Vegas Hilton, although it said the Flamingo Hilton in Las Vegas and its two hotel-casinos in Reno, Nevada, had done well. ..TX.- The hotels division recorded unchanged operating income, at Dollars 29.7m. Continuing weakness in New York and Hawaii, and industry-wide pressure on rates, had accounted for the result, Hilton said. The hotel occupancy rate rose by one point, to 70 per cent, compared with the same quarter in 1992, but average room rates fell in a number of areas. ..TX.- Turnover rose 17 per cent to Dollars 345.2m from Dollars 294.8m. Net income was struck after financing charges up to Dollars 17.7m from Dollars 13.2m due to the Dollars 300m of extra borrowing taken on last year to finance further casino developments. ..TX.- Hilton said it had accelerated its development of casinos in New Orleans and Kansas City, both of which were expected to open in the first quarter of 1994. ..CO.- Companies: Hilton Hotels Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P7011 Hotels and Motels. ..TP.- Types: FIN Interim results. ..IX.- P7011. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGOCUAHCFT ..HL.- 930715FT 930715 London Stock Exchange: Equity Futures and Options Trading (290) ..BL.- By CHRISTINE BUCKLEY ..TX.- VOLUME showed more health in stock index futures as good UK inflation figures and expectations of a German interest rate cut breathed a little life into the market, Christine Buckley writes. ..TX.- The better than expected inflation news encouraged investors to hope that a UK interest rate cut may be, if not round the corner, possibly on the horizon. Germany's cut, expected today, will add to the climate of anticipation. ..TX.- But as such hopes are long term, the volume in the September contract on the FT-SE 100 - 7,564 at the close - did not translate into an upward movement of the future, and it was kept in check ahead of Wall Street's opening. It started the day at 2,837, and just before the US market began trading it set the day's low of 2,830. A rally then pushed it up to 2,850 by mid-afternoon - a level which heralded the sellers. Their action took 10 points off to leave September at a 2,840 close - 5 points down on the day. ..TX.- The contract was just over a point ahead of its fair value premium to cash of 7 points, although it had traded more convincingly ahead of that level during the day. ..TX.- In traded options, activity was strong in the Euro FT-SE option, which is stimulated by the expiry tomorrow of the July contract. It traded 6,427 lots. Total volume was 26,932, against the previous day's 29,437, with the FT-SE 100 option having 7,646 lots dealt. ..CN.- Countries: GB United Kingdom, EC. DE Germany, EC. ..IN.- Industry: P6221 Commodity Contracts Brokers, Dealers. P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6221, P6231. ..DS.- The Financial Times ..XP.- London Page 38 ***************************************************************** ..AN.-00DGOCUAHBFT ..HL.- 930715FT 930715 London Stock Exchange: Switching talk again weakens shares (549) ..BL.- By STEVE THOMPSON ..TX.- FURTHER HINTS around the City that another big international switching operation out of UK equities could have been set in train saw London's equity market deliver another disappointing performance yesterday. ..TX.- The FT-SE 100 Index closed 4.8 lower at 2,832.3, ignoring a welter of positive factors, including the lowest UK headline inflation figure for around 30 years, a strong gilt-edged market and a firm opening performance by Wall Street. ..TX.- The major bearish factors affecting the market included substantial weakness in the food retailing and manufacturing sectors, the brewing group, power generation stocks, and the media and aerospace issues. And there were lingering fears that the completion of the BT3 flotation could bring a series of large rights issues. ..TX.- Significantly, the weakness in the market was not confined to the leaders: the FT-SE Mid 250 stocks also came under pressure, leaving the Mid 250 Index 7.5 down at 3,222.5. ..TX.- Activity in the market was a relatively high 612.7m shares, with non-Footsie stocks accounting for 55 per cent of the day's business, well down from recent levels. Dealers pointed out that customer business rose sharply on Tuesday when the value of retail activity was worth almost Pounds 1.6bn, the highest single day's total since May 20. Tuesday was featured by a string of heavy programme trades. ..TX.- The session began with share prices under minor downside pressure, reflecting the easier overnight performance by Wall Street and continuing concern over the recent poor showing by London in the face of the good news on UK manufacturing and output data published on Tuesday. ..TX.- The inflation news, revealed in mid-morning, showed headline inflation at a 30-year low and the underlying rate at a 25-year low. While it transformed the gilts market, where long-dated stocks raced higher, it failed to trigger any substantial support for equities. ..TX.- Share prices weakened significantly over the lunchtime period, with the FT-SE 100 declining to a low for the session of 2,826.7, a fall of 10.4, before stabilising as Wall Street opened in positive territory. ..TX.- The story of another switching operation being carried out followed hints that one of the big international broking houses had taken out a very big over-the-counter put option on the London equity market. The sharp sell-off that hit the London market last week was attributed to heavy switching, mainly by US institutions, out of UK equities and into the German market. ..TX.- Other traders said the weakness in the market was because of more mundane factors such as the continuing bookbuilding process in BT3, where the UK public part of the offer closed yesterday. 'It is summer, BT3 is there to distract us, and the market is struggling to find a support level,' said one strategist, but he conceded that the market could be due for a bounce. ..TX.- Sterling's strengthening, against both the dollar and the D-Mark, hit the big overseas earners. ..TX.- Abbey National, easier recently on a series of broker sell notes, topped the list of active stocks following a sizeable agency cross. But Standard Chartered, where talk of rights issues and takeovers were both heard, surged ahead to an all-time peak. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 38 ***************************************************************** ..AN.-00DGOCUAHAFT ..HL.- 930715FT 930715 London Stock Exchange: BAT in demand (789) ..BL.- By JOEL KIBAZO, CHRISTOPHER PRICE and CHRISTINE BUCKLEY ..TX.- International trading group BAT Industries bucked the market trend after Morgan Stanley issued a strong 'buy' recommendation. The shares finished 2 ahead at 418p following hectic trading of 9.4m. ..TX.- A note from Mr Youssef Ziai, an analyst at Morgan Stanley, calls BAT a 'cheap insurance stock'. He said: 'At the current share price, BAT's insurance operations alone account for nearly all of the stock's market capitalisation. The tobacco activities, with pre-tax earnings of over Pounds 1bn per annum, are in for less than one year's profits.' ..TX.- Strong rumours were heard that Rank Organisation would accompany this morning's results with the announcement of a large hotel disposal. The shares rebounded following a weak session on Monday to close 8 up at 767p. ..TX.- Market talk mooted that a Pounds 60m disposal had been agreed, suggesting that Rank may have finally sold one of its prestigious London hotels, such as the Royal Lancaster. ..TX.- Food retailers endured another poor session, with UBS said to have lowered its profits forecasts for the leading stocks, the broker blaming low food price inflation and continuing margin pressure. Argyll Group lost 3 to 307p, Iceland 9 to 216p, Kwik Save 8 to 684p, Morrison Supermarkets 6 to 134p, J. Sainsbury 5 to 431p and Tesco 5 1/2 to 201 1/2 p. ..TX.- Strength in Great Universal Stores continued ahead of today's results, with hopes still high that it will announce plans to restructure its shares. The ordinary stock rose 138 to 3338p and the 'A' 12 to 1765p. ..TX.- Profit-taking in the Recs and bearish noises in the generators made for a weak electricity utility sector. ..TX.- One broker was said to have issued 'take profits' advice on National Power, down 9 at 349p, and PowerGen, 10 off at 371p. Among the Recs, Norweb declined 7 to 516p and East Midlands 9 to 465p. ..TX.- Negative comment on Welsh Water ahead of results due today sent the shares tumbling 7 to 553p. ..TX.- Tabloid wars continued with further falls in share prices, but analysts generally forecast that they will prove to be just skirmishes and will not have a lasting effect on earnings. ..TX.- Centre of attention was United Newspapers, caught in the middle of a rights issue and facing increasing speculation that The Sun's cut in price is not so much an attack on the relatively buoyant Daily Mirror but an attempt to knock the Daily Star out of business. It moved down 5 to 516p. Mirror Group Newspapers eased 3 to 148p, Daily Mail & General Trust 'A' fell Pounds 2 1/2 to Pounds 96 1/2 and Telegraph dipped 5 to 388p. ..TX.- A mixture of profit-taking, some concern over BSkyB's expansion plans and resurgence of VAT fears were blamed for the tumble of 18 in Pearson shares to 442p. Volume was strong at 1.9m. ..TX.- Banking issues remained firm ahead of the interim reporting season. Barclays put on 4 at 485p, while Lloyds firmed 7 to 575p on suggestions that it would soon sell its stake in Standard Chartered. A Pounds 200m Eurosterling issue was well received by the market and Royal Bank of Scotland firmed 3 to 290p. ..TX.- Rumours that Hoare Govett had downgraded Reed International, denied by the broker, left the stock 12 down at 653p. ..TX.- Container transport group Tiphook tumbled 27 to 259p after stating that accounting changes had led to a loss of Pounds 21.8m, against profits of Pounds 74.6m last year. But the company lifted the dividend to 19.3p from 17.3p. ..TX.- The fall in copper prices saw international mining group RTZ slip 10 to 670p. ..TX.- A shortage of stock in Laird Group sent the shares 15 higher to 314p. SG Warburg and Kleinwort Benson were reported to be positive on British Steel, which rose 3 1/2 to 100p in volume of 10m. ..TX.- Profit-taking after its recent run brought British Aerospace down 7 to 420p. ..TX.- Good results from HP Bulmer showed profits of Pounds 19.6m, above analysts' expectations of Pounds 18.5m, and the stock rose 13 to 419p. The company said its profits growth was driven by rising sales in cider markets in the UK, Australia and Belgium. The UK cider market continued to expand, it added, with sales volume climbing 12.4 per cent last year. ..CO.- Companies: BAT Industries. Rank Organisation. National Power. PowerGen. Welsh Water. Reed International. Laird Group. British Steel. HP Bulmer. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2111 Cigarettes. P6231 Security and Commodity Exchanges. P7999 Amusement and Recreation, NEC. P4911 Electric Services. P4941 Water Supply. P2741 Miscellaneous Publishing. P3312 Blast Furnaces and Steel Mills. P2082 Malt Beverages. ..TP.- Types: CMMT Comment & Analysis. MKTS Market data. ..IX.- P2111, P6231, P7999, P4911, P4941, P2741, P3312, P2082. ..DS.- The Financial Times ..XP.- London Page 38 ***************************************************************** ..AN.-00DGOCUAG9FT ..HL.- 930715FT 930715 London Stock Exchange: Big Abbey turnover (167) ..BL.- By JOEL KIBAZO, CHRISTOPHER PRICE and CHRISTINE BUCKLEY ..TX.- An agency cross in banking group Abbey National sent turnover soaring to 22m shares, the day's highest total. Agency broker James Capel was believed to have taken a block of 7m from an institution at 410p, passing it on to several investors at 411p. ..TX.- The stock has been weak since the tail end of last week when Robert Fleming reiterated its negative stance on the stock, saying bad debt was too high and thus the shares were overpriced. SG Warburg was also said to have turned cautious earlier this week, removing the stock from its buy list to a hold position. However, James Capel advised investors to buy on weakness. The shares closed 5 lighter at 409p. ..CO.- Companies: Abbey National. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6021 National Commercial Banks. P6231 Security and Commodity Exchanges. ..TP.- Types: CMMT Comment & Analysis. MKTS Market data. ..IX.- P6021, P6231. ..DS.- The Financial Times ..XP.- London Page 38 ***************************************************************** ..AN.-00DGOCUAG8FT ..HL.- 930715FT 930715 London Stock Exchange: ACT shares placed (159) ..BL.- By JOEL KIBAZO, CHRISTOPHER PRICE and CHRISTINE BUCKLEY ..TX.- Credit Lyonnais Laing placed 5.88m of the nil-paid new ordinary shares in computer software group ACT in a bought deal. The broker purchased the shares from Singer & Friedlander, the merchant bank, which decided not to take up its rights. ..TX.- ACT launched a four-for-13 rights issue at 123p a share to raise Pounds 50.9m as part of a Pounds 93.5m deal to buy the rival BIS Group. It is thought that the broker bought the shares at around 32.5p apiece and sold them to a variety of institutions at around 35.5p. The nil-paid closed 3 up at 36p. The ordinary shares finished 8 off at 159p ex-dividend. ..CO.- Companies: ACT. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3571 Electronic Computers. P7372 Prepackaged Software. P6231 Security and Commodity Exchanges. ..TP.- Types: CMMT Comment & Analysis. MKTS Market data. ..IX.- P3571, P7372, P6231. ..DS.- The Financial Times ..XP.- London Page 38 ***************************************************************** ..AN.-00DGOCUAG7FT ..HL.- 930715FT 930715 London Stock Exchange: C&W advances (157) ..BL.- By JOEL KIBAZO, CHRISTOPHER PRICE and CHRISTINE BUCKLEY ..TX.- Reports that Energis, the new telecommunications venture set up by the National Grid, had told analysts that it would not be specifically targeting Mercury customers when it launches its new business next year lifted Cable and Wireless, Mercury's parent company. ..TX.- Mercury was considered particularly vulnerable to Energis, which was launched three months ago, because its customers had already changed once from BT and could be prepared to do so again. ..TX.- C&W also benefited from buying in the US which had created a shortage in ADRs. The shares advanced 7 to 770p. BT, which yesterday announced that the BT3 public offer was oversubscribed, steadied at 410 1/2 p. ..CO.- Companies: Cable and Wireless. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4512 Air Transportation, Scheduled. P6231 Security and Commodity Exchanges. ..TP.- Types: CMMT Comment & Analysis. MKTS Market data. ..IX.- P4512, P6231. ..DS.- The Financial Times ..XP.- London Page 38 ***************************************************************** ..AN.-00DGOCUAG6FT ..HL.- 930715FT 930715 London Stock Exchange: Unilever dives (189) ..BL.- By JOEL KIBAZO, CHRISTOPHER PRICE and CHRISTINE BUCKLEY ..TX.- Anglo-Dutch foods group Unilever recorded its biggest turnover for nearly four years and a second day's steep decline as fears resurfaced over the value of brands ahead of today's press conference on pricing strategy by Procter & Gamble. ..TX.- Selected food manufacturing and drinks stocks weakened as investors took fright at the prospect of price wars, particularly in markets where margins are already under pressure. In Unilever's case this would apply to the detergents business, where P&G has indicated that it intends to bring pressure to bear. ..TX.- Unilever shares followed Monday's fall of 25 with a further drop of 24 yesterday to 953p. Turnover was a hefty 7.4m, its biggest since November 1989. Among other strong 'brand' groups, Cadbury-Schweppes weakened 9 to 439p, Tate & Lyle 5 to 385p, Grand Metropolitan 6 to 409p and Guinness 13 to 454p. ..CO.- Companies: Unilever. ..CN.- Countries: GB United Kingdom, EC. NL Netherlands, EC. ..IN.- Industry: P2099 Food Preparations, NEC. P6231 Security and Commodity Exchanges. ..TP.- Types: CMMT Comment & Analysis. MKTS Market data. ..IX.- P2099, P6231. ..DS.- The Financial Times ..XP.- London Page 38 ***************************************************************** ..AN.-00DGOCUAG5FT ..HL.- 930715FT 930715 London Stock Exchange: Standard rises on bid hint (159) ..BL.- By JOEL KIBAZO, CHRISTOPHER PRICE and CHRISTINE BUCKLEY ..TX.- STRONG demand for Standard Chartered shares sent them sharply ahead to reach an all-time high amid rumours of rights issues and takeovers. The stock jumped 23 to 827p, although volume was thin at just under 1m shares traded. ..TX.- A combination of mostly old stories surrounded the banking group. One was that the Development Bank of Singapore was in the process of preparing to make a takeover bid. Other stories included suggestions that the bank would soon make a cash call and also that Lloyds Bank was considering the placing of its 4.6 per cent stake in Standard, acquired during its abortive bid in 1986. ..CO.- Companies: Standard Chartered. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. CMMT Comment & Analysis. ..IX.- P6081, P6231. ..DS.- The Financial Times ..XP.- London Page 38 ***************************************************************** ..AN.-00DGOCUAG4FT ..HL.- 930715FT 930715 London Stock Exchange: New highs and lows for 1993 (410) ..TX.- NEW HIGHS (136). ..TX.- BRITISH FUNDS (35) OTHER FIXED INTEREST (10) CANADIANS (1) Toronto-Dom., BANKS (6) ANZ, Bk. Leumi, Bk. Scotland, Natl. Australia, NatWest, Standard Chrtd., BREWERS (1) Bulmer (HP), BLDG MATLS (1) Heywood Williams, BUSINESS SERVS (1) Bridgend, CHEMS (1) Porvair, ELECTRICALS (2) Ericsson, Motorola, ELECTRICITY (1) Midlands, ELECTRONICS (3) Elect'comps., Electron Hse., Scantronic, ENG GEN (3) Dyson (J & J), Do A, Kvaerner, FOOD MANUF (1) Avonmore, HOTELS & LEIS (2) Friendly Htls., Prism, INSCE BROKERS (1) Lowndes Lambert, INSCE COMPOSITE (1) GRE, INSCE LIFE (1) Legal & Genral, INV TRUSTS (29) Abtrust Prfd. Inc., Dartmoor 6 1/4 pc Deb. '25, European Assets, Exeter Prfd. Zero Deb. '02, Fidelity Euro. Values Wts., First Ireland, Gartmore Euro. Wts., Genesis Emrg. Mkts C Prf., Jove, Martin Currie Euro. Wts., Kleinwort High Inc. Zero Pf., Latin American, Mediterranean Fd., Mid Wynd, Murray Enterprise, Do Zero Cv. '94, Murray Ventures, Pantheon Wts., Primadona, RIT Capital, South America Fd. Wts., Sphere Inc., St Andrew, St David's, TR European Gwth., TR Technology Zero Pf., Do Stppd. Pf., Templeton Emrg. Mkts., Do Wts., MEDIA (2) Abbott Mead Vickers, Sterling Publsg., MTL & MTL FORMING (2) Morris Ashby, Thyssen, MISC (1) Nobo, MOTORS (5) Burndene, Laird, Lookers, Do 8pc Pf., Sanderson Murray E, OIL & GAS (1) Aviva, OTHER FINCL (3) Jupiter Tyndall, Mercury Asset Mngmt., Perpetual, PROP (7) Brit. Land, Do 8 5/8 pc Pf., Estates & Agency, Fletcher King, Letinvest 11 1/4 pc Deb. '12, Slough Ests., Do 8 1/4 pc Pf., STORES (3) Essex Furn., GUS, Moss Bros, TEXTS (5) Allied Text., Forminster, Ingham, Parkland, Victoria Carpet, TRANSPORT (1) Forth Ports, WATER (1) South Staffs., MINES (5) Europa Minerals, Gencor, Loraine, Minorco, Ovoca. ..TX.- NEW LOWS (29). ..TX.- BRITISH FUNDS (1) Treas. 8 1/2 pc '94, AMERICANS (1) Woolworth, BANKS (1) Espirito Santo, BUSINESS SERVS (2) Holmes Prctn., RCO, CHEMS (2) BOC, Caird, CONTG & CONSTRCN (1) EBC, ENG GEN (1) Barry Wehmiller, FOOD MANUF (4) BSN, Cranswick, JLI, Unilever, FOOD RETAILING (4) Kwik Save, Low (Wm), Sainsbury, Tesco, HEALTH & HSEHOLD (1) Intercare, MISC (2) Cornwell, Cosalt, OIL & GAS (1) Ex. Co Louisiana, PACKG, PAPER & PRINTG (4) Bowater 7 3/4 pc Pf., Clondalkin, De La Rue, St Ives, PROP (1) Ascot, STORES (3) Boots, Country Casuals, Lloyds Chems. ..CN.- Countries: GB United Kingdom, EC. CA Canada. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 38 ***************************************************************** ..AN.-00DGOCUAG3FT ..HL.- 930715FT 930715 World Stock Markets (America): US shares post strong gains as bond yields fall (583) ..BL.- By PATRICK HARVERSON ..DL.- NEW YORK ..TX.- Wall Street ..TX.- US SHARE prices posted strong gains yesterday as bond yields fell to record lows following another set of bullish inflation figures, writes Patrick Harverson in New York. ..TX.- The Dow Jones Industrial Average closed 27.11 up at 3,542.55. The more broadly based Standard & Poor's 500 gained 1.99 at 450.08, while the American SE composite, which has outperformed other indices lately, finished 0.44 down at 438.67. The Nasdaq composite rose 4.02 to 712.49, a record high. New York SE volume amounted to 297.4m shares. ..TX.- Good inflation news and falling bond yields ended three days of weak, indecisive trading. Equity prices climbed from the opening after the Labor Department announced that its consumer price index was unchanged in June. ..TX.- This delighted dealers and investors who, earlier this year, feared that inflation was making a comeback. Analysts were particularly encouraged by the paltry 0.1 per cent increase in the 'core' CPI, which excludes the volatile food and energy components. ..TX.- Not only was the CPI data good news in itself, but the figures spurred heavy buying of Treasury securities. The demand lifted the benchmark 30-year bond almost 3/4 point, sending the yield to below 6.6 per cent for the first time since 1977, when the Treasury began issuing the 30-year bond on a regular basis. ..TX.- Equity investors like falling bond yields because they lower the cost of borrowing for US corporations, and low interest rates can lure money away from short-term assets and into shares. ..TX.- Among individual stocks, second-quarter earnings continued to dominate trading. General Electric moved up Dollars 5/8 to Dollars 98 5/8 after the company announced a 10 per cent increase in quarterly earnings. ..TX.- Federal Express jumped Dollars 6 1/2 to Dollars 53 3/8 on reporting a 56 per cent improvement in fiscal fourth-quarter earnings. Another stock helped by better than expected earnings was CBS, which put on Dollars 7 1/4 at Dollars 245. ..TX.- Procter & Gamble rose Dollars 7/8 to Dollars 52 1/2 as investors reacted positively to news that the consumer products group is cutting its prices on laundry products and dish soap by up to 15 per cent to compete with rival brands and private labels. ..TX.- Profit-taking continued to take its toll of brokerage issues, in spite of some strong second-quarter earnings. Merrill Lynch fell a further Dollars 2 1/4 to Dollars 82 3/8 , PaineWebber declined Dollars 1 to Dollars 28, Morgan Stanley lost Dollars 1 to Dollars 68 7/8 and Dean Witter Discover slipped Dollars 1 1/4 to Dollars 35 5/8 . ..TX.- On the Nasdaq market, Dell Computer dropped Dollars 3 3/8 to Dollars 15 7/8 in volume of 6m shares after the company forecast a second-quarter loss and said it would make a pre-tax charge of between Dollars 75m and Dollars 85m to cover the cost of a restruct-uring. The charge was considerably bigger than analysts had expected. ..TX.- Canada ..TX.- TORONTO registered a modest decline in fairly heavy trading. The TSE 300 index ended 10 points off at 3,941.7 as falls outscored advances by 405 to 343. Volume was 61m shares valued at CDollars 800.3m. ..TX.- The gold shares index fell 2.42 per cent as the New York bullion price lost USDollars 3 an ounce. In that group, American Barrick dipped CDollars 7/8 to CDollars 31. ..CN.- Countries: US United States of America. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 35 ***************************************************************** ..AN.-00DGOCUAG2FT ..HL.- 930715FT 930715 World Stock Markets (Asia Pacific): Nikkei eases as Pacific Rim indices move narrowly (851) ..BL.- By EMIKO TERAZONO ..DL.- TOKYO ..TX.- SHARE prices moved in a narrow range following Tuesday's rise to above 20,000 for the Nikkei average, which closed marginally lower yesterday after fluctuating on profit-taking and arbitrage buying, writes Emiko Terazono in Tokyo. ..TX.- The Nikkei was finally off 41.31 at 20,139.11, its first decline in four trading days. It rose to a day's high of 20,207.52 just after the opening but slipped later on arbitrage unwinding and profit-taking, setting a day's low of 20,030.30. ..TX.- Volume totalled 300m shares, against 331.7m. Rises led falls by 495 to 476, with 186 issues unchanged. The Topix index of all first section stocks shed 3.73 to 1,631.58. In London the ISE/Nikkei 50 index put on 1.09 at 1,240.37. ..TX.- Equities were supported by hopes that monetary or fiscal support would be implemented by the new government to be elected this weekend. ..TX.- The new cabinet - probably a coalition around a core conservative party - is likely to try to build support through income tax cuts. A fiscal stimulus package is unlikely to be implemented, thought traders, due to the lack of a kingpin figure to orchestrate the various interests of politicians and ministries. The Bank of Japan, meanwhile, may be reluctant to cut the official discount rate due to fears of reflation. ..TX.- Mr Yasushi Ueki at Nikko Securities said that while a large loss by the ruling Liberal Democratic party would damage investor sentiment, an unexpected victory, on the other hand, would also be a negative factor for shares. 'It will mean a return to the old corrupt ways,' he explained. ..TX.- On the trading floor, Gajoen Kanko, a hotel and restaurant operator, was suspended in the afternoon session due to reports that Dream, an unlisted pachinko pinball operator which holds a large stake in Gajoen, had filed for court protection under the bankruptcy law. ..TX.- Gifu Bank, a regional bank in which Dream has a 5.5 per cent holding, fell Y45 to Y535. ..TX.- Kirin Brewery, the industry leader, lost Y20 to Y1,280 on reports that four company officials had been arrested for paying off racketeers. ..TX.- Profit-taking depressed bank shares, which gained on Tuesday on hopes of credit easing. Industrial Bank of Japan retreated Y20 to Y3,130. ..TX.- In Osaka, the OSE average dipped 31.47 to 22,157.43 in volume of 23.3m shares. ..TX.- Roundup ..TX.- INDIVIDUAL equities and sectors moved more than indices on the Pacific Basin markets. ..TX.- AUSTRALIA saw strength in National Australia Bank, heavy trade in Woolworths and profit-taking in golds bring the All Ordinaries index into balance at a close just 0.3 higher at 1,804.5 in turnover of ADollars 348.8m. ..TX.- National Australia finished 24 cents ahead at ADollars 10.30, after reaching ADollars 10.32. Woolworths followed its successful market debut, topping the active stocks list with 9.9m shares traded as it added a cent at ADollars 2.81. The gold shares index receded 13.5 to 2,202.2. ..TX.- Market leader BHP appreciated 10 cents to ADollars 14.66. Salomon Brothers recently made a strong buy recommendation on the stock, saying that its improving balance sheet underpinned its ability to expand aggressively. ..TX.- TAIWAN's turnover fell from TDollars 17.22bn to TDollars 15.35bn as the weighted index finished 9.29 higher at 4,022.47. SEOUL closed virtually flat, with the composite index just 0.2 firmer at 762.96 in turnover down from Won478bn to Won424bn. ..TX.- HONG KONG slipped a mere 0.60 to 6,955.50 as a bout of late selling wiped out an earlier 73-point rise in the Hang Seng index. Turnover increased from HKDollars 3.02bn to HKDollars 3.22bn. ..TX.- There was local retail buying of Cheung Kong and Hutchison, but institutional selling dragged both off their highs. Cheung Kong lost 30 cents to HKDollars 25.30 and Hutchison closed steady at HKDollars 20.30. Red chips, or China-related stocks, were popular buys after being oversold recently. Citic Pacific jumped 60 cents to HKDollars 16. ..TX.- NEW ZEALAND lost ground after a sequence of highs, the NZSE-40 index finishing 17.11 down at 1,706.62 in a turnover of NZDollars 26.3m. ..TX.- Brewery concern Lion Nathan, which earlier announced a placing of 85m shares at NZDollars 3.05, shed 10 cents to NZDollars 3.30, due in part to share dilution but mostly because of the big discount involved. ..TX.- SINGAPORE featured Tonhow Industries, a takeover target, which closed 36 cents stronger at SDollars 1.05. But the Straits Times Industrial index was 2.41 easier at 1,775.11. ..TX.- BANGKOK fell for the third straight day, the SET index losing 7.68 at 892.98 in moderate turnover of Bt5.28bn. ..TX.- MANILA's composite index shed 7.70 to 1,616.98, but the debut of Jollibee Foods, the fast food chain, saw the shares climbing to above 16 pesos, a premium of more than 80 per cent to the initial offer price. ..TX.- COLOMBO saw demand for most Sri Lankan stocks, although turnover fell from Rp180.7m to Rp104.5m as the All-share index moved forward 8.34 to 687.41. ..CN.- Countries: AU Australia. TW Taiwan, Asia. HK Hong Kong, Asia. NZ New Zealand. SG Singapore, Asia. PK Pakistan, Asia. TH Thailand, Asia. CO Colombia, South America. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 35 ***************************************************************** ..AN.-00DGOCUAG1FT ..HL.- 930715FT 930715 World Stock Markets (Europe): Stet up 7% on telecoms restructuring plan (909) ..TX.- A SLIGHT easing of pressure on the French franc and a modest cut in the German repo rate steadied nerves as attention turned to the Buba meeting today. Paris was closed for a public holiday. ..TX.- MILAN, encouraged by the long awaited statement on the restructuring of the telecommunications sector, moved ahead, while technical trading ahead of today's end of the monthly account also lifted prices. ..TX.- The Comit index closed up 7.93 or 1.45 per cent to 553.66. ..TX.- While the broad details of the restructuring of the telecoms sector has been in the market for some time, the lack of other positive news recently has focused investors' attention on this area, said Mr John Stewart of Milan brokers, Pastorino. ..TX.- Stet also gained on news of its five year convertible bond, convertible into Sip savings shares. The stock rose L264 or 7.2 per cent to L3,910. ..TX.- Italcable and Sip, which are to be merged by the end of the year to allow the formation of Telecomm Italia on January 1, 1994, showed respective gains of L316 and L86 to L7,890 and L2,811. ..TX.- Reports that Fiat might be seeking to reduce its shareholding in Gemina, the merchant bank, lifted the latter's price L38 to L1,380, while Fiat gained L103 to L6,495. ..TX.- FRANKFURT closed mixed, the DAX index rising 4.39 to 1,811.55 against a day's high of 1,821.31. Interest rate cut hopes abated, but tomorrow's expiry of equity options traded on the Deutsche Terminborse boosted interest in some blue chips. Turnover was DM9.6bn. ..TX.- Daimler rose DM9 to DM673 after two news items: first, that an S-class revamp would produce a lighter, more fuel efficient car; and, secondly, on the state of Bavaria's plan to sell its 8 per cent stake in the group's Deutsche Aerospace subsidiary. ..TX.- Metallgesellschaft added DM9.50 to recent gains which have taken it up by nearly a quarter in less than a month. It was boosted by an announcement from MG's Metall Mining Corp confirming rumours that it was considering forming a new unit to hold its gold assets, dealers said. Mr David Morgan at Lehman Brothers in London observed that MG is a reflection of base metal prices, not a bull point, and a guide to the health of German manufacturing industry, which is debatable. ..TX.- In steels, Krupp Hoesch climbed DM7.10 to DM132.60 and Thyssen by DM5.20 to DM212. Mr Morgan said that Thyssen has indicated that the worst is over in its steel division and that Krupp Hoesch, highly-geared and in the midst of very deep restructuring, is another bet on German economic recovery. ..TX.- The energy, chemicals and metals group, Viag, rose DM6.80 to DM393.00 on the confirmation that it would maintain its 1993 dividend; and Henkel, which makes Persil, fell DM9.50 to DM550.20 although it said that it saw no reasons for a global price war in detergents, following drastic price cuts by Procter & Gamble in the US. ..TX.- AMSTERDAM returned to a positive stance in spite of a further sharp fall in Unilever, down Fl 5.40 or 2.7 per cent to Fl 192.10. The CBS Tendency index rose 0.2 to 117.1. ..TX.- Hoare Govett called the market's reaction to news that Procter & Gamble of the US was to cut the list price of liquid detergents 'unjustified'. It said that,in the short term,the impact of P & G's strategy on Unilever's earnings would be 'negligible', given the latter's aggressive promotion and discounting of new products in the US. ..TX.- Ahold, which has a strong US supermarket presence, lost Fl 1.10 to Fl 94.90 on the same story. ..TX.- BRUSSELS noted a 12 per cent rise in Arbed, the Luxembourg-based steel maker, up BFr380 to BFr3,500, while the Bel-20 index eased 0.41 lower to 1,328.13. ..TX.- STOCKHOLM gathered ground for the seventh straight session, assisted by a SKr13 rise in Ericsson B to SKr366. The Affarsvarlden general index rose 5.20 to 1,139.80. ..TX.- DUBLIN extended its rally as retail investors bought into Bank of Ireland before it goes ex rights today, and shares in the major Irish food processors surged to new all-time highs on the back of positive sentiment towards the sector. ..TX.- The ISEQ overall index rose 15.78, or 1 per cent to 1,635.59, its financial component putting in a 1.2 per cent per cent gain. In foods, said Mr Aidan McGuire of Davy Stockbrokers, Avonmore's 3.5p rise to 167p left it up 10p on the week on a combination of earnings and rating upgrades, while Greencore, 6.5p higher at 332.5p put itself 32.5p ahead of the placing price for the Bank of Ireland stake of 9.6m shares earlier this week. ..TX.- ------------------------------------------------------------------------ FT-SE Actuaries Share Indices July 14 THE EUROPEAN SERIES ------------------------------------------------------------------------ Hourly changes ------------------------------------------------------------------------ Open 10.30 11.00 12.00 FT-SE Eurotrack 100 1236.77 1237.76 1237.63 1238.37 FT-SE Eurotrack 200 1282.25 1284.33 1283.61 1285.05 13.00 14.00 15.00 Close FT-SE Eurotrack 100 1236.56 1235.86 1236.91 1237.14 FT-SE Eurotrack 200 1282.82 1285.07 1282.67 1283.38 ------------------------------------------------------------------------ Jul 13 Jul 12 Jul 9 Jul 8 Jul 7 FT-SE Eurotrack 100 1235.91 1232.90 1230.56 1225.73 1211.33 FT-SE Eurotrack 200 1279.32 1274.63 1274.12 1270.80 1260.04 ------------------------------------------------------------------------ Base value 1000 (26/10/90) High/day: 100 - 1238.81; 200 - 1285.20 Low/day: 100 - 1235.29 200 - 1281.19. ------------------------------------------------------------------------ ..CN.- Countries: IT Italy, EC. DE Germany, EC. FR France, EC. NL Netherlands, EC. BE Belgium, EC. IE Ireland, EC. SE Sweden, West Europe. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 35 ***************************************************************** ..AN.-00DGOCUAG0FT ..HL.- 930715FT 930715 World Stock Markets: Europe and Middle East edge into lead (280) ..BL.- By JOHN PITT ..TX.- Performance in European and Middle Eastern emerging markets edged ahead of Latin America last month, according to data supplied by the IFC, a part of the World Bank. ..TX.- Over the year so far, the former are even more impressive: up by nearly 60 per cent in dollar terms compared with a 5 per cent rise in Latin America and Asia's 14 per cent. ..TX.- Most of the gain in Europe/Middle East can be attributed to Turkey's startling rally since January: in spite of weakness over the last week, the market remains more than 100 per cent up on the year. ..TX.- Within this region, Portugal has shown a reasonable advance over the year although, as Baring Securities notes in a recent research document, the market has been a disappointing performer since the Gulf war. ..TX.- The broker comments that an overhaul of the market's structure since 1992 - including the introduction of continuous trading and the establishment of a central clearing house - has stimulated overseas interest. ..TX.- Baring puts this together with falling interest rates and the devaluation of the escudo, and forecasts a 'strong upside for equities over the next couple of years'. ..TX.- Mexico, which has lagged behind many of the world's emerging markets this year, attracted the attention of Nomura this week. The global strategy team recommends a switch of funds from France to Mexico, arguing that the latter's upside potential seems more promising over the next six months. ..CN.- Countries: MX Mexico. XN Middle East. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. CMMT Comment & Analysis. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 35 ***************************************************************** ..AN.-00DGOCUAGZFT ..HL.- 930715FT 930715 World Stock Markets: South Africa (66) ..TX.- JOHANNESBURG closed near intraday highs in slow but steady afternoon trading as selected stocks found support from foreign investors. The golds index rose 34 to 1,984. Industrials added 9 at 4,645 and the overall 45 at 4,135. ..CN.- Countries: ZA South Africa, Africa. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 35 ***************************************************************** ..AN.-00DGOCUAGYFT ..HL.- 930715FT 930715 Foreign Exchanges: No holiday for the ERM (496) ..BL.- By STEPHANIE FLANDERS ..TX.- SEVERAL European central banks spent the French Bastille Day holiday intervening to support existing ERM parities, writes Stephanie Flanders. ..TX.- Both the French franc and Danish krone were under persistent speculative pressure yesterday, in spite of a limited cut in the German repo rate, frequent intervention by the German, French, Danish and Dutch central banks and a vow of support from France's President Mitterrand. ..TX.- The Danish currency began the day at the bottom of the ERM grid. Traders claimed that the Dutch and Danish governments had intervened in the market repeatedly during the day. The krone closed at DKr3.8951 against the D-Mark, only slightly above its floor of DKr3.9016. Also catching the markets' attention was the Spanish peseta, which lost more than 1.5 pesetas against the D-Mark to end at Pta78.70. ..TX.- Many traders thought that the krone and the peseta had diverted speculators' energies from the franc, but it was not left untouched. The French currency lost ground during the night and in morning trading on European markets, at times touching the FFr3.42 level against the D-Mark for the first time this week. ..TX.- Analysts were unimpressed with the 2 basis points reduction in the German repo rate, taking it as a sign that there will be no cut in official German rates at today's Bundesbank meeting. However, many market traders are still looking for a German cut, and may react aggressively if this does not transpire. ..TX.- Frequent small but public interventions by the Bundesbank held the franc within a FFr3.415 to FFr3.420 range. But the Bank of France also intervened, using a large commercial bank as an intermediary to purchase francs outside the country. The French unit closed in London at FFr3.417 per D-Mark, down from Tuesday's FFr3.414. ..TX.- In stark contrast to events on the Continent, sterling yesterday continued to make steady gains against the dollar and the D-Mark. The pound finished at Dollars 1.5025, nearly a cent higher than the previous close of Dollars 1.4935. It showed even more strength against the ERM currencies, gaining nearly a pfennig to close at DM2.5775. ..TX.- In recent months, a number of dealers have claimed that DM2.58 was an important barrier. Although the pound may be experiencing some 'safe haven' gains from developments in the ERM, many in the market consider the British currency's recent strength to be long term. 'The rise in sterling is a continuation of the effect of Tuesday's output figures,' commented one London dealer. 'It is driven more by the all-round positive outlook for the economy, than any temporary ERM excitement.' ..TX.- The dollar weakened, with subdued US producer price figures and profit-taking between them taking the US currency down from the previous day's close of DM1.7200 to finish at DM1.7155. In New York it ended at DM1.7160. ..CN.- Countries: FR France, EC. PK Pakistan, Asia. DE Germany, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 29 ***************************************************************** ..AN.-00DGOCUAGXFT ..HL.- 930715FT 930715 Money Markets: German rates ease (443) ..BL.- By STEPHANIE FLANDERS ..TX.- THE Bundesbank kept the markets guessing yesterday by combining a limited cut in its repo rate with a generous injection of funds in this week's tender, writes Stephanie Flanders. ..TX.- The slight easing of monetary conditions brought German call money rates down a fraction. Pressure on the French franc persisted, however, since few now expect a more substantial loosening of policy at today's Bundesbank council meeting. ..TX.- In all, the German central bank injected an extra DM9.5bn of funds into the domestic money markets. Traders had been ready to interpret any net addition of more than DM7bn as a supportive gesture towards the French authorities. However, most of the funds were allocated at 7.28 per cent, only 2 basis points lower than last week's fixed repo rate of 7.30 per cent. ..TX.- 'The Bundesbank really only did all that it had to,' commented one London-based trader. 'No repo rate reduction would have been tantamount to hanging the franc out to dry.' In holiday trading by Paris commercial banks, French one-month money market rates rose 20 basis points to 8.40 per cent, although three-month rates were steady at 7.50 per cent. ..TX.- In London, a large Pounds 2.55bn shortage which had been widely anticipated proved easy to despatch. The Bank of England offered more than Pounds 2.1bn in the first round, of which the majority was offered for repurchase. Although this took some of the pressure off short rates, overnight rates went as high as 6 3/4 per cent before falling to a low of 5 3/4 . ..TX.- Elsewhere in sterling money markets, the news that British retail price inflation for June had been the lowest for nearly 30 years helped to balance the inflationary concern produced by yesterday's strong output data. Three-month sterling money market rates stayed steady at 6 per cent. ..TX.- Trading in sterling futures reflected the view that the combination of the output and inflation figures left the British government in a position to cut interest rates at its leisure. ..TX.- 'It is still almost 99.9 per cent certain that interest rates will fall before the end of the year,' said a London analyst. 'But there is considerably more upside potential for a cut before December than before September, because the politicians are in a position to play it long.' ..TX.- The September and December sterling contracts rose nearly 10 basis points in the morning, before finishing a net 5 basis points up at around 94.21 and 94.44 respectively. ..CN.- Countries: DE Germany, EC. FR France, EC. GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 29 ***************************************************************** ..AN.-00DGOCUAGWFT ..HL.- 930715FT 930715 Commodities and Agriculture: France samples home-grown petrol - An unusual use for sugar and cereal products (1030) ..BL.- By DAVID BUCHAN ..TX.- PUT a sugar beet in your tank. Nigel Mansell did, with good effect. The British racing driver won last year's Portuguese grand prix in a Williams-Renault car running on a mixture of ordinary petrol and a biocarburant known as ETBE produced in France. ..TX.- Such 'green petrol' is now becoming increasingly available to ordinary French motorists and the opinion polls show that they are more than happy to use it. ..TX.- Since April Elf-Aquitaine's Feyzin refinery near Lyons has been producing ETBE, or ethyl-tertio-butyl-ether. The product is a mixture of ethanol, made from sugar beet or cereals, and isobutane, an industrial product. With a capacity to make 75,000 tonnes a year, the Feyzin refinery can produce enough ETBE to put 5 per cent of the biocarburant in all the company's unleaded petrol. ..TX.- To begin with Elf just added ETBE to the petrol it sold in the Rhone-Alpes region around Feyzin, with no publicity. But emboldened by positive soundings from opinion polls the oil company is now openly marketing its ETBE mix of petrol, from specially marked pumps, in the departments of Seine-et-Marne and Essonne to the south of Paris. ..TX.- A form of green diesel is also coming on to the French market. It contains a methylester made from rape seed oil, which is added to standard diesel fuel. It was developed in the early 1980s by a company called Sofiproteol, under the trade mark name of Diester, to which Elf bought the exclusive distribution rights. ..TX.- There are now several producers of the generic product, rape oil methylester, but so far it has only been sold to 'captive fleets'. Shell France, for instance, announced this month that it would be supplying the 354-bus fleet of Caen in Normandy with diesel composed of one-third rape oil methylester. However, with the commercial advantage of the Diester brand name, Elf now plans to market it more widely. ..TX.- Developing green oil is an old dream for farm-rich but energy-poor France. But the idea has been driven forward by last year's reform of the European Community's Common Agricultural Policy, particularly with its requirement that all but the smallest farmers must take 15 per cent of their land out of food production. In theory such a move could render 1.3m hectares idle in France. But, according to Mr Jean-Pierre Le Roudier, who runs the Association for the Development of Agricultural Carburants, 1m hectares of that land could produce enough to put 5 per cent of ETBE in petrol and 5 per cent of rape oil methylester in diesel - and in the process minimise farmers' loss of income. ..TX.- The French government has done its bit. Since last year biocarburants have been exempt from the standard petrol and diesel tax, and that has at last made the green fuels competitive. In February a government-commissioned report by Mr Raymond Levy, former president of Renault, came out broadly in favour of continued public support for biocarburants, although he drew complaints from sugar beet producers (whose products go into ethanol, the base for petrol additives) that he was biased in favour of the rape oil additives for diesel. ..TX.- But cost is crucial, says Mr Alain Guillon, Elf's head of refining and marketing. 'We are ready to go on producing Diester, provided it is competitive with diesel, and to use ethanol for ETBE, provided it is competitive with methanol.' ..TX.- Elf started importing methanol in 1986 to produce MTBE (methyl-tertio-butyl-ether) to give petrol back the octane rating that it loses from the elimination of lead. But three years ago the company started tests to see what it could do if it replaced the imported methanol with home-grown ethanol. ..TX.- One thing it decided not to do was to inject pure ethanol into petrol, as had been done widely in the US. Mr Jean-Paul Lemonde, the Feyzin refinery director, explains that the main problem with pure ethanol is that it is soluble in water and therefore more prone to contaminate and be contaminated. ETBE does not have that disadvantage. Mr Pierre Varriot, head of Feyzin's steamcracker unit, admits that 'isobutane is a bit harder to mix with ethanol than methanol but we have proved industrially that ETBE works'. ..TX.- Elf 'wanted to be ready with all the technical solutions, when the farmers asked for help last year', Mr Guillon says. The oil company does big business with France's 1m-strong farming community, which it did not want to jeopardise. But he cautions that growing biocarburants is by no means a total solution to French farmers' problems. That caution was echoed in the Levy report which calculated that putting 5 per cent of biocarburants in all French fuels would only create 8,000 to 10,000 new jobs, half of them outside farming. ..TX.- Furthermore, Mr Guillon warns that 'all our strategy is reversible. If, for instance, the tax exemption were to disappear, then we would go back to importing methanol as a petrol additive and we would forget about adding rape oil into diesel'. That is why French biocarburant producers are keen to see progress on the 1992 proposal by Mrs Christiane Scrivener, the EC tax commissioner, for a 90 per cent reduction in excise taxes on green fuels across the Community. Such a move would not only help any French exports but would also help lock the current French tax exemption in place. ..TX.- Belgium, whose own oil company, Petrofina, broadly favours biocarburant development, has promised to make the Scrivener proposal a priority of its EC presidency in the second half of this year. But EC tax proposals need unanimity to pass. Behind the reticence of several governments to the tax plan are environmentalists who argue that biocarburants pollute as much as fossil fuels, though in different form, and oil companies like British Petroleum and Esso, who claim that aiding natural ethanol will hurt the market for sythetic ethanols. ..CO.- Companies: Elf-Aquitaine. ..CN.- Countries: FR France, EC. ..IN.- Industry: P0133 Sugarcane and Sugar Beets. P2911 Petroleum Refining. P011 Cash Grains. P5541 Gasoline Service Stations. ..TP.- Types: TECH Products & Product use. CMMT Comment & Analysis. ..IX.- P0133, P2911, P011, P5541. ..DS.- The Financial Times ..XP.- London Page 28 ***************************************************************** ..AN.-00DGOCUAGVFT ..HL.- 930715FT 930715 Commodities and Agriculture: Nickel market likely to overcome current problems, analysts say (818) ..BL.- By KENNETH GOODING, Mining Correspondent ..TX.- ABOUT one-quarter of the western world's primary nickel capacity is suffering losses at present London Metal Exchange prices, according to the AME Mineral Economics consultancy group. ..TX.- However, AME and other analysts suggest that longer-term prospects for nickel are good, despite the short-term problems. The outlook 'is probably better than for any of the other major base metals, with the possible exception of aluminium', says Billiton-Enthoven Metals, part of the Royal Dutch/Shell group. ..TX.- Commenting on the immediate outlook, Rudolf Wolff, part of the Noranda natural resources group, suggests in its latest nickel report that prices are likely to drift down to Dollars 4,800 a tonne or Dollars 2.18 a pound. That is because the rate of exports from the Commonwealth of Independent States can be expected to increase but production of stainless steel, the biggest consumer of nickel, is likely to fall in the second half of 1993 after a strong first-half rise of 5 per cent. ..TX.- AME points out that at Dollars 2.60 a lb - the price at the end of 1992 - seven of the production units it monitors would have been operating at a cash break-even point or worse. ..TX.- According to AME, the highest-cost operators in 1992 were the Brazilian ferronickel producers with cash costs of Dollars 3.56-Dollars 4.01 a lb, followed by Larco in Greece at Dollars 3.45 and Societe Metallurgique le Nickel's Sandouville refinery in France at Dollars 3.00. Glenbrook's Riddle operation in the US had cash costs of Dollars 2.78, and those at Empress Nickel's Eiffel Flats refinery in Zimbabwe were Dollars 2.70. Costs at Queensland Nickel's Yabulu operation in Australia were Dollars 2.56 a lb. ..TX.- The lowest-cost product was nickel oxide from the Matsuzuka refinery in Japan at Dollars 1.14 a lb. The refinery was supplied by Inco's Ontario mines and the Copper Cliff smelter. ..TX.- Among the big producers, the lowest-cost producers last year were Western Mining in Australia with estimated cash costs of Dollars 1.60; Inco's Canadian Thompson smelter at Dollars 1.71 and Copper Cliff at Dollars 2.06; and Clydach UK at Dollars 2.23. Falconbridge of Canada, at Dollars 2.10, was the highest-cost producer among the five big producers. ..TX.- AME's study predicts that refined nickel output in the western world should bottom out at 550,000 tonnes this year, after 592,000 tonnes in 1992. Demand is expected to rise to 630,000 tonnes this year, up from 617,000 tonnes. ..TX.- Analysts believe net imports to the west from the eastern bloc - mainly from Russia but also from Cuba - will continue at a relatively high level. AME suggests those imports will total 95,000 tonnes this year, down from 112,000 tonnes. ..TX.- In its latest study of the nickel market, Billiton points out that new imports from the eastern bloc accounted for 18 per cent of total consumption in 1991 and 1992. 'While we believe that, for a variety of reasons, exports from the CIS to the west will decline over the next few years, we nevertheless conclude that they will remain substantial in volume for the foreseeable future. On the other hand, exports from the west to China will probably continue to increase. On balance, however, the west will remain a significant net importer of nickel.' ..TX.- Billiton says primary nickel production in the west will fall by 30,000 tonnes from its 1992 record of 595,000 tonnes but, because of the imports, a supply surplus will remain. Billiton forecasts an average price of Dollars 2.60 a lb for 1993, Dollars 3.25 for next year and Dollars 4.00 for 1995. ..TX.- Rudolf Wolff expects CIS exports to be about 80,000 tonnes this year and to lead to a supply surplus of 10,000 tonnes. It suggests prices above Dollars 5,300 a tonne (Dollars 2.40 a lb) are likely to be 'capped' by this surplus supply. ..TX.- New Legs for Nickel: from AME Mineral Economics, 352 Kent Street, Sydney, NSW 2000, Australia. Nickel Market Report: from Billiton-Enthoven Metals, 84 Fenchurch Street, London EC3M 4BY, UK. Nickel Update; from Rudolf Wolff, Plantation House, 31 Fenchurch Street, London EC3M 3DX, UK. ..TX.- ------------------------------------------------------------------------ Western World Nickel Market Balance (tonnes) 1992 1993* 1994* 1995* 1996* ------------------------------------------------------------------------ Refined production 592,000 550,000 580,000 590,000 600,000 Net imports from former eastern bloc 112,000 95,000 90,000 90,000 90,000 Total supply 704,000 645,000 670,000 680,000 690,000 Refined consumption 618,000 630,000 670,000 700,000 720,000 Market surplus/deficit +86,000 +15,000 -20,000 -30,000 World stocks 175,000 190,000 190,000 170,000 140,000 Months' consumption 3.3 3.6 3.4 2.9 2.3 LME price (1992 dollars/lb) 3.17 2.85 3.10 3.30 3.70 ------------------------------------------------------------------------ *forecast. Source: AME Mineral Economics ------------------------------------------------------------------------ ..CN.- Countries: GB United Kingdom, EC. US United States of America. AU Australia. RU Russia, East Europe. CA Canada. ..IN.- Industry: P1099 Metal Ores, NEC. P1061 Ferroalloy Ores, Ex Vanadium. P3339 Primary Nonferrous Metals, NEC. ..TP.- Types: CMMT Comment & Analysis. RES Natural resources. ..IX.- P1099, P1061, P3339. ..DS.- The Financial Times ..XP.- London Page 28 ***************************************************************** ..AN.-00DGOCUAGUFT ..HL.- 930715FT 930715 Commodities and Agriculture: Norway increases gas supplies to Germany (403) ..BL.- By KAREN FOSSLI ..DL.- OSLO ..TX.- NORWAY is to increase its supplies of natural gas to Germany by 3.5bn cubic metres a year, and has secured a price rise for gas from the giant Troll field. ..TX.- The additional supplies will increase the value of Norway's gas sales to Germany by an estimated 3bn Norwegian kroner (Pounds 275m) a year. ..TX.- Ruhrgas of Germany has agreed to purchase an additional 2bn cu m of Norwegian gas a year and to exercise 50 per cent of a purchase option covering 1.5bn cu m a year from the Troll field. With half of the Troll purchase option exercised, Ruhrgas could exercise an option for a further 1.5bn cu m a year, but this would have to be decided by July 1 1995. Other companies with outstanding Troll purchase options, covering 5.4bn cu m of gas, include Germany's Thyssengas and BEB, Distrigaz of Belgium and Ferngas of Austria. ..TX.- Under yesterday's deal, Norway's annual gas supplies to Germany will increase from 9bn cu m a year now to 22bn in the year 2005, of which 14.2bn cu m will be purchased by Ruhrgas. The share of Norwegian gas in Germany's overall supplies will be lifted from 14 per cent to more than 25 per cent by 2005. ..TX.- A consortium of German gas buyers, including Ruhrgas, has also agreed to a price adjustment for Troll gas, which was priced at an estimated NKr0.70 per cubic metre under the original sales agreement in 1986. The price rise marks the end of a dispute between the Germans and Norway's gas negotiating committee, which has lasted for more than a year. ..TX.- Under the terms of the original Troll contract, representatives of both sides were entitled to demand a price review before deliveries of the gas commenced. The Troll producers exercised that right, seeking a higher price for the gas, which also included supplies from the Statfjord, Heimdal, and Gullfaks fields. However, under the price review, negotiations are still outstanding between Norway and buyers in the Netherlands, Belgium, Austria and France. ..TX.- With the additional purchases by Germany, total Norwegian gas supplies to Europe under the Troll contract will reach 44.7bn cu m by 2005. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. P1321 Natural Gas Liquids. ..TP.- Types: RES Natural resources. CMMT Comment & Analysis. ..IX.- P1311, P1321. ..DS.- The Financial Times ..XP.- London Page 28 ***************************************************************** ..AN.-00DGOCUAGTFT ..HL.- 930715FT 930715 Commodities and Agriculture: EC proposes to extend ban on BST hormone (340) ..BL.- By DAVID GARDNER ..DL.- BRUSSELS ..TX.- THE European Commission yesterday presented plans to extend its four-year-old ban on the dairy hormone bovine somatrophin (BST) by a further seven years - mainly because the hormone's use would drive smaller dairy farmers out of business. ..TX.- The commission's predominantly economic rationale for seeking a ban on the productivity-boosting hormone is based on fears that its use could disrupt finely balanced calculations for the beef and dairy sector, under last year's reform of the EC's common agricultural policy. ..TX.- The commission admitted it could not fault BST conclusively on veterinary, health or ethical grounds, although it pointed out that monitoring the effects of a hormone used on such a large scale could not be properly enforced. ..TX.- It argued, however, that BST, which delivers milk productivity increases of 6-20 per cent, would have the effect of concentrating milk output on larger holdings, driving smaller farmers out of business and leading to the more intensive farming that the CAP reform seeks to discourage. ..TX.- Such a development would lead to increased slaughtering of dairy cows - 4-6 per cent of the EC herd, the commission said - adding to the already chronic oversupply of beef. ..TX.- Moreover, the commission argued, consumer reaction against hormones was now so pronounced that authorisation of BST would lead to further declines in beef and dairy product consumption, adding to market imbalances. Mr Rene Steichen, EC agriculture commissioner, said it would 'tarnish the image of a product now considered natural and wholesome'. ..TX.- BST was developed largely by US multinatonals like Monanto and Eli Lilly. The US Senate has recently voted for a 15-month moratorium on its use. ..TX.- Extending the EC ban on the hormone will have to gain the approval of the council of agricultural ministers. ..CN.- Countries: QR European Economic Community (EC). ..IN.- Industry: P021 Livestock, Ex Dairy and Poultry. P024 Dairy Farms. P027 Animal Specialties. ..TP.- Types: TECH Safety & Standards. CMMT Comment & Analysis. ..IX.- P021, P024, P027. ..DS.- The Financial Times ..XP.- London Page 28 ***************************************************************** ..AN.-00DGOCUAGSFT ..HL.- 930715FT 930715 World Commodities Prices: Market Report (245) ..BL.- By REUTER ..TX.- COPPER prices staged a substantial recovery yesterday after sustaining heavy falls earlier in the week. Dealers attributed the rise, which lifted the three months position at the London Metal Exchange by Dollars 43 to Dollars 1,921.50 at the close, mainly to technical factors, notably Far Eastern options buying and tightness around the three months delivery period. But they saw little in the way of fundamental demand to sustain the market and thought it could be 'riding for a fall' when the tightness wore off. ALUMINIUM also rallied, the three months price closing Dollars 27.25 up at Dollars 1,203.50 a tonne, aided by spill-over sentiment from copper and expectations of strong support below Dollars 1,200. At the London Commodity Exchange robusta COFFEE prices edged lower in nervous conditions as traders waited to see if frost warnings in Brazil would be justified. After London's close New York's arabica coffee market continued to decline. COCOA values were firmer at the LCE on trade buying in London and speculative buying in New York. The September price closed at Pounds 759 a tonne, up Pounds 11 on the day. ..TX.- Compiled from Reuters ..CN.- Countries: GB United Kingdom, EC. US United States of America. ..IN.- Industry: P1021 Copper Ores. P1099 Metal Ores, NEC. P1061 Ferroalloy Ores, Ex Vanadium. P0179 Fruits and Tree Nuts, NEC. P6231 Security and Commodity Exchanges. ..TP.- Types: COSTS Commodity prices. ..IX.- P1021, P1099, P1061, P0179, P6231. ..DS.- The Financial Times ..XP.- London Page 28 ***************************************************************** ..AN.-00DGOCUAGRFT ..HL.- 930715FT 930715 World Commodities Prices: Wool (115) ..TX.- The market continues inactive with prices untested at auction during the recess between the main selling seasons. The trade has been encouraged by large sales from the Australian stockpile last week - more than 12,000 bales and the largest weekly total since early December. These are related to Australian business with China and if further demand develops from one of Australia's main wool customers the outlook for the whole market next season is more hopeful. In the UK, problems related to the marketing of British wool persist. ..CN.- Countries: AU Australia. CN China, Asia. ..IN.- Industry: P0214 Sheep and Goats. ..TP.- Types: COSTS Commodity prices. ..IX.- P0214. ..DS.- The Financial Times ..XP.- London Page 28 ***************************************************************** ..AN.-00DGOCUAGQFT ..HL.- 930715FT 930715 Government Bonds: Gilt prices leap ahead as inflation falls to 30-year low (760) ..BL.- By PETER JOHN and PATRICK HARVERSON ..DL.- LONDON, NEW YORK ..TX.- ECONOMIC data showing the lowest inflation for almost 30 years sent UK government bond prices shooting upwards and yields dropping below 8 per cent for the first time in more than 20 years. ..TX.- The yield on ultra-long gilts maturing in 2017 fell to 7.98 per cent with prices leaping forward by a full percentage point, building on the strong rally that has been developing since May. Long-dated yields have not been sustainably below 8 per cent since 1968. ..TX.- The rise in prices at first reflected a technical readjustment by marketmakers, but the shift was sustained by heavy interest from domestic funds, which have been shy of the gilt market compared with their overseas equivalents. ..TX.- UK funds have feared a return to the 'boom-bust' economics of the past two decades but there is a growing belief that low inflation might have taken hold. ..TX.- Mr Chris Anthony, UK economist with UBS, said the data showing headline inflation down to only 1.2 per cent were 'totally contrary to the consensus and reinforced the bullish argument for gilts at the long end.' Another economist said: 'We have economic recovery with no inflationary pressure.' ..TX.- Short-dated government bond yields, reflecting the market's expectations on interest rates, remained virtually unchanged because the latest improved manufacturing output data pushed back hopes for monetary easing. ..TX.- Meanwhile, the Bank of England announced an additional Pounds 700m tranche of existing 7 1/4 per cent stock maturing in 1998; the partly-paid issue was priced at 102 1/4 and the issue will be available today. ..TX.- The Bank also announced the issue of Pounds 300m in tranches of index-linked bonds, consisting of Pounds 100m of 2 1/2 per cent index-linked stock due 2003 and Pounds 200m of 4 1/8 per cent index-linked due 2030. ..TX.- SURPRISINGLY generous supply from the German central bank at its weekly repo sent strong signals that the Bundesbank was keen to cut interest rates again and pushed government bond prices higher. Bund futures for September rose 0.24 to 96.27. ..TX.- Commercial banks needed DM68.5bn to cope with their day-to-day management. The market had been expecting around DM72bn as a gesture of goodwill, and the final figure of DM78bn at 7.28 per cent and above surprised most analysts. ..TX.- Ms Alison Cottrell, economist with Midland Global Markets, argued that the recent intervention to support the French franc made the oversupply even more generous. ..TX.- The Bundesbank has been buying francs for D-Marks fairly aggressively over the past two days. This has shifted more German money to the commercial banks and might have encouraged the central bank to maintain a tighter hold on supply. ..TX.- Nevertheless, there is a consensus that the Bundesbank is unlikely to cut rates at its council meeting today and will prefer to wait until its next meeting, its last before the summer recess, in a fortnight's time. ..TX.- DISAPPOINTING money supply figures put pressure on Spanish government bonds yesterday. There was further pressure from a weak peseta as the strains within the European exchange rate mechanism grew and the September Bonos futures contract fell 0.33 to 92.42. ..TX.- CONTINUING pressure on the French franc sent the currency to within a centime of its floor against the D-Mark, but the French government bond market was closed for the Bastille Day holiday. ..TX.- US Treasury prices rose strongly at the long end of the market yesterday, sending yields to new record lows, following a bullish consumer prices report. ..TX.- In late trading the benchmark 30-year government bond was up at 107 5/16 , yielding 6.559 per cent. At the short end of the market, the two-year note was also firmer, up 3/32 at 100 9/32 , to yield 3.957 per cent. ..TX.- After the market produced a muted response to good producer prices data on Tuesday, yesterday there was no doubt about dealers' and investors' attitudes to the consumer prices figures. The consumer prices index for June was unchanged, and the 'core' measure (excluding food and energy prices) was up only 0.1 per cent last month. ..TX.- The figures confirmed that after several months of worryingly high inflation at the start of the year, inflationary pressures in the economy have abated. Bond prices moved higher after the CPI was released, and the 30-year yield dropped below 6.6 per cent. ..CN.- Countries: GB United Kingdom, EC. DE Germany, EC. ES Spain, EC. FR France, EC. US United States of America. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: MKTS Market data. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 27 ***************************************************************** ..AN.-00DGOCUAGPFT ..HL.- 930715FT 930715 International Bonds: Abbey National leads flock of issuers with Pounds 350m offer (462) ..BL.- By SARA WEBB ..TX.- BORROWERS flocked to the international bond markets again in a wide range of currencies, astonishing many market participants with the deluge of new issues. ..TX.- Yesterday saw the launch of several large deals from corporate names including Abbey National, Royal Bank of Scotland, Rolls-Royce and Hoechst. ..TX.- Abbey National Treasury Services launched a Pounds 350m tranche of Eurosterling bonds, taking the total size of its existing 10-year issue up to Pounds 1bn. The move creates the largest corporate Eurosterling issue, matching the EIB's 10-year deal in size. ..TX.- Mr Jonathan Nicolls, director of corporate and capital markets at Abbey National, pointed out that while the UK bank obviously requires sterling funding, it is also keen to establish 'a genuine benchmark' in the Eurosterling market. ..TX.- He added: 'There has been a lot of demand for 10-year paper in last four weeks and I was keen to respond to that.' The demand stems from the fact that many foreign investors are interested in sterling paper because of the attractive yields compared with other European markets and the perception that UK interest rates should fall further. ..TX.- Abbey National swapped the deal into floating rate sterling to achieve funding at around Libor plus 20-25 basis points. ..TX.- The original Pounds 650m 10-year tranche launched in March was priced to yield 50 basis points over the gilt. Since then, the yield spread has fallen to about 36-37 basis points in the secondary market. Yesterday's tranche was priced to yield 40 basis points over the gilt, and the bonds rose on the back of the gilt market's rally, from 99.47 to 100.20-100.35, according to one of the lead managers. ..TX.- Royal Bank of Scotland also tapped the sterling sector, issuing a Pounds 200m perpetual sub-ordinated bond issue which qualifies as upper Tier Two capital. ..TX.- The bonds have a coupon of 9.5 per cent. However, after 25 years (and provided the bonds are not called) the coupon will be set at whichever is higher - either 9.5 per cent or 237.5 basis points above the five-year benchmark gilt yield. The coupon will be reset in this manner at five-yearly intervals. ..TX.- The deal was sold mainly to insurance companies and pension funds which have long-dated liabilities, as well as to some bond funds. ..TX.- The Eurodollar sector saw heavy issuance with a Dollars 500m, seven-year deal from Hoechst, the chemicals group, and a Dollars 300m, 10-year deal from Rolls-Royce. The Rolls-Royce issue was increased from Pounds 250m due to good demand. ..CN.- Countries: GB United Kingdom, EC. US United States of America. IT Italy, EC. ES Spain, EC. CH Switzerland, West Europe. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: MKTS Market data. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 27 ***************************************************************** ..AN.-00DGOCUAGOFT ..HL.- 930715FT 930715 International Capital Markets: Milan to trade 41 more shares on computer system (546) ..BL.- By HAIG SIMONIAN ..DL.- MILAN ..TX.- SCREEN-based share trading on the Milan stock exchange will receive its biggest boost tomorrow when 41 more shares move to the computer-based system. ..TX.- The switch, which will include some of Italy's most heavily-traded equities such as Generali and Stet, takes to 80 the number of shares traded since screen-based trading made its cautious debut with just five stocks in November 1991. ..TX.- Since then, the system has been gradually expanded, with the biggest boost coming with the addition of 25 new shares in May 1992. Despite the cautious growth, the system has suffered from severe technical setbacks, although trading has been smooth in recent months. ..TX.- Increasing the number of shares to 80 means the screen-based system will account for about 70 per cent of the total capitalisation of the Milan bourse and 80 per cent of average daily trading volumes. ..TX.- The expansion is being accompanied by the introduction of a new index, the Mibtel, which could in time form the basis for futures and options trading on Italian equities. ..TX.- The Mibtel, which will be calculated every 15 minutes at the outset but will be calculated every minute eventually, marks the stock exchange's first real-time equity index. ..TX.- Its introduction is a further step in the long-overdue efforts to put Italy's financial markets on a par with developments now commonplace elsewhere in Europe. ..TX.- This year the bourse appointed a new ruling council, chaired by Mr Attilio Ventura, to improve transparency. ..TX.- No timetable has been set for futures contracts or options on futures. However, having a real-time index covering a large portion of the market is an essential pre-condition for their introduction. ..TX.- Broad legislation for futures and options on equities was approved along with a packet of other bourse reforms in January 1992. ..TX.- The new index comes just a few days after Banca Commerciale Italiana (BCI), which calculates the popular Comit index, widely followed by foreign investors, launched a new 30-share product based on stocks traded on-screen. ..TX.- Consob, Italy's stock market and companies watchdog, which has been supervising the introduction of screen-based trading, has plans to shift the bulk of share dealing to the screen-based system by the end of this year. ..TX.- However, there is no fixed timetable, and regulators will be monitoring carefully the latest expansion of the system before moving further. ..TX.- The growing interest in Italian equities has prompted Morgan Stanley International and Banca Commerciale Italiana to launch an issue of put and call warrants on the Italian BCI-30 index. ..TX.- The index, recently constructed by BCI, is composed of the 30 largest and most liquid Italian shares. It is designed to have a high correlation to the Italian stock market, although with slightly higher volatility. BCI will calculate the index on a real-time basis. ..TX.- The warrant issue consists of three tranches each of puts and calls, with American-style expiration. All will have a two-year maturity, to August 16, 1995. Issue prices will be fixed on the basis of market prices on July 16. Application has been made to list the warrants for trading in Luxembourg. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: CMMT Comment & Analysis. MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 27 ***************************************************************** ..AN.-00DGOCUAGNFT ..HL.- 930715FT 930715 International Company News: NZ brewer placement may fund acquisition (309) ..BL.- By TERRY HALL ..DL.- WELLINGTON ..TX.- LION NATHAN, the New Zealand-based brewing and soft drinks group, announced yesterday that it may be about to mount a takeover bid for the brewing business of Australia's SA Brewing group. ..TX.- Lion is raising NZDollars 260m (USDollars 143m) through a private placing of equity, and yesterday's prospectus said the proceeds would be used to reduce debt and support the possible acquisition of the brewing operations of SA Brewing Holdings. ..TX.- Mr Douglas Myers, chief executive, said his company, already the biggest brewer in Australia with some 40 per cent of the beer market, was tendering to buy the assets. ..TX.- A spokesman said Lion had had extensive talks with institutions in Australia. He said that it was interested in SA Brewing, but that the price would 'have to be right'. ..TX.- SA Brewing would make no comment yesterday. ..TX.- The company has consistently declined to comment on reports that it is planning to sell its brewing operations, which have been valued at up to ADollars 350m (USDollars 238m). ..TX.- The group has suffered sluggish profits recently as a result of poor beer and packaging trading. For the six months to December, net earnings were just 1.1 per cent ahead at ADollars 57.15m, although the outlook for the second half was said to be favourable. ..TX.- In March, when announcing a big jump in half-year profits, Lion forecast satisfactory full-year profits but said tougher competition and difficult trading conditions in the Australian beer market would be a challenge. ..TX.- Boosted by an acquisition, Lion's net profits for the six months to February rose 73 per cent to NZDollars 79.5m. ..CO.- Companies: Lion Nathan. SA Brewing Holdings. ..CN.- Countries: NZ New Zealand. ..IN.- Industry: P2082 Malt Beverages. P2086 Bottled and Canned Soft Drinks. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P2082, P2086. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGOCUAGMFT ..HL.- 930715FT 930715 International Company News: Westinghouse income falls 18% (254) ..BL.- By MARTIN DICKSON ..DL.- NEW YORK ..TX.- WESTINGHOUSE Electric, the US conglomerate trying to recover from poor property investments, yesterday reported an 18 per cent drop in second quarter income from continuing operations, which it acknowledged was below its expectations. ..TX.- The company blamed the drop mainly on the performance of its environmental business, which it said had been hit by 'weakness in the US environmental remediation market and the poor European economies'. ..TX.- Mr Michael Jordan, chief executive, said Westinghouse was in the 'midst of a great transition'. ..TX.- Westinghouse reported net income from continuing operations of Dollars 84m, or 20 cents a share, compared with Dollars 103m, or 30 cents, in the same period of last year. Revenues were Dollars 1.98bn, compared with Dollars 2.18bn. ..TX.- The company is gradually getting out of financial services, and in particular property investment. It said that in the second quarter it had sold Dollars 2.3bn in assets, for cash, from its financial services business and more than Dollars 3bn in the first half of the year, and this essentially eliminated the company's exposure from commercial property assets. ..TX.- For the six months, Westinghouse reported income from continuing operations of Dollars 148m, or 35 cents a share, compared with Dollars 168m, or 68 cents, in the same period of last year. ..CO.- Companies: Westinghouse Electric Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P6719 Holding Companies, NEC. P6552 Subdividers and Developers, Ex Cemeteries. ..TP.- Types: FIN Interim results. ..IX.- P6719, P6552. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGOCUAGLFT ..HL.- 930715FT 930715 International Company News: Second-term loss at Alcan Aluminium (233) ..BL.- By ROBERT GIBBENS ..DL.- MONTREAL ..TX.- ALCAN ALUMINIUM, the Canadian aluminium group, faced with weaker ingot and fabricated product prices, posted a second-quarter loss of USDollars 35m, or 18 cents a common share, against a loss of Dollars 29m, or 15 cents, a year earlier. ..TX.- Sales and operating revenues for the quarter were 5 per cent lower at Dollars 1.86bn. ..TX.- For the first six months, Alcan's loss deepened to Dollars 55m, or 29 cents a share, compared with a deficit of Dollars 44m, or 24 cents, a year earlier. First-half sales and operating revenues were Dollars 3.6bn, against Dollars 3.8bn. ..TX.- Second-quarter fabricated products volumes were stable but realised prices were down 9 per cent. Ingot shipments were slightly higher but prices were down 10 per cent. ..TX.- The lower prices were partly offset by cost reductions and a weaker Canadian dollar. Interest costs were also lower. ..TX.- Total shipments of ingot and fabricated products in the second quarter were 641,000 tonnes, against 610,000 tonnes, and in the first half roughly the same at 1.22m tonnes. ..TX.- In Canada, where most of Alcan's primary production is located, losses were up in the quarter while US operations posted a loss, compared with a small profit in the 1992 period. ..CO.- Companies: Alcan Aluminium. ..CN.- Countries: CA Canada. ..IN.- Industry: P3334 Primary Aluminum. ..TP.- Types: FIN Interim results. ..IX.- P3334. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGOCUAGKFT ..HL.- 930715FT 930715 International Company News: LA Gear worse than expected (111) ..BL.- By KAREN ZAGOR ..DL.- NEW YORK ..TX.- LA GEAR, the US footwear and clothing maker in the red since the end of 1990, yesterday posted a bigger-than-expected second quarter loss. ..TX.- For the three months to May 31, the company had a net deficit of Dollars 13.2m, or 57 cents a share, against a deficit of Dollars 24.4m, or Dollars 1.19, a year earlier. The 1992 results included an after-tax charge of Dollars 13.9m to settle litigation. ..CO.- Companies: LA Gear Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P3149 Footwear, Ex Rubber, NEC. ..TP.- Types: FIN Interim results. ..IX.- P3149. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGOCUAGJFT ..HL.- 930715FT 930715 International Company News: Celanese Canada quadruples profit (134) ..BL.- By ROBERT GIBBENS ..TX.- CELANESE Canada, the synthetic fibre and chemical products group controlled by Germany's Hoechst, said first half profits quadrupled from a year earlier because of strength in textiles and industrial products and a lower Canadian dollar. The pace of growth is expected to hold throughout 1993. ..TX.- Net profit was CDollars 28.2m (USDollars 22m), or CDollars 2.06 a share, up from CDollars 7.3m, or 50 cents, a year earlier, on sales of CDollars 213m against CDollars 207m. ..TX.- Second-quarter earnings were CDollars 15.5m, or CDollars 1.14, against a loss of CDollars 900,000 a year earlier, on sales of CDollars 111m against CDollars 117m. ..CO.- Companies: Celanese Canada. ..CN.- Countries: CA Canada. ..IN.- Industry: P2899 Chemical Preparations, NEC. ..TP.- Types: FIN Interim results. ..IX.- P2899. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGOCUAGIFT ..HL.- 930715FT 930715 International Company News: Laidlaw will not take up ADT shares (264) ..BL.- By BERNARD SIMON ..TX.- LAIDLAW, the Ontario-based waste services and transport operator, will not take up its proportionate share of the forthcoming public equity issue by ADT, its 28.4 per cent-owned international security and vehicle auction affiliate. ..TX.- The decision will lower Laidlaw's stake to just over 25 per cent, which will still leave the Canadian company as ADT's biggest single shareholder. ..TX.- Mr Donald Jackson, Laidlaw chief executive, said yesterday he supported ADT's refinancing effort, but that Laidlaw's resources were best spent on its own core businesses. ..TX.- ADT plans to issue 18m shares in the US. At its current share price of Dollars 9 on the New York Stock Exchange, the issue will raise about Dollars 160m. ..TX.- Laidlaw's shares have tumbled by almost 20 per cent since it surprised the investment community last week with a loss of Dollars 33.6m, or 12 cents a share, for the three months to May 31. The loss was chiefly due to a Dollars 120m writedown stemming from a review of its US solid waste operations. ..TX.- The shares closed at CDollars 8 on the Toronto stock exchange yesterday, down 88 cents. ..TX.- Mr Jackson forecast earnings of 6 to 8 cents a share in the current quarter, slightly below analysts' estimates. He acknowledged that 'environmental services markets are going through a period of consolidation and restructuring'. ..CO.- Companies: Laidlaw Inc. ADT. ..CN.- Countries: CA Canada. ..IN.- Industry: P4953 Refuse Systems. P5511 New and Used Car Dealers. P4789 Transportation Services, NEC. ..TP.- Types: COMP Shareholding. ..IX.- P4953, P5511, P4789. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGOCUAGHFT ..HL.- 930715FT 930715 International Company News: FTC drops inquiry into Intel (324) ..BL.- By RICHARD WATERS ..DL.- NEW YORK ..TX.- The US Federal Trade Commission yesterday formally dropped its three-year investigation into unfair trading practices at Intel, the world's largest manufacturer of semiconductors. ..TX.- The news came after the market had closed and was too late to reverse a Dollars 1 1/8 fall in the company's share price, to Dollars 53 3/8 , in the wake of second-quarter figures announced on Monday. ..TX.- In a letter to Intel president Mr Andrew Grove, Ms Mary Lou Steptoe, acting director of the FTC's bureau of competition, said of its investigation: 'On further review of this matter, it now appears that no further action is warranted by the Commission. Accordingly . . . the investigation is closed.' ..TX.- The FTC, which has never previously confirmed the existence of the investigation, said that it had looked into possible 'unlawful tying or exclusive dealing practices or other unfair methods of competition' involving the marketing, distribution and sale of the company's microprocessors and other computer parts. ..TX.- The company, which has a large share of the market for microprocessors for personal computers, continues to face private anti-trust actions brought by two of its competitors. ..TX.- Mr Tom Dunlap, general counsel to Intel, welcomed the FTC decision, adding that the company intended to continue with its 'very aggressive, but very fair intellectual property programme'. ..TX.- The investigation had cost the company 'many millions of dollars,' he said, but had not resulted in any changes in business policy. ..TX.- The decision to end the investigation had been generally expected in the market. Mr Dunlap expressed confidence that the decision would lead to the ending of private actions brought against the company, since these had been based on the same documents that the company had disclosed to the FTC. ..CO.- Companies: Intel Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P3674 Semiconductors and Related Devices. ..TP.- Types: COMP Company News. ..IX.- P3674. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGOCUAGGFT ..HL.- 930715FT 930715 International Company News: Royal Trustco to bail out share scheme executives (414) ..BL.- By BERNARD SIMON ..DL.- TORONTO ..TX.- THE PARENT company of Royal Trust, the Canadian financial institution controlled by the Bronfman family whose operations are being sold to Royal Bank of Canada, will spend about CDollars 20m (USDollars 15.6m) on life insurance policies to bail 151 managers out of an executive compensation scheme which went badly awry. ..TX.- Royal Bank has refused to employ any RT managers unless they are relieved of all obligations under a share purchase plan, which forced them as a condition of employment to buy large parcels of shares in Royal Trustco, RT's parent company. The purchases were financed by corporate loans. ..TX.- The idea of the scheme was that the managers would augment their salaries with handsome capital gains as RT's profits improved and the share price appreciated. Dividends would be used to pay interest on the loans. ..TX.- Instead of improving, business has gone into reverse, however. Earlier this year Mr Hartland MacDougall, RT chairman, announced that losses for 1992 were in the region of CDollars 900m. The share price of Royal Trustco, which recently changed its name to Gentra, has collapsed from a peak of more than CDollars 19 in 1989 to 37 cents. ..TX.- Many RT managers faced financial ruin if their loans were called in under the original terms of the purchase plan. Their total indebtedness under the scheme is CDollars 53.5m. ..TX.- Gentra now plans to extend the term of the loans for up to 70 years. The loans will be payable only if the shares rise above the original purchase price, or when the participant dies. In the latter event, the participant's obligations will be covered by the insurance policy. ..TX.- The bailout does not apply to 74 employees, with loans totalling CDollars 21m, who will not remain with RT after its sale to Royal Bank. ..TX.- Similar compensation plans have been in force at other companies controlled by Toronto's Bronfman family. But the share prices of these companies have generally performed better than Royal Trustco, and fewer employees have been involved in the share purchase schemes. ..TX.- None the less, several of the Bronfmans' most senior executives have received large loans to relieve them of the burden of falling share prices. ..CO.- Companies: Royal Trust. Royal Bank of Canada. ..CN.- Countries: CA Canada. ..IN.- Industry: P6726 Investment Offices, NEC. P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: MGMT Management & Marketing. CMMT Comment & Analysis. ..IX.- P6726, P6081. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGOCUAGFFT ..HL.- 930715FT 930715 International Company News: NZ brewer placement may fund acquisition (452) ..BL.- By TERRY HALL ..DL.- WELLINGTON ..TX.- LION NATHAN, the New Zealand-based brewing and soft drinks group, announced yesterday that it may be about to mount a takeover bid for the brewing business of Australia's SA Brewing group. ..TX.- Lion is raising NZDollars 260m (USDollars 143m) through a private placing of equity, and yesterday's prospectus said the proceeds would be used to reduce debt and support the possible acquisition of the brewing operations of SA Brewing Holdings. ..TX.- Mr Douglas Myers, chief executive, said his company, already the biggest brewer in Australia with some 40 per cent of the beer market, was tendering to buy the assets. ..TX.- A spokesman said Lion had had extensive talks with institutions in Australia. He said that it was interested in SA Brewing, but that the price would 'have to be right'. ..TX.- SA Brewing would make no comment yesterday. 'We don't intend to make a statement on it,' said Mr John Morton, SA Brewing's company secretary. ..TX.- The company has consistently declined to comment on reports that it is planning to sell its brewing operations, which have been valued at up to ADollars 350m (USDollars 238m). ..TX.- The group has suffered sluggish profits recently as a result of poor beer and packaging trading. For the six months to December, net earnings were just 1.1 per cent ahead at ADollars 57.15m, although the outlook for the second half was said to be favourable. ..TX.- In March, when announcing a big jump in half-year profits, Lion forecast satisfactory full-year profits but said tougher competition and difficult trading conditions in the Australian beer market would be a challenge. ..TX.- Boosted by an acquisition, Lion's net profits for the six months to February rose 73 per cent to NZDollars 79.5m. Mr Myers said 3.6 percentage points of its key market share in New South Wales had been lost during the period. ..TX.- Lion's share of the beer market was 40.7 per cent in Australia and 58.2 per cent in New Zealand. ..TX.- The share placing is being made at NZDollars 3.05. It involves the issue of 49.8m new shares, representing 10 per cent of Lion, and the sale of 35.2m shares from its treasury. ..TX.- Mr Myers said the move would significantly strengthen Lion's balance sheet. He said a more conservative balance sheet and greater Australian institutional support would form a strong base for growth. ..TX.- 'Over 70 per cent of our assets are located in Australia. We wish to increase the level of ownership by Australian institutions,' he said. ..CO.- Companies: Lion Nathan. SA Brewing Holdings. ..CN.- Countries: NZ New Zealand. ..IN.- Industry: P2082 Malt Beverages. P2086 Bottled and Canned Soft Drinks. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P2082, P2086. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGOCUAGEFT ..HL.- 930715FT 930715 International Company News: Setback at International Paper (279) ..BL.- By KAREN ZAGOR ..DL.- NEW YORK ..TX.- INTERNATIONAL Paper, the US forest products group, reported a 29.9 per cent downturn in underlying second-quarter earnings, reflecting slow growth in domestic markets and weak overseas economies. ..TX.- The company warned that weakness in European and export markets would probably continue in the second half. ..TX.- Net income for the three months to June 30 was Dollars 77m, or 62 cents a share, on sales of Dollars 3.5bn compared with earnings of Dollars 112m, or 92 cents, on sales of Dollars 3.4bn a year earlier. ..TX.- Interest costs were considerably higher in the 1993 period, and in the 1992 quarter International Paper had benefited from tax-related interest income and higher capitalised interest attributable to two important European projects. ..TX.- Stripping out income taxes, extraordinary items and the cumulative effect of accounting changes, International Paper earned Dollars 122m in the quarter against Dollars 174m a year earlier. ..TX.- For the first six months, net income was Dollars 141m, or Dollars 1.14 a share, on sales of Dollars 6.9bn, against profits of Dollars 164m, or Dollars 1.36, on sales of Dollars 6.7bn in the same period of 1992. ..TX.- Packaging operations saw sales decline to Dollars 890m from Dollars 925m, but the company's other leading business segments posted improved sales. ..TX.- Mr John Georges, chairman and chief executive, said demand for printing papers had risen a few percentage points from last year. Increases in reprographic and coated groundwood papers had been made for the third quarter. ..CO.- Companies: International Paper. ..CN.- Countries: US United States of America. ..IN.- Industry: P2611 Pulp Mills. P2621 Paper Mills. ..TP.- Types: FIN Annual report. ..IX.- P2611, P2621. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGOCUAGDFT ..HL.- 930715FT 930715 International Company News: Second-term loss at Alcan Aluminium (315) ..BL.- By ROBERT GIBBENS ..DL.- MONTREAL ..TX.- ALCAN ALUMINIUM, the Canadian aluminium group, faced with weaker ingot and fabricated product prices, posted a second-quarter loss of USDollars 35m, or 18 cents a common share, against a loss of Dollars 29m, or 15 cents, a year earlier. ..TX.- Sales and operating revenues for the quarter were 5 per cent lower at Dollars 1.86bn. ..TX.- For the first six months, Alcan's loss deepened to Dollars 55m, or 29 cents a share, compared with a deficit of Dollars 44m, or 24 cents, a year earlier. First-half sales and operating revenues were Dollars 3.6bn, against Dollars 3.8bn. ..TX.- Second-quarter fabricated products volumes were stable but actual realised prices were down 9 per cent. Ingot shipments were slightly higher but realised prices were down 10 per cent. ..TX.- The lower prices were partly offset by cost reductions and a weaker Canadian dollar. Interest costs were also lower. ..TX.- Total shipments of ingot and fabricated products in the second quarter were 641,000 tonnes, against 610,000 tonnes, and in the first half roughly the same at 1.22m tonnes. ..TX.- In Canada, where most of Alcan's primary production is located, losses were higher in the second quarter while US operations posted a loss, compared with a small profit in the 1992 period. ..TX.- Latin America improved and posted a small profit. European results deteriorated with the recession and the Pacific suffered a small loss, reflecting poor results from the Japanese associate. ..TX.- Alcan's results are the latest set of weak numbers to emerge from the industry. Earlier this week Aluminum Company of America, the world's biggest producer, reported a 21 per cent decline in second-quarter net income. ..TX.- Inflated by imports from the former Soviet Union, world aluminium stocks are high and prices weak. ..CO.- Companies: Alcan Aluminium. ..CN.- Countries: CA Canada. ..IN.- Industry: P3334 Primary Aluminum. ..TP.- Types: FIN Interim results. ..IX.- P3334. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGOCUAGCFT ..HL.- 930715FT 930715 International Company News: Dream seeks bankruptcy protection (436) ..BL.- By ROBERT THOMSON ..DL.- TOKYO ..TX.- DREAM, a Japanese civil engineering company turned pinball parlour operator and stock speculator, has filed for bankruptcy protection with the Nagoya District Court. ..TX.- The failure of Dream, which has about Y50bn (Dollars 462m) in outstanding debts, also raises doubts about the future of Gajeon Kanko, a stock market-listed hotel operator, which admits that Dream pays its employees' salaries. Trading in Gajeon Kanko stock was suspended yesterday. ..TX.- Dream's filing highlights the extreme pressure on companies which thrived in the easy money days of the late 1980s, but which are now facing huge losses on stock and property investments. They are also finding funds difficult to raise, as once-friendly banks are refusing to provide fresh loans. ..TX.- Both companies are linked to the already collapsed Cosmopolitan speculators' group, which bought stakes in dozens of companies during the 1980s, including a range of regional banks, which were expected to fund its investment activities. ..TX.- Former Cosmopolitan executives boasted of gangster links, although the claims could have been an attempt to lubricate the company's many attempts at 'greenmail', forcing companies to buy off spurious takeover attempts. ..TX.- Dream is still the largest shareholder in Gifu Bank, a conservative regional bank based in central Japan. While Dream, which operates pachinko (Japanese-style pinball) parlours, holds 5.5 per cent of the bank, it is understood that most of the company's funds have come from independent finance companies. ..TX.- For the year ended March, 1993, Dream reported a pre-tax loss of Y2.3bn and shortly after acquired 10m shares in Gajeon Kanko for Y2bn, which the company now says was never paid. With the allocation of the shares, Dream had acquired 21 per cent of Gajeon, making it the biggest shareholder. ..TX.- The complex links among the many speculator groups in Japan have led to Gajeon being caught up in the scandals surrounding Itoman, the large textile trader taken over by the Sumitomo group this year following a string of investments in stocks, property and French impressionist paintings. ..TX.- Mr Tsutomu Kudo, Gajeon's president, yesterday said his company had no collateral for the Y2bn in stocks given to Dream, nor is there a formal loan contract between the two companies. ..TX.- Apart from highlighting the influence of speculator groups, the Dream and Gajeon sagas have also drawn attention to auditors in Japan. ..TX.- Two years ago, an auditor approved, then rejected, and then approved Gajeon's accounts, though little new information was provided. ..CO.- Companies: Dream. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P6719 Holding Companies, NEC. P7999 Amusement and Recreation, NEC. ..TP.- Types: COMP Company News. ..IX.- P6719, P7999. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGOCUAGBFT ..HL.- 930715FT 930715 International Company News: TV network boosts CBS to Dollars 107.4m (260) ..BL.- By KAREN ZAGOR ..TX.- CBS, which owns one of the three US television networks, posted unexpectedly strong second-quarter earnings of Dollars 107.4m, or Dollars 6.73 a share. ..TX.- The group predicted record earnings from continuing operations for the full year. ..TX.- A year earlier, CBS posted net earnings of Dollars 69m, or Dollars 4.46. Earnings in the 1993 quarter included a one-time pre-tax gain of Dollars 14.2m. Sales grew to Dollars 835.8m from Dollars 779.9m. ..TX.- On Wall Street, CBS shares closed at Dollars 245, a rise of Dollars 7 1/4 . ..TX.- The improved earnings were attributed to better results from the company's television network, benefiting from higher advertising sales, cost containment and its leading position in the prime time market. ..TX.- For the first half, CBS recorded net profits of Dollars 161.6m, or Dollars 10.23 a share, on sales of Dollars 1.71bn. ..TX.- In the first six months of 1992, the group took charges for accounting changes of Dollars 81.5m, which reduced net income to Dollars 5m, or 32 cents, on sales of Dollars 1.86bn. ..TX.- Mr Laurence Tisch, chairman and chief executive, said the company's television network saw sales grow by 8 per cent in the latest quarter. ..TX.- He added that CBS expected to exceed significantly its record full-year earnings from continuing operations of Dollars 11.54 a share, set in 1989. ..CO.- Companies: CBS Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P7812 Motion Picture and Video Production. P4833 Television Broadcasting Stations. ..TP.- Types: FIN Interim results. ..IX.- P7812, P4833. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGOCUAGAFT ..HL.- 930715FT 930715 International Company News: Charles Schwab ahead at Dollars 31.6m but growth slows (302) ..BL.- By PATRICK HARVERSON ..DL.- NEW YORK ..TX.- CHARLES Schwab, the largest discount brokerage house in the US, yesterday reported a big increase in second-quarter profits to Dollars 31.6m, up from the Dollars 18.5m earned in the same quarter of 1992. ..TX.- Like other securities houses, however, Schwab's profits in the second quarter were slightly lower than in the first period of the year, when the firm earned a record Dollars 35.4m. ..TX.- The downturn in earnings suggests that while Wall Street continues to benefit from a two-year boom in stock market and underwriting activity, the pace of growth has slackened over the past three months. ..TX.- Yesterday, the San-Francisco based firm said that client trading activity in June was the softest of any month this year. ..TX.- Mr Charles Schwab, chairman, said he also expected retail trading activity to weaken in the third quarter, although he believed the firm's results for that period would still be an improvement on the same period of 1992, when Schwab earned a below-average Dollars 7.8m. ..TX.- Commission revenues rose 34 per cent to Dollars 136m, mutual fund service fees by 53 per cent to Dollars 23.1m, and principal transactions revenues by 30 per cent to Dollars 39.3m. ..TX.- Non-interest expenses rose 26 per cent to Dollars 180.4m, primarily due to increased trading activity and an 8.5 per cent rise in client assets to a record Dollars 79.2bn. ..TX.- Shares in Schwab rose initially on the earnings announcement, but then fell back from close to a year-high on profit-taking. By the end of trading the stock was at Dollars 27 5/8, down Dollars 1 3/8. ..CO.- Companies: Charles Schwab Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P6211 Security Brokers and Dealers. ..TP.- Types: FIN Interim results. ..IX.- P6211. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGOCUAF9FT ..HL.- 930715FT 930715 International Company News: Genentech results show sharp increase (358) ..BL.- By RICHARD WATERS ..DL.- NEW YORK ..TX.- GENENTECH, the US bio-technology company 60 per cent owned by Roche of Switzerland, lifted second-quarter net income to Dollars 10.4m from Dollars 3.4m a year earlier, driven by a jump in income from product sales and licensing. ..TX.- The increase in earnings per share to 9 cents, up from 3 cents a year earlier (though below the 12 cents of the first quarter), helped to lift the company's shares by Dollars 1/2 to close at Dollars 44 1/4 in New York. ..TX.- Sales of Activase, the heart drug which is the company's biggest-selling product, continued to recover from the decline which had largely accounted for a slump in the company's 1992 earnings. ..TX.- Following results at the end of April from a 40,000-patient trial, sales of Activase rose to Dollars 55.8m in the quarter, up from Dollars 49.2m in the first three months and Dollars 44.6m in the second quarter of 1992. ..TX.- Overall, product sales increased to Dollars 110.8m (Dollars 95.8m in the second quarter of 1992). ..TX.- Contract income jumped from Dollars 5.3m to Dollars 24.3, due largely to an Dollars 18.2m contribution from a three-year licence agreement with Schering. Total revenues were up to Dollars 169.8m, from Dollars 153m in the first quarter and Dollars 136m in the second three months of 1992. ..TX.- The company's normally high research and development spending jumped further, to Dollars 83.9m (Dollars 73.3m), as it took a charge of Dollars 13.7m to end an agreement involving the Research Institute of Molecular Pathology in Vienna. ..TX.- The R&D effort yielded two significant developments in the quarter: the start of development work on a new heart drug and a decision by the US Food and Drug Administration to review Genentech's cystic fibrosis treatment. ..TX.- On the former, Mr Kirk Raab, chairman, said: 'If this molecule performs as well in the clinic as it does in the laboratory, it could advance the treatment of heart attack even further than Activase has.' ..CO.- Companies: Genentech Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P2834 Pharmaceutical Preparations. ..TP.- Types: FIN Interim results. ..IX.- P2834. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGOCUAF8FT ..HL.- 930715FT 930715 International Company News: Federal Express shares soar as profits rise 56% in fourth term (377) ..BL.- By KAREN ZAGOR ..DL.- NEW YORK ..TX.- SHARES in Federal Express jumped yesterday morning after the US's biggest overnight delivery company unveiled a 56 per cent increase in fourth-quarter profits, reflecting reduced international losses. ..TX.- At the market's close, shares in the Memphis-based company were up Dollars 6 1/2 at Dollars 53 3/8 after a delayed opening following the earnings release after Wall Street's close on Tuesday. ..TX.- The company said it was talking to Lufthansa, the German airline, about buying passenger aircraft to be converted to freighters in a deal that could be worth about Dollars 400m. ..TX.- For the three months to May 31, Fedex posted net income of Dollars 55.8m, or Dollars 1.01 a share, compared with Dollars 35.8m, or 66 cents, a year earlier. Revenues rose 8 per cent in the last quarter of fiscal 1993 to Dollars 2.04bn from Dollars 1.89bn the previous year. ..TX.- Operating income in the quarter rose 24 per cent to Dollars 136.5m from Dollars 109.8m. ..TX.- In the latest quarter, the international business showed some improvement. Operating losses narrowed to Dollars 25.4m on revenues of Dollars 539.2m from an operating deficit of Dollars 53.2m on revenues of Dollars 536.1m a year ago. ..TX.- Mr Alan Graf, chief financial officer, expects international operations to break even by fiscal 1995 or earlier. ..TX.- For the full year, Fedex had net income of Dollars 53.9m, or 98 cents, compared with a loss of Dollars 113.8m, or Dollars 2.11, the previous year. Results were distorted by one-time charges in both years, including the adoption of new accounting standards in fiscal 1993 and a pre-tax Dollars 254m charge for restructuring. ..TX.- Stripping out extraordinary items, the company earned Dollars 109.8m, or Dollars 2.01, in fiscal 1993, against Dollars 54.7m, or Dollars 1.01, a year earlier. Revenues rose to Dollars 7.81bn from Dollars 7.55bn. ..TX.- In the US, the average price per package fell faster than costs, contributing in a decline in domestic underlying operating income to Dollars 559.2m from Dollars 635.9m a year ago. ..CO.- Companies: Federal Express Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P4513 Air Courier Services. P4215 Courier Services, Ex by Air. ..TP.- Types: FIN Annual report. ..IX.- P4513, P4215. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGOCUAF7FT ..HL.- 930715FT 930715 International Company News: Rubbermaid advances to Dollars 50.6m (268) ..BL.- By KAREN ZAGOR ..TX.- RUBBERMAID, the household plastic goods company, yesterday posted a 16 per cent improvement in second-quarter net income on sales which rose 9 per cent, reflecting the success of new products and aggressive marketing which helped lift volume in the quarter. ..TX.- For the three months to June 30, net income was Dollars 50.6m, or 32 cents a share, on sales of Dollars 488.5m, against earnings of Dollars 43.7m, or 27 cents, on sales of Dollars 449.1m a year earlier. ..TX.- Mr Wolfgang Schmitt, Rubbermaid's recently-appointed chief executive, said: 'We intend to deliver another record year in 1993. New product efforts have been intensified with plans to exceed 1992's level of introducing, on average, a new product every day of the year. ..TX.- 'With the momentum of these new products and some firming in the economy, we would expect second-half sales comparisons to exceed those of the first half,' he said. ..TX.- Mr Schmitt added that the company continued to emphasise cost controls and productivity improvement. ..TX.- He was named chairman of Rubbermaid in November after the unexpected resignation of Mr Walter Williams following an examination ordered by outside directors of budget overruns in Rubbermaid's commercial products division. Mr Williams is said to have resigned for personal reasons, unconnected with the examination. ..TX.- For the first six months, Rubbermaid had net income of Dollars 100.2m, or 63 cents, against Dollars 67.4m, or 41 cents, a year ago. ..CO.- Companies: Rubbermaid Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P3089 Plastics Products, NEC. ..TP.- Types: FIN Interim results. ..IX.- P3089. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGOCUAF6FT ..HL.- 930715FT 930715 International Company News: Banacci posts earnings up 9% (200) ..BL.- By DAMIAN FRASER ..DL.- MEXICO CITY ..TX.- FINANCIERO Banamex-Accival, Mexico's largest financial group, reported an equivalent of net earnings of 663m pesos (Dollars 211m) in the second quarter, 8.9 per cent up from the same period in 1992. ..TX.- However, earnings at Banamex, the group's bank, dropped by 18.7 per cent to 526m pesos, and at Accival, the brokerage, by 46.3 per cent to 37m pesos. ..TX.- Banacci's earnings would have fallen by 11.4 per cent if a revaluation of assets had been excluded. ..TX.- Most Mexican financial groups exclude revaluation of assets from net earnings. Banacci reported a revaluation of 29m pesos, compared with a large deficit in the second quarter last year. ..TX.- It said a significant portion of the surplus was due to an appreciation of securities held by its subsidiaries, which if realised, would have been reported as trading income. ..TX.- The group blamed the sharp fall in Banacci's income on the slowdown in the Mexican economy and the stringent monetary and credit policies of the government. ..CO.- Companies: Financiero Banamex-Accival. ..CN.- Countries: MX Mexico. ..IN.- Industry: P6282 Investment Advice. P6719 Holding Companies, NEC. ..TP.- Types: FIN Interim results. ..IX.- P6282, P6719. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGOCUAF5FT ..HL.- 930715FT 930715 International Company News: First Chicago net up at Dollars 160m (338) ..BL.- By RICHARD WATERS ..TX.- A RISE of 75 per cent in non-interest income at First Chicago, the thirteenth-largest bank in the US last year ranked by assets, pushed net income up to Dollars 169m, or Dollars 1.81 a share, from Dollars 35m, or 32 cents, a year earlier. ..TX.- Increased income from trading in financial markets and a further strong performance by the bank's venture capital investments largely accounted for the rise. ..TX.- Profits from trading short-term interest rate and bond derivatives, and from trading in emerging markets, lifted dealing profits to Dollars 92m. ..TX.- Meanwhile, venture capital holdings turned in earnings of Dollars 57m, or 67 cents, against a Dollars 21m loss a year earlier. ..TX.- Non-interest income was also boosted by a rise in credit-card fees during the quarter to Dollars 164.2m from Dollars 116.6m in the same period in 1992. Total non-interest income leapt to Dollars 540m from Dollars 288m. ..TX.- Net interest income edged ahead to Dollars 303m from Dollars 290m as First Chicago continued to shrink its loan assets. These fell to Dollars 22bn from Dollars 25bn, resulting from securitisation of Dollars 1bn of credit-card receivables and a continuation of the move away from lending to large companies. ..TX.- Lending to small and medium-sized companies in and around Chicago remained steady. Loan demand from this sector had begun to strengthen, though the bank had not relaxed its credit policies, said Mr John Ballantine, chief credit officer. ..TX.- The work-out of troubled real-estate loans continued, with the disposal of nearly Dollars 200m of assets to leave a portfolio of Dollars 402m. ..TX.- The gains during the quarter pushed the bank's return on capital to 21 per cent, and enabled it to raise key tier one capital ratio to a comfortable 8 per cent, from 6 per cent as recently as last September. ..CO.- Companies: First Chicago Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: FIN Annual report. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGOCUAF4FT ..HL.- 930715FT 930715 International Company News: Marion Merrell Dow restructures (403) ..BL.- By PAUL ABRAHAMS ..TX.- MARION Merrell Dow, the pharmaceuticals group 70 per cent owned by Dow, the large US chemicals company, yesterday announced a sweeping package of measures to reduce costs by about Dollars 250m a year. ..TX.- The restructuring, including a 13 per cent cut in staff, rationalisation of research and development, and other cost-cutting measures, will lead to a special pre-tax charge of about Dollars 180m. Most of the Dollars 250m savings should be achieved this year. ..TX.- Mr Fred Lyons, MMD president, said: 'We are moving aggressively to realign our business, both to improve current results in face of rapidly changing conditions and to prepare for the longer-term opportunities.' ..TX.- The measures were principally in response to the growing importance of the 'managed' (bulk discount) care sector in the US, Mr Lyons said. MMD is a leader in managed care, from which it generates about 40 per cent of its US sales. ..TX.- The rationalisation is also a response to a series of blows in recent months. Sales of Nicoderm, the best-selling smoking patch in the US, collapsed this year as the smoking cessation market, worth Dollars 800m in 1992, fell to Dollars 350m. ..TX.- MMD has also been affected by the expiry last November of the US patents of its best-selling product, the heart drug Cardizem, which had sales last year of more than Dollars 1bn. Sales of Seldane, its anti-histamine, have been undermined by safety concerns. Business in Europe has also been affected by healthcare reforms in Germany and Italy. ..TX.- The company plans to cut as many as 1,300 jobs from its workforce of 9,800. Most of the reduction will be in the US. The figure includes cutting 275 full-time US sales representatives and 200 part-time sales positions. ..TX.- MMD saw first-quarter turnover fall 21 per cent to Dollars 617m from Dollars 779m and pre-tax profits decline 56 per cent to Dollars 74m. ..TX.- It said it would focus its R&D on specific projects, including a Seldane metabolite that would not have the side effects now associated with the product; Sabril, an anti-epileptic; and allergy products. ..TX.- Last year, MMD formed a joint venture with SmithKline Beecham, the Anglo-American healthcare group, to develop and market over-the-counter medicines in the US. ..CO.- Companies: Marion Merrell Dow Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P2834 Pharmaceutical Preparations. ..TP.- Types: PEOP Labour. FIN Interim results. ..IX.- P2834. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGOCUAF3FT ..HL.- 930715FT 930715 International Company News: PET plant for Indonesia (88) ..BL.- By AP-DJ ..DL.- TOKYO ..TX.- JAPAN's Mitsubishi Kasei will build the first polyethylene terephthalate (PET) resin plant in Indonesia at a cost of about Dollars 80m, AP-DJ reports from Tokyo. ..TX.- Construction of the 40,000 tonne-per-year plant will begin this year in partnership with Indonesia's Bakrie and Brothers. The plant will be operational in mid-1995, according to Mitsubishi Kasei. ..CO.- Companies: Mitsubishi Kasei Corp. ..CN.- Countries: ID Indonesia, Asia. ..IN.- Industry: P2891 Adhesives and Sealants. ..TP.- Types: RES Facilities. ..IX.- P2891. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGOCUAF2FT ..HL.- 930715FT 930715 International Company News: Seagram forms Polish venture (84) ..BL.- By AP-DJ ..TX.- SEAGRAM, the Canadian drinks group, has formed Seagram Polska, a wholly-owned marketing, sales and distribution operation in Poland, AP-DJ reports. ..TX.- The unit will market and distribute an extensive range of premium international spirits and wine brands. ..CO.- Companies: Seagram. Seagram Polska. ..CN.- Countries: PL Poland, East Europe. ..IN.- Industry: P2084 Wines, Brandy and Brandy Spirits. P2085 Distilled and Blended Liquors. P5921 Liquor Stores. ..TP.- Types: COMP Company News. ..IX.- P2084, P2085, P5921. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGOCUAF1FT ..HL.- 930715FT 930715 International Company News: Shell expands in Canada (165) ..BL.- By ROBERT GIBBENS ..DL.- MONTREAL ..TX.- SHELL Canada has strengthened its natural gas reserves in the Sable Island area off Nova Scotia in a property exchange with Petro-Canada, writes Robert Gibbens in Montreal. ..TX.- Petrocan has acquired Shell's 5.3 per cent stake in the Terra Nova oilfield off Newfoundland, increasing its interest to 49 per cent. ..TX.- In exchange, Petrocan has transferred part of its minority interests in six gasfields in the Sable Island area to Shell. This means Shell now has a 25 per cent share of 3,700bn cubic feet of gas reserves about 175 miles east of Halifax. ..TX.- Most of the gas reserves were found in the mid-1970s in an exploration programme led by Shell. However, Shell and partners have no plans yet to develop the gas. ..CO.- Companies: Shell Canada. Petro-Canada. ..CN.- Countries: CA Canada. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. P1381 Drilling Oil and Gas Wells. ..TP.- Types: RES Facilities. ..IX.- P1311, P1381. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGOCUAF0FT ..HL.- 930715FT 930715 International Company News: AlliedSignal buys Data Control (175) ..BL.- REUTER ..TX.- ALLIEDSIGNAL, the US aerospace and automotive group, is to buy the Data Control unit from Sundstrand of the US, for Dollars 195m. The deal is expected to close in September, Reuter reports. ..TX.- The business, with 1992 sales of Dollars 194m, makes avionics products for data management, ground hazard avoidance, general aviation communications, navigation and instrumentation. ..TX.- Allied said the deal would contribute to 1994 earnings, but did not elaborate. ..TX.- Separately, Sundstrand which makes aerospace components, said its second-quarter earnings, to be released this week, would be up from the second quarter of 1992 but the company was 'disappointed with the overall level of our earnings momentum.' ..TX.- It added that the sale of its Data Control business to AlliedSignal for Dollars 195m would result in a significant, non-recurring financial gain. ..CO.- Companies: AlliedSignal Inc. Data Control. ..CN.- Countries: US United States of America. ..IN.- Industry: P3728 Aircraft Parts and Equipment, NEC. P3714 Motor Vehicle Parts and Accessories. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P3728, P3714. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGOCUAFZFT ..HL.- 930715FT 930715 International Company News: Varity wins VW brakes contract (142) ..BL.- By REUTER ..TX.- VARITY, the the Buffalo-based industrial group, has won a long-term contract, valued at more than Dollars 135m annually, to supply anti-lock braking systems to Volkswagen in Germany, Reuter reports. ..TX.- Varity's Kelsey-Hayes will supply its latest EBC 10 line of braking systems to Volkswagen beginning in 1996, for use in the 1997 model year. ..TX.- This is the third large European contract for the system won by Kelsey-Hayes since it introduced its products overseas in 1991, the company said. ..TX.- It predicted that Europe's anti-lock braking systems market would grow to 60 per cent of all vehicles manufactured there in 1997, compared with 25 per cent today. ..CO.- Companies: Varity Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P3714 Motor Vehicle Parts and Accessories. ..TP.- Types: MKTS Contracts. ..IX.- P3714. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGOCUAFYFT ..HL.- 930715FT 930715 International Company News: Gencor unit in R1.25bn share swap (272) ..BL.- By PHILIP GAWITH ..DL.- JOHANNESBURG ..TX.- GENBEL, the investment arm of Gencor, South Africa's second largest mining house, has announced two large share swap transactions, valued at R1.25bn (Dollars 372m), which will expedite the unbundling of the Gencor group. ..TX.- In a tidying-up exercise preceding the planned unbundling, Genbel has exchanged its foreign interests as well as a portfolio of mining shares for shares in Engen, Sappi and Beatrix, three other companies in the Gencor stable. The portfolio is valued at R862m. ..TX.- In a second share exchange with Sankorp, Gencor's ultimate controlling company, Genbel has exchanged R385m worth of Sappi and Engen shares for R50m in cash plus shares in ABSA, Murray and Roberts, Malbak and Mercedes Information Technology. ..TX.- From a Gencor perspective, the deal achieves two main aims: it means they will have fewer Engen and Sappi shares to distribute when the unbundling is effected, and it also consolidates their control of various mining companies, notably Kinross, Impala, Samancor, Trans-Natal and Winkelhaak. ..TX.- Getting access to offshore assets will also assist Gencor if it makes a bid for Billiton, the mining arm of the Royal Dutch Shell group with which it is currently in discussion. ..TX.- Genbel's offshore interests (valued at R512m) consisted of shares in TransAtlantic Holdings, cash and minor exploration ventures in Turkey. These interests, plus R350m worth of shares in the five mining companies, have been exchanged for 8.9m Engen shares, 12.4m Sappi shares and 5.1m Beatrix shares. ..CO.- Companies: Genbel Investments. ..CN.- Countries: ZA South Africa, Africa. ..IN.- Industry: P6719 Holding Companies, NEC. ..TP.- Types: COMP Company News. ..IX.- P6719. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGOCUAFXFT ..HL.- 930715FT 930715 International Company News: Dell stock hit by gloomy second-quarter forecast (460) ..BL.- By LOUISE KEHOE ..DL.- SAN FRANCISCO ..TX.- DELL Computer's share price fell sharply yesterday when the US personal computer manufacturer said it expected to report a loss for its second fiscal quarter after significant writedowns and restructuring charges. ..TX.- Dell said losses would be between Dollars 1.65 and Dollars 1.85 a share and it expected to record between Dollars 75m and Dollars 85m in pre-tax charges for the quarter, which ends August 1. The company added that the projected loss may place the company in default of the terms of its credit facilities. ..TX.- Dell has been a long-time favourite among Wall Street investors. It has grown rapidly to become the fifth-largest PC company in the world by pioneering direct marketing of PCs through mail and telephone sales. ..TX.- Its sales tripled over the past two years to Dollars 2bn in fiscal 1992. ..TX.- In early trading, Dell's share price dropped to Dollars 13 7/8 , a 2 1/2 -year low. It regained some of its losses to trade at Dollars 15 7/8 at the close, down Dollars 3 3/8 from Tuesday's close and 68 per cent below its high of Dollars 49 7/8 reached in January. ..TX.- Dell said it expected to report revenues of between Dollars 710m and Dollars 730m for the second quarter, up by between 55 per cent and 60 per cent from the same period last year. Total revenues for fiscal 1993 would be about Dollars 3bn, it added. ..TX.- Dell's fast growth was at the root of its problems. Management controls had not kept pace with the rapid expansion of sales, the company said. However, analysts added that it faced credibility problems. ..TX.- In May, Dell reported a sharp drop in first-quarter earnings, which it blamed on delays and cancellation of notebook computer products. At the time, analysts expressed concern that Dell's problems appeared to go beyond notebook computers. Yesterday, their fears were confirmed. ..TX.- Dell said that in addition to costs associated with delayed and cancelled notebook products, it would take restructuring charges. ..TX.- The group said it expected to resume its earnings growth by the fourth quarter of the fiscal year. ..TX.- 'While the loss is certainly disappointing, we are determined to take the steps necessary to strengthen Dell for the future,' said Mr Michael Dell, chairman and chief executive. ..TX.- Dell said it was working with its lenders to revise the terms of its credit facilities. 'I am confident that we will be able to secure alternative financing or obtain a waiver,' said Mr Thomas Meredith, chief financial officer. ..CO.- Companies: Dell Computer Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P3571 Electronic Computers. P7372 Prepackaged Software. ..TP.- Types: FIN Interim results. CMMT Comment & Analysis. ..IX.- P3571, P7372. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGOCUAFWFT ..HL.- 930715FT 930715 International Company News: Thyssen units see profits in next two years (157) ..BL.- By REUTER ..DL.- ESSEN ..TX.- THYSSEN Industrie, the capital goods division of Thyssen, hopes to bring all of its divisions back into the black in the next two years, according to Mr Eckhard Rohkamm, management board chairman, Reuter reports from Essen. ..TX.- Mr Rohkamm said that if all divisions were able to remain profitable under difficult economic conditions, the company would be able to lift its sales to earnings ratio. ..TX.- He declined to say which companies would post a loss in the current year but said automotive supply and engineering were hit hardest by the slump in car and steel industries. ..TX.- Orders on hand were about DM9bn (Dollars 5.6bn) but group incoming orders would be down 10 per cent from DM8.4bn a year earlier. ..CO.- Companies: Thyssen Industrie. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P6719 Holding Companies, NEC. ..TP.- Types: COMP Company News. ..IX.- P6719. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGOCUAFVFT ..HL.- 930715FT 930715 International Company News in Brief: Petrofina (181) ..BL.- By REUTER ..DL.- BRUSSELS ..TX.- Petrofina, the Belgian oil group, said its wholly-owned Fina Exploration Minh Hai BV unit would sell a 15 per cent interest in an oil concession covering three blocks in an offshore area to the south of Vietnam to Japanese oil companies Cosmo Oil and Japan Petroleum Exploration, Reuter reports from Brussels. ..TX.- Petrofina said the sale was subject to ratification by the Vietnamese authorities. No further details were given. ..TX.- The blocks in the Gulf of Thailand are located 200 miles off the Vietnamese coast. A drilling programme to begin exploration of the sites is was scheduled for August. ..TX.- Fina Exploration Minh Hai is the operator and will retain a 40 per cent interest in the concession. The other partners are the UK's Enterprise Oil with 25 per cent and Sodec, a unit of the Royal Dutch/Shell Group, with a 20 per cent stake. ..CO.- Companies: Petrofina. ..CN.- Countries: BE Belgium, EC. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. P2911 Petroleum Refining. ..TP.- Types: COMP Company News. ..IX.- P1311, P2911. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGOCUAFUFT ..HL.- 930715FT 930715 International Company News in Brief: Viag (112) ..BL.- By REUTER ..DL.- BONN ..TX.- Viag, the diversified utility group, will ask shareholders to authorise capital increases of up to DM150m (Dollars 87m), Reuter reports from Bonn. ..TX.- Mr Alfred Pfeiffer, the management board chairman, said that it was necessary to finance expansion measures to the fullest. He said the authorisation would allow Viag to issue warrants if necessary. Viag would sell operations such as its North American standard metallurgy business, the technical ceramics operations of Didierwerke and the secondary activities of VAW Aluminium Werke. ..CO.- Companies: Viag. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P4939 Combination Utilities, NEC. ..TP.- Types: COMP Company News. ..IX.- P4939. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGOCUAFTFT ..HL.- 930715FT 930715 International Company News in Brief: Banco Central Hispano (137) ..BL.- By REUTER ..DL.- MADRID ..TX.- Banco Central Hispano is about to buy a 10 per cent stake in Antena 3 Television from the private television station's former chairman, according to El Pais, the Spanish newspaper, Reuter reports from Madrid. ..TX.- BCH said the bank would pay approximately Pta5.5bn (Dollars 44.3m) for the stake owned by Mr Javier Godo, a Spanish financier who holds interests in print and broadcast media. ..TX.- Banesto's industrial arm, La Corporacion Banesto, reportedly controls 25 per cent of Antena 3 while the Spanish publishing group Grupo Zeta holds 24 per cent. ..CO.- Companies: Banco Central Hispano. Antena 3 Television. ..CN.- Countries: ES Spain, EC. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. P7812 Motion Picture and Video Production. ..TP.- Types: COMP Shareholding. ..IX.- P6081, P7812. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGOCUAFSFT ..HL.- 930715FT 930715 International Company News in Brief: Sandoz (112) ..BL.- By REUTER ..DL.- ZURICH ..TX.- Sandoz, the Swiss pharmaceuticals and chemicals group, said Mac, its Italian subsidiary, has acquired Veneziani from MaxFin of Milan. MaxFin is a member of the Varasi group, Reuter reports from Zurich. ..TX.- Veneziani is a leading manufacturer of high-performance corrosion protection products for the construction industry. It was founded in 1863 and achieved sales of more than L40bn (Dollars 27m) in 1992. It employs 130 people in two plants. The terms for the sales were not disclosed. ..CO.- Companies: Mac. Veneziani. MaxFin. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P2899 Chemical Preparations, NEC. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P2899. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGOCUAFRFT ..HL.- 930715FT 930715 International Company News in Brief: German DIY group plans flotation (114) ..BL.- By REUTER ..DL.- MANNHEIM ..TX.- HORNBACH Holding, the German holding company controlling a group of home improvement stores, said it planned to float DM15m (Dollars 9.4m) worth of ordinary shares in its Hornbach-Baumarkt unit, Reuter reports from Mannheim. ..TX.- Mr Otmar Hornbach, the chief executive, said the issue price would be based on the current market price of preferred shares in the holding company. Existing shareholders can buy three new shares for every eight held. ..CO.- Companies: Hornbach Holding. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P6719 Holding Companies, NEC. P5231 Paint, Glass, and Wallpaper Stores. ..TP.- Types: FIN Share issues. ..IX.- P6719, P5231. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGOCUAFQFT ..HL.- 930715FT 930715 International Company News: Rights issue by Banesto in strong demand (362) ..BL.- By TOM BURNS ..DL.- MADRID ..TX.- BANESTO, the Spanish commercial bank, yesterday claimed strong demand for its 3-for-1 rights issue, designed to improve the institution's weak capital base by raising some Pta52.6bn (Dollars 395m). ..TX.- Mr Mario Conde, chairman, said 25 per cent of the rights had been subscribed within the first five days of trading. The issue is the first stage of a three-part plan to increase the bank's capital, and the response means JP Morgan's Dollars 1bn Corsair fund, which has committed Dollars 200m to Banesto, may reserve its investment for the second tranche. ..TX.- In the second stage, Banesto will place 22.2m shares with investors, including the US institutions grouped in the Corsair fund and Mr Conde. Banesto shares are trading at slightly over Pta2,000 each. The new shares in the rights issue are priced at Pta1,500 and the shares in the placement at Pta1,900. ..TX.- Mr Conde said fee commissions had realised Pta10.5bn in the second quarter of 1993, up 11.5 per cent on the first quarter and 21 per cent on the last quarter of 1992. ..TX.- Average monthly borrowing on the interbank market had been reduced from Pta587.9bn in May to Pta236.6bn last month, Mr Conde said. Bad debts totalled Pta213.7bn in the second quarter, against Pta219.5bn in the first quarter, and provisions now cover 56 per cent of bad debts against 46.5 per cent at end-1992. ..TX.- He said Pta18.3bn had been set aside for bad debts in the second quarter following a Pta10.7bn allocation in the first three months. Total provisions in the first six months of this year are already up on last year's total of Pta24.7bn. ..TX.- The third tranche of the capital raising effort will be a Dollars 400m convertible bond with a coupon of between 6 per cent and 7 per cent. A final decision on the timing will be taken after subscription of the rights issue and the share placement ends in the first week of August. ..CO.- Companies: Banco Espanol de Credito. ..CN.- Countries: ES Spain, EC. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: FIN Share issues. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGOCUAFPFT ..HL.- 930715FT 930715 International Company News: Efim defence transfer agreed (398) ..BL.- By ROBERT GRAHAM ..DL.- ROME ..TX.- THE reorganisation of the companies in Italy's troubled defence sector was brought a step closer yesterday. ..TX.- The government has allowed the defence companies in the portfolio of Efim, the state industrial holding placed in liquidation a year ago, to be taken over without payment by Finmeccanica, the main industrial and high-technology arm of IRI, the state holding company. ..TX.- Efim possesses seven main defence groups employing 11,400 people with turnover of L2,269bn (Dollars 1.4bn). ..TX.- The principal problem has been to find a formula which guaranteed the survival of these companies, at least those with recognised leadership in technology, and keep sufficient control within Italian hands. Since January, Finmeccanica has been managing the Efim defence interests on a temporary six-month contract. ..TX.- Finmeccanica stated that it was only willing to take over the Efim defence companies if their balance sheets were thoroughly examined and the government agreed to outline a clear programme of defence needs and procurement plans. ..TX.- Only on this basis, Finmeccanica argued, could the companies be absorbed and rationalised, fitting into its own defence interests grouped around Alenia, the aerospace group. ..TX.- Otherwise, Finmeccanica said it could only undertake to run the companies as an operator without financial responsibility - at least so long as they were loss-making. ..TX.- The government failed to come up with a defence procurement programme by June 30, and a decision was delayed for a further 15 days. ..TX.- Yesterday's move appeared a hurried attempt to put in place the outlines for what will be a more timely process of guaranteeing work in the defence procurement programme. ..TX.- In a separate development, representatives of foreign banks, owed L4,400bn as a result of Efim being put into liquidation and payments being frozen, yesterday met Treasury officials in Rome. ..TX.- They are understood to have pressed the Treasury to urge Brussels to lift its veto, imposed more than three months ago, on about L7,000bn of funds earmarked by the Italian government for Efim creditors and suppliers. ..TX.- Of the L9,000bn so far agreed by the government to fund the liquidation and cover outstanding Efim debts, only L2,000bn has been given the green light by Brussels. ..CO.- Companies: Efim. Finmeccanica Societe Finanziaria per Azioni. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P6719 Holding Companies, NEC. P3724 Aircraft Engines and Engine Parts. ..TP.- Types: COMP Company News. ..IX.- P6719, P3724. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGOCUAFOFT ..HL.- 930715FT 930715 International Company News: Bavaria plans large share sell-off (722) ..BL.- By CHRISTOPHER PARKES and QUENTIN PEEL ..DL.- FRANKFURT, MUNICH ..TX.- THE Bavarian government hopes to raise between DM2bn and DM3bn (Dollars 1.25bn-Dollars 1.9bn) through the privatisation of its shareholdings in several German companies, Mr Edmund Stoiber, the state premier, said yesterday. ..TX.- Its biggest stake is a 58 per cent holding in Bayernwerk, the largest southern German energy utility, which would be merged with Viag, the Bonn-based industrial conglomerate. ..TX.- Negotiations with Viag are under way, and Mr Stoiber said he confidently expected the new company to move its headquarters to Munich as part of the deal. ..TX.- 'I believe they are ready to move and create a big new undertaking with its headquarters in Munich,' he said. ..TX.- At the same time, the Bavarian government is planning an early sale of its 8 per cent stake in Deutsche Aerospace (Dasa), the Daimler-Benz aerospace subsidiary, for an estimated DM400m. ..TX.- The proposed sell-offs mark the first significant move among the German Lander to break supportive links forged during the post-war economic recovery with vital infrastructural and new, job-creating industries. ..TX.- The federal government is committed to cashing in most of its remaining holdings, including a 51 per cent stake in the Lufthansa airline, which is being restructured and restored to profit. ..TX.- Recent interest in privatisation has been spurred primarily by the urgent need, stressed by the Bundesbank, for the reduction of federal and state deficits. ..TX.- Central bank officials have lately suggested that the budget consolidation process could be helped by sell-offs. ..TX.- Activity has been encouraged by statements from national leaders of the Social Democratic party (SPD) that there are no longer any ideological objections to the sale of public assets. However, acceptance at Land level, where the SPD controls most of the regional governments in western Germany, has yet to be tested. ..TX.- There is a growing acceptance among public sector shareholders that the attractions of Germany to foreign shareholders could be enhanced if all traces of political involvement in private sector business were removed. Many of Germany's leading companies have regional politicians on their supervisory boards by virtue of extensive state holdings. ..TX.- The Lower Saxony government, for example, owns 20 per cent of Volkswagen, Europe's biggest volume car maker. North Rhine Westphalia controls the Westdeutsche Landesbank, which in turn has significant stakes in local and international businesses. ..TX.- Bavaria's decision to offload the holding in Dasa is likely to enhance the attractions of Daimler-Benz shares when they are listed on the New York Stock Exchange later this year. ..TX.- The state's withdrawal from Bayernwerk in a phased process (its 58 per cent holding will be reduced to 50.1 per cent in the first stage) would suit the ambitions of Viag to consolidate its position and expand further in the highly profitable power business. ..TX.- Viag owns 39 per cent of the utility, which, in turn, has a 24.9 per cent stake in the conglomerate. ..TX.- Viag is known to have been pressing for a restructuring. The conditions for absorbing Bayernwerk into a privately-controlled concern were better than before, Mr Alfred Pfeiffer, Viag chairman, told shareholders yesterday. ..TX.- Mr Georg von Waldenfels, the Bavarian finance minister, said the government might retain a stake of up to 40 per cent in the new business, a complete withdrawal was being considered in the medium term. ..TX.- Mr Stoiber, who took over as Bavarian premier only last month, said that the privatisation process was not intended to finance the Bavarian state budget, but rather to provide long-term investment funds to attract and promote more high-technology investment in the state. ..TX.- Apart from Bayernwerk and Dasa, Bavaria has a stake in Rhein-Main-Donau, the company operating the canal linking Germany's two main rivers with the Danube, and in Bayerische Wasserkraftwerke, a hydroelectric generating business. ..TX.- Mr von Waldenfels said the government aimed for a quick sale of both holdings. However, there were no plans to withdraw from the Bayerische Vereinsbank, one of the top five banks in the country, and traditional links with the Hofbrauhaus brewery would remain, Mr von Waldenfels said. ..CO.- Companies: Bayernwerk. Viag. Deutsche Aerospace. Lufthansa. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P4911 Electric Services. P6719 Holding Companies, NEC. P3724 Aircraft Engines and Engine Parts. P4512 Air Transportation, Scheduled. P9611 Administration of General Economic Programs. ..TP.- Types: CMMT Comment & Analysis. COMP Shareholding. ..IX.- P4911, P6719, P3724, P4512, P9611. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGOCUAFNFT ..HL.- 930715FT 930715 UK Company News: Telemetrix arm buys in east Germany (89) ..TX.- Zetex, the wholly owned specialist semiconductor subsidiary of Telemetrix, has acquired certain plant and equipment located at Neuhaus, Thuringia in Germany, for the assembly of discrete surface mount semiconductors. ..TX.- A consideration of a nominal DM1 is payable to the Treuhandanstalt. Telemetrix said the open market value of the plant and equipment acquired was about Pounds 1m. ..CO.- Companies: Zetex. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P3674 Semiconductors and Related Devices. ..TP.- Types: RES Facilities. ..IX.- P3674. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGOCUAFMFT ..HL.- 930715FT 930715 UK Company News: Graystone redeems Pounds 3.25m of loan note (115) ..TX.- Graystone, the engineering components company, has completed negotiations for the redemption of half of the Pounds 6.5m loan note issued to Prospect Industries in payment for its acquisition in November. ..TX.- Graystone has redeemed Pounds 3.25m nominal of the loan note for Pounds 2.08m. In addition it has agreed revised terms with Prospect in the event of a redemption of the balance. ..TX.- Graystone also said it intended to apply to the High Court to reorganise and reduce its share capital. ..CO.- Companies: Graystone. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3569 General Industrial Machinery, NEC. ..TP.- Types: COMP Company News. ..IX.- P3569. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGOCUAFLFT ..HL.- 930715FT 930715 UK Company News: Pict sells stake in Edinburgh Oil (84) ..TX.- Pict Petroleum, the oil and gas exploration and production group, has sold its stake in USM-quoted Edinburgh Oil & Gas. ..TX.- The 2.65m shares, representing some 15.2 per cent of Edinburgh's equity, have been acquired by Liverpool Limited Partnership. ..CO.- Companies: Pict Petroleum. Edinburgh Oil and Gas. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. P2911 Petroleum Refining. ..TP.- Types: COMP Disposals. COMP Shareholding. ..IX.- P1311, P2911. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGOCUAFKFT ..HL.- 930715FT 930715 UK Company News: Bogod declines 10% to Pounds 232,000 (94) ..TX.- Bogod Group, which sells sewing machines, parts and accessories, saw pre-tax profits dip 10 per cent, from Pounds 259,000 to Pounds 232,000, over the 12 months to March 31. Turnover showed little change at Pounds 5.72m. ..TX.- A recommended final dividend of 0.5p maintains the total of the A shares at 0.7p, payable from earnings of 2.58p (2.99p) per share. ..CO.- Companies: Bogod Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5722 Household Appliance Stores. ..TP.- Types: FIN Annual report. ..IX.- P5722. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGOCUAFJFT ..HL.- 930715FT 930715 UK Company News: North Housing Ass to build 1,750 homes (128) ..TX.- North Housing Association achieved a surplus of Pounds 13.7m from turnover of Pounds 41.5m in the year to end-March, despite the continuing decline in 'right to buy' sales, which contributed Pounds 900,000 less than last year. ..TX.- The outcome compared with a surplus of Pounds 12.2m from turnover of Pounds 37.3m last year. ..TX.- Directors said the total surplus would be reinvested for the benefit of people in housing need. The association intends to start building 1,750 new homes in the current year, for which the expected total expenditure is Pounds 76m. ..CO.- Companies: North Housing Association. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9532 Urban and Community Development. ..TP.- Types: FIN Annual report. ..IX.- P9532. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGOCUAFIFT ..HL.- 930715FT 930715 UK Company News: Strong asset rise at M&G Dual Trust (104) ..TX.- Net asset value at the M&G Dual Trust was Pounds 26.68 per capital share at June 30, up from Pounds 21.73 a year earlier. ..TX.- The trust's capital is fully invested in the M&G General Trust Fund, distribution from which dipped to Pounds 2.2m (Pounds 2.34m) over the six month period. ..TX.- The interim dividend is held at 30.55p and directors forecast a maintained final of 38.55p. ..CO.- Companies: M and G Dual Trust. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6726 Investment Offices, NEC. ..TP.- Types: FIN Interim results. ..IX.- P6726. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGOCUAFHFT ..HL.- 930715FT 930715 UK Company News: Johnson Matthey sees improvement (150) ..TX.- There were 'signs of improvement' is some of the most important markets served by Johnson Matthey, the world's biggest platinum group metals marketing group, reported Mr David Davies, chairman, at the annual meeting. ..TX.- In particular, recovery in the US had benefited North American sales by the catalytic systems and materials technology divisions. ..TX.- The recent improvement in platinum, palladium and gold prices had largely offset a further fall in the price of rhodium, Mr Davies pointed out. ..TX.- He reported that more than 90 per cent of shareholders had accepted an enhanced scrip alternative to the final dividend which would save the group Pounds 3.8m of advance corporation tax and also benefit shareholders. ..CO.- Companies: Johnson Matthey. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2865 Cyclic Crudes and Intermediates. P3341 Secondary Nonferrous Metals. ..TP.- Types: FIN Annual report. ..IX.- P2865, P3341. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGOCUAFGFT ..HL.- 930715FT 930715 UK Company News: Nobo shows 49% growth to Pounds 1.65m (165) ..TX.- NOBO Group, a manufacturer of office and business products, returned profits of Pounds 1.65m pre-tax for the year to end-April, an improvement of 49 per cent over last time's Pounds 1.11m. ..TX.- The figure was helped by a Pounds 187,000 reduction in interest charges to Pounds 476,000. ..TX.- Turnover was static at Pounds 21.1m - Nobo disposed of its office furniture business in October last year. Turnover of the core business of visual aids and desk top accessories increased by 6 per cent. ..TX.- A proposed final dividend of 3.3p makes a 4.8p (3.5p) total. Earnings improved from 6.34p to 10.41p per share. ..TX.- Year-end gearing was cut to 32 per cent (60 per cent) helped by cash flow from the disposal and the placing of 526,660 new shares in March. ..CO.- Companies: Nobo Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2531 Public Building and Related Furniture. ..TP.- Types: FIN Annual report. ..IX.- P2531. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGOCUAFFFT ..HL.- 930715FT 930715 UK Company News: Tapping institutional investors - Has the nursing home sector saturated the market? (798) ..BL.- By MAGGIE URRY ..TX.- THE POOR performance of Court Cavendish's shares in their first two days of trading as a quoted company has raised questions for investors who have chosen the nursing home sub-sector as a growth area. ..TX.- Court Cavendish was floated at 225p a share, valuing the company at Pounds 51m. Its issue involved raising Pounds 40m through the sale of 17.7m new shares, as well as existing shareholders selling 2.56m shares. ..TX.- Although the public offer was 2.2 times subscribed and allocations were scaled down, the shares had fallen to 198p by last night's close, 27p below the issue price. ..TX.- Last week another nursing home group, CrestaCare, raised Pounds 33.3m through a placing, doubling its market value. There is also persistent speculation that Takare, the market leader, will return to the market for new equity in September - speculation described by Mr Hamilton Anstead, deputy managing director, as idle and irresponsible. ..TX.- So has the healthy appetite for nursing home shares suddenly faded? CrestaCare's advisers say they found no difficulty in finding buyers for the company's new shares, even after a placing of over 20 per cent of the group's equity as recently as March. ..TX.- One excuse put forward for Court Cavendish's dismal initial showing was that the CrestaCare placing - which came between the closing of Court Cavendish's offer and its first dealings - sated institutional investors desire for stock. ..TX.- When stags tried to sell their shares they found no institutional demand, and the weight of selling pushed Court Cavendish's price down. ..TX.- But one institutional investor gave another reason. He believes that Court Cavendish, placed fifth in the market behind the likes of Takare and Westminster Health Care, was overpriced given its record - or even that it should not have floated at all. ..TX.- He points to its record of losses since formation four years ago and a refinancing two years ago. In effect, he says, the flotation was another refinancing exercise. Court Cavendish is using the money to repay debt of Pounds 24.6m and to fund further expansion. ..TX.- Others say that Court Cavendish's policy of buying nursing homes, many converted from old, large houses with extra accommodation added, compared badly with the policy of the market leaders of building their own homes to particular specifications. ..TX.- Another consideration is that the industry has been affected by the changes to the government's funding of nursing home care on April 1, which has slightly depressed occupancy rates and put some pressure on pricing. ..TX.- However, most accept that this is a short term effect, and in the longer term the reforms should increase private sector provision of nursing homes. ..TX.- The wider question, though, is how long this young but fast-growing industry will need to suck in new equity capital to expand. ..TX.- Once established with a high occupancy rate, nursing homes are highly cash generative. But even so the rapid expansion rates of many companies, which can see demand for beds fast outstripping supply, means relatively young companies cannot finance their expansion internally. ..TX.- Takare, which joined the Official List in 1989, has raised Pounds 67.2m through three equity issues, and another Pounds 50m through a 20-year debenture secured on some of its homes. ..TX.- At the time of its last placing in September 1991, which raised Pounds 35.4m, Takare promised not to issue more equity for two years, hence the speculation that it will come to the market this autumn. ..TX.- But Mr Anstead says Takare has sufficient bank facilities never to come to the equity market again, although conceding this would take its gearing to 100 per cent at some future date before rising cash flow brought debt down once more. He says the company is not ruling out an equity issue but will not make one if there is not the appetite for it. ..TX.- Mr Kent Phippen, finance director of Westminster Health Care, which floated in April with an issue raising Pounds 63m, says that there are early signs of a leasing market for nursing homes developing in the UK. Such a market operates well in the US, but may take a couple of years before opening here. ..TX.- He believes that with many homes operated under long-term contract to health authorities, the guaranteed revenue stream should entice institutions more used to investing in office blocks. ..TX.- All in all, there is still confidence that Court Cavendish's experience of apparently poor institutional demand for its shares should not put a damper on the industry as a whole. ..CO.- Companies: Court Cavendish Group. CrestaCare. Takare. Westminster Health Care. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8059 Nursing and Personal Care, NEC. P8361 Residential Care. ..TP.- Types: FIN Share issues. CMMT Comment & Analysis. ..IX.- P8059, P8361. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGOCUAFEFT ..HL.- 930715FT 930715 UK Company News: Stanley Leisure at Pounds 8m despite Aintree debacle (363) ..BL.- By CATHERINE MILTON ..TX.- AINTREE'S Grand Debacle failed to prevent Stanley Leisure Organisation, the betting shop, casino and snooker club group, lifting pre-tax profits from Pounds 7.82m to Pounds 8.05m in the year to May 2. ..TX.- Stanley would normally net up to Pounds 300,000 from the Grand National. But offsetting the loss of the Aintree profit, it benefited from evening racing during the period. It would press, however, for a more 'betting shop-friendly' racing schedule. ..TX.- Stanley did not adopt FRS 3. Mr Paul Olive, financial director, said the standard would not have altered the year's results. The previous period covered 53 weeks. ..TX.- Mr Leonard Steinberg, chairman, said 'turnover has gone up and we feel that the company and the industry generally has come out of recession.' Turnover improved from Pounds 203.3m to Pounds 218.4m. ..TX.- The company increased the number of its betting shops to 326 (314) at the year-end. The total currently stands at 355. The division contributed Pounds 189.6m (Pounds 174.3m) to turnover. The average stake per slip increased to Pounds 3.45 (Pounds 3.38); however pre-tax profits fell to Pounds 5.76m (Pounds 6.22m). ..TX.- The acquisition in February of the Surrey Group of betting shops in Scotland for Pounds 2.99m contributed 2 per cent of total turnover and Pounds 50,000 to pre-tax profits. ..TX.- The casino division, which accounts for about half of group turnover, now has 18 (17) outlets and contributed Pounds 6.73m (Pounds 5.94m) to pre-tax profits on increased sales, thanks mainly to cost control. ..TX.- The snooker division made a small profit masked by its inclusion with central costs. ..TX.- Gearing rose to 36.8 per cent (35.3 per cent) on net debt of Pounds 34.2m (Pounds 29.5m). Net asset value per share rose to 210p, up 10 per cent on last year, in part as a result of a Pounds 5.34m surplus on property revaluation. ..TX.- A proposed final dividend of 2.8p makes a 4.32p (4.16p adjusted) total. Earnings per share rose to 12.78p (12.32p restated). ..CO.- Companies: Stanley Leisure Organisation. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7999 Amusement and Recreation, NEC. ..TP.- Types: FIN Annual report. ..IX.- P7999. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGOCUAFDFT ..HL.- 930715FT 930715 UK Company News: Venture offshoot helps BWD to Pounds 1.81m (264) ..BL.- By IAN HAMILTON FAZEY, Northern Correspondent ..TX.- BWD SECURITIES, the USM-quoted stockbroking and financial services group, reported a 48 per cent rise in pre-tax profits to Pounds 1.81m for the six months to May 31. ..TX.- The outcome also represented an increase of nearly 4 per cent on profits of Pounds 1.74m recorded in the last full year. ..TX.- Turnover rose 34 per cent to Pounds 7.43m (Pounds 5.53m), partly reflecting steady increases in new clients nationwide for BWD Rensburg, its stockbroking arm, and expansion of Northern Registrars, the wholly owned share registry subsidiary. ..TX.- Profits were helped by 'significant uplift' at Capital for Companies, the Leeds-based venture offshoot, which raised Pounds 39m for assured tenancy schemes under the Business Expansion Scheme. Although the government is shutting down the BES in December, the schemes will yield annual fee income for five years. ..TX.- The interim dividend is 1.5p (1.3p), payable from earnings per share of 6.6p (4.5p). ..TX.- The group is placing 841,885 new shares at 95 1/2 p each via James Capel, its broker, to fund the purchase of a 10,000 sq ft modern office block near its headquarters for Northern Registrars. The subsidiary now acts as registrar for about 70 companies and continuing expansion has seen it outgrow its existing offices. ..TX.- The new shares will rank pari passu with the 18.03m existing shares but will not qualify for the interim dividend. ..CO.- Companies: BWD Securities. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6211 Security Brokers and Dealers. ..TP.- Types: FIN Interim results. ..IX.- P6211. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGOCUAFCFT ..HL.- 930715FT 930715 UK Company News: Widney to buy SPC for Pounds 4m (274) ..BL.- By JOHN MURRELL ..TX.- WIDNEY, a maker of windows and water treatment, power transmission and electronic equipment, has entered into a conditional agreement to acquire SPC International for a maximum Pounds 4m. ..TX.- The company's shares were suspended at 7p last month pending the announcement of an acquisition. Dealings were restored yesterday and the shares closed at 8p. ..TX.- The principal activity of SPC, which was formed in 1989, is the purchase, refurbishment and resale of electronic point of sale systems, cash dispensing equipment and financial terminals for use in banks and shops worldwide. ..TX.- The initial consideration of Pounds 3.2m will be satisfied via the allotment of 42.67m new shares, of which 23.47m are being placed on behalf of the vendors at 7 1/2 p to raise some Pounds 1.76m. ..TX.- Deferred consideration of up to Pounds 800,000 is dependent on profits. Widney intends to raise a further Pounds 2.73m by the issue of an additional 36.41m new shares at 7 1/2 p to improve working capital and to cover the costs of the purchase. ..TX.- Accordingly, a total of 79.08m new shares will be issued of which 19.2m, representing 14 per cent of the enlarged capital, will be retained by the vendors. ..TX.- The vendors of SPC have undertaken that profits before tax for the year ended June will be not less than Pounds 600,000 (Pounds 487,000) and that net assets at completion will be not less than Pounds 1.25m. ..CO.- Companies: Widney. SPC International. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3589 Service Industry Machinery, NEC. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P3589. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGOCUAFBFT ..HL.- 930715FT 930715 UK Company News: Leslie Wise slips to Pounds 1.23m at six months (144) ..TX.- Interim pre-tax profits of Leslie Wise, the textile company which supplies retail groups such as Burton and Etam, slipped from Pounds 1.51m to Pounds 1.23m. ..TX.- Turnover for the six months to May 31 was virtually static at Pounds 22.6m (Pounds 22.8m). Margins were under pressure in the core garment business due to lower volumes and rising raw material costs. ..TX.- Directors pointed out that trading throughout the group had improved towards the end of the opening six months and that this trend had been maintained so far in the second half. ..TX.- Earnings emerged at 2.38p (2.96p) and the interim dividend is unchanged at 1.75p. ..CO.- Companies: Leslie Wise Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2339 Women's and Misses' Outerwear, NEC. ..TP.- Types: FIN Interim results. ..IX.- P2339. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAFAFT ..HL.- 930715FT 930715 UK Company News: Explaura seeks Pounds 2.44m via rights issue (148) ..TX.- Explaura Holdings, the USM-quoted company which quarries limestone aggregates in Newfoundland, Canada, launched a rights issue late yesterday to raise Pounds 2.44m. ..TX.- Having fallen 1/4 p, the shares were suspended at 3 1/2 p pending the rights announcement. ..TX.- The group is issuing some 83.9m new ordinary shares at 3p apiece. The issue is being made by way of an open offer: qualifying shareholders may apply for any number of new ordinary, but are guaranteed a minimum of 2 for every 3 held, and 2,912 new ordinary for every 3 special held. Irrevocable undertakings for shares to the minimum subscription of Pounds 1.6m have been received. ..CO.- Companies: Explaura Holdings. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1429 Crushed and Broken Stone, NEC. P1499 Miscellaneous Nonmetallic Minerals. ..TP.- Types: FIN Share issues. ..IX.- P1429, P1499. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAE9FT ..HL.- 930715FT 930715 UK Company News: Growing thirst for cider lifts Bulmer to Pounds 19.6m (558) ..BL.- By PAUL TAYLOR ..TX.- THE CONTINUED growth of cider market in the UK, Australia and Belgium helped HP Bulmer to a 15 per cent increase to Pounds 19.6m in pre-tax profits for the 53 weeks to April 30. ..TX.- The increase from Pounds 17.1m was achieved on sales ahead 13 per cent to Pounds 251.8m (Pounds 221.9m), including Pounds 6.84m from Cidrerie Stassen, the Belgian branded cider maker acquired in September. Sales were underpinned in the UK by volume gains achieved by Bulmer's leading brands, Strongbow, Woodpecker and Scrumpy Jack. ..TX.- Earnings per share improved 15 per cent to 22.89p (19.96p); a proposed final dividend of 6.4p (5.55p) makes a total for the year of 10.15p (9p). The shares gained 13p to close at 419p. ..TX.- Mr John Rudgard, chief executive, said the UK cider market had 'continued to grow in all sectors,' including the private label business for supermarket chains which expanded by 28 per cent last year. ..TX.- In the UK Strongbow continued to dominate the mainstream cider market, capturing 28.3 per cent of the on-trade business and adding 5,400 new taps. Strongbow draught volumes grew by 17 per cent last year while in the premium sector Scrumpy Jack volumes jumped 54 per cent. ..TX.- The Australian operations achieved 10.8 per cent volume growth and a 34 per cent increase in operating profits to Pounds 2.37m on sales of Pounds 14.4m. In Belgium, Stassen achieved a 30 per cent volume growth in the 8 months to the end of April and contributed Pounds 771,000 to total group operating profits of Pounds 24.1m (Pounds 20.5m). ..TX.- In soft drinks, both Kiri and Orangina achieved volume gains while Volvic, the second largest mineral water brand after Evian, managed to increase volumes by 25 per cent to 34.6m litres. However, the beer portfolio had 'a difficult year' because of depressed demand with sales of Red Stripe down slightly. ..TX.- The pectin operations also suffered from reduced demand and fierce price competition and operating profits fell by 61 per cent to Pounds 972,000 (Pounds 2.5m) on turnover of Pounds 12.5m (Pounds 14.5m). Mr Rudgard said a strategic review of the business was nearing completion. ..TX.- COMMENT ..TX.- Bulmer's great strength is the depth of its brand portfolio across all the market segments built through hefty marketing and solid investment expenditure. The loss next year of the Perrier and Buxton distribution contract - representing 14 per cent of secondary distribution tonnes - should be covered within a year by volume growth in the rest of the product portfolio. UK operating margins, although increasing, are still held back by the lower margin beer and soft drinks operations, but would benefit from the disposal or closure of the pectin business. This year pre-tax profits should reach Pounds 21m, equivalent to earnings of 24.7p and producing a prospective p/e of just under 17. Investors have a choice in how to play the rapidly growing cider market: for certainty, they can chose Bulmer's established depth of brands and management; for a bit of excitement, they can pick up and coming Taunton Cider's ability to capture share with new brands. ..CO.- Companies: HP Bulmer Holdings. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2082 Malt Beverages. P5813 Drinking Places. ..TP.- Types: FIN Annual report. CMMT Comment & Analysis. ..IX.- P2082, P5813. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAE8FT ..HL.- 930715FT 930715 UK Company News: Aberforth Split Level assets up 22% (100) ..TX.- Aberforth Split Level Trust, which invests in small UK quoted companies, had a net asset value of 239.7p per capital share at June 30, up almost 22 per cent over the year. ..TX.- Available revenue amounted to Pounds 1.27m (Pounds 1.43m) for earnings of 8.43p (9.56p) per income share. ..TX.- A lower final dividend of 2.4p reduces the total for the year to 8.4p (9p). ..CO.- Companies: Aberforth Split Level Trust. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6726 Investment Offices, NEC. ..TP.- Types: FIN Annual report. ..IX.- P6726. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAE7FT ..HL.- 930715FT 930715 UK Company News: First half sales rise 18% at Irish Life (105) ..TX.- For the first six months of 1993 sales at Irish Life rose 18 per cent to IPounds 165.4m (Pounds 154.9m). ..TX.- Single premium sales in Ireland were down slightly at IPounds 60.7m while recurring premium sales fell by 8 per cent to IPounds 26m. In the UK, single premium sales were ahead by 22 per cent to IPounds 13.7m but recurring premium sales were down 12 per cent to IPounds 7.3m. ..CO.- Companies: Irish Life. ..CN.- Countries: IE Ireland, EC. ..IN.- Industry: P6311 Life Insurance. ..TP.- Types: FIN Interim results. ..IX.- P6311. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAE6FT ..HL.- 930715FT 930715 UK Company News: Batleys declines 22% to Pounds 6.53m (102) ..TX.- Pre-tax profits of Batleys, the private Huddersfield-based chain of cash and carry wholesalers, fell 22 per cent from Pounds 8.33m to Pounds 6.53m in the year to May 1. ..TX.- The outcome was struck on turnover of Pounds 477.9m, against Pounds 454.9m for the previous 53 weeks. Interest charges were Pounds 178,000 lower at Pounds 523,000 and earnings per share were 28.06p (35.54p). ..CO.- Companies: Batleys. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5411 Grocery Stores. P5149 Groceries and Related Products, NEC. ..TP.- Types: FIN Annual report. ..IX.- P5411, P5149. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAE5FT ..HL.- 930715FT 930715 UK Company News: Heron restructuring moves ahead (67) ..TX.- Heron International, Mr Gerald Ronson's property and trading group, announced yesterday that the Netherlands debt restructuring scheme of arrangement for Heron International Finance had been ratified by the District Court in The Hague. ..CO.- Companies: Heron International. ..CN.- Countries: NL Netherlands, EC. ..IN.- Industry: P6552 Subdividers and Developers, Ex Cemeteries. ..TP.- Types: COMP Company News. ..IX.- P6552. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAE4FT ..HL.- 930715FT 930715 UK Company News: Judgment against Crest Nicholson (145) ..TX.- Crest Nicholson, the Surrey-based housebuilder, yesterday received an adverse judgment in the High Court arising from its decision to rescind a contract to purchase development land at Ford's Farm, Calcot, near Reading, in 1988. ..TX.- The court held that Crest had wrongfully refused to complete the purchase of the land and awarded damages and interest amounting to Pounds 1.7m against Crest, which was also ordered to pay three quarters of the plaintiff's costs. ..TX.- Crest said the loss arising from the judgment, which is expected to amount to about Pounds 2m, would be charged as an exceptional item in the accounts for the year to October 31. ..TX.- Crest shares closed 3p lower at 59p. ..CO.- Companies: Crest Nicholson. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1521 Single-Family Housing Construction. ..TP.- Types: COMP Company News. ..IX.- P1521. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAE3FT ..HL.- 930715FT 930715 UK Company News: Adam & Harvey falls to Pounds 4.86m (98) ..TX.- Adam & Harvey, the international distribution and steel stockholding concern, suffered a fall in pre-tax profits from Pounds 6.4m to Pounds 4.86m for the year ended March 31, from turnover behind at Pounds 40.4m against Pounds 42.7m. ..TX.- Earnings per share were 54.2p (69.9p) while the dividend is stepped up to 12p (11p) with an increased final of 7p. ..CO.- Companies: Adam and Harvey Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5051 Metals Service Centers and Offices. ..TP.- Types: FIN Annual report. ..IX.- P5051. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAE2FT ..HL.- 930715FT 930715 UK Company News: Games side boost for Prism (187) ..TX.- A STRONG performance from its computer games division helped Prism Leisure report record profits for the 12 months to March 28. ..TX.- Shares of the USM-quoted group rose 10p to 150p after the announcement of pre-tax profits of Pounds 1.33m, up 37 per cent on the comparable Pounds 975,000. Turnover improved to Pounds 15.5m (Pounds 13.5m). ..TX.- Mr Geoff Young, chairman, said the computer games side had exceeded expectations: 'The customer profile has continued to improve and now covers many major retailers,' he said. ..TX.- The audio and video operation maintained profits in difficult trading, but the German subsidiary, which began trading last July, produced an 'encouraging' profit, Mr Young said. ..TX.- Cash balances at the year-end amounted to Pounds 1.5m. ..TX.- A proposed final dividend of 2.37p brings the total to 3.27p - a 20 per cent rise - covered over three times by earnings of 10.4p (8.4p) per share. ..CO.- Companies: Prism Leisure Corp. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3571 Electronic Computers. P3944 Games, Toys, and Children's Vehicles. ..TP.- Types: FIN Annual report. ..IX.- P3571, P3944. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAE0FT ..HL.- 930715FT 930715 UK Company News: Headlam seeks Pounds 5m to fund purchase of Claremont Fabrics (240) ..BL.- By PETER FRANKLIN ..TX.- HEADLAM Group, the floorcoverings and fabrics distribution group, is buying Claremont Fabrics, a textile converter and fabrics wholesaler. ..TX.- Consideration is Pounds 5.3m in shares, of which 208,661 are being retained by one of the vendors and 3.96m are being offered to Headlam shareholders under a 2-for-13 rights issue at 127p to raise Pounds 5.04m for the vendors. ..TX.- A further 692,847 shares will be offered to Headlam shareholders on the same terms to raise an additional Pounds 500,000 to provide working capital for the enlarged group and funds to meet the acquisition costs. ..TX.- The purchase is conditional on shareholders' approval and the rights issue is conditional on completion of the purchase; application has been made to the Stock Exchange for the proposed new shares to be admitted to the Official List. ..TX.- Dealings in the new shares are expected to commence on August 2. The rights is underwritten by Robert Fleming and the broker to the issue is Albert E Sharp. ..TX.- Claremont Fabrics made pre-tax profits of Pounds 816,000 on turnover of Pounds 10.7m in the year to April 30, at which date it had net assets of about Pounds 1.13m. ..CO.- Companies: Headlam Group. Claremont Fabrics. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5713 Floor Covering Stores. P5714 Drapery and Upholstery Stores. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P5713, P5714. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAEZFT ..HL.- 930715FT 930715 UK Company News: Storehouse chief lashes out - Shareholders quiz chairman over departure of chief executive (459) ..BL.- By NEIL BUCKLEY ..TX.- MR IAN Hay Davison, chairman of Storehouse, the retail group comprising BHS and Mothercare, strongly criticised the decision by Mr David Dworkin, former chief executive, to resign only six months after taking up the position. ..TX.- Mr Hay Davison's attack on his former colleague, made in response to repeated questions from shareholders at the company's annual meeting about Mr Dworkin's resignation and pay, was unusually outspoken for a company chairman. ..TX.- He said his reaction to Mr Dworkin's departure from the group only weeks after receiving a performance-related bonus of Pounds 2.71m was one of 'fury'. He added that he felt Mr Dworkin had let the company down. ..TX.- 'Maybe because he's an American and comes from a different cultural context he did not understand that in this country you just don't leave a position of chief executive of a company so soon after taking it up,' he said. ..TX.- Mr Dworkin was promoted from chief executive of BHS to chief executive of the Storehouse group in July 1992, but resigned in February to head US stores group Carter Hawley Hale. His basic pay rose last year from Pounds 344,000 to Pounds 575,000 but a long-term performance bonus of Pounds 2.71m - negotiated when he first arrived at BHS in 1991 - took his total remuneration for the year to Pounds 3.29m. ..TX.- Mr Hay Davison is thought to be more angry about Mr Dworkin's decision to leave after only six months in the chief executive's job than about the bonus payment. He reminded shareholders yesterday that Mr Dworkin had achieved dramatic results at Storehouse and that the group's market capitalisation had increased by Pounds 400m since the beginning of 1992. ..TX.- No money was paid to Mr Dworkin in compensation for loss of office. But Mr Hay Davison told shareholders that, as a result of its recent experience, Storehouse had reduced the length of executives' employment contracts to a maximum of two years. Mr Hay Davison told the meeting that Storehouse's sales were currently 5 per cent ahead of last year. The company avoided giving a figure when it reported its full-year results in May, saying only that sales were in line with targets. ..TX.- However, he warned that Storehouse, like other retailers, had experienced a general slow-down in trading since earlier in the year, and that its year-on-year growth in sales came from its success in increasing market share. It saw 'little if any increase in overall demand'. ..CO.- Companies: Storehouse. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5661 Shoe Stores. P5641 Children's and Infants' Wear Stores. ..TP.- Types: PEOP People. CMMT Comment & Analysis. FIN Annual report. ..IX.- P5661, P5641. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAEYFT ..HL.- 930715FT 930715 UK Company News in Brief: Proudfoot (60) ..TX.- PROUDFOOT: 10 per cent of 1992 final dividend was taken up under scrip dividend alternative and application for listing has been made in respect of 377,698 new ordinary shares. ..CO.- Companies: Proudfoot. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7389 Business Services, NEC. ..TP.- Types: FIN Share issues. ..IX.- P7389. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAEXFT ..HL.- 930715FT 930715 UK Company News in Brief: ACT Group / BIS Group (72) ..TX.- NO PROBES: The proposed acquisition by ACT Group of the BIS Group from Nynex Corporation is not being referred to the Monopolies Commission. ..CO.- Companies: ACT Group. BIS Group. Nynex Corp. ..CN.- Countries: GB United Kingdom, EC. US United States of America. ..IN.- Industry: P3571 Electronic Computers. P7372 Prepackaged Software. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P3571, P7372. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAEWFT ..HL.- 930715FT 930715 UK Company News in Brief: Molyneux Estates (51) ..TX.- MOLYNEUX ESTATES: Applications for recent open offer received in respect of 1.99m shares (23.89 per cent). ..CO.- Companies: Molyneux Estates. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6552 Subdividers and Developers, Ex Cemeteries. ..TP.- Types: FIN Share issues. ..IX.- P6552. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAEVFT ..HL.- 930715FT 930715 UK Company News in Brief: Mid-States (74) ..TX.- MID-STATES has acquired the business of Harts Autoparts of Chattanooga, Tennessee, for Dollars 1.8m (Pounds 1.2m) in cash, together with a deferred payment of Dollars 121,000. ..CO.- Companies: Mid-States. Harts Autoparts. ..CN.- Countries: GB United Kingdom, EC. US United States of America. ..IN.- Industry: P3714 Motor Vehicle Parts and Accessories. P5531 Auto and Home Supply Stores. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P3714, P5531. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAEUFT ..HL.- 930715FT 930715 UK Company News in Brief: Lowe (Robert H) (91) ..TX.- LOWE (ROBERT H) said negotiations were in progress for the disposal of its children's wear division, which trades under the Babygro banner, to Delta Textiles (London). Delta is the UK subsidiary of Delta Galil Industries, an Israeli textile manufacturer. ..CO.- Companies: Robert H Lowe and Co. Babygro. Delta Textiles (London). ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2341 Women's and Children's Underwear. P2329 Men's and Boys' Clothing, NEC. ..TP.- Types: COMP Mergers & acquisitions. COMP Disposals. ..IX.- P2341, P2329. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAETFT ..HL.- 930715FT 930715 UK Company News in Brief: International Business Communications (Holdings) (95) ..TX.- INTERNATIONAL BUSINESS Communications (Holdings): Applications for recent open offer received in respect of 2.27m shares, a take-up of 39.56 per cent of shares available for clawback. Elections also received in respect of Pounds 1.26m nominal of unsecured subordinated debenture stock 1996 for conversion into ordinary shares, which will result in the issue of up to 1.4m new shares. ..CO.- Companies: International Business Communications (Holdings). ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6719 Holding Companies, NEC. ..TP.- Types: FIN Share issues. ..IX.- P6719. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAESFT ..HL.- 930715FT 930715 UK Company News in Brief: Hunters Armley (48) ..TX.- HUNTERS ARMLEY has acquired Alf Smith Printers (Bradford) for a maximum Pounds 1.12m cash. ..CO.- Companies: Hunters Armley. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2759 Commercial Printing, NEC. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P2759. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAERFT ..HL.- 930715FT 930715 UK Company News in Brief: Hammerson Property (72) ..TX.- HAMMERSON PROPERTY: Recent rights issue taken up in respect of 16.4m ordinary and 59.4m A ordinary shares, representing 96.89 and 96.94 per cent of offer respectively. Balances sold in market at a premium. ..CO.- Companies: Hammerson Property Investment and Development Corp. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6552 Subdividers and Developers, Ex Cemeteries. ..TP.- Types: FIN Share issues. ..IX.- P6552. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAEQFT ..HL.- 930715FT 930715 UK Company News in Brief: Finsbury Smaller Companies Trust (72) ..TX.- FINSBURY SMALLER Companies Trust: Applications for open offers received in respect of 72,408 C ordinary and 492,226 C preference shares. Subject to placing and open offers going unconditional, all applications will be met in full. ..CO.- Companies: Finsbury Smaller Companies Trust. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6726 Investment Offices, NEC. ..TP.- Types: FIN Share issues. ..IX.- P6726. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAEPFT ..HL.- 930715FT 930715 UK Company News in Brief: Derwent Valley (93) ..TX.- DERWENT VALLEY has received acceptances to its open offer in respect of 1.72m new ordinary shares (44.35 per cent). Shareholders had previously undertaken not to accept their entitlements to 472,653 shares (12.18 per cent). These, together with the remaining 1.69m shares not taken up (43.48 per cent), are to be taken up in accordance with arrangements outlined last month. ..CO.- Companies: Derwent Valley Holdings. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6512 Nonresidential Buildings Operators. ..TP.- Types: FIN Share issues. ..IX.- P6512. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAEOFT ..HL.- 930715FT 930715 UK Company News in Brief: Cardiff Property (68) ..TX.- CARDIFF PROPERTY: At first closing date the offer for Village Residential had been accepted in respect of 3.07m shares (59.9 per cent). Offer declared unconditional in all respects and extended until July 26. ..CO.- Companies: Cardiff Property. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6552 Subdividers and Developers, Ex Cemeteries. ..TP.- Types: FIN Share issues. ..IX.- P6552. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAENFT ..HL.- 930715FT 930715 UK Company News in Brief: Bullers (98) ..TX.- BULLERS is to purchase the assets and continuing business of Michael Sutty for Pounds 70,000 cash, with a further maximum Pounds 50,000 payable as royalty sales over a two-year period. Finance has been provided from bank facilities made available by Marmara Bank of Turkey, whose chairman, Mr Atilla Uras, is a Bullers director and who through his company, Auric Holdings, owns 29.9 per cent of the Bullers equity. ..CO.- Companies: Bullers. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3269 Pottery Products, NEC. ..TP.- Types: RES Facilities. ..IX.- P3269. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAEMFT ..HL.- 930715FT 930715 UK Company News in Brief: Bromsgrove (61) ..TX.- BROMSGROVE has paid Pounds 1.35m for Banafix, a Buckinghamshire-based company engaged in the reinforcement of glazed areas in buildings through the application of protective security film. ..CO.- Companies: Bromsgrove Industries. Banafix. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1793 Glass and Glazing Work. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P1793. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAELFT ..HL.- 930715FT 930715 UK Company News: Ex-Savoy man turns down Forte job offer (247) ..BL.- By MICHAEL SKAPINKER, Leisure Industries Correspondent ..TX.- AN ATTEMPT by the Forte hotel group to recruit Mr Willi Bauer, former general manager of the Savoy, to run its luxury establishments has failed. ..TX.- Forte said yesterday that Mr Bauer, chief executive of Wentworth golf and country club group, had decided not to take the job for personal reasons. ..TX.- Mr Bauer would have run Forte's Exclusive hotel portfolio, which includes the Hyde Park and Grosvenor House in London, the George V in Paris, the Ritz in Madrid and the Bristol in Warsaw. Mr Rocco Forte, Forte chairman, has said he would like to merge the hotels with those run by the Savoy group. ..TX.- Forte acquired the majority of Savoy shares following a bitter takeover battle in the 1980s, but has a minority of voting shares. During the bid, Mr Forte strongly criticised Mr Bauer's management skills. Savoy and Forte agreed a five-year truce which ends in November next year. ..TX.- Mr Bauer said last night of the proposed Forte position: 'It was and is the most exciting job in the industry. But it would have meant an awful lot of travelling and responsibilities worldwide. A job like that takes 100 per cent commitment and I wouldn't want to travel 60 to 70 per cent of the time.' ..CO.- Companies: Forte. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7011 Hotels and Motels. ..TP.- Types: PEOP People. ..IX.- P7011. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAEKFT ..HL.- 930715FT 930715 UK Company News: Scantronic shows advance to Pounds 3.09m (347) ..BL.- By CATHERINE MILTON ..TX.- STRONG EUROPEAN markets helped Scantronic Holdings, the security components supplier and manufacturer, lift pre-tax profits from Pounds 2.54m to Pounds 3.09m in the year to March 31. ..TX.- Mr Ray Dias, finance director, said the company did not adopt FRS 3 ti wanted to report separately exceptional and extraordinary provisions relating to litigation. ..TX.- The group took a Pounds 444,000 exceptional charge for doubtful trading debt due from Alarm Parts and a Pounds 1.5m extraordinary cahrge mainly against costs relating to the damages claim against the former owner of Arrowhead, a US acquisition. ..TX.- Turnover rose to Pounds 39.1m (Pounds 36.1m). Mr Wallace Clapperton, chairman, said European markets were the main area where progress was achieved. ..TX.- 'Mainland European sales benefited from increased original equipment manufacture business which more than countered recessionary conditions.' ..TX.- European operations contributed turnover of Pounds 30.4m (Pounds 26.2m) and operating profits of Pounds 3.99m (Pounds 3.55m). ..TX.- Scantronic has now split continental and UK operations to give 'greater focus' to the overseas business, where it has a low market share. ..TX.- There was a reduced operating loss of Pounds 153,000 (Pounds 591,000) from the North American operations although turnover slipped to Pounds 8.68m (Pounds 9.86m). ..TX.- Mr Clapperton said: 'Despite our earlier expectations, the North American market showed no sign of upturn. Progress to bring operations into line with existing business levels was achieved through the strengthening of local management and the launch of new products.' ..TX.- Scantronic maintained a Pounds 2m spend on research and development, some 5 per cent of sales. Gearing was held at just under 20 per cent, and the company generated more than Pounds 5m in cash for the second year in succession, including Pounds 1m from US operations. Net interest charges fell to Pounds 311,000 (Pounds 422,000). ..TX.- The final dividend is 2.331p (2.185p) making 3.121p (2.975p) for the year, payable from earnings of 4.05p (2.18p). ..CO.- Companies: Scantronic Holdings. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3699 Electrical Equipment and Supplies, NEC. ..TP.- Types: FIN Annual report. ..IX.- P3699. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAEJFT ..HL.- 930715FT 930715 UK Company News: Pay-out in prospect for creditors of ACS (236) ..BL.- By PAUL TAYLOR ..TX.- CREDITORS of Atlantic Computer Systems, the main UK operating company in the collapsed Atlantic Computer leasing group, may receive a dividend of between 10p and 15p in the pound, according to the company's joint liquidators. ..TX.- Mr John Soden and Mr Richard Boys-Stones of Price Waterhouse were appointed joint liquidators of ACS earlier this week following on from their appointment as joint administrators in April 1990. ..TX.- When Atlantic collapsed in 1990, dragging down its parent company, British & Commonwealth Holdings, ACS had liabilities of Pounds 500m - mostly contingent liabilities arising from clauses in the company's portfolio of more than 2,500 leases. ..TX.- Since then, however, the administrators have achieved realisations after costs of over Pounds 39m compared with initial estimates of about Pounds 16m and have been successful in minimising liabilities through negotiations with lessees and funders - removing some Pounds 85m of liabilities and dealing with over 67 per cent of the leases. ..TX.- Mr Soden said that although significant uncertainty will remain about the level of dividend until all the claims have been received, 'we may be in a position to pay a first dividend by the end of this year.' ..CO.- Companies: Atlantic Computer Systems. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7379 Computer Related Services, NEC. P3571 Electronic Computers. ..TP.- Types: COMP Company News. ..IX.- P7379, P3571. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAEIFT ..HL.- 930715FT 930715 UK Company News: Markheath shares dip on news of delay in results (226) ..BL.- By PETER PEARSE ..TX.- SHARES in Markheath, the property group 61 per cent-owned by the Australian Adelaide Steamship and its associates, fell 1 1/4 p to 5 3/4 p yesterday on news that it was to delay the announcement of its annual results. ..TX.- Mr Ian Creber, finance director, said that negotiations with the group's banks were continuing, causing the delay. ..TX.- These talks have been going on since at least the January announcement of the half-time results, when losses deepened to Pounds 4.71m (Pounds 459,000). ..TX.- Mr Creber said that then the discussions were over the availability of credit facilities; now they were about their maturity dates. He said that rental income was 'not enough to cover the group's operating costs and bank interest. ..TX.- Markheath's financial restructuring, involving repair to the balance sheet, is complicated by the fact that the directors believe, having studied management accounts, that net assets have fallen below Pounds 15.26m, or less than half of the called-up share capital. ..TX.- Mr Creber insisted that this fall-off in net assets - from Pounds 55m at March 31 1992 - did not trigger the delay in the results announcement. ..CO.- Companies: Markheath. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6552 Subdividers and Developers, Ex Cemeteries. ..TP.- Types: COMP Company News. ..IX.- P6552. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGOCUAEHFT ..HL.- 930715FT 930715 Companies in this issue (230) ..TX.- ------------------------------------- UK ------------------------------------- ACT 38 ADT 26 Abbey National 38 Aberforth Split 22 Adam & Harvey 22 Atlantic Computer 22 BAT Industries 38 BT 21 BWD Securities 23 Batleys 22 Bogod 23 Bulmer (HP) 22 Cable and Wireless 38 Crest Nicholson 22 Edinburgh Oil & Gas 23 Explaura Holdings 22 Forte 22 Graystone 23 Great Univsl Stores 38 ..TX.- Headlam 22 Heron Intl 22 Irish Life 22 Johnson Matthey 23 Leslie Wise 22 M&G Dual Trust 23 Markheath 22 Nobo 23 North Housing Assn 23 Pict Petroleum 23 Prism Leisure 22 Rank Organisation 38 SPC Intl 23 Scantronic 22 Simon Engineering 16 Spring Ram 22 Standard Chartered 38 Stanley Leisure 23 Storehouse 22 Telemetrix 23 Tiphook 21 ..TX.- Unilever 38 Widney 23 ------------------------------------- Overseas ------------------------------------- Alcan 26 AlliedSignal 25 Banacci 25 Banesto 24 Bayernwerk 24 CBS 25 Celanese Canada 26 Charles Schwab 25 Dasa 24 Dell Computer 24 Dream 26 Efim 24 Federal Express 25 First Chicago 25 Genbel 25 Genentech 25 ..TX.- Intel 26 Kirin Brewery 4 LA Gear 26 Laidlaw 26 Lion Nathan 26 Marion Merrell Dow 25 Procter & Gamble 21 Reichmann 3 Royal Trustco 26 Rubbermaid 25 SA Brewing 26 Seagram 25 Soros Realty 3 Thyssen Industrie 24 Varity 25 Viag 24 Westinghouse 26 ------------------------------------- ..CN.- Countries: XA World. ..IN.- Industry: P99 Nonclassifiable Establishments. ..TP.- Types: COMP Company News. ..IX.- P99. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGOCUAEGFT ..HL.- 930715FT 930715 Fewer punters flock to BT3 sale (399) ..BL.- By ROLAND RUDD ..TX.- RETAIL investors have shown a weaker appetite for the latest offer of BT shares than they did in the previous sale in 1991. ..TX.- With applications closing yesterday morning, they had applied for at least 800m shares, representing 1.3 times the minimum number of shares offered by the government. ..TX.- In 1991 the subscription rate was 1.6 times with applications for 1.7bn shares chasing the 1.05bn sold. ..TX.- The Share Information Office and larger share shops reported around 1.4m applications, although this figure could rise a little after the final count. ..TX.- The government has earmarked 600m shares for UK retail investors, half of the 1.2bn new BT shares in total on offer but has retained the right to raise this figure to 67 per cent. ..TX.- Institutional shareholders have made bids for more than 1.2bn, equal twice the number offered at the moment. Analysts said the Treasury was less likely to claw back more shares from the institutional offer to sell to retail investors. ..TX.- The government will raise more money from the Pounds 5bn sale if it gives institutions, which are paying more for the shares, half of the total allocation. The final decision on allocation will not be taken until tomorrow morning. ..TX.- More than half of BT shareholders and employees have applied for shares compared with 15 per cent in the last sale in 1991. Retail investors have on average applied for 600 shares at a total cost of Pounds 900, which is similar to the last sale. The first instalment for small shareholders is 150p, compared with 160p for institutions. ..TX.- The international offer remains open until 4pm tomorrow. The government will over the weekend announce the price of the third instalment in the partly-paid issue. ..TX.- SG Warburg, the government's global co-ordinator, may buy back the partly paid shares after they start trading on Monday as part of its stabilisation programme to create an orderly after-market. ..TX.- Warburg has warned institutions not to dump their existing shares before the sale in the hope of buying them back cheaply. ..TX.- Analysts say that the lower than usual volume of share trading before the sale shows that the share price is artificially high. ..TX.- Lex, Page 20 ..CO.- Companies: British Telecommunications. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4813 Telephone Communications, Ex Radio. ..TP.- Types: FIN Share issues. CMMT Comment & Analysis. ..IX.- P4813. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGOCUAEFFT ..HL.- 930715FT 930715 CSFB struggles to tame its personalities: A case of banking turmoil (874) ..BL.- By RICHARD WATERS and PATRICK HARVERSON ..TX.- The powerful personalities of its top executives have always been both one of the biggest strengths and one of the biggest weaknesses of CS First Boston, the New York-based investment banking group. ..TX.- Both Mr Archie Cox, appointed head of its First Boston subsidiary in the US three years ago, and Mr Hans-Joerg Rudloff, who turned its London-based Credit Suisse First Boston arm into one of the top houses in the international capital markets during the 1980s, had a high profile at their respective firms. ..TX.- Yet personality clashes and business rivalries, particularly between New York and London, have held back CS First Boston at a time when rivals like Goldman Sachs and Morgan Stanley have extended their reach into the international investment banking business. ..TX.- CS First Boston has made various attempts to overcome the divisiveness. Last month, for instance, it announced a reorganisation based on product lines rather than geographic regions. ..TX.- Mr Cox's sudden resignation on Tuesday, following Mr Rudloff's similarly abrupt departure in March, strengthens the impression that the group is trying to slough off its image as a collection of rival personal fiefdoms. ..TX.- The precise disagreement that sparked Mr Cox's resignation - officially for 'personal reasons' - remains unclear, but it was not hard to see the tensions building. The management reorganisation, begun earlier this year, had eaten into Mr Cox's control over First Boston, making him one among a small group of new senior managers, albeit the most powerful. ..TX.- He had been named worldwide head of equities and co-head of investment banking. Alongside him in the latter sat Mr David Mulford, a former US Treasury secretary and Mr Rudloff's successor in London. Two other rising stars were also grabbing at his coat-tails: Mr Bob Diamond and Mr Allen Wheat, joint heads of fixed income. ..TX.- The shake-up had coincided with a move by Mr Jack Hennessy, chief executive of CS First Boston Group and a former head of the US subsidiary, to assert greater control over the business. ..TX.- Insiders report that Mr Hennesey has taken a more prominent role since the upheaval began. He will take on Mr Cox's duties until a replacement is found. The relationship between Mr Cox and Mr Hennessy was reportedly a turbulent one. ..TX.- If the shake-up had increased the pressure on Mr Cox, then so had a near rebellion in New York over the disappointing level of 1992 bonuses. While competitors have been raking in record profits amid the biggest bull market the securities industry has seen, CS First Boston's earnings have proved disappointing. Last year, the group reported net income of Dollars 175m, down 19 per cent from the Dollars 215m earned in 1991. ..TX.- In the US markets, First Boston has been struggling to stem a decline in its share of the profitable securities underwriting business. Although First Boston's share of all corporate debt and equity underwritten in the US held steady at 9.6 per cent in the first half of this year, its share of investment grade bond issues - a traditional strength at the firm - fell from 9.2 per cent to 8 per cent, dropping the firm one place to sixth in the league table of Wall Street underwriters. ..TX.- The group has also been hampered by a poorly performing European operation. Analysts in London have estimated that earnings from CSFB's UK unit fell 20 per cent last year to a meagre Dollars 20m. The high cost of its move to new offices and heavy investment in Eastern Europe, together with a poor trading performance in the last part of 1992, accounted for the fall. ..TX.- London's decline led bonuses in New York to be pared back, prompting disatisfaction there and a number of senior defections among traders. This mirrored a similar wave of disaffection that swept through London three years ago, when poor results in New York meant that London-based executives were unable to reap the rewards of a bumper year. ..TX.- The shake-up at the top is far from over. CS First Boston's new crop of senior managers are as powerful as their predecessors, and it is as yet unclear which of them will rise to the top. The ambitious Mr Mulford was seen within the firm as a pretender to the top investment banking job even before Mr Cox's departure. ..TX.- Mr Wheat, meanwhile, has created the group's biggest profit earner in its derivatives unit, Credit Suisse Financial Products, and brushed off any suggestions that he was about to be sidelined by Mr Mulford's arrival. ..TX.- The question is who will replace Mr Cox in the New York job. According to one observer, Mr Hennessy is a 'hard-driving taskmaster' who is not easy to work with. It may be that someone other than him will be needed to run the US operation, possibly an outsider who does not have 'any IOUs at the firm'. The appointment will be the most important yet in a year of big change. ..TX.- Lex, Page 20 ..CO.- Companies: CS First Boston Inc. First Boston Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: PEOP People. CMMT Comment & Analysis. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGOCUAEEFT ..HL.- 930715FT 930715 SE faces more secrecy on trades (478) ..BL.- By RICHARD WATERS ..TX.- THE largest trades conducted on the London stock market will not have to be made public until up to a week after they have taken place, if a proposal to be put to the Stock Exchange's board today is adopted. ..TX.- If approved, the change could boost the profits of London securities firms, which claim current regulations expose them to losses. ..TX.- The move would be a reduction in the level of transparency on the London market, which already requires less disclosure of trade information than other international markets. ..TX.- The relaxation would apply only to the very biggest trades, in which a marketmaker buys or sells a large block of shares. The delay in publication would give marketmakers longer to lay off their risks before competitors were alerted to their positions. ..TX.- The rule change would apply only to trades which are at least 75 times bigger than the average trade in a company's shares (known as the 'normal market size'). Details would have to be published only after the marketmaker had laid off at least 90 per cent of its own risk, though publication of all trades would be obligatory after a week. ..TX.- The proposal is the latest step in a five-year battle between UK marketmakers and regulators over trade publication. Securities houses have argued that London's marketmaking system, unlike the auction systems in most other large stock markets, will only operate with a degree of secrecy. ..TX.- The rule change is understood to have been approved by the Securities and Investments Board, the Department of Trade and Industry and a number of City trade groups. ..TX.- The London International Financial Futures Exchange is believed to have resisted the change, arguing that reducing the level of transparency would harm trading in the FT-SE 100 futures contract. ..TX.- Under the proposed rule change, it would be left to each securities house to decide for itself when 90 per cent of its risk had been laid off. ..TX.- Regulators hope that the concession to the marketmakers, though reducing disclosure of block trades, will lead to greater disclosure of other routine transactions. ..TX.- Marketmakers can now get around the need to publish all trades within 90 minutes by agreeing a 'protected trade' with a client. Here, the marketmaker guarantees a certain price for a trade, but promises to try to improve on it during the day. The trade is not reported and published until it has been confirmed. ..TX.- Regulators fear that normal trades are being dressed up as protected trades to bypass the publication rules. By allowing marketmakers greater secrecy on large deals, the regulators hope they will be less likely to use protected trades. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. P6221 Commodity Contracts Brokers, Dealers. ..TP.- Types: CMMT Comment & Analysis. MKTS Market data. ..IX.- P6231, P6221. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGOCUAEDFT ..HL.- 930715FT 930715 Accounting changes obliterate Tiphook's profits (426) ..BL.- By ANDREW BOLGER ..TX.- SHARES in Tiphook fell by 27p to 259p after the UK transport rental company announced a change in accounting policy which wiped out its profits. ..TX.- Mr Robert Montague, chairman, said accounting policy was being changed to reflect the increasing number of US shareholders. The proportion of the group's equity held as American Depositary Receipts has risen from 2 per cent in 1991 to just over 50 per cent. About 65 per cent of the group's Pounds 1.16bn borrowings are in the US. ..TX.- Annual profits before tax and various charges fell from Pounds 86.4m to Pounds 55.5m, in line with analysts' reduced expectations. However, Tiphook said that from now it would report in dollars and the results would more closely reflect US accounting conventions. The group said applying the new accountancy policy led to predominantly one-off charges of Pounds 77.3m, giving a pre-tax loss of Pounds 21.8m in the year to April 30. Turnover increased marginally from Pounds 322m to Pounds 324m. ..TX.- One analyst said the changes 'just muddy the waters further'. ..TX.- The drop in the proportion of UK shareholders - from 60 per cent to less than 30 per cent of the equity - reflects the disgruntlement of UK institutional investors, who have seen the group's share price halved in less than two years. Their tolerance has also been tested by share price falls ahead of two recent company announcements - a profits warning in April and last week's notification of the proposed accountancy changes. ..TX.- Some shareholders have pressed for more non-executive directors and expressed concern over the high remuneration enjoyed by executives. Mr Montague said there were no plans to change the board. Tiphook would remain UK domiciled. ..TX.- He added that US investors seemed more comfortable with leasing companies such as Tiphook, which although heavily geared were strongly cash-generative. Operating cashflow in the year had been Pounds 163.9m, down 13 per cent. ..TX.- Tiphook said its biggest business, containers, had shown resilience to the recession. Utilisation had averaged 82 per cent, compared with 88 per cent, but average rental rates fell by less than 2 per cent. ..TX.- Under the new standard, there was a loss per share of 41.2p, compared with earnings of 46.3p. A final dividend of 14.4p gives a total of 21.2p, against 19p. ..TX.- Lex, Page 20 ..CO.- Companies: Tiphook. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3412 Metal Barrels, Drums and Pails. P7513 Truck Rental and Leasing, No Drivers. ..TP.- Types: FIN Annual report. CMMT Comment & Analysis. ..IX.- P3412, P7513. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGOCUAECFT ..HL.- 930715FT 930715 P&G to unveil cost-cutting package at rare meeting (441) ..BL.- By MARTIN DICKSON ..DL.- NEW YORK ..TX.- PROCTER & GAMBLE, the US consumer products giant, is expected to unveil a wide-ranging cost reduction programme, probably including substantial job cuts, at a rare meeting today with Wall Street analysts. ..TX.- The meeting comes two days after P&G, which faces increasing competition from cut-price labels, announced plans to slash the price of its liquid laundry detergents in the US market. ..TX.- That move is expected to hurt not only the manufacturers of cheaper products but also Anglo-Dutch Unilever, P&G's main US rival. Unilever's shares fell 24p to 593p on the London Stock Exchange yesterday. ..TX.- The analysts' meeting at the company's headquarters in Cincinnati, Ohio, will be the first held by Mr Edwin Artzt, P&G's chairman, since May 1990. ..TX.- P&G, an unusually secretive company, is expected to spell out how it intends to reach its previously announced goal of cutting overheads as a percentage of net sales from 14.5 per cent to 12 per cent over the next three years. ..TX.- Some analysts have speculated that this could involve the loss of 10,000 of the group's 102,000 jobs around the world. However, the overwhelming majority of any reductions is expected to be voluntary, through early retirement and similar programmes. ..TX.- P&G needs to prune costs to complement the price cuts it has been making to maintain market share in the face of competition from discounted brands. ..TX.- It has revamped its US marketing strategy, introducing a policy of 'value pricing'. This involves cutting down on short-term, deep-discount promotional deals, which periodically slash the cost of products to the retailer, and replacing them with a system of more consistent lower prices. ..TX.- However, the change has stirred up opposition among less efficient retailers, who have relied on deep-discount promotions for a substantial part of their profits. ..TX.- Tuesday's detergent price cuts stem from this marketing battle. P&G is cutting the price of its Tide and Cheer liquid detergents by 15 per cent from August 2, with lesser reductions on other detergents, dishwashing liquid and fabric softener. ..TX.- The company indicated the move was aimed at narrowing the gap between its products and cheaper brands, but analysts said it appeared as much a strike against Unilever, which has just introduced super-concentrated versions of its liquid detergents. ..TX.- 'There is no better time for price cuts than in a competitor's new product launch,' said Mr Gabriel Lowy, of securities firm Oppenheimer & Co. ..TX.- Lex, Page 20 ..CO.- Companies: Procter and Gamble. ..CN.- Countries: US United States of America. ..IN.- Industry: P2844 Toilet Preparations. P2834 Pharmaceutical Preparations. ..TP.- Types: PEOP Labour. CMMT Comment & Analysis. ..IX.- P2844, P2834. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGOCUAEBFT ..HL.- 930715FT 930715 Attali comes under harsh attack: EBRD chief may bring forward departure after critical audit report (548) ..BL.- By ROBERT PESTON, Banking Editor ..TX.- MR JACQUES ATTALI, president of the European Bank for Reconstruction and Development, will be severely criticised in a report on financial mismanagement at the bank to be published tomorrow. ..TX.- Following a two-month investigation, the bank's audit committee is putting the finishing touches to the report. Bank employees who have seen the initial draft say it focuses on four areas of financial mismanagement by Mr Attali. It says the EBRD chief: ..TX.- Wasted thousands of pounds by taking more than 40 flights on private jets supplied by French company, Air Entreprise. ..TX.- Received fees for giving speeches on several occasions, contrary to the bank's code of conduct. ..TX.- Charged personal expenses to the bank, including several trips to the London nightclub, Annabels. These have been reimbursed but in some cases there was an 18-month delay before the reimbursement was made. ..TX.- Had a close relationship with Mr Jean-Louis Berthet, the architect used in the Pounds 55.5m project to furnish the bank's headquarters, which undermined the ability of the building contractor, Bovis, to control the construction project. ..TX.- Also criticised are two other executives, Mr Pierre Pissaloux, who until recently held the posts of director of the cabinet and of the budget, though he is now only cabinet director, and Mr Anders Ljungh, the bank's vice-president in charge of finance. ..TX.- Mr Pissaloux is accused of poor judgment in his management of the building project, allowing overspending in certain areas. However, he is praised for the speed with which the project was finished. Mr Ljungh is accused of not keeping sufficient control of bank spending. ..TX.- The bank's board of 23 directors, who represent the countries and agencies which own the bank, are also rebuked for approving and then increasing the budget for furnishing the office without receiving sufficient information on why more than Pounds 50m was required. ..TX.- In June, Mr Attali announced his intention to resign as president following disclosures that he had taken Dollars 30,000 in fees for speaking at a conference and had also been reimbursed twice for a first-class return flight to Japan. ..TX.- He said at the time he would go when a permanent successor took up office, which is unlikely until September. He was not at the bank yesterday. One bank executive said: 'The audit report is so critical of him, I suspect he may decide to quit this week.' ..TX.- Mr Pissaloux is praised for other actions. At the end of last year, Mr Pissaloux took away the corporate credit card issued to Mr Francois Olive, Mr Attali's personal assistant, who organised Mr Attali's travel and entertaining, when he became concerned at the expenses charged to it. ..TX.- At the beginning of this year, Mr Pissaloux also forced Mr Attali to get competing quotes from aircraft charter companies before renting private jets. ..TX.- The audit committee, chaired by Swedish director, Mr Claes de Neergaard, employed consultants from Coopers & Lybrand to carry out much of the investigation, which concentrated on the building refurbishment, the use of private jets and Mr Attali's management of his expense account. ..CN.- Countries: LU Luxembourg, EC. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: PEOP People. CMMT Comment & Analysis. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGOCUAEAFT ..HL.- 930715FT 930715 New laws urged to counter black market in secret data (458) ..BL.- By RACHEL JOHNSON ..TX.- NEW LAWS are needed to stamp out the black market in confidential personal information, the data protection registrar said yesterday. ..TX.- Mr Eric Howe, the registrar, is so concerned about the market in computerised data on individuals' income tax, bank accounts and credit cards he has asked the home secretary to launch a parliamentary investigation. ..TX.- Mr Howe said at a news conference at which he presented the agency's ninth annual report: 'I have drawn it to the attention of the home secretary . . . and it may be that ministers and parliament might like to consider a wider inquiry to find out what is this market, how big is it, how easy is it to use.' ..TX.- He wants the government to consider whether there should be stronger legislation against those who force 'disclosure (of personal data) by deceit'. ..TX.- The Data Protection Act requires banks and other personal data users to have appropriate security for the information they hold. Data users of this type have to register under the act if they disclose personal details to another authorised organisation such as a credit reference agency. ..TX.- However, Mr Howe sees a possible weakness in the law as it stands since unauthorised people can fool data users into handing over information such as bank account details. ..TX.- The black market has arisen either because bank staff supply details knowingly to third parties with no legitimate access or because they are duped into giving away confidential information to unauthorised private agents posing as authorised users and hired mainly to collect debts. ..TX.- Banks and finance houses have become more concerned about leaks of information after complaints by Mr Norman Lamont, the former chancellor, and Ms Stella Rimington, the head of MI5, that the security of personal files had been breached. ..TX.- The British Bankers' Association has been reviewing security in banks after reports that 'tracing agents' were bribing banks' staff to obtain the internal codes required to authenticate telephone inquiries. ..TX.- The registrar believes stronger sanctions are needed as well as improved security at the banks. ..TX.- Mr Howe also warned that the reissue of National Health Service numbers could introduce a system of national identification by the back door. He doubted whether the use of NHS numbers would be adequately restricted by Crown Copyright. ..TX.- Complaints by individuals to the registrar about the use of their personal data rose from 1,747 in 1992 to 4,590 this year after a television campaign. ..TX.- Secrets exploited, Page 6 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6021 National Commercial Banks. P6162 Mortgage Bankers and Correspondents. P6141 Personal Credit Institutions. P7323 Credit Reporting Services. ..TP.- Types: NEWS General News. ..IX.- P6021, P6162, P6141, P7323. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGOCUAD9FT ..HL.- 930715FT 930715 The Lex Column: BT3 (252) ..TX.- Calculators will doubtless be working overtime in the investing institutions to gauge the retail demand for BT3. Since retail investors are said to have applied for at least 800m shares, against the 600m on offer, that implies the 1.4m or so applicants have applied for a minimum of 570 shares each. However, the public is unlikely to have applied for more than the 630 shares tendered for in BT2, since the first payment is much larger this time. All of which suggests that while the public has applied for more than 800m shares, the final total may not be much more than 900m. ..TX.- The 600m share institutional offer closes tomorrow and there seem to be bids for around 1.2bn shares. Those tenders are clustering around a 10p premium to the price on BT's fully paid shares, reflecting the time value of money. It would thus seem unlikely that the Treasury would increase the retail element to 800m and cut institutions back, since fund managers are paying a higher price, and small investors may also have bid for more shares than they expect to get. If these prove to be the final figures, the offer will count as a modest success. Whether the same can be said of the excessive hype and baffling advertising campaign is another matter. ..CO.- Companies: British Telecommunications. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4813 Telephone Communications, Ex Radio. ..TP.- Types: FIN Share issues. CMMT Comment & Analysis. ..IX.- P4813. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGOCUAD8FT ..HL.- 930715FT 930715 The Lex Column: UK inflation (136) ..TX.- If Tuesday's industrial production and yesterday's inflation figures had not arrived on government notepaper, the casual observer might have thought they related to Japan. The UK does seem to have survived the first wave of price pressure from devaluation, due to low wage inflation and a yawning gap in the productive potential of the UK economy. Manufacturers are even managing to restore margins despite subdued price rises. One area where this may not be true is food retailing, where costs are rising but retail prices are under pressure. Those fat margins built up in recession may soon start to slim. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Inflation. ECON Industrial production. CMMT Comment & Analysis. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGOCUAD7FT ..HL.- 930715FT 930715 The Lex Column: CSFB (290) ..TX.- The resignation of Mr Archibald Cox as head of its US operations suggests CSFB is some way from achieving management stability. Having appointed Mr David Mulford to the top job in London in March - in place of the established Mr Hans Joerg Rudloff - it might have hoped for a period of calm. Mr Cox hardly has a record of precipitate career moves, so it is hard to believe that bickering over the level of bonuses paid in New York played more than an incidental role. That raises the question of whether his departure is a symptom of a deeper malaise. Like other globally-minded investment banks, CSFB must mould an integrated business from the far flung parts of its empire. Splitting into regional units in 1988 to accommodate the buy-out of First Boston proved an unsatisfactory response. In an era of cross-border capital flows, organising an investment bank geographically makes little sense. By reshaping itself into product groups earlier this year, CSFB has belatedly fallen into line with practice elsewhere. Since that involved curtailing the power of regional chiefs, friction was always likely. ..TX.- If Mr Cox's resignation has indeed arisen out of the decision to impose a more rational management structure, CSFB could emerge stronger from the upheaval. Having clung to the idea of regional units for so long, though, it has lost ground against the best of the competition. What the company really needs now is a focus on profitability rather than personalities. ..CO.- Companies: CS First Boston Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P6211 Security Brokers and Dealers. P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: PEOP People. CMMT Comment & Analysis. ..IX.- P6211, P6081. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGOCUAD6FT ..HL.- 930715FT 930715 The Lex Column: Tiphook (242) ..TX.- Tiphook's reputation for impenetrable accounting will only be enhanced by its latest changes. Since the bulk of its revenues are in dollars, the switch to dollar-based accounting is superficially reasonable. All the more so since most of its debt and almost 50 per cent of its shareholders are in the US. But blaming a Pounds 77.3m profits hit on these accounting changes is rich when most of the charges would have been incurred anyway. The Pounds 16m cost of unwinding its interest rate swaps position would have affected profits under its old policies. So, too, would the punitively expensive Pounds 21m cost of redeeming Pounds 150m of preference shares. ..TX.- Such irritations might have been overlooked had Tiphook's underlying business held much appeal. But with poor annual figures, a patchy trading outlook and escalating competition, the company has a real fight on its hands. Year-end gearing of 473 per cent, which comes close to the ceiling imposed by its articles of association, constrains it further. Although high gearing is normal for leasing companies, a likely interest bill three times forecast profits is a worrying ratio nonetheless. Despite the hefty dividend yield, there seems little reason to risk holding Tiphook's shares. ..CO.- Companies: Tiphook. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3412 Metal Barrels, Drums and Pails. P7513 Truck Rental and Leasing, No Drivers. ..TP.- Types: CMMT Comment & Analysis. FIN Annual report. ..IX.- P3412, P7513. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGOCUAD5FT ..HL.- 930715FT 930715 The Lex Column: Bursting branded bubbles (277) ..TX.- Procter & Gamble's price offensive in the US detergents market has blown more bubbles up the noses of investors worried about brand values. There may be specific reasons for P&G's campaign: the need to counter Unilever's launch of super-concentrated detergents being one. But the move also reflects the general industry shift towards the latest fad of everyday low pricing. P&G has been cutting the promotional spend on 70 per cent of its products, allowing it to reduce prices. The sums may only work, though, if P&G is able to make similar cuts in costs. P&G's press conference today may reveal how. ..TX.- The question worrying investors, though, is whether such moves are short term expedients designed to address flagging sales or longer term strategies which will re-write the rules of the branded game. Trading conditions have changed greatly since the 1980s. Companies are being forced to adapt. Whereas the 1974 and 1981 recessions were followed by bursts of medium economic growth and high inflation, the outlook for the 1990s is for low growth and low inflation. This is squeezing consumers' discretionary spending and emphasising value. ..TX.- That said, branded companies able to offer demonstrably superior products at modest premium prices should continue to thrive. The 5 per cent fall in Unilever's shares over the past two days is surely overdone. But such companies will have to overcome a wave of adverse sentiment before they can hope to reverse their recent share price weakness. ..CO.- Companies: Procter and Gamble. ..CN.- Countries: US United States of America. ..IN.- Industry: P2844 Toilet Preparations. ..TP.- Types: CMMT Comment & Analysis. PEOP Labour. ..IX.- P2844. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGOCUAD4FT ..HL.- 930715FT 930715 A voice for the oppressed: The strength and appeal of Islamic fundamentalist movements throughout the Middle East (2057) ..BL.- By ROGER MATTHEWS ..TX.- Moslems in turmoil: terror sheikh surrenders after Brooklyn mosque drama.' The recent headline in a British Sunday newspaper articulates a widespread western view of Islamic fundamentalism and its association with terrorism. ..TX.- 'West anxious to refuse Moslem peace force', the headline in one of yesterday's papers, emphasises just how uncomfortably that perception sits alongside the west's failure to ease the worsening plight of the Bosnian people, and the mounting frustration of Islamic leaders at being blocked from coming to the aid of their co-religionists. ..TX.- The offer by seven members of the Islamic Conference Organisation to provide 17,000 troops, including 10,000 Iranians, for peacekeeping duties in Bosnia poses an acute dilemma for the west, precisely because it feeds the fear of Islamic extremism getting a foothold in Europe. ..TX.- Foremost among those international leaders who endorse that interpretation is Mr Yitzhak Rabin, the prime minister of Israel. 'They (the fundamentalists) are starting to build an infrastructure of terror all over the world,' he told a Paris audience last week. 'They will not tolerate the presence of any foreign, non-Islamic entity in the Middle East. They will fight all the moderate Arab regimes.' ..TX.- After the arrest in New York of eight men, accused of plotting explosions and identified instantly by police as Islamic fundamentalists, the American public was similarly left in little doubt by some of its politicians that the US was itself under threat. It is an assumption already reflected in US Middle East policy, where the containment of Iran, described by Washington as the world's foremost sponsor of terrorism, has been given top priority. ..TX.- Senior officials in Washington emphasise that the US has nothing against Islamic regimes as such. The Saudi Arabian government, for example, is more fundamentalist than most. It is also authoritarian, denies any movement towards political pluralism, refuses women the right to drive cars, beheaded 66 miscreants in public last year, and is spending billions of dollars on building up its military machine. The US views Saudi Arabia as a close friend and its staunchest ally in the Gulf. ..TX.- On the other hand, Iran, which also defines itself as an Islamic state and, according to Amnesty International, executed 330 people last year, has elections of a sort and a functioning parliament, allows women to drive cars, and is spending a fraction of the Saudi Arabian outlay on new weaponry. Together with President Saddam Hussein's Iraq, it is described by the US as a grave threat to world stability. ..TX.- The basic difference between Iran and Saudi Arabia, at least when viewed from Washington, is that one sees the US as the Great Satan while the other sees it as the Great Saviour. Put another way, Washington has much less of a problem with the domestic policies of Islamic governments than it does with their external posturing. ..TX.- In part this is because Islamic fundamentalism has, for the past 15 years, been primarily a rallying point and a focus for dissent against regimes which permitted no alternative political voice and were sometimes allied to the US. The Iranian leadership under Ayatollah Khomeini saw America as the root of all evil and its presence in the Middle East a provocation to all Moslems. Iran still sees its role as coming to the aid of oppressed Moslems anywhere in the world, but especially in the Middle East. ..TX.- After 14 years of Islamic government, Iran cannot claim much success abroad, or at home. Despite all the talk of exporting revolution, there is not a lot to show. Equally, the sorry state of the Iranian economy leaves little to crow about. But what Iran has been able to do, to a modest extent, is capitalise on the political and economic failures of others. In the process its capacity for trouble-making has been purposely exaggerated, not least by some Middle Eastern leaders such as President Hosni Mubarak, who for months has been crediting Iran with the prime responsibility for terrorist attacks in Egypt. ..TX.- Outside Iran, fundamentalist or radical Islamic movements have thrived most where there has also been the partial collapse of the state (Lebanon and Sudan), where economic deprivation and disparities have been particularly marked (Algeria and Egypt), and as a consequence of occupation (the West Bank, Gaza and Lebanon). They have been additionally aided by the more general perception among Arab populations that their governments have failed them. ..TX.- The movements which inspired millions in the post-colonial era - Nasserism, Arab socialism, Arab nationalism, Arab unity in all its different guises - have collapsed. The depth of the region's political malaise was never better illustrated than by the often contradictory Arab reactions to Iraq's invasion of Kuwait. Against this background, slogans such as 'Islam Is The Solution' are destined to rally support. But there is no structure or uniformity to the response. No populist Islamic army is forming under green banners and curved scimitars to drive out the corrupt and morally bankrupt before moving on to deal with the infidels. Instead, there is a multiplicity of Islamic organisations, even within a single country, a wide range of objectives, and little articulation of what Islam thinks is The Solution. ..TX.- Where there is a degree of international co-ordination it stems primarily from Iran. Even then it is difficult to identify who is responsible when power is shared between spiritual leader, president, parliament, ministers, senior ayatollahs, religious institutions and religious foundations. Contradictions are inevitable. The country's economic reconstruction programme needs to attract western capital and technology, but its foreign policy, especially on the Middle East peace process, is diametrically opposed to US and European efforts. ..TX.- Iran's successes have been greatest where Israel has blundered out of the frying pan into the fire, most notably in its efforts to smash opposition to its military occupation in the West Bank, Gaza and Lebanon. The harsh response to the five-year Palestinian uprising in the occupied territories has given Hamas, the radical group supported by Iran, the chance to draw popular support away from the more moderate Fatah, the dominant component in the Palestine Liberation Organisation headed by Mr Yassir Arafat. ..TX.- In south Lebanon, the formerly quiescent Shia population was politicised by Israel's invasions in 1978 and 1982. The invasions succeeded in ending the Palestinian military threat to Israel's northern border but contributed to the birth of Hizbollah, which is also backed by Iran and was responsible for seizing western hostages in Beirut. Hizbollah not only continues to inflict more casualties on Israeli troops than the Palestinian guerrillas, but has become an important element in determining Lebanon's political stability. ..TX.- Conversations with officials in Tehran leave little doubt that Iran sees its allies in the occupied territories and its co-religionists in Lebanon as offering direct leverage on the peace process and on wider American-Israeli plans. Just how extensive Iranian ambitions are is difficult to assess, but it would seem obvious that Iran will seek to exploit the weaknesses in the pro-American Arab alliance that Washington is seeking to maintain. ..TX.- One of the keys to that alliance is Egypt, among the most immediate targets of Islamic extremists. The activities of a handful of terrorists during the past year have unnerved the regime, especially as they have aimed principally at the tourist industry, the country's biggest single source of foreign revenue. But while there is plentiful evidence of dissent in Cairo's poorest suburbs, there is no sign of the explosive discontent which led to the country's mass riots in January 1977. ..TX.- Egyptians are famously slow to rouse and, as the 1977 riots showed, it was government blundering rather than opposition agitation which triggered public anger. The Moslem Brotherhood, for decades Egypt's main standard-bearer of political Islam, is winning greater public support, but it seems to be more by default that by any specific policies it has to offer. An hour spent seeking to draw out a party spokesman elicited only the repeated assertion that all the answers to Egypt's myriad problems are contained in the Koran. ..TX.- But if Islamic groups are reticent about precise policies, they are learning fast how to operate at the grassroots. Islamic groups in several countries have understood the effectiveness of social welfare schemes and have taken full advantage of any opportunities to become part of the political establishment. Leading the way are Hizbollah in Lebanon, the Islamic Salvation Front in Algeria, and the Moslem Brotherhood in Egypt and to a lesser extent in Jordan. ..TX.- In Lebanon, devastated by 17 years of civil war, Hizbollah runs schools, hospitals and clinics, provides housing, and administers shops which sell subsidised food. It put up candidates for last year's general elections, and its eight members of parliament set an example by the enthusiasm with which they participate in debates and sub-committees. Hizbollah is also the only faction not to have been disarmed, on the basis that it is fighting to eject Israel from the south in order to restore national sovereignty. In short, Hizbollah has covered all the options. ..TX.- Allowing Hizbollah into the democratic process posed relatively few risks in Lebanon where representation is regulated according to the size of the country's religious minorities. But in Algeria - where there was no such limitation and the ruling party had little popular support - a sudden plunge into democracy by a desperate government allowed the protest vote to swing massively to the Islamic Salvation Front. It was only stopped from taking power by the regime halting the electoral process, pushing the country towards worsening political violence. ..TX.- President Mubarak says he warned Algeria's leaders of precisely that danger. He has no intention of legalising the Moslem Brotherhood in Egypt and permitting it to fight an election against the officially sponsored National Democratic party. However, there seems equally little prospect of the NDP as constituted ever winning mass support, a vacuum which the Islamic groups are in part trying to fill with welfare programmes similar to those adopted by Hizbollah. ..TX.- Groups of Egyptian liberal intellectuals have warned Mr Mubarak of the risks if the government continues with its confrontational 'them or us' policy. Harsh police measures to crush the Islamic challenge is not an answer, they argue, except perhaps for Syria, where the brutal suppression of the 1982 revolt in the town of Hama has broken the back of opposition to the regime for more than a decade. ..TX.- But it has not provided the answer to what or who follows President Hafez al-Assad, any more than other Arab regimes have managed to create institutions which will provide for orderly and popular transfers of power. Such failures have allowed the perception to gain ground in the Middle East that it is only the Islamic movements which truly care for the poor and oppressed, an impression heightened by the collapse of communism and the Soviet Union and what are seen as hostile American attitudes. ..TX.- In the slums of Cairo, among the squatters in the wreckage of downtown Beirut, in Baghdad or Khartoum, the assertion that the US is at war with Islam falls on receptive ears. However justified the Gulf war was by international law, the further missile attacks on Baghdad and the continued sanctions which bear most heavily on ordinary Iraq people can be all too easily arranged to fit a specific message. ..TX.- The west's failure to save the Moslems of Bosnia adds substantially to that message and will be further reinforced if it refuses the offer of an Islamic peacekeeping contribution. And, of course, there is Israel. Despite 20 months of American-sponsored peace talks it shows little sign of withdrawing from the occupied territories or relinquishing east Jerusalem. ..TX.- Such issues bear far more heavily on the lives of most Moslems in the Middle East than the prominently headlined activities of a few extremists in New York. If the wider concerns of Moslems are not accorded more equal prominence, the US and its allies may be unable to check the growing suspicion that Islam is being elected to succeed communism as the primary threat to western values and political order. ..CN.- Countries: IL Israel, Middle East. SA Saudi Arabia, Middle East. IR Iran, Middle East. EG Egypt, Africa. KW Kuwait, Middle East. LB Lebanon, Middle East. ..IN.- Industry: P9721 International Affairs. P9711 National Security. ..TP.- Types: NEWS General News. ..IX.- P9721, P9711. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGOCUAD3FT ..HL.- 930715FT 930715 Leading Article: Lords' day (423) ..TX.- IN THE last century, Parliament's House of Lords was described by Bagehot as a dignified rather than an efficient part of the UK constitution. Widening the suffrage had led to the triumph of the democratic Commons over the aristocratic Lords. But yesterday their lordships again found themselves at the centre of the political debate as anti-Maastricht campaigners urged them to overturn the Commons by voting for a referendum on the treaty. ..TX.- Both sides in the debate assiduously courted the 'backwoodsmen', the hereditary lords who rarely attend debates. Last time they turned out in force was in 1988, to defeat moves to introduce an element of progressivity in the poll tax. Their pivotal role in so doing was equally controversial, because many of these wealthy but unelected legislators gained hugely from the abolition of rates. ..TX.- Attempts to reform the House of Lords have been fraught with difficulty, however. It may be anachronistic that the UK's upper house is largely composed of peers who have either inherited their titles or received them as beneficiaries of the prime minister's patronage. It may be absurd that this large and unwieldy body which meets more frequently than almost any other legislature in the world in practice wields very little power. But finding cross-party agreement on how to reform the Lords has repeatedly foundered, not least because many MPs prefer a toothless second chamber that is unable to challenge the Commons' democratic credentials. ..TX.- Yet a second chamber that enjoyed greater legitimacy could do much to improve the quality of Britain's governance, as a pamphlet published today by the left-leaning Institute for Public Policy Research points out. It would be better able to amend and improve bad legislation. Its authority would be strengthened in scrutinising the work of the European Community. It could vet appointments to quangos, providing checks on the exercise of ministerial patronage. And it could be given special powers to veto constitutional changes which would therefore require the endorsement of both houses. ..TX.- But it can do none of these things well without the legitimacy conferred by democracy. That means elections for most or all of its members, though there is a case for some appointees to represent special interest groups such as business, religious organisations and ethnic minorities. Dignity should give way to legitimacy in the UK's upper house. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9199 General Government, NEC. P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: GOVT Government News. CMMT Comment & Analysis. ..IX.- P9199, P9311. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGOCUAD2FT ..HL.- 930715FT 930715 Leading Article: Improving the World Bank (656) ..TX.- THE WORLD Bank is never going to be loved. With a portfolio of Dollars 140bn invested in 1,800 projects and programmes, it is too powerful for that. It can hope only to be respected. But to win that respect, it must be both open and tough, open about its failures, tough on its shareholders and, most of all, itself. With its 'agenda for improving development effectiveness', the bank is taking steps in the right direction. ..TX.- The bank's prime aim of poverty reduction can, in the words of its president, Mr Lewis Preston, be attained only 'by restoring or accelerating economic growth and by focusing on policies and programmes that specifically benefit the poor'. The bank tries to turn such benign intentions into reality via its lending. ..TX.- To Mr Preston's credit, he decided to find out how well the bank's lending was working. The answer, it turns out, was not very well. The proportion of operations in progress that had 'major problems' had risen from 11 per cent in 1981 to 20 per cent a decade later. In agriculture, 25 per cent of projects were in difficulty. The bank's Operations Evaluations Department judged only 63 per cent of completed operations to be satisfactory in 1991, a sharp decline from the 85 per cent achieved in 1981. ..TX.- This looks dreadful. So, in many ways, it is. But oversimplification must be avoided. It would be easy for the bank to improve its performance by avoiding innovative, risky or complex projects, particularly in the poorest countries. Furthermore, many failures are to be explained by adverse global developments, such as deteriorating terms of trade and high real interest rates. Also important has been the poor state of many borrowers' economies. The debt crisis inflicted serious damage, for example, though these difficulties usually reflected and, in turn, contributed to wider economic mismanagement. ..TX.- Nevertheless, the bank does bear much of the blame. It is simultaneously a financial intermediary, a dispenser of largesse and a supplier of advice. All these objectives have to be served by its lending operations. Conflicts inevitably arise. In practice, effectiveness has too often been subordinated to the desire to expand lending and remain on good terms with clients, who are also shareholders. ..TX.- The bank's proposed solutions are to move the management of country portfolios to centre stage in its dialogue with borrowers; to foster 'genuine partnership' with borrower agencies; to ensure the participation of the poor; to restructure ongoing operations when necessary; to simplify project design; to improve the management of operations; and to enhance the role played by operations evaluation. It also aims to redirect internal incentives towards rewarding successful progress in projects, from project approval. ..TX.- This is fine, so far as it goes. But it does not go far enough. The bank cannot force governments to do what they do not want to do. Similarly, it cannot give countries honest and effective government. What the bank can do is decide whether a particular government or borrower is worthy of support. If the conditions for effective use of resources do not exist, the bank must walk away, explaining clearly both to the client and to a wider audience why it has decided to do so. ..TX.- This will take courage. But it will also demand greater openness. The bank needs to see an informed public opinion as its friend. Some of the bank's critics will never be mollified. But many in both developed and developing countries want the bank to succeed in its prime goal of helping reduce poverty. They also recognise that developing countries need honest and effective government, implementing sensible policy. If the bank stands firmly for that, it will deserve respect. If it is seen to stand for that, it will receive it. ..CN.- Countries: US United States of America. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGOCUAD1FT ..HL.- 930715FT 930715 Leading Article: German mould (418) ..TX.- YESTERDAY'S announcement that the Bavarian state government is to sell off its 8 per cent stake in Deutsche Aerospace provides a further indication of the degree to which unification's turbulent aftermath is shaking the foundations of the German economic system. The united Germany which eventually emerges from the current recession will differ from the old west Germany in more profound respects than just population and geography. ..TX.- Necessity, rather than ideology, is the primary reason for the Bavarian Land's decision. No one can doubt the urgent need to raise revenue from any source possible, both centrally and regionally, in order to close Germany's gaping government budget deficit. ..TX.- But the sale - the first significant divestiture by a regional administration of a strategic industrial stake, originally taken to aid the postwar reconstruction - does mark a significant moment in Germany's economic evolution. Many other state habits, such as the vast panoply of subsidies and holdings, may not survive the budgetary squeeze. ..TX.- Nor is the state sector alone being shaken up. Three years of high interest rates and a strong D-Mark have forced German industry to think hard about ways to cut costs and become more competitive. Companies are, as a result, looking beyond Germany's borders: to New York for capital, and to east and south Europe for cheaper labour. ..TX.- Germany's social partners are, meanwhile, slowly modifying past practices which have sometimes stressed regulated uniformity over competition and flexibility. The strains in east Germany resulting from Germany's co-ordinated wage-bargaining system signal the need for change; the draft law on flexible working hours, approved by the cabinet this week, suggests it is beginning. ..TX.- This is not an obituary for an economic model which, in the main, has served postwar Germany well. The structure of German industry is, and will remain, very different from the Anglo-Saxon model: secrecy remains highly prized, public companies are much less common, ownership is more concentrated, industrial cross-holdings are normal and hostile takeovers rare. ..TX.- Yet change will continue at the margin. For even if the Bundesbank chooses to cut interest rates at today's council meeting - and the French authorities must surely hope it will - the pressure on industry to become more competitive can only intensify. ..CO.- Companies: Deutsche Aerospace. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P3724 Aircraft Engines and Engine Parts. P3721 Aircraft. P9311 Finance, Taxation, and Monetary Policy. P9611 Administration of General Economic Programs. ..TP.- Types: COMP Shareholding. CMMT Comment & Analysis. ..IX.- P3724, P3721, P9311, P9611. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGOCUAD0FT ..HL.- 930715FT 930715 Observer: Relocation (123) ..TX.- Talk about charity beginning at home. Yesterday's Independent illustrated its report on the restored dividend at estate agents Savills with a picture of a country house. The caption read: ' . . . Lower Roundhurst near Hazelmere, Lancashire, is priced at Pounds 1.8m.' ..TX.- What wasn't mentioned was that the property belongs to one of the Indy's columnists who'll no doubt welcome the publicity for the sale - share-tipster Jim Slater. ..TX.- Even so, the paper stopped short of putting potential buyers directly on the scent. The house is not in Hazelmere, Lancashire, but Haslemere, Surrey. ..CO.- Companies: Savills. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6531 Real Estate Agents and Managers. ..TP.- Types: COMP Company News. ..IX.- P6531. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGOCUADZFT ..HL.- 930715FT 930715 Observer: Title tattle (164) ..TX.- News that just departed Bank of England governor Robin Leigh-Pemberton has taken the title of Lord Kingsdown caught Observer off-guard. Didn't Kingsdown in Kent already have a lord of the manor in Kenneth Noye, one of the brains behind the 1982 Brinks-Mat bullion robbery? ..TX.- Perhaps the former guardian of Britain's gold was moving in to search for the still missing bulk of the robbers' undercover reserves. But the odds would surely be against him in an area where many of the houses look as though they must have been built without planning permission, besides being guarded by rottweilers. ..TX.- Wrong track, however. The said Kingsdown has nothing to do with Leigh-Pemberton's new title, which has a spotless record indeed. It has been kept unused for over a century, dating back to one of Leigh-Pemberton's great great grandads who died childless. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P99 Nonclassifiable Establishments. ..TP.- Types: NEWS General News. ..IX.- P99. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGOCUADYFT ..HL.- 930715FT 930715 Observer: Flagging (118) ..TX.- There might well be some awkward silences at the first meeting of the newly formed board to keep the British Labour movement's colours flying by preserving trade union banners for posterity. After all, besides John Smith, the board includes TGWU leader Bill Morris and his GMB counterpart, John Edmonds. ..TX.- But if the two union bosses can't think of anything to say to the would-be reforming party leader, they could always borrow the immortal line from teenage novelist Daisy Ashford's Young Visiters: 'You look rather rash my dear your colors dont quite match your face.' ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8631 Labor Organizations. ..TP.- Types: NEWS General News. ..IX.- P8631. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGOCUADXFT ..HL.- 930715FT 930715 Observer: Chinese walls (223) ..TX.- 'Nothing to worry about, there's always a bit of unrest at this time of the year,' Britain's Beijing embassy assured visiting members of the House of Commons foreign affairs committee in May 1989. ..TX.- What they'd inquired about was student demonstrations in Tiananmen Square - which left some of the visitors with what one of them, Conservative Michael Jopling, terms 'the view that the embassy was not in touch with what was going on'. ..TX.- With the committee planning to go to Beijing again, Jopling yesterday asked the subsequently appointed ambassador, Sir Robin McLaren, in London between talks with China about Hong Kong, if the embassy's eyes were sharper these days. ..TX.- Perhaps more used to silken diplomacy than direct confrontation, the envoy replied that he had read all the embassy's cables in 1989 and could assure the committee members that it had been 'by no means complacent or dismissive'. Nor was his snapshot of the present position likely to change Jopling's view. ..TX.- Communist countries were difficult to understand, it went, rather like a lake with black water and currents running beneath the surface. The present situation in China was 'very interesting' and the ambassador could not predict the future with confidence. ..CN.- Countries: CN China, Asia. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGOCUADWFT ..HL.- 930715FT 930715 Observer: Snoop's oops (92) ..TX.- A thrill of righteous anger no doubt ran through the Norwegian social security officer off-duty at a party. Dancing around before him was Nelly Elgaaen, who he knew was receiving welfare support while off work claiming she had a bad back. ..TX.- He promptly reported her, and the welfare payments were halved. ..TX.- They've now been restored. She was dancing as a remedial measure prescribed by her physiotherapist. ..CN.- Countries: NO Norway, West Europe. ..IN.- Industry: P8399 Social Services, NEC. ..TP.- Types: NEWS General News. ..IX.- P8399. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGOCUADVFT ..HL.- 930715FT 930715 Observer: Happy landing (272) ..TX.- Good to see someone preserving a sense of humour amid the massacre on Lime Street. David Springbett, who yesterday published a modified version of the London insurance market's official business plan, wants to 'springclean the place'. ..TX.- Hence the scheme's title: 'Lysold', an old-fashioned cleaning fluid, which just happens to be an anagram of Lloyd's. ..TX.- While he may be a self-styled 'expert bullshitter', Springbett clearly has staying power. Witness his entries in the Guinness Book of Records, which include the fastest round-the-world trip on a commercial airliner. ..TX.- Twelve years ago he found himself above the Atlantic seated beside a striking girl called Paddy, who alas didn't see him as her ideal man. Not content with pointing out that he was fat, she mentioned that her current beau was Arnold Schwarzenegger who'd famously earnt a Guinness Book entry as the most perfectly formed man. ..TX.- Divining that a mention in said esteemed tome was the key to the young lady's heart, Springbett contemplated his navel in quest of a way. He hit on the round-the-world trip for which, being a good insurance professional, he hedged himself with the bookies at 25 to 1. ..TX.- Then a quick word with the publisher secured him a quarter-page colour photo in the next edition - one up on Schwarzenegger, who Springbett claims had achieved only a black and white. ..TX.- Upon publication, the young lady accepted his hand, and the two are still blissfully married. Here's hoping she goes on inspiring him to great deeds. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2741 Miscellaneous Publishing. ..TP.- Types: NEWS General News. ..IX.- P2741. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGOCUADUFT ..HL.- 930715FT 930715 Letter: Private View obscures complexity of living species (305) ..BL.- From Mr PAUL MUNTON ..TX.- Sir, The Private View interview with Claude Martin, the new director of World Wide Fund for Nature (July 9/10), seemed to miss the point. ..TX.- Dr Martin might have been asked if the Panda symbol was not now so prominent that it obscured the complexity and importance of the work that goes on under its logo. Pandas and other 'cuddlies' have long been the advertising front for funding of a lot of hard-headed thought and work on the diversity of life on earth, from viruses to vertebrates, and the relationship of that diversity with the economic, ethical and spiritual life of humans. ..TX.- Each living species is more complex than any man made machine. Very few individuals of any species are the same, and their inter-relations so intricate as to be largely beyond human elucidation. To demand the moral justification of conserving the angonoka tortoise is as irrelevant as a Tory government asking the same question about any particular small business during a time of depression. ..TX.- Given the bent of the FT, a deeper examination might have been appropriate: of Martin's view on the implications of taking funds from industrial and economic interest groups; on environmental action by industry; and upon ensuring the continued availability of biological resources to man. ..TX.- These are complex and important issues and their treatment in your feature may be likened to an interview with the chairman of the stock exchange on the simplistic and outmoded basis that he oversaw a casino and that capitalism contained the seeds of its own destruction. ..TX.- Paul Munton, ..TX.- Ministry of the Environment, ..TX.- Muscat, ..TX.- PO Box 323 ..TX.- Sultanate of Oman ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9511 Air, Water, and Solid Waste Management. ..TP.- Types: NEWS General News. ..IX.- P9511. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGOCUADTFT ..HL.- 930715FT 930715 Letter: BT services already taken to air (193) ..BL.- From Mr COLIN BROWNE ..TX.- Sir, As many of your readers will have discovered for themselves, BT has offered a worldwide commercial in-flight telephone service since September 1990 ('Mercury to start in-flight phone lines', July 7). ..TX.- BT's Skyphone service, operated in conjunction with our partners, Singapore Telecom and Norwegian Telecom, is used by two leading airlines - Singapore Airlines and Air China. The consortium is also in detailed discussion with other airlines. ..TX.- Earlier this year, BT launched the world's first global airborne fax service, again with Singapore Airlines and Air China. ..TX.- BT and France Telecom are now in the final stages of implementing a dedicated, land-based pan-European digital service called Jetphone. The service is due to start in October 1993 and has the support of a number of European airlines. The system will provide 'the office in the sky', as well as on-board shopping, car and hotel reservations and in-flight entertainment. ..TX.- Colin Browne, ..TX.- director of corporate relations, ..TX.- BT, ..TX.- 81 Newgate, ..TX.- London EC1A 7AJ ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4813 Telephone Communications, Ex Radio. ..TP.- Types: NEWS General News. ..IX.- P4813. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGOCUADSFT ..HL.- 930715FT 930715 Letter: Time to make the water polluters pay (2) (159) ..BL.- From Mr JAMES SKINNER ..TX.- Sir, In the debate about the price we must pay for clean water frequent reference is made to the cost of combating pollution caused by fertilisers and pesticides. If these costs were charged to farmers, according to the 'polluter pays' principle, it would be one step towards establishing the true costs of intensive as opposed to extensive farming. ..TX.- Other external costs incurred by intensive farming include massive 'set-aside' costs; storage and disposal of crop surpluses; unemployment benefits; soil depletion; high energy consumption etc. If these were charged to intensive farmers, the true economics of organic farming might become more apparent, and water bills might rise more gently. ..TX.- James Skinner, ..TX.- Heron House, ..TX.- Chiswick Mall, ..TX.- London W4 2PR ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9511 Air, Water, and Solid Waste Management. P4941 Water Supply. ..TP.- Types: NEWS General News. ..IX.- P9511, P4941. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGOCUADRFT ..HL.- 930715FT 930715 Letter: Time to make the water polluters pay (1) (365) ..BL.- From Mr CHRIS SMITH MP ..TX.- Sir, Your editorial, 'The value of clean water' (July 14), concludes that the case of Ofwat, the water regulator, 'demands a political response'. Quite so. Ofwat's argument is based on the false premise that the costs of cleaner water must be borne by consumers. This need not be so. The government should be regulating industries and agriculture more stringently in order to reduce the amount of pollution discharged into water courses. Prevention is better - and cheaper - than cure. Instead of this, the government is deregulating. ..TX.- When pollution cannot be prevented, the polluter and not the consumer should pay to remove it from water. This is a principle to which the government pays lip-service, but fails to implement. It should do so. ..TX.- The water companies will, of course, have to pay to clean up sewage out of general revenue. But even this does not necessarily mean that the consumer needs to be hit hard in the short term in the way that Ofwat predicts. The current financial regime created at the time of privatisation discourages water companies from borrowing money for long-term investment. Yet water and sewerage companies ought to find it easy to borrow for investment at reasonable rates - their business could hardly be described as high risk. ..TX.- On a more symbolic level water company executives should perhaps consider whether it is wise to bleat about the cost of environmental improvements while continuing to award themselves pay increases of more than 40 per cent every year. ..TX.- It is a false dichotomy to posit a choice between clean water and affordable water. We can and must have both. What is needed is a sensible, non-dogmatic approach which combines a range of options and instruments, and a demonstration of firm political will. As you imply, it is now up to the government to provide this. ..TX.- Chris Smith, ..TX.- shadow secretary of state ..TX.- for environmental protection, ..TX.- House of Commons, ..TX.- London SW1A 0AA ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9511 Air, Water, and Solid Waste Management. P4941 Water Supply. ..TP.- Types: NEWS General News. ..IX.- P9511, P4941. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGOCUADQFT ..HL.- 930715FT 930715 Lobbying not worth a button: UK government plans to prune its contacts with trade associations (1280) ..BL.- By ANDREW TAYLOR ..TX.- The British Button Manufacturers Association was formed in 1915 when the country's clothing manufacturers were still a force to be reckoned with. Today, the association shares its headquarters with the Buckinghamshire home of its secretary, Mrs Patricia Smith. ..TX.- Its membership has fallen to 14 companies, from about 160 at the end of the second world war, but it still expects to have occasional meetings with senior government officials on issues that affect European and world button markets. Hundreds of other UK trade associations, large and small, have similar aspirations. ..TX.- However, Mr Michael Heseltine, trade and industry secretary, wants to restrict their access, concentrating ministerial and civil servants' time on a smaller number of 'better resourced, more powerful' lead associations in each industrial sector. His aim, announced in a recent speech to the Confederation of British Industry, is to improve the quality of industrial lobbying in Whitehall and Brussels. ..TX.- The principal role of trade organisations is to lobby government on legislation and likely policy changes that could affect the way in which their member companies operate. Mr Heseltine believes that fewer, larger groups would be more effective than a myriad of smaller, more narrowly focused bodies. ..TX.- The prospect of losing already limited access to government dismays Mrs Smith, who is contracted by the button makers to work one morning a week - in practice, it is more - assisting with pay negotiations, dealing with correspondence, organising meetings and keeping abreast of possible legislative changes. ..TX.- She says: 'Recently we became concerned about European Community attempts to restrict the use of nickel, which affects button making. After much badgering we got a meeting with Department of Trade officials, but only at a very low level. We were very disappointed.' The department has raised the issue in Brussels, but the proposed EC legislation remains unchanged. ..TX.- By concentrating on the big picture there is a danger that issues affecting small component suppliers could be ignored, says Mrs Smith. This could have a detrimental effect on larger manufacturers which rely on small suppliers. ..TX.- Ministers and government officials say they do not have enough time to see all the organisations demanding their attention. They add it can be confusing to receive conflicting messages from trade associations in the same sector. ..TX.- There are about 2,000 registered trade associations in Britain, compared with 1,200 in Germany and 1,000 in France, according to Mr Chris Henderson, a director of CBD Research, which since 1965 has published a series of British and European guides to business, trade and professional organisations. ..TX.- The formation and survival of so many associations is explained partly by history: the scale and diversity of Britain's industrial base spawned large numbers of trade groupings, whose members have traditionally valued their independence and who have enjoyed the club-like atmosphere of small, focused organisations. ..TX.- While industry has declined, the number of associations has remained high. In the past 25 years, since CBD Research has kept records, the number has been remarkably constant, says Mr Henderson. Associations in declining industries that have merged or disappeared have been replaced by new industry bodies formed in growth areas such as electronics, he says. ..TX.- But recession in the past few years has eroded individual membership numbers and trade association income - most fees are based on a member company's turnover, payroll or capital employed. ..TX.- Some smaller trade associations, faced with the loss of lobbying access as well as dwindling income, are seeking loose federations where they can share resources, while others have merged with larger, more powerful organisations in the same sector. ..TX.- Mergers between smaller associations have increased as the industries they represent have shrunk or rationalised. ..TX.- An example of the trend is the formation of the British Engineers' Cutting Tools Association, which represents the combined forces of the Sheffield-based Milling, Cutter and Tool Bit Association, the Twist Drill and Reamer Association and the Screw Thread Tool Association. The new body will remain a member of the 50-year-old Federation of British Engineers' Tool Manufacturers which helps co-ordinate the industry's lobbying activities. ..TX.- The Chemical Industries Association, singled out by Mr Heseltine as 'an excellent example' of a 'well-resourced lead association', acts as an umbrella organisation providing substantial lobbying assistance to other chemical trade associations trying to influence Whitehall and Brussels. It has an annual fee income of about Pounds 4m - only slightly less than the combined turnover of all 14 members of the British Button Manufacturers Association. ..TX.- Mr John Cox, the association's director-general, says: 'It is not enough just to respond to upcoming legislation. You have to be in permanent contact with policymakers so you can influence proposals before they are made. You have to know which members of parliament, in Westminster and Strasbourg, have influence and when you can contact them. We have to employ permanent staff to cope with this work, which smaller associations would not be able to afford.' ..TX.- Even large employers and trade bodies are forming links: the Confederation of British Industry and the Engineering Employers' Federation are examining ways to 'collaborate more closely to improve the delivery of industry's message to government'. ..TX.- But co-operation between groups in Britain tends to be less centralised than in Germany, for example, where specialist interest groups are more co-ordinated within central industrial organisations. These provide a well-organised system of industrial lobbying, says Mr Henderson, as well as providing services for a range of separate product groups - in a similar fashion to the Chemical Industries Association. ..TX.- The success of more centralised groups does not mean that small associations have no place in representing manufacturers' interests. 'The British system tends to be more informal,' says Mr Henderson. 'Separate product groups in the same industry may share the same headquarters and even the same secretary, but still value their independence. This does not necessarily make them less effective. ..TX.- 'Associations have a lot of functions. They may help organise specific industry training, maintain links with educational bodies, assist with pay negotiations, arrange conferences and generally promote and market their industry. It would be a pity if these individual services were lost as a result of member companies moving to more broadly based organisations.' ..TX.- But Mr Henderson shares Mrs Smith's concern that small but important issues might slip between the cracks, damaging the interests of small industries which supply larger manufacturing interests. ..TX.- It is not the first time that government has tried to rationalise its relations with industry lobbyists. The 1972 report of the Commission of Inquiry into Industrial and Commercial Representation under Lord Devlin similarly criticised duplication and confusion in trade associations competing in the same industries. ..TX.- The report said: 'Everybody agrees that there are too many bodies. A businessman can find himself paying out substantial sums to quite a number of different bodies without being at all clear what he gets in exchange . . . He can find himself attending quite a number of different meetings at which the same subjects are being discussed.' ..TX.- In the critical area of representation to government, it concluded: 'You can have competition of services but not competition of voices.' ..TX.- The commission's report was quietly forgotten and nothing changed. The Department of Trade and Industry, more than 25 years later, might be more persistent. ..TX.- The associations themselves appear to be moving in the right direction. It will be up to the DTI to ensure that those small but important issues do not slip through the cracks. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3999 Manufacturing Industries, NEC. P9651 Regulation of Miscellaneous Commercial Sectors. P9721 International Affairs. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P3999, P9651, P9721. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGOCUADPFT ..HL.- 930715FT 930715 Letter: Government failing to convince on CrossRail (311) ..BL.- From Mr JEREMY BAYLISS ..TX.- Sir, To achieve its target of attracting 30 per cent of the funding needed for CrossRail from the private sector ('Private cash sought for 30 per cent of CrossRail', July 8), the government has got to give private investors the confidence they need to commit the very large sums of funding required. The government is failing to do this at present. ..TX.- The case for CrossRail is unassailable. Probably the best conceived transport project to be undertaken in such a complex city setting, it will reduce congestion, bring environmental benefits and help to guarantee London's position as the world's leading international business centre. ..TX.- The government is right to look for input from the private sector. Governments worldwide are finding that they do not have the funds required to finance all the public services and infrastructure they would like to provide. CrossRail is a prime example of a project that would benefit from the commitment, management and market experience that the private sector can bring. ..TX.- If it is to win private sector backing, however, the government must now give an unequivocal commitment that the project will go ahead as soon as the legislation is enacted. It must also set out clear guidance on the level of funding and the sharing of risk. ..TX.- CrossRail will be a significant test of the feasibility of public/private sector partnership. The government must show full commitment in pushing it forward if it is to pave the way for private investment in other infrastructure projects needed for the 21st century. ..TX.- Jeremy Bayliss, ..TX.- chairman, ..TX.- RlCS infrastructure panel, ..TX.- The Royal Institution of Chartered Surveyors, ..TX.- 12 Great George Street, ..TX.- London ..TX.- SW1P 3AD ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4011 Railroads, Line-Haul Operating. P4111 Local and Suburban Transit. ..TP.- Types: NEWS General News. ..IX.- P4011, P4111. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGOCUADOFT ..HL.- 930715FT 930715 Book Review: Better in the black than clean and green (909) ..BL.- By DAVID LASCELLES ..TX.- ENVIRONMENTAL PROFILES OF EUROPEAN BUSINESS By Dion Vaughan and Craig Mickle Royal Institute of International Affairs and Earthscan Pounds 15. 107pp ..TX.- Moments of candour are rare when the environment is on the business agenda. I experienced one last year when asking the manager of a large UK oil refinery what benefits he got from investing in green technology. He answered: 'Absolutely none.' ..TX.- It made a refreshing change from the platitudes about getting ahead and doing one's bit for Mother Earth which businessmen feel compelled to utter on such occasions. But even this direct response was little help in plumbing the murky depths of business attitudes towards the environment. It is a subject rich in complexity, laced with emotion, tinged with fear - one where clear and honest thinking is notable for its scarcity. ..TX.- This book is an attempt to shine some light through the murk - at least so far as European business is concerned. It is only partially successful because the light is frustratingly patchy. But it does pick out the main features, and it gives readers a reassuring sense that what they are glimpsing bears some resemblance to the truth. ..TX.- The frustrating part is the anonymity given to the companies which are the subject of the book. This, the authors tell us without a trace of irony, was to allow the interviewees 'to define corporate positions clearly'. In itself, this tells us a lot about those positions: they are highly sensitive - and probably embarrassing as well. ..TX.- The book is a straight piece of research insofar as its authors, working under the aegis of the Energy and Environmental Programme of Chatham House, have collated the responses to questionnaires sent to 55 companies in France, Germany, Italy, Benelux and the UK, representing the automotive, metal processing, petrochemical, power generation and steel industries. The questionnaires asked them how important the environment was, where the pressures lay, how they dealt with them, where they saw environmental issues heading, and so on. ..TX.- The questions boil down to whether companies have any kind of policy on the environment. The chapter on the auto industry lays out what must be a fairly widespread view: 'Although all companies consider the environment an important corporate priority, most clearly consider profitability more important. Analysis of the responses suggests that few companies have a strategic plan to generate additional profitability from their environmental positioning and expenditure.' ..TX.- In other words, they do not associate the environment with profit-making. In the steel industry, environment ranked behind profitability, health and safety, and none of the companies interviewed had a main board director with sole responsibility for it. However, the survey did find a more advanced (if that is the right word) attitude in the chemical industry, where companies 'see their role as optimising value added . . . to raw materials through manufacturing. Environmental management is now a very important input to this process; polluting wastes are seen as unused resources.' Here, the environment is forcing companies to make fuller use of their materials. ..TX.- The chemical industry and the electric utilities emerge from the study as the sectors most deeply engaged in environmental issues, probably because of the strength of outside pressures, such as the carbon tax proposal and concern about acid rain. ..TX.- But for the utilities, the environment is a damage limitation exercise: the opportunities to gear up environmental spending are few. By contrast, the auto industry ought to see the environment as a challenge to respond to rising emission standards and excise taxes to develop new vehicles. But the study comments: 'What is surprising, however, is that only some automotive companies take this view. The rest react to, but do not seek to exploit or pre-empt, consumer demand for environmentally friendly products which at the moment appears somewhat artificial.' ..TX.- Why does business take such a reactive, even passive, stance? The respondents give a number of reasons: uncertainty about future legislation, the poor financial returns from environmental investment, and the lack of strong customer pressure. Notice, though, that these are all extraneous factors. ..TX.- Might the explanation also lie in the attitude of business itself? Two components of that attitude come through clearly. One is a narrow perception of the environment as a requirement to limit harmful emissions or make safe products, rather than as a broader concept representing a scale of values. The other is a lack of conviction that many environmental issues are genuine; many companies seem to see them as fads embraced by a fickle public - and exploited by press and politicians. ..TX.- These are sweeping statements, of course. They do not apply equally to all industries, and they only contribute to the way people think. But my candid oil refinery manager would recognise them straight away. ..TX.- The green lobby may seize on this study as confirmation of industry's minimalist approach to the environment. But that is not the real message. The findings depict businessmen who are primarily - and rightly - concerned with making a profit within the confines of the law, but who are confused by the buffeting of environmental pressures. The authors are probably right to conclude that nothing much will change without clear-sighted legislation, and a public that is willing to pay premium prices for environmentally friendly products. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2731 Book Publishing. ..TP.- Types: NEWS General News. ..IX.- P2731. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGOCUADNFT ..HL.- 930715FT 930715 Arts: Spielberg's twin-headed monster - Cinema (1248) ..BL.- By NIGEL ANDREWS and STEPHEN AMIDON ..TX.- JURASSIC PARK (PG) Steven Spielberg BARAKA (PG) Ron Fricke CHILDREN OF NATURE Fridrik Thor Fridriksson ..TX.- Here it is and was it worth the wait? When you tell someone you have seen Jurassic Park, back flies the mach-2 question: 'What's it like?' This never means what it should mean - 'What does it resemble?' - but 'Is it good/is it bad/will it scare the screaming daylights out of us?' ..TX.- Let us take the question at first value. Jurassic Park is like Jaws meets Westworld. (Steven Spielberg, its director, made the first and Michael Crichton, its writer, wrote and directed the second). It is like a nightmare day out at the Natural History Museum. And it is like a Hollywood story conference where savage, primeval pitches rend the air. ..TX.- 'Let's have the palaeontologist hero and the two kids climb the electrified fence]' 'Let's have the heroine feel a comforting arm on her shoulder and then discover it's only an arm]' 'Let's have the velociraptors run amok in the Visitors Centre kitchen]' 'Let's have Lord Attenborough play the park's founder with a limp, a Scottish accent and a cherubic smile.' (Result: Sir Richard resembles Ronnie Corbett gone AWOL in an HG Wells novel). ..TX.- Yes, but you still want to know: 'What is it like?' Well, it is good, it is bad, and occasionally it scares the daylights out of us. What is good is the hi-tech presumption of the film. Crichton's novel was a spinechiller-satire about an ultimate act of hubris. A theme park packed with prehistoric fauna, recreated through a far-fetched (but not that far-fetched) union of DIY and DNA, mutinies against its masters. Drawn to the theme of techno-impudence, Steven Spielberg makes a movie that is all techno-impudence. Jurassic Park spreads its banquet of gewgaws, gizmos and breakthrough graphics before us, condemning previous dinosaur films to cinematic prehistory. ..TX.- Computer imaging and state-of-art modelwork ensure that when Tyrannosaurus Rex growls into frame to terrify Dr Sam Neill and the two children he is escorting on an ill-fated preview tour of the park, the said T. Rex is a glistening, roaring, tail-thrashing mother of all monsters with no hint of stop-motion jerk. ..TX.- In fact no signs anywhere of the old clockwork epilepsy we knew and half-loved in Gorgo and Godzilla. Not in the 'raptors and iguanadons; nor in the gentle triceratops tended by 'palaeo-botanist' Laura Dern; nor in the puff-necked 'spitter' that disposes of the villainous Dennis (Wayne Knight), a park boffin who runs straight into death while smuggling stolen embryos to a waiting boat. ..TX.- But if the monsters have evolved beyond stop-motion, the human characters are a different story. Stereotypes made to fit a game-plan, they stand about striking prescribed attitudes and between shots make small adjustments of gesture to present a fresh facet of the same cliche. The palaeontologist must spout sandblown wisdom. The Chaos Theory scientist (Jeff Goldblum with Chaos Theory hair and scat speech-patterns) must burble about things unravelling. And the lady botanist must rail against sexist notions of female weakness one moment, scream like Fay Wray the next. ..TX.- In Jaws Spielberg painted an entire, convincing New England community behind and around the foreground monster. And in Close Encounters Of The Third Kind he gave a messianic madness to the hero's love affair with the cosmic-impossible. But in Jurassic Park the characters are prisoners of a theme park just like the dinosaurs. Only their theme park is called Hollywood and their inventor-orchestrator is the box-office. Lowest-denominator thinking means that each character represents a big, bland constituency for audience identification, from the all-purpose egghead sceptic (Goldblum) to the all-purpose damsel in distress mildly fuzzed by feminism (Dern). ..TX.- Only the actor saddled with the largest burden of cliches, Lord Attenborough, almost succeeds in throwing them off. Ever since he vanished behind a movie camera, fans of Sir Dickie the actor have been crying for him to come forth again. He is marvellous in Jurassic Park. Hammond, the park's founder, could have been a melodramatic cipher: a science-tampering scoundrel out of Fritz Lang by Dr No. But Attenborough gives him a foolish charm, a sing-song passion, even a wistful pain. (Listen to the pure emotion he finds in a tinselly speech about his flea-circus past). ..TX.- Elsewhere, the flimsiness of the people undoes even the ferocity of the beasts. And Spielberg - the Spielberg of ET rather than Jaws - is not above making the monsters cuddly when there is a pause in the ravening. For cuddlification comes with the territory: all those covetable tie-in models, toys, games, T-shirts, gum-wrappers . . . ..TX.- A Chaos Theory terror movie may be the promise, but in Jurassic Park cosiness is always just around the corner. As a lexicogapher friend pointed out, what you really get when you extract DNA from dinosaurs is the word 'souris.' Jurassic Park is a mouse with pretensions. But such is the power of hype that no one will notice until - only Dollars 100m to go - it has become the highest-earning film ever made. ..TX.- Baraka is a film based upon the problematical notion that cinematic silence equals importance. Subtitled 'A World Beyond Words,' Ron Fricke's film is a 90-minute non-verbal collage of imagery that attempts to show the interconnectedness of life on the planet. Starting with a snow monkey dozing off in a hot spring, Fricke's film quickly goes cosmic, presenting the viewer with a dizzying array of visual takes of smoldering volcanoes, surging city crowds, traditional religious ceremonies and clouds pouring over Himalayan mountaintops. ..TX.- Occasionally, this method provides memorable sequences, such as the montage comparing assembly line work throughout the world that ends with the truly unsettling sight of live chicks tumbling down a stainless steel shoot on the way to becoming inmates at the egg factory. And when Fricke's 70mm camera zooms in on small details - an Aboriginal man using a plastic comb to paint his face, for instance - he comes close to making his point. But the film eventually collapses under its own portentousness, particularly during a trip to Auschwitz. At times beautiful and arresting, Baraka is ultimately little more than a stylised exercise in global channel-hopping. ..TX.- One of the few countries Fricke does not visit is Iceland. Given the starkly beautiful landscape of that country on view in Children of Nature, you cannot help but feel he has missed something. Fridrik Thor Fridriksson's heartfelt second film details the last days of an elderly widower (Gisli Halldorsson) who abandons his farm for Reykjavik, only to have his daughter pack him off to an old folk's home. There, he meets a childhood sweetheart (Sigridur Hagalin), a proud and beautiful septuagenarian who wants to visit her birthplace on the island's desolate eastern region before dying. Their romance rekindles and, equipped with a stolen jeep, they set off across Iceland, followed by the police. ..TX.- Writer/director Fridriksson has fashioned a subtle, sometimes moving film about people who will not go gently into the Arctic night. Lovingly photographed and well acted, Children of Nature avoids casting the elderly as cute curmudgeons. However, Fridriksson fails to strike a consistent emotional tone, moving too abruptly from unrelieved gloom to fantastical whimsy. And the film's subtitles are replete with enough misspellings to keep the eye from fully enjoying those bleakly beautiful Icelandic vistas. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7832 Motion Picture Theaters, Ex Drive-In. ..TP.- Types: NEWS General News. ..IX.- P7832. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGOCUADMFT ..HL.- 930715FT 930715 Arts: The Mountain Giants - Theatre (618) ..BL.- By MALCOLM RUTHERFORD ..TX.- An initial warning may be in order: The Mountain Giants is more for the head than the heart and parts of it are obscure even by the standards of Pirandello. It was the author's last play and was unfinished when he died in 1936, though he left an outline for the final act. The production at the Cottesloe is a new version by Charles Wood who has written a conclusion that looks as if it is faithful enough to the original intentions. ..TX.- The Giants are fascists, yet while there are mentions of Herr Hitler and Berlin, they are plainly of the Italian, not the German variety, and therefore less efficient. The Italian giants, like the Germans, go in for stadiums, not theatres, but they are not really giants at all, 'just trying to be, hoping to be.' In a lovely Italian line, it is said that they are simply 'the Giganti family', as one may speak of other Italian dynasties. ..TX.- In fact, the giants never appear. There is one scene of loud martial music and the sound of giant feet marching, but they do not reach the stage. The most they do is send a bureaucrat to represent them. ..TX.- All that may seem lucid enough in exposition. The trouble is, however, that it does not emerge until around the middle of the play. ..TX.- The beginning is much more characteristically Pirandello. One set of peasant actors, led by the magician, Cotrone, meets another, more professional group known as the Contessa's company. There are some familiar exchanges about illusion and reality, then some more mystical scenes about dreams. It is only gradually that we understand that the professionals are under pressure from the regime, and that freedom of the imagination is in danger of being suppressed. ..TX.- In the second act the threat becomes clear enough, but then there is another twist. It is not the absent giants who boo the actors' play off the stage, but the huge audience of workers who 'dig, build and pave' for the giants' state. By then, all the customary playing with illusion is gone. ..TX.- The stark conclusion is that, under totalitarianism, individual art cannot exist: harder to say in the Italy of the 1930s than it is today. The piece ends, almost as it began, with the Contessa being wheeled off, as she was first wheeled on, in a cart, possibly dead. ..TX.- There have been other satirical shafts along the way. The sailors who support the regime, for example, are presented as a set of dummies in a child's nursery and only occasionally come to life. Presumably they are serving only to wear the uniform and are not really dangerous at all except in their readiness to conform. ..TX.- Even under William Gaskill's direction, this remains a collector's item: fascinating to watch, but not an entirely coherent play. ..TX.- It contains one magnificent performance by an actor who continues to grow in stature. That is Desmond Barrit as Cotrone. He will be remembered as playing both twins in the RSC's Comedy of Errors and, more electrically, as the property developer in The Chinese Wolf at the Bush earlier this year. ..TX.- Physically large, sometimes he just needs to stand there to impress: when he speaks he compels attention. As the magician commanding the actors, he is the one wise man in the play, standing slightly above it all. ..TX.- The actress who stands out is Sian Thomas as the Contessa, but one cannot say it is the best part Pirandello wrote. ..TX.- Cottesloe Theatre. (071) 928 2252 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7992 Public Golf Courses. ..TP.- Types: NEWS General News. ..IX.- P7992. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGOCUADLFT ..HL.- 930715FT 930715 Arts: Onegin proves a musical masterpiece - Opera (826) ..BL.- By MAX LOPPERT ..TX.- The Royal Opera's new Tchaikovsky production affords, in purely musical terms, one of the most distinguished performances to be mounted in the house in many a season. When given by ragbag assortments of singers from here, there and everywhere, parrotting the so-called original language while surtitles flash away above their heads, International Opera can be a dismal, unworthy business. When given as here - by a carefully chosen cast of principals uttering a language either native to them or communicatively 'lived', and a conductor intuitively alert to every strand of musical drama - it can seem the noblest of artistic pursuits, worth battling for even in the hardest of hard times. ..TX.- This is an Onegin musically structured to make fully-weighted sense of the work in a theatre that is, strictly speaking, several sizes too large. (Tchaikovsky had the work first performed by students at the Moscow Conservatory.) The bigger the house, the greater the danger of coarsening and blunting the delicate detail of this most intimately affecting of operatic tragedies. (Tchaikovsky purposely underlined its divergences from the forms and manners of Grand Opera by subtitling the work 'Lyric Scenes'.) ..TX.- The conductor of the new production is Valery Gergiev, fiery young chief of the Kirov Opera. He is making his Covent Garden debut, and perhaps has still to find his ease there: on Tuesday the early scenes betrayed passing imbalances in the choral ensemble. In essence, however, Gergiev's Onegin is already one of the most impassioned, vivid and spontaneously emotional we have heard: it is properly scaled for Covent Garden yet not overbearing, grand with no loss of orchestral and vocal immediacy. The sound is always beautiful, animated (as it were) from within, shaped along the dramatic lines with a keenness of perception that marries instinct and iron command. ..TX.- Gergiev takes chances. The domestic, countryfied atmosphere of the opening scene, with daughters duetting in the distance and mistress and maid reminiscing in the foreground, is risked by the slow tempo; likewise M. Triquet's birthday song, and the moment of relief it provides amid the gathering tensions of the Larin ball. Accentuation of dance-rhythms is not at all metrically mechanical; indeed, the conductor's rubato elasticities may surprise the unwary. But even while I wondered at or where I questioned the interpretative ideas, I felt the opera's dramatic vitality surging out into the theatre. This is opera-conducting of rare quality. ..TX.- Sergey Leiferkus (Onegin), Galina Gorchakova (Tatyana) and the Armenian Gegam Grigorian (Lensky) are members or associates of Gergiev's Kirov ensemble. The sense of singers supported from the pit, not merely accompanied, is another of the performance's special virtues. The baritone, a house favourite, is at his peak of eloquent, fine-grained artistry. Every inflection tells. A non-Russian speaker gains the illusion of understanding every word as it leaves his lips. He never loses the air of breeding that is Onegin's distinguishing mark; even in disintegration he avoids melodramatic overstatement. ..TX.- The soprano, who burst upon London audiences with tidal-wave force in The Fiery Angel, at the Proms and at Covent Garden, is possibly the most opulent, lustrously full-toned Tatyana in living memory: again, truly Covent Garden-sized without being oversized. She does not always shape the lines or make them perfectly smooth; though physically plausible, she is a sympathetic rather than an original, inventive actress. What she offers is a restrained, ravishing account of the role, and in context wonderfully appropriate. ..TX.- Grigorian, a small, rotund Lensky with a vibrant, technically free tenor and a heart-breaking openness of emotional expression, is all feeling - the over-abundance of happiness in the Act 1 aria, beautifully caught in the timbre and phrasing (and sustained in the conducting), sends out subtle, alarming warning signals. It is satisfying to see and hear Louise Winter (a delightfully spirited Olga), Sarah Walker (Filipyevna) and Gillian Knight (Mme Larin) keeping pace with such idiomatic artistry; and as Gremin it is peculiarly moving to see and hear again Nicolai Ghiaurov, no longer a basso cantante in full flood but a 63-year-old veteran wise, colourful and full of tender vocal touches. ..TX.- A triumphant Royal Opera Onegin all round? No: the production - by John Cox in Timothy O'Brien's designs - is plain to the eye, cautiously tactful, blandly second-rate. No big mistakes are made (which, when one considers how easy it is to go wrong in this opera - cf. Howard Davies's recent, mistake-riddled Onegin staging for Welsh National - is a merciful relief). Nothing gets in the way of the music. For many ROH patrons this may be sufficient. With this conductor and cast, it deserves to be. But the replacement of the old Julia Trevelyan Oman sets and costumes seems unjustified. ..TX.- Royal Opera House: in repertory until July 24; production sponsored by The Drogheda Circle. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7922 Theatrical Producers and Services. ..TP.- Types: NEWS General News. ..IX.- P7922. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGOCUADKFT ..HL.- 930715FT 930715 Arts: Today's Television (229) ..BL.- By CHRISTOPHER DUNKLEY ..TX.- Lee Kuan Yew, former leader of Singapore, talks to David Lomax in Business Matters which also reports on the island's business prospects. In 30 years it has developed from a ramshackle dockyard into one of the most influential business centres in the world, but the programme asks whether Lee Kuan Yew's autocratic habits will be appropriate for a new generation (7.40 BBC2). ..TX.- Crime Limited would be a healthier programme if the makers would stop pretending that it was performing some sort of high minded social service and admitted that it is doing just what all the other ambulance-chasing series are doing: chasing the ratings. It would be more honest to promote it in the style of the old evening paper fudge boards: 'Horrible murder: full details' (8.30 BBC1). ..TX.- Given that the US did not make war on Iraq because of threats to American oil supplies (the suggestion was vehemently rejected) but because a sovereign state had been invaded, how should we explain America's failure for 40 years to fight a war on behalf of Tibet? Under The Sun reports on the Chinese occupation (9.30 BBC2). ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4833 Television Broadcasting Stations. P4832 Radio Broadcasting Stations. P4841 Cable and Other Pay Television Services. ..TP.- Types: TECH Services & Services use. ..IX.- P4833, P4832, P4841. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGOCUADJFT ..HL.- 930715FT 930715 Arts: Angst in America - Theatre (506) ..BL.- By ANDREW ST GEORGE ..TX.- At first sight, Marvin's Room offers little to laugh at. It is a drama about leukaemia written by Scott McPherson, who died of Aids at 33 last year. But this fine American play, now at the Hampstead Theatre, can be extremely funny. It also enhances the Theatre's growing expertise in north American drama. ..TX.- It tells the story of Bessie, a middle-aged Floridian pushed to the side of her own life by her father's stroke and her aunt's general malaise. Then Bessie discovers she has leukaemia; her estranged sister Lee is summoned from Ohio, with her sons Hank (an institutionalised psychotic) and Charlie (an intractable nerd), in hopes of a bone marrow transplant. At this point, the play is poised to become a 1990s chromosome comedy. But the play's outcome is dislocated and truncated, a botched autopsy. In the end, none of Bessie's family can donate bone marrow; Marvin, Bessie's father, continues to twitch in the room at the back of the stage; and the greatest wisdom the play can offer, in its final lines, is 'There's nothing to be afraid of.' ..TX.- The early Florida medical scenes are, however, a treat: 'I am going to give you a local anaesthetic, and I am going to remove some bone marrow from your hip . . . There may be a crunching sound, but it sounds worse than it is, OK?' oozes Dr Wally. ..TX.- Bessie has a seizure during the family trip to Disney World. She comes round in the Lost Children Hut on a 'baby bear' bed, where she finds a moment of rare sororal intimacy, and also connects with Hank for the first time. ..TX.- David Petrarca's direction, wonderfully punctuated by Rob Milburn's pastiche musical arrangements (played by Cafe Noire), addresses the fact that McPherson's scenes never complete themselves. They border on the truth, never reaching it. Intimacies are shared through things, a soda, a photograph, or Lee offering to style her sister's wig. ..TX.- Alison Steadman plays Bessie superbly as a model of misapplied devotion opposite the excellent Phyllis Logan as her hard-as-nails sister Lee. They have a fine, contrasting rapport, with Steadman slightly frumpy and Logan slightly tarty but never resorting to stereotypes. Carmel McSharry as the aunt dosing up on multivitamins and daytime soaps manages to assemble a character out of the traits written for her. Ian Gelder as Dr Wally is developing his accomplished playing of Americans, and is a joy to watch. ..TX.- The play has an unsettling effect, somewhere losing control of itself and heading into chaos. Its message is a muted version of the 1980s clarion call 'You are where you are because you want to be there.' As Bessie learns the hopelessness of her own illness, she backs into her father's room to die with him. Neither has much choice. ..TX.- Hampstead Theatre, Swiss Cottage, NW3 (071 722 9301). ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7922 Theatrical Producers and Services. ..TP.- Types: NEWS General News. ..IX.- P7922. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGOCUADIFT ..HL.- 930715FT 930715 Arts: Youth and reverence - London Theatre (558) ..BL.- By ANTONY THORNCROFT ..TX.- Like babies to the font, the three severely disabled youths were carried reverentially to the front of the stage and laid on cushions. They were dressed in kimonos and greeted with oriental music. Their attendants wafted Japanese fans over them; the youths stared wide eyed with joy. One screeched his pleasure. There was nothing patronising about the tableau: it was one of the most moving examples of reverence for life observed on a stage. ..TX.- And this was no prefabricated platform in a community arts centre. This was the Olivier at the National Thetre in London. The participants came from the Harlow College Community Arts group, which involves more than 30 under-19-year-olds, ranging from the able bodied to the most afflicted. They were presenting Tower of Dreams, which through music, movement, and spectacle, makes the case for the disabled to be allowed on to the raft of life, represented as a fairground carousel. ..TX.- It was part of the 1993 Lloyds Bank Theatre Challenge, the last such Challenge. After five years and Pounds 1.2m, this investment in youth theatre has ended. However, the National is already planning another programme involving youth and is seeking a sponsor. ..TX.- A great attraction of the Challenge is that the 10 groups which this year caught the judge's eye from over 250 entries get the chance to strut for an hour on the UK's most prestigious stage. The three-night festival lets an audience see not so much new acting talent as the issues that excite youth. Rather than take a received text, most of the contributions this year were devised within the companies. ..TX.- It is an inspiring experience and one which dispels doubts about the importance of theatre in education. Of course there is an abundance of youthful worthiness and idealism on display, but also a great deal of fun. The level of acting assurance is amazing, almost frighteningly so. At the opening night on Tuesday the Harlow spectacle contrasted with the contributions of Redbridge College Performance Art Group and Burnley Youth Theatre which were both built around issues. There is something galvanising about plays involving teenagers which are devised and performed by teenagers: the language is so much more credible than the second-hand observations of older 'realist' playwrights. ..TX.- Both works were loosely structured, with ideas running way beyond anything so obvious as a plot, and they were inevitably a bit didactic. But from Burnley, along with frighteningly confident performances, there was wit and good nature and the ability to take a serious issue, contraception, light heartedly. There was even room for romance, even if did lead to divorce. ..TX.- Redbridge was an ensemble work, using mime and music to put over the dispiriting message than men are bastards. Perhaps the girls do not really believe it; perhaps they have been watching too much television. But it was enthusiastically performed and had the saddest of endings. Sandy Toksvig, the evening's presenter, announced that this would be Redbridge's last performance. It was the victim of local authority spending cuts, an unwelcome reminder of cruel and blinkered reality on an uplifting evening. ..TX.- There are three more playlets tonight. Try and get a scarce ticket. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7922 Theatrical Producers and Services. ..TP.- Types: NEWS General News. ..IX.- P7922. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGOCUADHFT ..HL.- 930715FT 930715 People: Bank for International Settlements (220) ..TX.- Robin Leigh-Pemberton (pictured right), who stepped down as governor of the Bank of England last month, has picked up his first outside directorship and a new title. ..TX.- The former governor, who was given a life peerage in the Queen's birthday honours list, took the title Lord Kingsdown yesterday and was also appointed a director of the Basle-based Bank for International Settlements, the central bankers' bank. ..TX.- The appointment was less surprising than the title. The governor of the Bank of England always sits on the BIS board and the tradition is that the ex-governor is the second British director. Until yesterday Lord Richardson of Duntisbourne, head of the Bank of England between 1973 and 1983, had been the second British director on the BIS board. ..TX.- The choice of title was less straightforward. The ex-governor has strong ties with Kent. He has been Lord Lieutenant since 1982. However, although his home is in Kent, he does not live in either of the county's two Kingsdowns. Instead he has taken the title of a great, great grandfather, Thomas Pemberton, a successful lawyer who was made a peer by Queen Victoria, but died childless. ..CN.- Countries: CH Switzerland, West Europe. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: PEOP People. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUADGFT ..HL.- 930715FT 930715 People: Departures (37) ..TX.- Allan Robertson is retiring from NCR. ..CO.- Companies: NCR. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3577 Computer Peripheral Equipment, NEC. P3571 Electronic Computers. ..TP.- Types: PEOP People. ..IX.- P3577, P3571. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUADFFT ..HL.- 930715FT 930715 People: Departures (36) ..TX.- David Gore has resigned from TRITON EUROPE. ..CO.- Companies: Triton Europe. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1382 Oil and Gas Exploration Services. ..TP.- Types: PEOP People. ..IX.- P1382. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUADEFT ..HL.- 930715FT 930715 People: Departures (40) ..TX.- Adrian Gregory, deputy chairman, has retired from WILLIS CORROON GROUP. ..CO.- Companies: Willis Corroon Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6411 Insurance Agents, Brokers, and Service. ..TP.- Types: PEOP People. ..IX.- P6411. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUADDFT ..HL.- 930715FT 930715 People: Departures (39) ..TX.- Michael Fort, formerly md of Pronuptia Youngs, has resigned from CUPID. ..CO.- Companies: Cupid. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2335 Women's, Juniors', and Misses' Dresses. ..TP.- Types: PEOP People. ..IX.- P2335. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUADCFT ..HL.- 930715FT 930715 People: Departures (34) ..TX.- Peter Wright has resigned from SERIF. ..CO.- Companies: Serif. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3944 Games, Toys, and Children's Vehicles. ..TP.- Types: PEOP People. ..IX.- P3944. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUADBFT ..HL.- 930715FT 930715 People: Departures (57) ..TX.- John Parsons, chief executive of Darchem, has left the company following the disposal of its UK contracting division by WILLIAM BAIRD. ..CO.- Companies: William Baird. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2311 Men's and Boys' Suits and Coats. P2321 Men's and Boys' Shirts. ..TP.- Types: PEOP People. ..IX.- P2311, P2321. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUADAFT ..HL.- 930715FT 930715 People: Departures (50) ..TX.- Sir Richard Trant has retired from the board of HUNTING but remains chairman of the defence division. ..CO.- Companies: Hunting. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4449 Water Transportation of Freight, NEC. P6719 Holding Companies, NEC. ..TP.- Types: PEOP People. ..IX.- P4449, P6719. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUAC9FT ..HL.- 930715FT 930715 People: Transatlantic Holdings (47) ..TX.- Brian Jolly, md of Capital & Counties, has been appointed to the parent board of TRANSATLANTIC HOLDINGS. ..CO.- Companies: Transatlantic Holdings. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6331 Fire, Marine, and Casualty Insurance. ..TP.- Types: PEOP Appointments. ..IX.- P6331. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUAC8FT ..HL.- 930715FT 930715 People: Berkeley Group (48) ..TX.- Tony Carey, chief executive of St George, has been appointed to the parent board of the BERKELEY GROUP. ..CO.- Companies: Berkeley Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6552 Subdividers and Developers, Ex Cemeteries. ..TP.- Types: PEOP Appointments. ..IX.- P6552. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUAC7FT ..HL.- 930715FT 930715 People: BICC Cables (46) ..TX.- Rainer Hemmann, md of KWO Kabel in Berlin, has been appointed to the board of BICC CABLES. ..CO.- Companies: BICC Cables. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3351 Copper Rolling and Drawing. ..TP.- Types: PEOP Appointments. ..IX.- P3351. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUAC6FT ..HL.- 930715FT 930715 People: North West Water (52) ..TX.- Bob Armstrong, personnel director for NORTH WEST WATER, has been appointed to the new position of customer services director. ..CO.- Companies: North West Water. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4941 Water Supply. P4952 Sewerage Systems. ..TP.- Types: PEOP Appointments. ..IX.- P4941, P4952. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUAC5FT ..HL.- 930715FT 930715 People: Tate & Lyle (49) ..TX.- Simon Gifford, group investments director, has been appointed company secretary of TATE & LYLE in succession to Nicholas Nightingale. ..CO.- Companies: Tate and Lyle. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2061 Raw Cane Sugar. ..TP.- Types: PEOP Appointments. ..IX.- P2061. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUAC4FT ..HL.- 930715FT 930715 People: Suter (37) ..TX.- John Ackroyd has been appointed md of SUTER Equipment. ..CO.- Companies: Suter Equipment. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3585 Refrigeration and Heating Equipment. ..TP.- Types: PEOP Appointments. ..IX.- P3585. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUAC3FT ..HL.- 930715FT 930715 People: Perkins Technology (56) ..TX.- Colin Ingram (above right), formerly chief engineer on the Renault/DAF vans project, has been appointed md of PERKINS Technology; he began his career as a graduate trainee with Perkins. ..CO.- Companies: Perkins Technology. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8711 Engineering Services. ..TP.- Types: PEOP Appointments. ..IX.- P8711. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUAC2FT ..HL.- 930715FT 930715 People: Cadbury (68) ..TX.- Alan Palmer (above left), marketing director of Trebor Bassett, has been appointed marketing director of CADBURY. He succeeds John Taylor who is appointed md of Trebor Bassett and is succeeded by Bruce Burnett, who is promoted from general market manager. ..CO.- Companies: Cadbury Schweppes. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2066 Chocolate and Cocoa Products. ..TP.- Types: PEOP Appointments. ..IX.- P2066. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUAC1FT ..HL.- 930715FT 930715 People: Airtours (43) ..TX.- Michael Lee, chief executive of Airtours International, is appointed to the main AIRTOURS board. ..CO.- Companies: Airtours. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4724 Travel Agencies. P4725 Tour Operators. ..TP.- Types: PEOP Appointments. ..IX.- P4724, P4725. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUAC0FT ..HL.- 930715FT 930715 People: Costain (48) ..TX.- John Anderson, formerly senior vice president of Life Sciences Inc, has been appointed president and md of COSTAIN Life Sciences. ..CO.- Companies: Costain Life Sciences. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6719 Holding Companies, NEC. ..TP.- Types: PEOP Appointments. ..IX.- P6719. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUACZFT ..HL.- 930715FT 930715 People: Low & Bonar (56) ..TX.- Peter Robson, md of Bonar Cooke Cartons, has been appointed md of LOW & BONAR's enlarged carton division following the acquisition of CMB Cartons. ..CO.- Companies: Low and Bonar. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2671 Paper Coated and Laminated, Packaging. ..TP.- Types: PEOP Appointments. ..IX.- P2671. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUACYFT ..HL.- 930715FT 930715 People: AAH Pharmaceuticals (46) ..TX.- Jeremy Poole has been appointed the first director of AAH PHARMACEUTICALS' Hospital Service; he moves from Fisons pharmaceutical division. ..CO.- Companies: AAH Pharmaceuticals. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2834 Pharmaceutical Preparations. ..TP.- Types: PEOP Appointments. ..IX.- P2834. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUACXFT ..HL.- 930715FT 930715 People: ScottishPower (45) ..TX.- Andrew Mitchell, company secretary of Stakis, has been appointed company secretary of SCOTTISHPOWER following the early retirement of Graham Watt. ..CO.- Companies: ScottishPower. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4911 Electric Services. ..TP.- Types: PEOP Appointments. ..IX.- P4911. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUACWFT ..HL.- 930715FT 930715 Technology: High-tech as a country pursuit (774) ..BL.- By PETER MARSH ..TX.- Britain's rural areas increased their high-technology employment during the 1980s at the expense of urban centres, according to a study which pours cold water on notions that high-tech industries in the UK have the potential to become big employers. ..TX.- The report by Bernard Fingleton of the Department of Land Economy at Cambridge University underlines how cities often provide an unsuitable environment for modern manufacturing. This is partly on the basis that many companies in this activity employ large numbers of highly paid workers in scientific disciplines who prefer living in the countryside. ..TX.- Another factor is that high-tech companies - in sectors including pharmaceuticals, aerospace, electronics, optical technology and high-value plastics - often require specialised, low-cost manufacturing and research buildings which may be hard to find in urban areas. ..TX.- The report says that only three, predominantly rural, UK regions increased job numbers in high-tech fields in the 1984-89 period. The areas are Wales, Yorkshire & Humberside and south-west England. ..TX.- Other regions, including the conurbations of Greater London and West Midlands, saw large falls in employment in technology-based industries. ..TX.- Between 1984 and 1989, numbers employed in this field fell by a greater amount than in manufacturing as a whole, while total employment, including services, rose due to the general economic expansion of that period. ..TX.- High-tech industries in the UK excluding Northern Ireland employed 782,000 people in 1989, 5.3 per cent down on the 826,000 five years earlier. Over the same period, the numbers in all types of manufacturing fell by 3.9 per cent, to 5.2m from 5.4m. During the five years, UK employment, generally, rose by 6.9 per cent. ..TX.- Behind the fall in high-tech employment is thought to be the large increases in productivity in these industries during the 1980s. Other factors were severe international competition and poor innovation in Britain. These aspects may limit the degree to which high-tech industry can expand in the UK in the 1990s. ..TX.- Specific factors pushing down high-tech employment in London and the south-east may have included the economic overheating of the late 1980s. This increased labour costs and rents at a particularly high rate in southern England, forcing expanding companies to move to other parts of Britain. ..TX.- Wales was a beneficiary of this process, the study says. Efforts, especially by the Welsh Development Agency, to attract high-tech companies helped to increase employment in this field nearly 50 per cent over the period, to just over 42,000 people. ..TX.- During the 1980s, other mainly rural parts of Britain increased high-tech employment, partly because of the attractions to many small companies of working in the countryside. ..TX.- Yorkshire and Humberside increased high-tech employment 24 per cent while the comparable figure for the south-west was 4 per cent. ..TX.- Greater London and West Midlands suffered a fall in the number of high-tech jobs of 31.1 per cent and 15.7 per cent respectively. ..TX.- In spite of a 6.3 per cent fall in employment in high-tech during the period in south-east England (not including Greater London) this region by the end of the 1980s continued to account for easily the greatest proportion of workers in this field. ..TX.- High-tech employees in the south-east compared with the overall technology workforce stayed constant at about 28 per cent during the period. ..TX.- The south-east has for many years had a high proportion of high-tech employees in its total workforce, partly because of the presence of big research centres in areas such as drugs, aerospace and electronics. ..TX.- Ominously, the study says it is difficult to envisage employment in high-tech industries expanding much in the 1990s. In 1989, this accounted for only 3.5 per cent of all UK employees and 15 per cent of manufacturing jobs. ..TX.- 'The location of high-technology manufacturing in Great Britain: Changes in the late 1980s', Bernard Fingleton, Department of Land Economy, Cambridge University, 19 Silver Street, Cambridge CB3 9EP. ..TX.- ------------------------------------------------------------ UK HIGH-TECHNOLOGY EMPLOYMENT ------------------------------------------------------------ Region 1984 1989 + or - per cent ------------------------------------------------------------ South East (exc. G London) 236,583 221,660 -6.3 Greater London 95,889 66,130 -31.1 E Anglia 21,338 19,787 -7.3 South West 79,068 82,480 +4.3 W Midlands 71,266 60,089 -15.7 E Midlands 59,018 57,543 -2.5 Yorks & Humberside 29,356 36,404 +24.0 North West 101,168 98,721 -2.9 North 40,919 37,711 -7.9 Wales 27,974 41,277 +47.6 Scotland 63,489 60,317 -5.0 ------------------------------------------------------------ TOTAL 826,000 782,000 -5.3 ------------------------------------------------------------ Source: Department of Land Economy, Cambridge ------------------------------------------------------------ ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9532 Urban and Community Development. P2834 Pharmaceutical Preparations. P3721 Aircraft. P3571 Electronic Computers. P9441 Administration of Social and Manpower Programs. ..TP.- Types: CMMT Comment & Analysis. ECON Employment & unemployment. ..IX.- P9532, P2834, P3721, P3571, P9441. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUACVFT ..HL.- 930715FT 930715 Technology: Just the ticket for Spielberg (370) ..BL.- By DELLA BRADSHAW ..TX.- The thunder of dinosaur feet in Jurassic Park is likely only to be beaten this weekend by the thunder of movie-goers' feet as they stampede to cinemas to see Steven Spielberg's latest blockbuster movie, which is previewed in the UK this evening. ..TX.- Those who prefer to turn their backs on this somewhat prehistoric method of getting a seat can use technology to ensure a place at the front of the queue. ..TX.- MGM Cinemas is using a fully automatic ticket booking service for customers in 34 cinemas in the London and Brighton area, including the Trocadero in London's cinema land in the west end. A telephone call will enable customers with credit cards to book a seat at their first choice cinema or at a nearby venue if that is not available. ..TX.- And, assures Keith Pullinger, assistant to the general manager at MGM, there will be enough lines to ensure that every caller gets through. 'I defy anyone to get their phones answered as quickly as we can.' ..TX.- The numbers to be called will be advertised in the local press - each of the 34 cinemas has been allocated a different number. Callers hear a recorded announcement asking questions about the film, day and time. By pressing the number indicated after the time or film the preference is registered. The most popular film is always listed first, says Pullinger. 'Seventy-five per cent of bookings now are for Jurassic Park.' ..TX.- Once the details, including the credit card number, are determined, the main computer, which is operated by Computicket, sends them to the cinema requested using the Paknet radio data network. Confirmation is then sent back to the computer centre and the tickets printed out in the cinema for collection. If the caller does not have a modern tone telephone, the system will switch the caller to a human operator. ..TX.- According to Pullinger the Computicket service is unique in offering both a manual and automatic booking service. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7832 Motion Picture Theaters, Ex Drive-In. P3571 Electronic Computers. P7379 Computer Related Services, NEC. ..TP.- Types: TECH Products & Product use. ..IX.- P7832, P3571, P7379. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUACUFT ..HL.- 930715FT 930715 People: Davies takes on another chair (304) ..TX.- Michael Davies, deputy chairman of TI and a director of British Airways, is taking over as non-executive chairman of Simon Engineering. Sir Philip Foreman, who has turned 70, had been serving as interim chairman for the past three months following the sudden death of the previous chairman Roy Roberts. He stays on as deputy chairman. ..TX.- Simon has been hard hit by the recession. At the annual meeting in May, Sir Philip forecast a loss for the first half of this year and revealed the company would then be in breach of one of its banking covenants, which knocked 25 per cent off the value of the shares in a day. ..TX.- Davies, who would not be drawn on how he will help restore the flagging fortunes of 'one of the UK's longest established engineering companies' said that his arrival 'did not necessarily mean anything' as regards the position of chief executive Brian Kemp, who joined in 1989. ..TX.- Davies, 59, admits he has recently been spending a good deal of his time at BA, where all the non-executive directors have been drawn in to the wranglings over the Virgin 'dirty tricks' affair. But he is adamant that he has time for another post in addition to the four other chairmanships, including that of Calor, which he maintains on top of the BA and TI commitments. 'I enjoy business,' he says, adding only that 'over time I do change my portfolio'. Those changes are, however, not likely to include BA in the near future, as this week he was re-elected to the board, on which he has sat since 1983. ..CO.- Companies: Simon Engineering. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1623 Water, Sewer and Utility Lines. P3552 Textile Machinery. ..TP.- Types: PEOP Appointments. ..IX.- P1623, P3552. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUACTFT ..HL.- 930715FT 930715 Technology: Making it quickly in metal - A breakthrough in rapid prototyping (910) ..BL.- By ANDREW BAXTER ..TX.- On the table in front of Richard Fedchenko is a small propeller blade made of cured polymer. It is a typical product of rapid prototyping - the process that manufacturers have been using for the past five years to help speed up their product development. ..TX.- Next to it is the same blade cast in metal. It might normally have taken months to produce, but is also a product of rapid prototyping. ..TX.- Fedchenko is a senior executive at 3D Systems, the California-based company which dominates the rapid prototyping industry. Last month, 3D launched QuickCast, a new rapid prototyping and tooling technology that claims to reduce the lead time on metal castings by 80 per cent. ..TX.- The launch is a big event for 3D and 'a quantum leap' for rapid prototyping, says Fedchenko. As such, it could have important business implications for rapid prototyping as a contributor to concurrent engineering, the umbrella term for using teamwork and technology to get products onto the market quicker and to increase competitiveness. ..TX.- Rapid prototyping is already being used by hundreds of companies worldwide, including British Aerospace and Mercedes-Benz. It takes any three-dimensional computer-aided design (Cad) file of a part, converts it into hundreds of layers and builds the prototype from that. ..TX.- 3D uses a system that traces each layer by directing a laser-generated ultraviolet light on to the surface of a vat of liquid polymer resin. ..TX.- Rival companies have different solutions such as 'instant slice curing' from the Israeli-US supplier Cubital, and laminated object manufacturing from Helisys in California. Several other companies, mainly US, are working on their own approaches. ..TX.- The process has already proved its worth, says Fedchenko. Weeks have been saved producing prototypes that can be discussed, looked at and handled by the product development team. The prototype can also be used as a strategic marketing tool. Logitech, the computer mouse producer, used rapid prototyping to produce a mouse in 10 days for a meeting with IBM, he says. ..TX.- But, while manufacturing industry has shown a lot of interest in rapid prototyping, some potential users have been waiting until it is possible to produce a metal part by rapid prototyping. Once a cast metal part is produced, it can be subjected to stress analysis, wind tunnel testing and other tests necessary before production - none of which can be carried out on a polymer prototype. ..TX.- This has become something of a holy grail for the rapid prototyping industry, because the current method of casting a metal prototype can take several months. It involves machining hard tooling from metal to produce wax patterns, which can then be cast using the traditional 'lost wax' process. ..TX.- Unfortunately this investment casting process - 'investing' the pattern in a slurry, heating to produce a ceramic mould and burn off the wax, then pouring molten metal into the mould - does not work with 3D's normal polymer prototypes. They expand with the heat, cracking the mould. ..TX.- Fedchenko says 3D has now solved the problem. Its QuickCast process produces a part with a complex internal triangular gridwork, which allows the part to collapse into itself during heating, leaving the mould undamaged. ..TX.- The gridwork reduces the weight of the prototype by two-thirds, leaving a much smaller residue of ash which can be sucked out of the mould with compressed air. A new type of epoxy resin, developed by 3D and Ciba-Geigy, has replaced the acrylate resin used previously. This has increased accuracy by 100 per cent, says Fedchenko, and produced a much smoother finish that does not need to be sanded and polished. ..TX.- The result is a very accurate metal prototype which can be produced some three to four weeks after a Cad design is completed, compared with an average of 18-20 weeks using wax patterns. ..TX.- On more complicated parts, significant sums of money can be saved as well as time. ..TX.- At last month's World Conference on Investment Casting in London, 3D was exhibiting an aero-engine front frame prototype made by a division of Allied-Signal, which saved Dollars 100,000 (Pounds 67,000) and 44 weeks using QuickCast. Other rapid prototyping companies are working on producing metal parts, but 3D's advantage is its installed base of some 350 prototyping machines worldwide. The fastest 3D machines with the biggest vats could cost as much as Pounds 400,000 in the UK, and 3D is offering QuickCast as an Pounds 8,000 software add-on, excluding the cost of the new resin. ..TX.- But, says Fedchenko, rapid payback is not in itself a sufficient justification for investing in rapid prototyping. 'You have to have a compelling need. The message is: does it give you a competitive advantage by getting you to market quicker?' ..TX.- Fedchenko believes the world rapid prototyping market could double over the next two years from Dollars 45m-Dollars 50m because of QuickCast. 3D is targeting foundries, traditional tool and die shops and rapid prototyping service bureaux and manufacturing industry from aerospace to medical implant producers. ..TX.- And the next stage? 3D is working on adapting its technology to produce the dies used in injection moulding machines. Further development is required, says Fedchenko, but 'rapid manufacturing' is on the horizon. ..CO.- Companies: 3D Systems. ..CN.- Countries: US United States of America. ..IN.- Industry: P3322 Malleable Iron Foundries. P3369 Nonferrous Foundries, NEC. P3399 Primary Metal Products, NEC. ..TP.- Types: TECH Products & Product use. CMMT Comment & Analysis. ..IX.- P3322, P3369, P3399. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGOCUACSFT ..HL.- 930715FT 930715 Management (Marketing and Advertising): Ouzo moves to the back shelf (774) ..BL.- By PHILIP RAWSTORNE ..TX.- Scotch has become the national drink of Greece, outselling the native ouzo by 40 per cent. A country of only 3m households and with a struggling economy, it imported 2.4m cases of mainly bottled-in-Scotland brands, worth Pounds 78m, last year. ..TX.- Since 1988, Greece has increased import volumes by 65 per cent and climbed from 10th to fourth place in the list of the industry's overseas markets. ..TX.- Growth was stimulated by reductions in the tax on imported spirits in 1987. After further cuts last year, Greece now has one of the lowest spirits taxes in Europe - close to a fifth of the UK rate. ..TX.- Lower prices and increased marketing encouraged a shift in consumer habits, particularly among young people who began to desert the tavernas for modern night clubs and bars. In these clubs Scotch has become the favourite tipple, selling for up to Pounds 60 a bottle, mixed in tall glasses with ice and water or ice and cola. The opportunity has been seized and exploited most successfully by United Distillers (UD), the Guinness spirits division. ..TX.- The old Distillers Company (DCL), taken over by Guinness in 1986, was weakly placed in the Greek market. ..TX.- Andrew Morgan, UD's regional director for southern Europe, recalls: 'DCL had 13 brands of Scotch on the market, handled by seven different distributors. The brands competed against each other as well as against those of our rivals.' ..TX.- Cutty Sark, owned by Berry Bros and Rudd, and Ballantine's from Allied-Lyons were the market leaders. UD's Johnnie Walker Red Label was a poor third; Dewar's trailed further behind. ..TX.- Morgan was sent to Greece to sort out the situation. 'The plan was to exert more clout by segmenting the portfolio and repositioning the brands, to develop our own local resources and recover profit margins,' he says. ..TX.- The portfolio was split into complementary halves: one focused on Dewar's, Bell's and Dimple; the other on Johnnie Walker Red Label and Black Label. ..TX.- It was decided to position Dewar's as the stylish drink for young people frequenting bouzouki clubs and bars. Volume sales were small, but the brand appealed to the young because of its market leadership in the US and because it was not associated with older drinkers in Greece. ..TX.- A joint venture, UD Kanellakis, was formed with the Greek distributor, Nektar, to handle the brand, and a portfolio which also included Bell's and Dimple, number two to Seagram's Chivas Regal in the deluxe sector, Rebel Yell bourbon and Tanqueray gin. UD retained strategic marketing control but used the Nektar sales force. ..TX.- The Johnnie Walker brands were targeted on the take-home trade and modern night clubs; given a slightly older, less brash, advertising image than Dewar's, designed to appeal to the Greek fondness a chat with friends over a drink. ..TX.- The take-home trade, with premium Scotch such as Red Label priced at about Pounds 7 and deluxe Black Label at twice that price, is growing fast. Last year it accounted for 55 per cent of total whisky sales compared with 30 per cent in 1988. To handle these brands - together with Gordon's, UD's best-selling gin - a joint venture was formed with Boutari, the country's leading wine producer and distributor. ..TX.- Constantine Boutari has transformed the country's wine industry, improving quality and developing new brands. As growth slowed, however, the group had been seeking opportunities to enter other drinks sectors. The partnership - recently formalised in the creation of UD Boutari and renewed for 20 years - provided the strategic opening it needed. ..TX.- Boutari now also imports and distributes Guinness stout and Carlsberg lager, as well as producing Kronenbourg and Henninger beers under licence. ..TX.- But the joint venture company, with Ian Meakins, a former member of UD's European marketing team as managing director, concentrates on the marketing and sales of UD's spirits and Boutari's wines. Profits go to the brand owners and costs are shared on a formula based on volume sales. It employs 80 salesmen in the clubs and bars, and supports its advertising with a stream of promotions. ..TX.- The two joint ventures have rapidly built UD's strength in the market. Its brands have grown faster than those of its rivals. In five years, UD Boutari has tripled sales of Johnnie Walker Red and made it market leader. UD Kanellakis has increased Dewar's sales tenfold. In the process, UD has more than doubled the trading profits of its operations in Greece. ..CO.- Companies: United Distillers. ..CN.- Countries: GR Greece, EC. ..IN.- Industry: P2085 Distilled and Blended Liquors. ..TP.- Types: MKTS Sales. MGMT Management & Marketing. ..IX.- P2085. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGOCUACRFT ..HL.- 930715FT 930715 Management (Marketing and Advertising): Grocers' guide to the east (328) ..BL.- By GARY MEAD ..TX.- Material deprivation played its part in the collapse of communist rule in east and central Europe. So it is not surprising that knowledge of marketing conditions in these countries is still pretty basic. ..TX.- But the gap is being plugged by market research. Mintel has published a report* produced by KAE Development, a specialist in business development in east Europe, examining various aspects of grocery marketing in the Czech and Slovak republics, Hungary and Poland, which together form a market of some 65m consumers. ..TX.- There are some striking east-west differences. While household spending on food, drink and tobacco is on average 19 per cent of total income across EC member countries, it is 70 per cent in Poland and 50 per cent in Hungary. ..TX.- The study also suggests that as much as 25 per cent of spending on groceries still goes on black-market products. ..TX.- Other findings useful for western businesses moving into the region include: ..TX.- high brand awareness of west European goods, but fickle brand loyalty. 'There is no longer such a strong belief that products from western Europe are superior, in fact there is a local patriotism which western European companies ignore at their peril.' ..TX.- The countries concerned have no shortages of consumer goods and 'most grocery sectors are well covered'. ..TX.- Promotions, competitions and similar marketing devices are very popular; a west European coffee company ran a promotion in the Czech republic offering consumers the chance to win a new car and attracted entries from almost one-third of the population. ..TX.- *Grocery Marketing in Practice 1993; price Pounds 3,300, or by individual country at Pounds 1,500 each. From Mintel, 18-19 Long Lane, London EC1A 9HE. ..CN.- Countries: PL Poland, East Europe. HU Hungary, East Europe. CZ Czech Republic, East Europe. SI Slovenia, East Europe. ..IN.- Industry: P7331 Direct Mail Advertising Services. P5411 Grocery Stores. ..TP.- Types: MGMT Management & Marketing. ..IX.- P7331, P5411. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGOCUACQFT ..HL.- 930715FT 930715 Management (Marketing and Advertising): Diary of a whisky salesman - Michael Cassell follows J&B's market manager from the Scottish highlands to the nightclubs of Spain (1049) ..BL.- By MICHAEL CASSELL ..TX.- The Brodie of Brodie, 25th laird and master of Castle Brodie, a romantic monument to Scottish highlands' history, wears the same, weary expression as his Labrador dog. ..TX.- His library is crammed with chattering Spaniards; there are some outside the window suspended under a hot air balloon and others lining up to be measured for a kilt. Tomorrow, they might throw a haggis. ..TX.- The Brodie of Brodie, turned 80, has seen it all before. So has Jonathan Stordy, the adrenalin-fired market manager for J&B whisky who is 50 years his junior. ..TX.- Serious business is at stake for Stordy, who has to ensure the Scottish evening is a hit with his 50 important guests. Back in Spain, after all, they are at the sharp end of an increasingly cut-throat assault on the local whisky market by J&B's owner, the Grand Metropolitan subsidiary International Distillers and Vintners. ..TX.- IDV is number one in what is its biggest market, each year selling at a premium price, 2.2m cases of 'smooth, soft aspirational' J&B Rare, along with much smaller quantities of the deluxe labels J&B Reserve, a blend at least 15 years old, and Knockando, a Speyside single malt. Stordy and his colleagues have to fight local whisky producers and rival, international brands such as Ballantines and Johnny Walker Red Label to sell every bottle. ..TX.- Mixing it in the marketplace gives the biggest buzz to a man who once dreamed of becoming a professional golfer and who joined IDV two years ago after a spell as a Unilever brand manager, promoting shampoo in Ecuador and washing powder in Egypt. But the ceilidh at Brodie Castle is still a very important part of his present job. ..TX.- The morning after the night before Spanish VIPs go to the Knockando distillery for lectures on whisky-distilling and blending. Stordy, in impeccable Spanish, shows videos which mix action-packed images of youthful, sporting prowess with the J&B brand. ..TX.- He is careful to stress the concept of responsible alcohol consumption. In Spain - where there are 13 measures to the bottle against 36 in the UK - J&B customers are told: 'To know how to drink is to know when to stop.' Half of them already take it with Coca Cola or water and ice. ..TX.- The Spanish visitors are impressed by the riverside distillery, if a little alarmed to hear that the equivalent of three and a half bottles of Scotch - 'the angel's share' - evaporate each minute from the large, bonded warehouses. ..TX.- Within days of the Scottish visit, Stordy is in Spain to do what he loves best. ..TX.- He regards himself, primarily, as 'a champion of J&B's long-term strategy, closest to the marketplace', acting as a bridge between J&B in Britain and its Spanish consumers but working closely with Anglo Espanola de Distribucion (AED), the Madrid-based national marketing company which IDV acquired in 1990. ..TX.- Apart from policing the quality of local marketing operations, Stordy's objectives include tailoring J&B's global strategy on issues such as premium pricing, presentation and image to match local conditions. He tries to help Scotland deliver improvements in customer service, speaks regularly to the 40-strong network of Spanish distributors and keeps close tabs on the competition. It is all, he says, about adding value. ..TX.- Stordy will not criticise the team in Scotland but is clearly frustrated at times by their reluctance to accept what they are told by people on the ground. Knockando, he says, is being outsmarted in the quality gift market by brands such as Chivas Regal and Cardhu. He is pushing his UK colleagues to retaliate with better packaging. Images of the Scottish highlands are not good enough. ..TX.- His overriding mission is to keep J&B in pole position in Spain, which means a very traditional drink bearing the royal warrant of no fewer than six British kings and two queens 'must stay exciting to the young'. 'We must be number one in the night,' he insists, as he begins a marathon 'on-trade' tour to bars, nightclubs and discos. ..TX.- At the Honky Tonk bar Stordy chats with Jose Luis Salto, the 'nightman of Madrid', who works across the city until dawn ensuring J&B is on show and in demand. ..TX.- On to a J&B open-air party at the Boulevard bar where clumsy clowns push the product. J&B supports 4,500 such parties every year at some of Spain's 300,000 bars, each event graded into A, B and C events, depending on how many cases each outlet normally sells. ..TX.- Next stop for Stordy and Javier Barruetabena, AED's sales director, is Joy Aslava, the top night spot where hundreds dance to music which thumps the chest while drinking Scotch at Pounds 6 a slug. Stordy is 'pacemaking', handing out luminous, bottle-shaped lapel badges which create instant interest. There are, however, too many bottles of Ballantines around for his liking. ..TX.- Next day, to the airport, where J&B has its revenge. After 15 meetings, Barruetabena has finally persuaded the airport bar concessionaire to replace Ballantines with J&B. Stordy is impressed. ..TX.- On to Barcelona - which consumes 10 times more bottles of J&B than the entire UK - for an important meeting with Caprabo, a supermarket and hypermarket operator ordering 10,000 cases of J&B a year. ..TX.- The government welcomes hypermarkets because price-cutting helps curb inflation. Suppliers such as J&B are more cautious, required to remain competitive but determined not to degrade the quality image. Off-trade sales are increasingly vital but J&B must keep within the clearly defined price bands which define its market. ..TX.- There is a late-night dinner with Vicente Estruga, a large, genial man who runs local distributor Dicom. More club visits follow and, in one, a reveller sings the praises of J&B over the bar. He wins a luminous badge. The night ends early at 3am, with an earnest, pavement conversation about promotional packs and point of sale material. Stordy is still firing on all cylinders but finally concedes: 'It's not a party. It's a bullfight.' ..CO.- Companies: International Distillers and Vintners. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2085 Distilled and Blended Liquors. ..TP.- Types: PEOP People. CMMT Comment & Analysis. MGMT Management & Marketing. ..IX.- P2085. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGOCUACPFT ..HL.- 930715FT 930715 Accountancy Column: Developing a strategy for quality research - Some of the problems faced in remaining flexible in the search for solutions (1204) ..BL.- By JOHN ARNOLD ..TX.- THE LATEST four-year strategy from the Research Board of the Institute of Chartered Accountants in England and Wales unveiled this week, highlights key questions in the nature of accounting research. ..TX.- An important purpose of accounting research is to contribute to the solution of practical problems by enhancing understanding of their causes and consequences. Such problems may be those faced by accountants - how best to account for brands, for example - or those caused by accountants or accounting - like whether current costing techniques result in the best management decisions. ..TX.- Expecting all research to produce short and medium-term benefits is to misunderstand its purposes and potential. Some of the benefits will be long-term. Others will not accrue to the accountancy profession at all. ..TX.- So who should fund it? In a capitalist economy, costs will normally be borne by those who benefit. Research designed to help accountants should generally be funded by individual firms or by professional bodies. ..TX.- The funding of research about accountants and accountancy is less clear. If the regulation of the profession is of interest to society at large, then the government should support it. But since the UK accountancy profession is largely self-regulated and wishes to remain so, it might be expected to bear the cost. ..TX.- Responsibility for funding will depend also on the focus of the research. There is little incentive for individual firms or even particular industrial or professional sectors to fund basic research as the benefits are long-term, sometimes speculative and widely spread, such as the effects of the increasing internationalisation of capital markets. ..TX.- So basic research in accounting is often funded by the government. But reductions in public sector grants during the past decade raise the possibility that the accountancy bodies should attempt to make good some of the deficit, as part of their duty as learned professional bodies. ..TX.- Applied accounting research normally produces results which are valuable to the accountancy profession as a whole, such as standard setting, auditing practices or corporate governance. It is an area where there is an obvious need for the professional bodies to provide support. ..TX.- Accounting development, or technical work, such as the development of a management accounting system for a particular firm, will often provide benefits which are peculiar to particular organisations or firms. So it is reasonable to expect those who benefit from the research to fund it. ..TX.- The new research board strategy document reflects these arguments. The primary objective is to assist the Institute to fulfil its principal object: 'To advance the theory and practice of accountancy in all its aspects, including in particular auditing, financial management and taxation'. ..TX.- In the last four years, the board has invested over Pounds 750,000 in research, sponsored almost 100 new projects and published 37 books and monographs. Much has influenced policy making. For example, projects or publications supported during the past two years which helped the Accounting Standards Board include goodwill and other intangibles, depreciation, the accuracy of property valuations, the information content of cash flow disclosures under FRS 1, reductions in disclosure requirements, segment reporting, summary financial statements, marking to market, discounting in financial reporting, accounting for acquisitions and mergers, and the future shape of financial reports. ..TX.- Of interest to the Auditing Practices Board have been topics such as the audit expectations gap, audit committees in large UK companies, the expanded audit report, the impact of audit regulation, and a survey of auditing in the UK. ..TX.- The board's achievements have extended further. Projects have included the use of accounting information in bank lending decisions, accounting systems in the context of changing management practice, the hidden costs of tax compliance, financial risk in capital budgeting, the development of an environmental research agenda, Housing Association accounting, financial reporting and management accounting in the regulated industries, and a project funded jointly with the Economic and Social Research Council on the extent to which UK and US share prices reflect accounting earnings. ..TX.- The board has also sponsored three joint projects with the Centre de Recherche et de Documentation of the Ordre des Experts Comptables, into comparative French and English treatments of pensions, goodwill and depreciation, published a book on financial reporting in Japan, and commissioned a series of 12 books on financial reporting in Europe. ..TX.- The new strategy document - which offers up to Pounds 275,000 a year - seeks broadly to continue and develop previous successes. But it differs from its predecessors in one important respect. The board is interested in high quality research in all the main areas of the discipline and, in the face of some opposition from those who believe that it should define a detailed research agenda, it has decided not to dictate a detailed programme of priority areas for research. ..TX.- Such a programme may be unduly inflexible and would quickly become outdated. The board will continue to seek suggestions from the Accounting Standards Board, the Auditing Practices Board and relevant institute committees as to research relevance. ..TX.- The board will continue with five principal activities: ..TX.- Sponsoring research projects. Projects may range from a few hundred pounds to Pounds 50,000 or more. Although there is no detailed programme of priority areas, the current agenda includes accountability within the business community and the public sector, the national and international reform of financial reporting, the role of accounting and auditing in regulation, the use of accounting information to support management decision-making, improving environmental accountability and the development of a fairer and more efficient system of taxation and social security. ..TX.- Disseminating research findings. The board attaches the greatest importance to making findings as accessible to as wide an audience as possible, through books, research monographs and articles in academic and professional journals. ..TX.- Organising and sponsoring conferences, seminars and workshops. The board will continue a programme on major subject areas and on themes which are multi-disciplinary. ..TX.- Developing the infrastructure for accounting research. Accounting and finance is a relatively young discipline in UK universities and it requires support. Existing help includes the Institute Academic Fellowships Scheme, which contributes to bridging the difference between academic and commercial salaries for leading young academics, a database group which collects information about the range of databases available and their potential uses, archives for the Accounting Standards Committee and the Auditing Practices Committee, and sponsoring the British Accounting Association's annual doctoral colloquium and summer school for younger academics. ..TX.- Organising specialist groups to advise on particular subject areas. Currently these offer advice on developing the research base in auditing, taxation, and international affairs, and identify areas of relevance to the profession. ..TX.- The board is entrusted with research funds which are substantial by accounting standards. It hopes to invest them as productively in the next four years as it has in the past. ..TX.- Research Board's Strategy 1993-96. Research Board, ICAEW, PO Box 433, Moorgate Place, London EC2P 2BJ. John Arnold is director of research at the Institute of Chartered Accountants in England and Wales. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8721 Accounting, Auditing, and Bookkeeping Services. ..TP.- Types: RES R&D spending. CMMT Comment & Analysis. MGMT Management & Marketing. ..IX.- P8721. ..DS.- The Financial Times ..XP.- London Page 10 ***************************************************************** ..AN.-00DGOCUACOFT ..HL.- 930715FT 930715 Troubles mount for Tory council (381) ..BL.- By JOHN AUTHERS ..TX.- THE RESIGNATION of Mr David Weeks as leader of Westminster City Council comes as the council prepares for what is expected to be a highly critical report by the district auditor into the housing policies of the council's previous leader, Dame Shirley Porter. ..TX.- Mr Weeks's resignation was forced by fellow Conservative councillors following an accusation by Mr Mervin Montacute, the council's managing director, that he was using council facilities 'for party political purposes'. ..TX.- The district auditor's investigation followed allegations by Labour that the council had given homeless families temporary accommodation while council property in marginal wards was left vacant, in an attempt to manipulate the 1990 local election. ..TX.- The Audit Commission said the investigation, which started in November 1991, had taken longer than expected because other matters had come to light. Publication is not expected until October. ..TX.- The council believes that the resignation of Mr Weeks, who was deputy leader and chairman of the planning committee under Dame Shirley, marks the end of the last link with the era of the controversial housing policy. Dame Shirley resigned her seat on the council earlier this year. ..TX.- The dispute between Mr Weeks and Mr Montacute culminated in a raid by Mr Montacute on the offices of Mr Weeks and Mr Andrew Dismore, the leader of the opposition. ..TX.- In a letter to Mr Peter Bradley, Labour's deputy leader, Mr Montacute said: 'I had reasonable cause to suspect that council facilities in the leader's office were being used for party political purposes. Party political material was found there. The actual use of council facilities was not great, but the political documents were of significance.' ..TX.- In a subsequent letter to Mr Dismore, Mr Montacute confirmed that 'some of the documents were copies of fundraising letters. Only a small number of inappropriate documents were found. There is no evidence, for example, of a mass mailing for fundraising purposes.' ..TX.- Mr Montacute refuses to publish the letters, citing advice from the council solicitor. He also refuses to answer Labour questions on whether any of the letters were addressed to the council's own contractors. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9121 Legislative Bodies. P9532 Urban and Community Development. ..TP.- Types: NEWS General News. ..IX.- P9121, P9532. ..DS.- The Financial Times ..XP.- London Page 9 ***************************************************************** ..AN.-00DGOCUACNFT ..HL.- 930715FT 930715 Boards face share option pressure: Threat to vote down schemes (385) ..BL.- By NORMA COHEN, Investments Correspondent ..TX.- BRITAIN'S two leading shareholder bodies have issued guidance to corporate boards on executive share option schemes aimed at ensuring that top executives are only rewarded with the schemes if their companies perform well. ..TX.- The National Association of Pension Funds and the Association of British Insurers, whose members between them own more than half the shares of UK corporations, said schemes which do not meet the guidelines may be voted down. ..TX.- The two bodies estimate that the vast majority of existing share option schemes will come up for re-approval by shareholders in 1994. The guidance is intended to help shareholders decide which schemes to approve. ..TX.- The document spells out the criteria to be used when deciding the basis on which they should be awarded. ..TX.- The guidance follows an NAPF consultative document earlier this year on share options which urged companies to avoid awarding shares based on a company's earnings per share. ..TX.- It said that earnings per share was a figure that was too volatile and too easily manipulated by boards. It urged that a company's share price be required to outperform either an index of similar companies or the broad stock index as a whole. ..TX.- However, the ABI, which has long urged companies to use earnings per share measurements, declined to endorse the consultative document. ..TX.- The new joint document says that whatever criteria are chosen they 'must not be capable of manipulation nor must they be influenced by the particular accounting treatment of various items'. The criteria must be agreed by a properly-constituted remuneration committee comprised mainly or wholly of non-executive directors. Full details of the criteria should go to shareholders. ..TX.- Mr Geoffrey Lindey, vice-chairman of the NAPF's investment committee, said: 'The first principle is that there should be a commonality of interest between shareholders and management.' He added that the majority of corporate respondents to the NAPF's initial consultative document indicated that they did not believe performance criteria should exist for issuing share options to executives: 'They felt it was part of their pay.' ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8741 Management Services. P6371 Pension, Health, and Welfare Funds. P6231 Security and Commodity Exchanges. ..TP.- Types: MGMT Management & Marketing. ..IX.- P8741, P6371, P6231. ..DS.- The Financial Times ..XP.- London Page 9 ***************************************************************** ..AN.-00DGOCUACMFT ..HL.- 930715FT 930715 MPs condemn lack of research for legal aid reforms (418) ..BL.- By TIM KING ..TX.- THE government acted in ignorance when it reformed the legal aid system, a committee of backbench MPs said yesterday. ..TX.- The Commons public accounts committee expressed concern that the Lord Chancellor's department did not have enough information about the likely impact of changes to legal aid introduced on April 1. ..TX.- In a report published yesterday the committee acknowledges that the Lord Chancellor's intention in changing eligibility for legal aid was to contain the rise in spending while targeting aid at those who needed it most. ..TX.- But the report says that the department's officials 'did not know the number of adults who would no longer be eligible for support, and were unable to confirm or reject the worrying estimates that had been made by the legal profession'. It adds: 'The department had no figures on the likely impact of their measures on the number of people who represented themselves and on the extra costs and delays that might be incurred.' ..TX.- According to the report, neither the department nor the Legal Aid Board had any information or analysis on why offers of legal aid were not taken up, even though that could help in forecasting and monitoring legal aid spending. ..TX.- In 1991-92, 2.8m people were assisted by legal aid at a cost of Pounds 947.1m, an increase of nearly 40 per cent on the previous year. Spending is expected to rise to Pounds 1.1bn in 1992-93 and to Pounds 1.5bn in 1995-96. ..TX.- The MPs argued that whatever the eligibility framework, the biggest opportunity for saving on legal aid spending was controlling the cost of cases. ..TX.- Court cases are now much more costly in real terms than 10 years ago, the report says. The MPs urge more control over the assessment and payment of the costs of court cases and action 'to eliminate additional costs arising from delays and shortcomings within the systems of civil and criminal justice'. ..TX.- In his annual report on the court service, also published yesterday, Lord Mackay, the Lord Chancellor, says that his department's priority will be to control legal aid costs and spending on the courts while maintaining standards of service. ..TX.- The Administration of Legal Aid in England and Wales (HC 459). HMSO. Pounds 13.25. ..TX.- Lord Chancellor's Department Court Service Annual Report, HMSO. Pounds 13.00. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8111 Legal Services. P8399 Social Services, NEC. P9211 Courts. ..TP.- Types: NEWS General News. ..IX.- P8111, P8399, P9211. ..DS.- The Financial Times ..XP.- London Page 9 ***************************************************************** ..AN.-00DGOCUACLFT ..HL.- 930715FT 930715 Big rise in total declared bankrupt (324) ..BL.- By TIM KING ..TX.- THE NUMBER of bankruptcy petitions issued in the High Court and county courts in England and Wales increased by 33 per cent to 46,333 last year. The rise followed a jump of 56 per cent between 1990 and 1991. ..TX.- Judicial statistics published by the Lord Chancellor's Department yesterday also showed that the level of mortgage repossessions fell by 24 per cent to 142,191 last year after peaking in 1991 at 186,649. ..TX.- Warrants issued to recover land fell by 7 per cent to 124,211. ..TX.- The statistics also showed that in the criminal division of the Court of Appeal there were 669 appeals against conviction, of which 285 were allowed. Of the 1,488 appeals against sentence, 900 were allowed and 49 allowed in part. ..TX.- The attorney-general made 24 referrals where it was thought a sentence was unduly lenient. In 20 cases the sentence was increased. ..TX.- The average waiting time for defendants remanded in custody and committed for trial at crown court rose from 10 weeks in 1991 to 11.1 weeks. ..TX.- But the statistics show some success in shifting the burden of work from the upper courts. The number of cases committed to the crown court for trial fell from 104,754 to 100,994, a fall of 3.6 per cent. ..TX.- The Lord Chancellor's Department attributes this fall to the greater use of cautioning by police and to magistrates dealing with a greater proportion of cases. ..TX.- Reforms made in July 1991 to move work from the High Court to the county courts led to a 27 per cent fall in the number of actions issued by the Queen's Bench Division. ..TX.- The number of cases dealt with by arbitration during the year rose by 30 per cent to 80,332. ..TX.- Lord Chancellor's Department: Judicial Statistics, 1992, published by HMSO, Pounds 13.65. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9211 Courts. ..TP.- Types: NEWS General News. ..IX.- P9211. ..DS.- The Financial Times ..XP.- London Page 9 ***************************************************************** ..AN.-00DGOCUACKFT ..HL.- 930715FT 930715 UK Economic Indicators (1129) ..TX.- ------------------------------------------------------------------------ ECONOMIC ACTIVITY - Indices of industrial production, manufacturing output (1985=100); engineering orders (Pounds billion); retail sales volume and retail sales value (1990=100); registered unemployment (excluding school leavers) and unfilled vacancies (000s). ------------------------------------------------------------------------ Indl. Mfg. Eng. Retail Retail Unem- prod. output order* vol. value* ployed Vacs. ------------------------------------------------------------------------ 1992 1st qtr. 105.4 111.1 30.8 98.6 99.6 2,635 119.8 2nd qtr. 105.0 111.6 31.0 99.4 104.5 2,708 117.0 3rd qtr. 105.9 111.5 30.4 99.6 104.8 2,805 115.9 4th qtr. 106.8 111.2 31.2 100.3 125.0 2,918 118.1 March 105.2 111.6 30.8 98.3 100.5 2,648 120.2 April 105.7 111.8 31.1 99.4 105.7 2,690 117.8 May 104.6 111.3 31.0 99.4 104.0 2,712 117.1 June 104.6 111.8 31.0 99.5 103.9 2,723 116.1 July 105.8 111.8 31.4 98.6 105.1 2,758 119.0 August 105.7 111.5 31.2 99.6 104.5 2,816 117.1 September 106.1 111.2 30.4 100.4 104.8 2,841 111.5 October 107.4 111.5 31.2 100.7 109.4 2,868 113.5 ..TX.- November 106.7 111.1 31.4 100.6 118.0 2,913 117.3 December 106.5 111.1 31.2 99.8 143.1 2,972 123.4 1993 1st qtr. 107.0 113.5 31.9 101.9 105.1 2,967 121.3 January 106.4 112.7 31.5 101.7 104.1 2,992 120.3 February 107.9 114.0 31.4 102.0 104.4 2,967 120.5 March 106.8 113.8 31.9 102.2 106.5 2,941 123.2 April 106.6 114.5 32.1 101.9 110.8 2,940 123.5 May 108.7 116.5 101.7 109.0 2,914 123.6 ------------------------------------------------------------------------ OUTPUT - By market sector; consumer goods, investment goods, intermediate goods (materials and fuels), engineering output, metal manufacture, textiles, clothing and footwear (1985=100); housing starts (000s, monthly average). ------------------------------------------------------------------------ Cnsmer. Invest. Intmd. Eng. Metal Textiles Housg. goods goods goods output mnfg. etc. starts* ------------------------------------------------------------------------ 1992 1st qtr. 110.2 110.6 101.5 108.0 107.4 86.4 14.0 2nd qtr. 111.4 111.1 100.1 108.4 108.0 87.5 14.5 ..TX.- 3rd qtr. 111.0 112.0 101.6 108.4 105.6 88.1 13.1 4th qtr. 111.0 112.5 103.1 108.5 98.5 88.3 10.6 March 110.9 111.0 100.8 109.0 107.0 87.0 14.8 April 111.0 111.6 101.4 109.0 108.0 87.0 14.0 May 111.2 110.4 99.7 108.0 110.0 88.0 14.1 June 111.9 111.3 99.2 108.0 105.0 88.0 15.5 July 111.4 111.9 101.3 109.0 107.0 87.0 14.2 August 110.5 112.2 101.4 108.0 109.0 88.0 12.5 September 111.1 111.8 102.0 108.0 101.0 89.0 12.6 October 110.9 113.2 103.9 109.0 102.0 89.0 11.8 November 109.9 112.2 103.3 108.0 101.0 89.0 10.8 December 112.2 112.1 102.1 108.0 92.0 88.0 9.2 1993 1st qtr. 112.2 116.1 101.7 111.0 105.3 88.9 15.8 January 111.3 115.8 101.0 111.0 108.0 89.0 14.4 February 112.2 117.2 102.9 112.0 106.0 89.0 14.3 March 112.9 115.2 101.2 111.0 102.0 88.0 18.7 April 111.8 118.6 100.2 113.0 109.0 89.0 16.1 May 113.8 120.6 102.4 116.0 112.0 91.0 16.1 ------------------------------------------------------------------------ EXTERNAL TRADE - Indices of export and import volume (1985=100); visible ..TX.- balance (Pounds m); current balance (Pounds m); oil balance (Pounds m); terms of trade (1985=100); official reserves (end period) ------------------------------------------------------------------------ Export Import Visible Current Oil Terms of Reserves volume volume balance balance balance trade* US Dollars bn ------------------------------------------------------------------------ 1992 1st qtr. 127.1 143.1 -3,000 -2,907 +422 99.4 44.31 2nd qtr. 129.4 147.9 -3,130 -3,206 +355 100.9 45.70 3rd qtr. 130.5 148.2 -3,287 -2,241 +367 101.7 42.68 4th qtr. 132.2 146.2 -4,354 -3,560 +340 96.6 41.65 March 129.9 145.1 -810 -779 +168 99.4 44.31 April 128.0 150.8 -1,275 -1,300 +117 100.2 45.77 May 133.2 146.9 -883 -909 +167 101.1 45.80 June 127.1 146.0 -972 -997 +71 101.5 45.70 July 129.2 149.1 -1,119 -770 +43 101.6 45.75 August 132.4 149.8 -1,174 -826 +246 102.5 44.45 September 129.9 145.7 -994 -645 +78 101.1 42.68 October 134.3 144.9 -1,108 -843 +168 97.2 42.14 November 133.3 145.7 -1,361 -1,097 +87 96.4 42.09 ..TX.- December 129.0 147.9 -1,885 -1,620 +85 96.2 41.65 1993 1st qtr. -4,500 40.90 January 42.56 February 43.45 March 40.90 April 41.66 May 41.73 June 41.90 ------------------------------------------------------------------------ FINANCIAL - Money supply (annual percentage change), M0, new M2 (retail deposits and cash), M4; bank sterling lending to private sector; building societies' net inflow; consumer credit??; Clearing Bank base rate (end period). ------------------------------------------------------------------------ Bank BS Cnsmer. Base MO M2 M4 lending inflow* credit?? rate % % % Pounds m Pounds m Pounds m % ------------------------------------------------------------------------ 1992 1st qtr. 1.9 7.6 6.0 +4,861 266 +142 10.50 ..TX.- 2nd qtr. 2.2 5.9 5.3 +9,750 77 +5 10.00 3rd qtr. 2.4 5.3 5.3 +5,944 -262 -11 9.00 4th qtr. 2.7 5.0 4.4 +4,890 214 +226 7.00 March 2.3 7.1 5.9 +988 -172 -27 10.50 April 2.4 6.2 5.6 +4,195 212 +16 10.50 May 2.7 5.9 5.1 +2,689 179 +45 10.00 June 1.5 5.6 5.2 +2,866 -314 -56 10.00 July 2.6 5.6 5.6 +2,900 -325 +83 10.00 August 2.5 5.7 5.4 +2,338 327 -69 10.00 September 2.2 4.7 4.8 +706 -264 -25 9.00 October 2.4 5.1 5.1 +3,612 281 +72 8.00 November 3.0 4.6 4.3 +107 -184 +17 7.00 December 2.8 5.2 3.7 +1,171 117 +137 7.00 1993 1st qtr. 4.4 4.8 3.3 +2,298 820 +400 6.00 January 3.9 4.6 3.1 +2,921 363 +150 6.00 February 4.5 5.1 3.3 +657 208 +54 6.00 March 4.9 4.8 3.6 -1,280 249 +196 6.00 April 4.8 5.5 3.5 +2,984 1,069 +194 6.00 May 3.3 5.9 3.8 +2,013 700 +118 6.00 June 4.4 6.00 ..TX.- ------------------------------------------------------------------------ INFLATION - Indices of earnings (1988=100); basic materials and fuels; wholesale prices of manufactured products (1985=100); retail prices and food prices (Jan 1987=100); Reuters commodity index (Sept 18th 1931 =100); trade weighted value of sterling (1985=100) ------------------------------------------------------------------------ Earn- Basic Whsale. Reuters ings matls.* mnfg.* RPI* Foods* cmdty.* Sterling* ------------------------------------------------------------------------ 1992 1st qtr. 135.8 102.9 136.5 136.2 129.0 1,599 90.6 2nd qtr. 136.1 102.2 137.9 139.1 129.1 1,598 92.3 3rd qtr. 137.5 100.7 138.5 139.0 127.3 1,542 90.9 4th qtr. 139.3 106.6 139.1 139.6 127.7 1,648 79.8 March 137.6 102.2 137.3 136.7 129.4 1,615 90.1 April 135.5 102.7 137.8 138.8 128.9 1,614 91.4 May 136.6 102.2 137.9 139.3 129.5 1,593 92.8 June 136.3 101.6 138.1 139.3 129.0 1,586 92.9 July 136.4 101.0 138.4 138.8 127.2 1,555 92.5 August 138.0 100.0 138.5 138.9 127.5 1,530 92.0 September 138.2 101.0 138.6 139.4 127.1 1,540 88.2 ..TX.- October 140.1 103.7 138.7 139.9 127.4 1,610 80.8 November 139.0 107.0 139.2 139.7 127.3 1,656 78.3 December 138.9 109.1 139.5 139.2 128.4 1,675 80.0 1993 1st qtr. 141.2 110.4 141.5 138.7 130.1 1,740 78.5 2nd qtr. 109.8 143.4 140.9 131.5 1,667 80.2 January 140.1 109.8 140.7 137.9 128.8 1,703 80.6 February 141.5 110.5 141.4 138.8 130.2 1,759 76.8 March 142.1 110.8 142.3 139.3 131.3 1,758 78.2 April 140.8 110.1 143.1 140.6 130.8 1,672 80.5 May 109.9 143.4 141.1 132.2 1,669 80.5 June 109.5 143.6 141.0 131.4 1,661 79.6 ------------------------------------------------------------------------ *Not seasonally adjusted ??Net changes in amounts outstanding, excluding bank loans. ------------------------------------------------------------------------ ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Inflation. ECON Employment & unemployment. ECON Gross domestic product. MKTS Market data. ECON Balance of trade. ECON Balance of payments. ECON Industrial production. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 9 ***************************************************************** ..AN.-00DGOCUACJFT ..HL.- 930715FT 930715 Birt launches counter-attack on BBC 'snipers' (387) ..BL.- By RAYMOND SNODDY ..TX.- MR JOHN BIRT, the BBC director-general, yesterday launched a counter-attack against his critics, describing them as traditionalists, opportunists, society's hecklers and old BBC soldiers 'sniping at us with their muskets'. ..TX.- The riposte, which included an unprecedented attack on the past inefficiency of the BBC, came the day after Mr Mark Tully, the BBC's veteran India correspondent, had attacked what he called the atmosphere of fear and sycophancy in the corporation. ..TX.- Mr Birt told the Radio Academy Festival in Birmingham yesterday that the BBC had been 'an unwieldy, almost soviet-style command economy' where money was allocated from the top down to every activity. ..TX.- Programme makers needed the skills 'of supplicants at some Byzantine court', and a lack of adequate financial information and control had permeated the whole organisation, he said. ..TX.- He set out examples of waste and inefficiency: A new radio studio used for 3 per cent of the time. ..TX.- A graphics suite used for one full day a fortnight. ..TX.- A large programme-making area spending Pounds 200m a year without a single accountant to track expenditure. ..TX.- A tendency for every department to invest in its own expensive facilities and staff whether necessary or not. ..TX.- Overheads of Pounds 300m a year. ..TX.- Mr Birt argued: 'Millions of pounds were wasted through the years, frittered away on over-provisioned overheads, and equipment lying idle. Waste is money that should have been spent on programmes.' ..TX.- Since 1990, Mr Birt added, Pounds 180m had been saved and savings now running at around Pounds 100m a year were being ploughed into programmes. ..TX.- He told the festival that there was no choice but Producer Choice, the system introduced in April that allows full costing of programmes and gives producers the right to buy services on the open market. ..TX.- Mr Birt conceded that modifications were necessary - a smaller number of business units inside the BBC and block contracts to reduce the number of individual transactions between them. ..TX.- Mr Birt appealed to his critics to face realities rather than looking back with nostalgia. ..CO.- Companies: British Broadcasting Corp. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4832 Radio Broadcasting Stations. P4833 Television Broadcasting Stations. P7812 Motion Picture and Video Production. ..TP.- Types: TECH Services & Services use. CMMT Comment & Analysis. ..IX.- P4832, P4833, P7812. ..DS.- The Financial Times ..XP.- London Page 9 ***************************************************************** ..AN.-00DGOCUACIFT ..HL.- 930715FT 930715 Third GEC strike (65) ..TX.- THE MSF general technical union yesterday said 3,000 workers at the GEC Marconi Avionics plants in Edinburgh and Fife would today hold a third one-day strike over a claim for an across-the-board pay increase. ..CO.- Companies: GEC Marconi Avionics. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3724 Aircraft Engines and Engine Parts. ..TP.- Types: PEOP Labour. ..IX.- P3724. ..DS.- The Financial Times ..XP.- London Page 9 ***************************************************************** ..AN.-00DGOCUACHFT ..HL.- 930715FT 930715 Parliament and Politics: Rightwing Tories urge spending cuts (302) ..BL.- By RALPH ATKINS ..TX.- RIGHTWING Tory MPs last night presented proposals for 'vigorous' cuts in public spending to Mr Kenneth Clarke, the chancellor, and warned that income tax increases would 'betray all that the party stood for'. ..TX.- Further curbs on public spending should also take priority over another extension of indirect taxes such as value added tax, the steering committee of the 92 Group of Conservative MPs said in a report given to Mr Clarke. ..TX.- Its proposals include a moratorium on recruitment to the Civil Service and government agencies, and cuts in spending on defence procurement and the M25 link-road programme. ..TX.- Some 92 Group members went further, suggesting an immediate 5 per cent cut in the public-sector workforce, excluding doctors, nurses, teachers and the police. ..TX.- Although many of the steering group's proposals would prove controversial even among the Tory right wing, the list of demands highlights the political difficulties facing Mr Clarke if taxes were increased to control public borrowing. ..TX.- Mr Clarke met the 92 group, which is supported by about 100 Conservative MPs and is chaired by Sir George Gardiner, Tory MP for Reigate, as part of extensive consultations he is holding within the party ahead of the autumn Budget. ..TX.- Ministers' claims that the targets set for public spending in the next financial year are tight were dismissed by the group. It said there is no need for the 4 per cent increase in cash terms envisaged. ..TX.- Other targets for a fresh review of spending include the overseas aid budget. 'It is ridiculous to be borrowing from one set of foreigners to give to another set of foreigners,' the submission said. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9199 General Government, NEC. ..TP.- Types: GOVT Government News. ..IX.- P9199. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGOCUACGFT ..HL.- 930715FT 930715 Parliament and Politics: Mad cow cases exceed 100,000 (96) ..TX.- CASES of 'mad cow disease' confirmed in Britain have risen above 100,000, the government admitted yesterday. ..TX.- Mr Nicholas Soames, a junior agriculture minister, said more than 7,000 of these cases had come to light since the end of April. He added that the number of suspect cases of bovine spongiform encephalopathy now being reported was less than at the same time last year. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P021 Livestock, Ex Dairy and Poultry. ..TP.- Types: NEWS General News. ..IX.- P021. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGOCUACFFT ..HL.- 930715FT 930715 Parliament and Politics: Papers detail espionage deals (118) ..TX.- DOCUMENTS published today by the Public Record Office show that Queen Victoria's ministers employed correspondents of the Reuters news agency as government intelligence gatherers. ..TX.- The papers - released with the approval of Mr Douglas Hurd, the foreign secretary, as part of the government's drive towards greater openness - indicate that the then prime minister Lord Salisbury cancelled the four-year, Pounds 500-a-year contract for 'confidential reports' in 1898. ..TX.- According to the Foreign Office, the papers detail expenditure on espionage financed by parliament in the years following the French revolution. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9199 General Government, NEC. ..TP.- Types: GOVT Government News. ..IX.- P9199. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGOCUACEFT ..HL.- 930715FT 930715 Parliament and Politics: Labour plan for British SEC body (182) ..BL.- By DAVID OWEN ..TX.- A LABOUR government would set up a full-blown British Securities and Exchange Commission with comprehensive supervisory and enforcement powers, a front-bench spokesman said yesterday, David Owen writes. ..TX.- Under a blueprint set out by trade and industry spokesman Mr Stuart Bell, the new body would swallow the much-criticised Serious Fraud Office, which would become its enforcement arm and take over fraud, regulatory and supervisory work from the DTI. ..TX.- Mr Bell said the British SEC would be a statutory authority with powers over retail banking, building societies, insurance, accountancy, pension funds and the Lloyd's insurance market. ..TX.- Mr Bell's speech to Oxford University's business summer school appeared to open a rift over City regulation between Labour's Treasury and trade and industry teams. Less than two months ago front-bench Treasury spokesman Mr Alistair Darling said he did not advocate the 'importation' of a US-style SEC. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8651 Political Organizations. P9651 Regulation of Miscellaneous Commercial Sectors. ..TP.- Types: NEWS General News. ..IX.- P8651, P9651. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGOCUACDFT ..HL.- 930715FT 930715 Parliament and Politics: Government heading for climbdown over adoption (288) ..BL.- By DAVID OWEN ..TX.- THE GOVERNMENT was yesterday heading for a climbdown over its plans to charge couples for adopting children, after both Downing Street and Mrs Virginia Bottomley, the health secretary, poured cold water on the idea. ..TX.- The controversial proposals - that were to have been set out in a white paper on adoption law from the Department of Health - sparked a public outcry last week. ..TX.- Mr John Bowis, the health minister who outlined the plans, was charged with creating a 'cash-register society' after he disclosed that councils would be given the power to impose fees of up to Pounds 1,500 for social workers' reports to assess the suitability of prospective parents. ..TX.- Yesterday Mrs Bottomley appeared to overrule Mr Bowis when she said she very much doubted whether there was 'any prospect of any type of charging for domestic adoptions'. ..TX.- There was 'no question' of financial matters standing in the way of adoption, she said. It was clear that adoption was a 'very sensitive' subject. ..TX.- Her position was supported by Downing Street, which said it did not believe local authorities should be charging people in a manner that would exclude good parents. ..TX.- It was 'unlikely' there would be much charging, Downing Street said, confirming it was 'looking at' the white paper in conjunction with the health department. ..TX.- Labour last night welcomed the government U-turn, describing charging for adoption as 'one of the Tories' crazier notions'. ..TX.- Mr David Blunkett, shadow health secretary, said: 'We should be encouraging, not discouraging, good parents to come forward.' ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8322 Individual and Family Social Services. ..TP.- Types: NEWS General News. ..IX.- P8322. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGOCUACCFT ..HL.- 930715FT 930715 Parliament and Politics: IPPR suggests reform for House of Lords (136) ..BL.- By JOHN WILLMAN ..TX.- THE House of Lords needs radical reform to make parliament more effective and revitalise the democratic process, according to the Institute for Public Policy Research, the centre-left think-tank, John Willman writes. ..TX.- The institute says today that there is an essential role for a second chamber in sharing the legislative burden and scrutinising the government, but the Lords lacks the legitimacy to function effectively. The institute proposes a 300-member second chamber with 270 members elected in regional constituencies by proportional representation. ..TX.- Reforming the Lords. IPPR, 30 Southampton Street, London WC2E 7RA. Pounds 7.50. ..TX.- Editorial Comment, Page 19 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9199 General Government, NEC. P8651 Political Organizations. ..TP.- Types: GOVT Government News. ..IX.- P9199, P8651. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGOCUACBFT ..HL.- 930715FT 930715 Parliament and Politics: Thatcher rebuffed in massive referendum vote (617) ..BL.- By IVOR OWEN, Parliamentary Correspondent ..TX.- BARONESS Thatcher, the former prime minister, saw her demand for a referendum on the Maastricht Treaty rejected by a massive 269 majority (445-176) last night when peers struggled through the division lobbies in what government business managers hailed as the biggest vote ever recorded in the House of Lords. ..TX.- Peers travelled from all quarters of the globe to attend the debate and some who are rarely seen at Westminster joined in the laughter and cheers when Lord Thomson of Monifieth (Liberal Democrat) welcomed 'so many strange and fresh faces'. ..TX.- Lady Thatcher was the central figure in a strongly argued debate, the outcome of which was never in doubt, in spite of her call to override government objections by voting for a referendum because it was 'the people's turn to speak'. ..TX.- Both Conservative and Labour peers were subject to a three-line whip against the referendum, while the Liberal Democrats were accorded a free vote. ..TX.- In a powerful speech, Lady Thatcher brushed aside warnings from some of her former cabinet colleagues that by backing a referendum, peers would endanger the government and risk a constitutional clash with the Commons. ..TX.- She maintained that it was 'not a matter of confidence in the government' because all the political parties were divided over the treaty. ..TX.- Government supporters nodded with approval when Lord Rawlinson of Ewell (C), a former attorney-general, suggested that Lady Thatcher was as embittered as Sir Edward Heath over being toppled from the leadership of the Tory party. ..TX.- He urged peers 'not to be used by those engaging in a political vendetta to destroy the government and the prime minister'. ..TX.- Lady Thatcher again insisted that the treaty would lead to the diminution of the authority of the British parliament and courts. ..TX.- The people should be allowed to speak, she declared, because the powers belonged to them while parliament's role was that of custodian. ..TX.- Before her speech Lady Thatcher sat for three hours impassively making notes as she was subjected to concentrated criticism from Tory peers who had worked closely with her in government. ..TX.- Lord Howe, the former foreign secretary and chancellor whose resignation speech in the Commons triggered her departure from 10 Downing Street in 1990, recalled that occasion by again resorting to a cricketing metaphor. ..TX.- Ridiculing suggestions that by voting for a referendum the Lords would act as a 'long stop', he said it would be like gathering up the ball when it was almost out of the ground. ..TX.- Viscount Whitelaw, one of Lady Thatcher's most influential confidants when he served as deputy prime minister, told peers that by supporting a referendum they would be seen to be seeking to usurp the 'leading role' of the Commons. ..TX.- In a notable maiden speech, Lord Lawson, the former chancellor, opposed a referendum on the treaty, but accepted that it would be an appropriate device to use if a future government sought to commit Britain to a single European currency and a single central bank. ..TX.- He said: 'Unless and until that time arrives - and for a number of reasons I rather doubt it ever will - I do not believe that the case for a referendum is made'. ..TX.- Lord Blake (C), who moved the referendum amendment to the Maastricht Bill, said there was a strong moral case for letting the people have their say. He insisted: 'The British people have a right to be consulted so they can endorse, or otherwise, a measure which irrevocably and irreversibly affects their governance.' ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9199 General Government, NEC. P8651 Political Organizations. ..TP.- Types: GOVT Government News. ..IX.- P9199, P8651. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGOCUACAFT ..HL.- 930715FT 930715 Parliament and Politics: Smith claims breakthrough in union links battle (398) ..BL.- By RALPH ATKINS and DAVID GOODHART ..TX.- MR JOHN SMITH, the Labour party leader, yesterday claimed a 'breakthrough' in the first round of his battle with the unions over their links with the party by striking a deal on sweeping reform proposals. ..TX.- Yet the initial reaction of some of the main union leaders was negative. Mr John Edmonds, leader of the GMB general union, said: 'There has been some movement and that is encouraging, but we are still not able to support Mr Smith's proposals for the selection of local candidates.' ..TX.- A spokesman for the shopworkers union USDAW said last night: 'It is a small step forward but we are clear that unless there is some union element in any formula our delegates could not accept it.' ..TX.- Last night, Mr Edmonds faced bitter criticism from Labour MPs at a private meeting in Westminster after again backing the principle of unionists voting collectively in leadership elections and in the selection of MPs. ..TX.- Mr Smith had expressed delight when an internal review group of union representatives and Labour MPs backed changes in line with his own thinking on the selection of Labour candidates, the election of future leaders and on ending union 'block votes' at party conferences. ..TX.- The Labour leader attended the meeting and afterwards a spokesman said: 'The chemistry is beginning to work.' ..TX.- Mr Smith's confrontation with union bosses over the principle of one-member-one-vote has turned into a test of his leadership. But he still faces a struggle to win approval for the proposals on selecting candidates. ..TX.- The agreement goes to Labour's National Executive Committee on Monday. A summer of attrition between the Labour leadership and the union movement is likely before the party conference. ..TX.- The review group's report was agreed without a vote when representatives of the GMB and TGWU general unions, the most vocal opponents of one-member-one-vote, apparently decided not to try to block the plan. ..TX.- The group backed Mr Smith's insistence that only full Labour party members should vote in the selection of parliamentary candidates. Under a so-called 'levy-plus' system, Labour-supporting trade unionists would also have to pay a reduced membership fee, in addition to the political levy, to become members. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8651 Political Organizations. P8631 Labor Organizations. ..TP.- Types: NEWS General News. ..IX.- P8651, P8631. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGOCUAB9FT ..HL.- 930715FT 930715 Parliament and Politics: Maastricht showdown brought forward (429) ..BL.- By PHILIP STEPHENS, Political Editor ..TX.- MR JOHN MAJOR last night brought forward a crucial Commons debate on the Maastricht treaty as ministers began a last-ditch campaign to persuade Tory Euro-sceptics to abandon their efforts to wreck the treaty. ..TX.- Ministers said that the debate on Britain's opt-out from the treaty's social provisions would be held next Thursday, four days earlier than originally planned. ..TX.- The decision - which will be endorsed by the cabinet this morning - is designed to put as much time as possible between a threatened defeat on the social chapter and the Christchurch by-election the following Thursday. ..TX.- But it comes amid private warnings that whatever the outcome of the debate the government now has little prospect of avoiding a humiliating rout at Christchurch. ..TX.- The air of desperation in the Tory campaign was underlined by a warning from a senior minister yesterday that defeat could hasten the next general election - and the possibility of a Labour government. ..TX.- Mr Peter Brooke, heritage secretary, later clarified his remarks, insisting that the Tories would win both the by-election and the next general election. But his apparent gaffe reflected deep pessimism in the government about its prospects in Christchurch. ..TX.- Ministers are predicting privately that the 23,000 Tory majority in the once rock-solid seat could be replaced by a Liberal Democrat majority of upwards of 10,000. ..TX.- The Commons debate will come after the Maastricht Bill has received the royal assent early next week. ..TX.- Hard-line Tory Euro-sceptics plan to vote with Labour and Liberal Democrat MPs for a motion which would call on the government not to ratify formally the treaty unless it abandons the social chapter opt-out. ..TX.- The cabinet has been told that a victory for the Labour amendment would not have legal force and the government could press ahead regardless with ratification. But Mr Major is aware that rejection by MPs of the social chapter opt-out would represent another damaging blow to his personal authority. ..TX.- Ministers have been told not to speak publicly about the government's tactics in the event of such a defeat. But the Tory rebels are to be told privately that they will not prevent ratification by voting with the opposition. ..TX.- At present about a dozen Tory Euro-sceptics are threatening to defy Mr Major, but Tory party managers are courting assiduously the support of Ulster Unionist MPs. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P9199 General Government, NEC. P8651 Political Organizations. ..TP.- Types: NEWS General News. ..IX.- P9311, P9199, P8651. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGOCUAB8FT ..HL.- 930715FT 930715 Parliament and Politics: Labour prepares blueprint for statutory British SEC (264) ..BL.- By DAVID OWEN ..TX.- A LABOUR government would set up a full-blown British Securities and Exchange Commission with comprehensive supervisory and enforcement powers, the party said yesterday. ..TX.- Under a blueprint set out by Mr Stuart Bell, a trade and industry spokesman, the new body would swallow the much-criticised Serious Fraud Office, which would become its enforcement arm and take over fraud, regulatory and supervisory work from the Department of Trade and Industry. ..TX.- Mr Bell said that the SEC would be a statutory authority with powers over retail banking, building societies, insurance, corporate governance, accountancy, pension funds and the Lloyd's insurance market. ..TX.- Labour would also overhaul insolvency laws, introducing US-style chapter-eleven procedures to give companies in difficulty a 'better chance of survival'. ..TX.- Mr Bell's speech to the Oxford University business summer school appeared to open a rift over City regulation between Labour's Treasury and trade and industry teams. ..TX.- Less than two months ago Mr Alistair Darling, a front bench Treasury spokesman, said he did not advocate the 'importation' of a US-style SEC. ..TX.- Mr Bell said Labour would 'build upon' the recent Large report on 'improving the efficacy of financial regulation' to provide greater openness, cost-effectiveness and public accountability. He promised Labour would 'consult widely' with the City. ..TX.- Anticipating criticism of Labour's suggested approach, Mr Bell argued that statutory regulation was 'no more time-consuming or expensive than self-regulation'. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8651 Political Organizations. P9651 Regulation of Miscellaneous Commercial Sectors. ..TP.- Types: NEWS General News. ..IX.- P8651, P9651. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGOCUAB7FT ..HL.- 930715FT 930715 Parliament and Politics: Asylum changes to take effect (83) ..TX.- NEW rights of appeal for asylum seekers and the scrapping of such rights for would-be visitors to the UK are to come into force from July 26, Home Office minister Mr Charles Wardle said last night. On that date the Asylum and Immigration Appeals Act 1993 will take effect. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9711 National Security. P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9711, P9721. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGOCUAB6FT ..HL.- 930715FT 930715 Parliament and Politics: Labour presses Scottish campaign (89) ..TX.- LABOUR yesterday demanded an independent review of the government's plans for redrawing the local government map of Scotland. ..TX.- The Opposition launched a debate on a motion accusing the government of 'blatant manipulation of boundaries for narrow party interests'. ..TX.- Scottish secretary Mr Ian Lang rejected allegations of gerrymandering and accused Labour of 'scaremongering' about the effect of his proposals on jobs. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8651 Political Organizations. ..TP.- Types: NEWS General News. ..IX.- P8651. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGOCUAB5FT ..HL.- 930715FT 930715 Business optimism rising in Scotland (205) ..TX.- SCOTTISH business optimism is higher than at any time since late 1990, according to yesterday's quarterly survey published by the Fraser of Allander Institute and six chambers of commerce. ..TX.- The institute - the economic research body at Strathclyde University in Glasgow - found business confidence had risen across the board, even in the construction industry. It also found rising demand for personal loans. ..TX.- Demand had risen 'significantly' in manufacturing and retailing, but had fallen in construction. A 'moderate' rise in the wholesale and tourism sectors was noted in the survey. ..TX.- Investment plans were stepped up in manufacturing, distribution and tourism, but had been reduced in the construction and oil industries. ..TX.- The survey also found that while jobs continued to be shed in all sectors - apart from tourism and leisure - the rate of decline was slowing down. ..TX.- Pay rises, however, continued to fall in construction and the wholesale, retail and finance sectors, but rose in the manufacturing and tourism industries. ..TX.- In all sectors except manufacturing pay rises stood at 4 per cent or less. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGOCUAB4FT ..HL.- 930715FT 930715 Compensation plan (61) ..TX.- THE government yesterday announced details of a compensation scheme for miners suffering from chest diseases. The deal is thought to be worth as much as Pounds 100m a year. The scheme starts in September. ..CO.- Companies: British Coal Corp. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1222 Bituminous Coal-Underground. ..TP.- Types: PEOP Labour. ..IX.- P1222. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGOCUAB3FT ..HL.- 930715FT 930715 Coal sale pressure (58) ..TX.- THE Scottish Trades Union Congress will today press the government to sell off assets of British Coal on a regional basis to allow the creation of a Scottish company. ..CO.- Companies: British Coal Corp. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1222 Bituminous Coal-Underground. ..TP.- Types: COMP Company News. ..IX.- P1222. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGOCUAB2FT ..HL.- 930715FT 930715 Calls for Hanson union council (101) ..TX.- A SENIOR TUC official yesterday called for a world-wide council of Hanson Corporation union representatives. ..TX.- Mr David Lea, TUC assistant general secretary, made the call at a rally to support miners on strike against the Hanson subsidiary Peabody, the biggest coal producer in the USA. He said: 'Unions in Europe are beginning to set up councils for multinational companies. It is high time that we had a council for the Hanson unions.' ..CO.- Companies: Hanson Corp. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8631 Labor Organizations. ..TP.- Types: PEOP Labour. ..IX.- P8631. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGOCUAB1FT ..HL.- 930715FT 930715 Bifu to ballot on strike at Lloyds (149) ..BL.- By DIANE SUMMERS ..TX.- BIFU, the banking union, is balloting its 12,000 members at Lloyds Bank this week on a series of one-day strikes over pay, Diane Summers writes. ..TX.- The union is protesting at the ending of cost-of-living increases and the introduction of performance pay. The ballot will close at the end of August. ..TX.- The 22,300 members of the Lloyds Group Union have been balloted on the same issue - the result is expected in the next few days. ..TX.- Lloyds management said that although there had been no cost-of-living increase, performance awards to the 48,000 staff this year had added 3.4 per cent to salaries on average. Employees had also received an average 4.1 per cent through profit-sharing. ..CO.- Companies: Lloyds Bank. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6021 National Commercial Banks. ..TP.- Types: PEOP Labour. ..IX.- P6021. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGOCUAB0FT ..HL.- 930715FT 930715 Many jobs are 'filled by word of mouth' (421) ..BL.- By DAVID GOODHART, Labour Editor ..TX.- NEARLY half of all job vacancies in Britain are filled through informal 'word of mouth' contact, according to Mr Mike Fogden, chief executive of the Employment Service, the agency which runs government Jobcentres. ..TX.- Mr Fogden said that between 40 per cent and 45 per cent of jobs are filled by informal contacts. The agency, which he has run since 1987, accounts for about 30 per cent of placements, with the rest covered by classified advertising and private agencies. ..TX.- He said that as many as 25 per cent of the workforce may have experienced unemployment between April 1990 when joblessness started rising and February this year when it fell. The total number of new claimants of unemployment benefit since April 1990 is 13.2m - but that includes many people who have been counted more than once. ..TX.- Mr Fogden said that the broader geographical and occupational spread of unemployment in the recession 'may have been a factor in the early fall in the jobless figure'. In the recession of the early 1980s the jobless were concentrated in declining industrial regions far from where jobs were being created, while in the latest recession the jobless have been closer to new jobs, he explained. ..TX.- However, Mr Fogden warned that the proportion of people out of work for more than one year will rise to about 40 per cent of the jobless total from the current figure of just over 30 per cent. Currently, said Mr Fogden, about 25 per cent of all the unemployed are back to work within one month and two-thirds are back within six months. ..TX.- Jobcentres deal with only about 20 per cent of vacancies in the London region, but up to 80 per cent in parts of northern England. ..TX.- The centres concentrate on finding jobs for semi-skilled and skilled manual workers and clerical staff. They deal only rarely with employees earning more than Pounds 25,000 per year. Mr Fogden said that about 70 per cent of his staff deal with benefits and 30 per cent with job placement. ..TX.- The Employment Service's market share of job placements has risen slightly during the recession. ..TX.- The service has been widely praised in recent years for an improvement in image and performance. Yet critics say that it has simply found ways to push more people off the unemployment register. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7361 Employment Agencies. ..TP.- Types: ECON Employment & unemployment. ..IX.- P7361. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGOCUABZFT ..HL.- 930715FT 930715 Hunt launches 27 work-creation schemes (458) ..BL.- By LISA WOOD, Labour Staff ..TX.- MR DAVID HUNT, the employment secretary, yesterday announced the formation of 27 local projects aimed at creating jobs and helping the long-term jobless. ..TX.- The projects, announced on the eve of publication of the latest unemployment figures, are the result of a call by the government for the 82 Training and Enterprise Councils (Tecs) to generate ideas to tackle local problems. An extra Pounds 25m was made available in the last Budget for the scheme, called Tec Challenge. ..TX.- Tecs administer the government's main training programmes for the unemployed and try to create jobs that are suitable for their areas - such as offering tailor-made training for companies wishing to take on recruits. ..TX.- While funding for the projects is finite, the Department of Employment may select some of them for general use should they be particularly successful. Mr Hunt said yesterday: 'I hope that some of the best schemes generated by Tec Challenge will come to be standard practice for many Tecs in future.' ..TX.- Ideas include: ..TX.- A grant of up to Pounds 75 a week for 20 weeks from Aztec, the Kingston-upon-Thames Tec, to allow people to build up a portfolio of part-time jobs. ..TX.- A Calderdale and Kirklees Tec plan for business start-ups based on developing new products and focused upon unemployed graduates, particularly engineers, and those with management skills. ..TX.- A Kent Tec project to help smaller companies expand and recruit unemployed people - with help including a recruitment subsidy. ..TX.- Merseyside Tec will offer a recruitment package for employers, linked to customised training. ..TX.- For the past four months unemployment has gone down - with various theories put forward to explain the unexpected trend. ..TX.- A report published today by the Employment Policy Institute, an independent think-tank, says there is little evidence to support controversial claims that unemployment has fallen as a result of an 'administrative fiddle' by the Department of Employment. ..TX.- The report says that the timing of the fall is probably best explained by employers 'over sacking' last year - leading to a period of 'employment readjustment' over the past few months - combined with a reduction in the number of people in the labour market. ..TX.- The report concludes that there is some faint ground for optimism, but it remains possible that unemployment will start to rise again in the next few months. Whatever happens, it seems unlikely that predictions of unemployment peaking well in excess of 3m, will be fulfilled. ..TX.- Economic Report, Volume 7. EPI, Southbank House, Black Prince Road, London SE1 7SJ. Pounds 20. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8331 Job Training and Related Services. P9441 Administration of Social and Manpower Programs. ..TP.- Types: ECON Employment & unemployment. ..IX.- P8331, P9441. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGOCUABYFT ..HL.- 930715FT 930715 Summer sales help cut inflation (589) ..BL.- By EMMA TUCKER, Economics Staff ..TX.- AN UNUSUALLY early start to the summer sales helped push the inflation rate down to 1.2 per cent - its lowest level for nearly three decades. ..TX.- The retail prices index dropped 0.1 per cent in June to 141.0. ..TX.- The Central Statistical Office said price cuts were most pronounced in household goods, clothing and footwear. ..TX.- Sale offers on a range of furniture and electrical appliances caused a 0.6 per cent month-on-month fall in the price of household goods. Clothing and footwear prices registered the sharpest June fall since 1952 at 0.9 per cent. ..TX.- Most vegetables were cheaper, and plentiful supplies of fresh fruit helped keep price rises at bay. Seasonal food prices dropped 4.6 per cent on the previous month, the sharpest June fall since 1987. ..TX.- Special offers on aftershave, condoms and spectacles pushed the price index for personal goods and services down. Prices fell by 0.3 per cent compared with the previous month. ..TX.- Reductions in the cost of local cheap-rate telephone calls caused a 0.8 per cent drop in the prices of household services in June. ..TX.- Price increases for second-hand cars and petrol have moved against the downward trend, with sharper increases than a year ago. Motoring costs rose 1.1 per cent over the month, and were 4.7 per cent higher than a year ago. ..TX.- Mortgage rates held steady compared with a small fall in June last year. ..TX.- The last time inflation was 1.2 per cent was in February 1964. It was last lower in July 1963 when prices rose by 0.8 per cent year-on-year. ..TX.- International comparisons show that only Denmark and the Irish Republic have lower inflation rates than the UK. It is lower than the EC average of 3.3 per cent and the G7 average of 2.7 per cent. ..TX.- The bringing forward of the summer sales to June may mean that the inflation figures for July will be less encouraging, since prices will be compared against extremely sharp reductions in July last year. British Telecommunications' special offer on cheap-rate local calls also ends in July. ..TX.- Nonetheless, prices for seasonal food usually fall sharply in July and continuing summer sales will help keep down prices for clothing, footwear and household goods. ..TX.- Most economists are confident that underlying inflation will remain within the government's target range of between 1 per cent and 4 per cent for the rest of this year. Underlying inflation - the RPI excluding mortgage interest payments - was 2.8 per cent in the year to June, unchanged on the previous month. ..TX.- -------------------------------------------- INFLATION REFLECTS HIGH STREET PRICE CUTS -------------------------------------------- UK inflation rate (+1.2 per cent) -------------------------------------------- per cent -------------------------------------------- Housing (164) -6.6 Motoring (136) +4.7 Food (non-seasonal) (123) +2.8 Alcohlic drink (78) +4.5 Household goods (79) +1.0 Clothing & footwear (58) -0.1 Household services (47) +3.0 Leisure goods (46) +1.6 Catering (45) +5.3 Fuel & light (46) -2.0 Personal goods, serv. (39) +3.7 Tobacco (35) +7.3 Leisure services (62) +4.1 Food (seasonal) (21) -4.1 Fares & travel costs (21) +5.2 -------------------------------------------- Figures in brackets are weights in retail prices index in parts of 1,000. Percentages represent annual per cent change to June 1993. -------------------------------------------- Source: CSO -------------------------------------------- ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P52 Building Materials and Garden Supplies. P53 General Merchandise Stores. P54 Food Stores. P55 Automotive Dealers and Service Stations. P56 Apparel and Accessory Stores. P57 Furniture and Homefurnishings Stores. P59 Miscellaneous Retail. ..TP.- Types: ECON Inflation. MKTS Sales. ..IX.- P52, P53, P54, P55, P56, P57, P59. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGOCUABXFT ..HL.- 930715FT 930715 Bankrupt petitions up 33% last year (330) ..BL.- By TIM KING ..TX.- THE NUMBER of bankruptcy petitions issued in the High Court and county courts in England and Wales increased by 33 per cent to 46,333 last year. The rise followed a jump of 56 per cent between 1990 and 1991. ..TX.- But judicial statistics published by the Lord Chancellor's department yesterday showed that the level of mortgage-repossessions fell by 24 per cent to 142,191 last year after peaking in 1991 at 186,649. ..TX.- Warrants issued to recover land fell by 7 per cent to 124,211. ..TX.- The statistics also showed that in the criminal division of the Court of Appeal there were 669 appeals against conviction, of which 285 were allowed. Of the 1,488 appeals against sentence, 900 were allowed and 49 allowed in part. ..TX.- The attorney general made 24 referrals where it was thought a sentence was unduly lenient. In 20 cases the sentence was increased. ..TX.- The average waiting time for defendants remanded in custody and committed for trial at Crown Court rose from 10 weeks in 1991 to 11.1 weeks. ..TX.- But the statistics show some success in shifting the burden of work from the upper courts. The number of cases committed to the Crown Court for trial fell from 104,754 to 100,994, a fall of 3.6 per cent. ..TX.- The Lord Chancellor's department attributes this fall to the greater use of cautioning by the police and to magistrates dealing with a greater proportion of cases. ..TX.- Reforms made in July 1991 to move work from the High Court to the county courts led to a 27 per cent fall in the number of actions issued by the Queen's Bench Division. ..TX.- The number of cases dealt with by arbitration during the year rose by 30 per cent to 80,332, after the limit for automatic reference to arbitration was increased from Pounds 500 to Pounds 1,000. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9211 Courts. ..TP.- Types: NEWS General News. ..IX.- P9211. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGOCUABWFT ..HL.- 930715FT 930715 Daily Star funds ITV game show (86) ..TX.- THE DAILY STAR is to become the first sponsor of an interactive ITV game show in a promotional package worth Pounds 1.5m. Pot of Gold, made by Central Television and Reg Grundy Productions, offers a Pounds 25,000 prize for viewers and a daily Pounds 1,000 prize for readers. ..CO.- Companies: United Newspapers. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7331 Direct Mail Advertising Services. P7312 Outdoor Advertising Services. ..TP.- Types: COMP Company News. ..IX.- P7331, P7312. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGOCUABVFT ..HL.- 930715FT 930715 Third strike at GEC plant (68) ..TX.- THE MSF general technical union yesterday said that 3,000 workers at the GEC Marconi Avionics plants in Edinburgh and Fife would today hold a third one-day strike over a claim for an across-the-board pay increase. ..CO.- Companies: GEC Marconi Avionics. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3724 Aircraft Engines and Engine Parts. ..TP.- Types: PEOP Labour. ..IX.- P3724. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGOCUABUFT ..HL.- 930715FT 930715 Printing clash over bargaining (127) ..TX.- THE GPMU print union and the British Print Industry Federation yesterday clashed over the results of this year's company-by-company bargaining which followed the breakdown of national pay bargaining earlier this year. ..TX.- The GPMU said 1,334 companies - about 60 per cent of the total - had agreed to the union's minimum terms of a Pounds 6.50 rise in weekly pay on the skilled rate, an increase of about 4 per cent. ..TX.- The federation said two-thirds of the 858 companies it surveyed had paid below the union claim and 235 had enforced pay freezes. ..TX.- It says the average settlement is 1.9 per cent. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8631 Labor Organizations. ..TP.- Types: PEOP Labour. ..IX.- P8631. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGOCUABTFT ..HL.- 930715FT 930715 European Court rules on equal pay (176) ..BL.- By DIANE SUMMERS ..TX.- THE ADVOCATE general of the European Court of Justice yesterday said that employers must justify any differences in pay between groups of men and women doing jobs of equal value, even if the differences result from collective agreements which do not appear to be discriminatory, Diane Summers writes. ..TX.- The advocate general's opinion, which will influence a ruling expected from the court in the next few months, relates to a British equal pay case that has been running for eight years. ..TX.- Dr Pamela Enderby, a senior grade speech therapist with Frenchay Health Authority in Bristol, is claiming comparability with a senior grade pharmacist. ..TX.- Speech therapists in the National Health Service are generally women, while 70 per cent of pharmacists in higher grades are men. Speech therapists may earn only 60 per cent of the salary of pharmacists. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9441 Administration of Social and Manpower Programs. P6231 Security and Commodity Exchanges. ..TP.- Types: PEOP Labour. ..IX.- P9441, P6231. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGOCUABSFT ..HL.- 930715FT 930715 Credit details costly (295) ..TX.- CONFIDENTIAL computer data do not come cheap. ..TX.- The Financial Times yesterday anonymously rang three detective agencies to ask prices for details of individual bank records and credit card details - information the Data Protection Act requires banks to keep confidential. ..TX.- At one, the top rate was Pounds 500 plus VAT for account and credit card details. At the second, a simple search into a current account cost Pounds 250-Pounds 300 so long as the account-holder's name, address, and account numbers were provided. The third, registered with the National Association of Private Investigators, charged Pounds 300 plus VAT and needed a fortnight to deliver. ..TX.- Mr John Lamidey, assistant data protection registrar, said private tracing agents bribe staff to obtain data or internal codes used to authenticate inquiries. He said they place small advertisements in evening papers inviting staff of utilities or financial services companies to make extra money. ..TX.- Mr Geoffrey Cooke, deputy director of the British Bankers Association, said: 'It's not a matter of hacking. Dishonesty and duplicity is involved.' ..TX.- The banks have some way to go. Mr Lamidey said only two out of 10 banks he has visited - Abbey National and TSB - will not disclose any account details over the telephone. ..TX.- Barclays Bank insists its safeguards against unauthorised disclosure are sufficient. Requests for account details come from other branches or customers. A Barclays employee has to quote a password which is changed up to three times a day. Even then, information is not given out immediately. ..TX.- If a call comes from a customer, the bank will disclose information only if the caller's identify can be verified. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7323 Credit Reporting Services. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P7323. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGOCUABRFT ..HL.- 930715FT 930715 Whitehall calls for training improvements (396) ..BL.- By TONY JACKSON, Industrial Editor ..TX.- HUMAN resources and training are the chief obstacles to industrial competitiveness, a government study has found. Whitehall officials told MPs yesterday that the main difference between the UK and its competitors lies at the craft and technician level, while management quality is also variable. ..TX.- The report says that productivity in manufacturing still lags behind Japan, France and Germany by 25 per cent. However, the gap has closed from between 40 per cent and 45 per cent at the end of the 1970s. ..TX.- Mr Robert Dobbie, head of the recently formed competitiveness division at the Department of Trade and Industry, told the Commons trade and industry committee that the gap was largely due to the use of human resources rather than lack of investment. ..TX.- The UK's lower spending on research and development was a source of concern, he said. However, innovation depended not only on research, but on the successful exploitation of new ideas. ..TX.- The report on UK manufacturing competitiveness, submitted by the DTI to the committee, is a summary of a study submitted to ministers earlier this year. Press reports at the time alleged that the study had been suppressed because it was too damning about UK industry. This was denied yesterday by officials who said the new version contained the same data and omitted only confidential advice to ministers. ..TX.- Mr Tim Sainsbury, industry minister, said the report showed that although British industry had caught up significantly in the past 15 years, there were still gaps. 'In the training of technicians and craftsmen, the results are perhaps worse than we expected,' he said. 'In other areas they were better.' ..TX.- Mr Dobbie told MPs that British management was also variable in quality. The best were of world class, but there was a long tail of poorer performers. He denied MPs' suggestions that UK manufacturers were at a disadvantage on fiscal grounds: 'The fiscal regime in the UK is relatively favourable towards industry.' ..TX.- He also denied that UK companies were handicapped by shareholder pressure for large dividend payments. 'The evidence is that in general, UK companies do not get into difficulties by paying too large dividends,' he said. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8741 Management Services. P8331 Job Training and Related Services. ..TP.- Types: MGMT Management & Marketing. ..IX.- P8741, P8331. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGOCUABQFT ..HL.- 930715FT 930715 Council tendering gives 'average saving of 6.5%' (316) ..BL.- By JOHN AUTHERS ..TX.- COMPULSORY competitive tendering by local authorities in England has yielded an average cut in costs of 6.5 per cent, research by the Department of the Environment shows. ..TX.- Mr Tony Baldry, the environment minister, told a seminar at Oxford University that the main findings, to be published next week by the University of Birmingham's Institute of Local Government, 'proved the success of CCT so far'. ..TX.- The department said the findings mean the average authority had made savings of Pounds 500,000. ..TX.- Mr Baldry said: 'Where they existed, inefficient working practices have been exposed and tackled. CCT prompted authorities to review services and standards - sometimes for the first time.' ..TX.- The figures are similar to those of the Audit Commission, published in March, which estimated a reduction of 7 per cent in the cost of contracted services. ..TX.- The research by Birmingham University is less optimistic than that produced last week by Dr Stefan Szymanski of the London Business School. He found that competitive tendering produced an average cost saving for refuse-collection contracts of 27 per cent. ..TX.- Birmingham's research covers all blue-collar services - including building cleaning, street cleaning, catering, ground maintenance, vehicle-fleet management, and sport and leisure management as well as refuse collection. It includes the administrative costs of managing the contracts, unlike Mr Szymanski's research. ..TX.- Mr Keiron Walsh, who wrote the Birmingham report, said savings varied widely between different types of authorities and between services. Refuse collection had seen some of the greatest savings. ..TX.- He suggested that the savings could not be explained by technological improvements, such as the introduction of wheel-bins for refuse collection, because in all cases the comparison was made between the years immediately before and immediately after the contracting out of services. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9121 Legislative Bodies. ..TP.- Types: NEWS General News. ..IX.- P9121. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGOCUABPFT ..HL.- 930715FT 930715 Agencies exploit the secrets of 20m borrowers: The trade in credit references (714) ..BL.- By JOHN GAPPER and RACHEL JOHNSON ..TX.- THE ASSERTION yesterday by Mr Eric Howe, the data protection registrar, that there is 'an established market' in personal financial information is on the face of it hardly controversial. ..TX.- Any applicant for a store credit card faces the disclosure of large amounts of personal data on the payment of just Pounds 1.41 by the store. This is the sum Infolink, one of the two largest credit reference agencies, charges its 10,000 users to examine a person's address, history of bankruptcy or arrears, and an array of information on how he or she has paid off other loans. ..TX.- Mr Howe's fiercest strictures yesterday were reserved for the apparent loophole in the law that allows a person holding the right codes to fool bank staff into disclosing account details. ..TX.- But this market is overshadowed by a larger and legitimate one - the market in credit references of about 20m borrowers, which is estimated to involve 100m inquiries a year. The market's buyers are banks and retail outlets offering credit - the sellers are the credit reference agencies. ..TX.- Tracing agents who specialise in debt collection and other private inquiries can also subscribe to this data. But the agencies insist that only those with appropriate licences can obtain financial data in addition to the standard public records such as county court judgments. ..TX.- The agencies - the largest are Infolink, CCN and Equifax - offer tiered access to data, and charge different amounts depending on the data disclosed: ..TX.- Infolink charges 53p per record for a check on 'black data' held against a person, including court judgments and bankrupcy rulings that indicate that a person is a very poor credit risk. This will also allow a check on whether the right address has been given. ..TX.- For Pounds 1.41, a user approved to receive credit data will get additional 'white data' on how the individual has handled other financial contracts. This will not include information such as bank account details and payment records unless the user has access to 'closed' data. ..TX.- Subscribers who have agreed to supply information such as payment records for their own credit card will receive detailed information from other subscribers' records. ..TX.- Mr Kevin Still, Infolink head of marketing, insists that the company constantly refines security to avoid hackers, or users gaining access to more data than they are allowed. 'By definition, any data system has to be very careful about unauthorised access,' he says. ..TX.- But the way credit reference agencies operate, and the use of customer data held by banks has led to a number of concerns. Two of these were raised yesterday by Mr Howe in his report, and are likely to remain controversial as banks review their code of practice for personal customers. ..TX.- First, Mr Howe questioned whether banks could legitimately supply 'white data' on how customers operate their accounts to credit reference agencies. Smaller banks such as Co-operative Bank supply such information in order to gain access to the closed 'user groups' in which sensitive data is held. ..TX.- Barclaycard has announced its intention to supply 'white data' to credit agencies about customers who give consent on application forms. Mr Howe says the argument that this is a legitimate exchange deal 'may be difficult to sustain' under the banking code. ..TX.- Mr Geoffrey Cooke, deputy director of the British Bankers' Association, says such disclosure 'accords with the code as it stands, but we are happy to discuss it'. ..TX.- Second, Mr Howe expressed concern about credit card numbers and bank account numbers being held by credit agencies on an individual's file. ..TX.- Mr Still says the possibility of misuse has already been eliminated by the credit agencies. Those with access to files which hold information about credit cards or bank accounts are only given basic details, without relevant numbers. ..TX.- No matter how secure and well-regulated are credit agencies' methods, the concerns raised by Mr Howe are likely to recur. And consumers may question whether there is a clear distinction between the black market trade in financial data, and the lawful trade done by agencies. ..CO.- Companies: Infolink. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7323 Credit Reporting Services. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P7323. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGOCUABOFT ..HL.- 930715FT 930715 Dare Wigan: racing writer: Obituary (202) ..TX.- DARE WIGAN, who has died in hospital following a stroke, wrote a daily racing column for the Financial Times and was a notably successful racehorse breeder. He was 76. ..TX.- His racing column appeared for 11 years from the mid-1960s, and he contributed to The Observer, Country Life and other publications. In the second world war he served with the Coldstream Guards. He was a gentle man, always courteous and modest. ..TX.- In racing and horse-breeding circles he was known for the West Blagdon Stud in Cranborne, Dorset, which he ran with his wife Dawn. Although small, averaging only four breeding mares, the stud produced a stream of winners from its foundation mare, Pelting. ..TX.- Pelting had 14 foals. Twelve appeared on the racecourse and all were winners. West Blagdon Stud achieved the top foal price at the leading Newmarket bloodstock sales on five occasions, an outstanding performance for a small enterprise. ..TX.- Wigan left four children, one of whom, Dominic, took over his father's FT column for a number of years. Another, James, is a bloodstock agent. ..CO.- Companies: Financial Times. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2711 Newspapers. ..TP.- Types: PEOP People. ..IX.- P2711. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGOCUABNFT ..HL.- 930715FT 930715 Names reverse Norman conquest (436) ..BL.- By RICHARD LAPPER ..TX.- FEUDAL TITLES, some of which date back to the Domesday Book, have become the latest assets to be auctioned off by distressed Lloyd's Names to help them stave off financial difficulties. ..TX.- 'It's like the Norman conquest only in reverse,' said Mr Robert Smith, of London-based Manorial Auctioneers, who specialises in the area. 'The Anglo-Saxons are getting their own back.' Mr Smith said his firm has sold more than 200 Norman titles in the first six months of the year. ..TX.- 'It's a very painless way of raising a bit of cash,' said Mr Smith, who added that at least 100 Names - the individuals whose assets support the insurance market - have sold their titles this year alone. 'They are trying to stave off the evil day. A lot are bankrupt and don't know it.' ..TX.- One Name who sold recently was the Earl of Carlisle, who raised Pounds 55,000 by selling his barony of Gilsland in Cumbria to an American. ..TX.- The titles are among more than 13,000 which date back to the Domesday Book. Titles like the Lordship of Aisby, in Lincolnshire, the Baron of Teerraghin, in County Sligo, and the head of the Fief of Craqueville, in Jersey, have long since lost their rights to large estates, although they sometimes have access to mineral rights. ..TX.- Even so, British and US businessmen are prepared to pay many thousands of pounds for the social cachet conferred on barons, earls, viscounts and marquesses. ..TX.- 'They become the most recent link in a chain of owners going back centuries and they like the feeling,' said Mr Smith. 'Some actively replace the old families in the local firmament.' ..TX.- Mr Smith is marketing 70 titles including the Lordship of Shrewsbury's Fee in Isleham, Cambridgeshire - a snip at Pounds 5,500 - and the Lordship of Bermondsey in London - a more expensive Pounds 35,000. ..TX.- The Barony of Eye in East Anglia is the costliest on offer at Pounds 85,000. ..TX.- These are useful sums for Names, who have been hit by cumulative losses of more than Pounds 5bn in the past three years. Names have also been contributing to a surge in the antiques market, with increased business at auction houses as heirlooms are sold. ..TX.- But few Names have been forced to sell their properties. Mr Patrick Ramsay, of estate agent, Knight Frank and Rutley, which specialises in country house sales, said that relatively few country houses had come on to the market. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5999 Miscellaneous Retail Stores, NEC. ..TP.- Types: NEWS General News. ..IX.- P5999. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGOCUABMFT ..HL.- 930715FT 930715 Golden Mile is tarnished (422) ..BL.- By BRONWEN MADDOX and DAVID GARDNER ..DL.- LONDON, BRUSSELS ..TX.- BLACKPOOL'S Golden Mile, which is preparing for the holiday season, reacted with outrage yesterday to the European Court of Justice ruling that its beaches do not meet environmental regulations. ..TX.- Mr John Donovan, secretary of the 1,300-strong Blackpool Hotel and Guest House Association, which caters for many of the 15m visitors a year, said: 'The reason people don't go into the sea is because it is too cold, not because it is dirty.' ..TX.- The court said that nearby Southport also fell below European Community standards, but the European Commission withdrew its complaint against Formby Point. Yesterday's ruling carries no financial penalty, but the UK has been ordered to pay costs. ..TX.- The EC bathing waters directive, agreed in 1975, requires countries to meet specified standards within 10 years. The court rejected the government's argument that the timetable should apply from the date when a stretch of coastline was designated a place 'where people bathe in large numbers', not from the date of the directive. The UK, which designated only 27 beaches, now has 455 on the list, with Blackpool added in 1987. ..TX.- The government dismissed the ruling as largely 'technical'. Mr Tim Yeo, environment minister, said: 'The commission has accepted we are doing everything possible to bring these bathing waters up to standard as soon as practicable.' ..TX.- The water industry was spending some Pounds 2bn to ensure that 'virtually all' waters met the directive by 1995, he added. ..TX.- According to government figures, recent investment has brought '79 per cent of (UK bathing) waters within compliance in 1992 compared with 56 per cent in 1987'. This still makes the UK the second dirtiest country in the EC league table, ahead only of Germany which has 76 per cent compliance. ..TX.- All other countries report more than 90 per cent compliance, but the Commission acknowledges 'problems with the comparability' of the data. ..TX.- North West Water, the water and sewerage company which supplies Blackpool, said yesterday that 'planning wrangles' had delayed modernisation. ..TX.- 'Everybody wants the beaches cleaned up but not everybody wants treatment works on the doorstep,' it said. In the next three years it will spend some Pounds 400m on the north-west coastline, including Pounds 150m at Blackpool. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7999 Amusement and Recreation, NEC. P4952 Sewerage Systems. P9511 Air, Water, and Solid Waste Management. P4941 Water Supply. ..TP.- Types: RES Pollution. CMMT Comment & Analysis. TECH Safety & Standards. ..IX.- P7999, P4952, P9511, P4941. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGOCUABLFT ..HL.- 930715FT 930715 Gainsborough sells for Pounds 1m (258) ..BL.- By ANTONY THORNCROFT ..TX.- ONE OF Gainsborough's earliest and most charming portraits, of friends in his native Suffolk, has been acquired by the Tate Gallery in partnership with Gainsborough's House in Sudbury. ..TX.- The London dealer Hazlitt, Gooden & Fox, bidding on behalf of the museums, paid Pounds 1,079,500, at the bottom of the estimate, at Sotheby's yesterday. ..TX.- The National Heritage Fund and the National Arts Collections Fund contributed most of the funding for the painting, which will be shared between the two museums. ..TX.- The Tate has no comparable painting by Gainsborough of this period - the mid-1750s - when the artist was in his early twenties. ..TX.- The Gainsborough was the highlight of an auction of British paintings which brought in Pounds 2.8m. More than a third of the lots on offer were unsold. ..TX.- A portrait of Sir Charles Watson, painted in Rome by Pompeo Batoni when the young English aristocrat was on the Grand Tour, comfortably beat its estimate at Pounds 463,500. ..TX.- Christie's held a successful auction of early English silver which totalled Pounds 1.4m and was 89 per cent sold by value. An Elizabeth I silver gilt cup and cover with an ostrich-egg base sold for Pounds 353,500 to the London dealer Tessiers. Its upper estimate had been Pounds 250,000. ..TX.- An even earlier item, the Malmesbury Cup, dated to 1529, just made its low estimate, selling for Pounds 254,500. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8412 Museums and Art Galleries. ..TP.- Types: NEWS General News. ..IX.- P8412. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGOCUABKFT ..HL.- 930715FT 930715 TUC calls for Hanson council (80) ..TX.- A SENIOR TUC official yesterday called for a world-wide trade union council to bring together representatives of workers employed by Hanson Corporation. Mr David Lea, TUC assistant general secretary, made the call at a rally to support miners on strike against the Hanson subsidiary Peabody, the biggest coal producer in the USA. ..CO.- Companies: Hanson. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8631 Labor Organizations. ..TP.- Types: PEOP Labour. ..IX.- P8631. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGOCUABIFT ..HL.- 930715FT 930715 World Trade News: German state seeks investment (153) ..BL.- By PETER NORMAN ..TX.- MECKLENBURG-West Pomerania, the most rural and thinly populated of the new east German Lander (states), is seeking foreign private investment in the water, sewage, housing and tourist industries, said Mr Berndt Seite, its prime minister, Peter Norman writes. ..TX.- Visiting the UK, Mr Seite said seven British companies were interested in investing in the state, including companies in the building material and food sectors. He said it could take 20 years before the state caught up with western Germany's standard of living. But it could offer a wide range of financial inducements to potential investors and had good contacts with industry in former communist countries. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P494 Water Supply. P152 Residential Building Construction. P7999 Amusement and Recreation, NEC. ..TP.- Types: NEWS General News. ..IX.- P9311, P494, P152, P7999. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGOCUABHFT ..HL.- 930715FT 930715 World Trade News: Japan cautious on surplus cut (336) ..BL.- By CHARLES LEADBEATER ..DL.- TOKYO ..TX.- JAPAN's current account surplus is unlikely to be reduced in the next two years despite last week's agreement with the US that there should be a significant cut, a senior Japanese government official warned yesterday. ..TX.- Mr Sozaburo Okamatsu, the Ministry of International Trade and Industry's vice-minister for international affairs, said the surplus would probably only start to fall in three years' time and the pace of change would depend on the state of the world economy as much as the strength of Japanese domestic demand. He confirmed the Japanese government was discussing policies which would allow it to meet its commitment to pursue strong and sustainable domestic demand. ..TX.- Miti officials believe it could take up to five years for the surplus to be significantly reduced, as the agreement demands. ..TX.- Mr Okamatsu, the senior Miti official involved in negotiating a trade talks framework with the US, said the agreement did not sanction the use of numerical targets to open up Japanese markets to imports. The 'objective criteria' referred to in the framework to measure progress in opening markets would only be used to assess past progress and not set goals. ..TX.- 'We only agreed to use data from the past, not data which could be used as a target for the future,' he said. ..TX.- The use of numerical targets to guide Japanese policy had been the most contentious issue in talks over the framework, which culminated in an agreement last Saturday. ..TX.- The US had been pressing Japan to accept the goal of halving the current account surplus - expected to be about Dollars 150bn (Pounds 100bn) this year - to 1-2 per cent of gross national product. ..TX.- Instead, the agreement commits Tokyo to 'achieve a highly significant reduction in the surplus over the medium term'. Mr Okamatsu defined the medium term as about five years. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: MKTS Foreign trade. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGOCUABGFT ..HL.- 930715FT 930715 World Trade News: Geneva reclaims Gatt talks (330) ..BL.- By DAVID DODWELL, World Trade Editor ..DL.- GENEVA ..TX.- THE 116 countries involved in the Uruguay Round of global trade liberalisation yesterday launched two weeks of intensive negotiations in Geneva aimed at laying foundations for a successful agreement by the end of the year. ..TX.- Talks will focus on tariff cuts in manufactures and farm products, and opening markets to trade in services. ..TX.- This is the first time in six months that multilateral negotiation toward the long-delayed agreement has been engaged. For much of the past two years most negotiators have been hapless spectators to bilateral wrangling between the US and the European Community, and more recently between the 'quad' countries, which include Japan and Canada. ..TX.- Mr Peter Sutherland, the new director-general of the General Agreement on Tariffs and Trade, which is overseeing the negotiations, called yesterday on participants to table significant market-opening offers. 'We can't allow the process to drift aimlessly. We simply don't have the time,' he said after briefing negotiators on the breakthrough achieved at the Group of Seven summit in Tokyo last week. ..TX.- He hailed the tariff-cutting agreement as 'not comprehensive, but a good package which allowed us to say there had been a very positive result'. It was already clear the overall Uruguay Round package should achieve tariff cuts 'well in excess' of its one-third target. ..TX.- Mr Sutherland has called a further meeting of the Trade Negotiations Committee - the principal body overseeing the Uruguay Round negotiations - in two weeks. He will then examine progress, and 'point fingers at the poor performers' if necessary. ..TX.- A further TNC meeting will be called late in August to 'set a critical path' for negotiations through autumn. The target is to complete an agreement in principle by December 15, when the US administration's fast-track authority runs out. ..CN.- Countries: FR France, EC. ..IN.- Industry: P9721 International Affairs. P3523 Farm Machinery and Equipment. ..TP.- Types: NEWS General News. ..IX.- P9721, P3523. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGOCUABFFT ..HL.- 930715FT 930715 World Trade News: Brussels wants US treaties modified - Commission seeks to be sole trade negotiator (472) ..BL.- By LIONEL BARBER and DAVID GARDNER ..DL.- STRASBOURG, BRUSSELS ..TX.- THE European Commission has asked seven member states to modify bilateral friendship treaties with the US, in a move aimed at restoring its authority as sole trade negotiator of the EC. ..TX.- The Commission's proposal is a further challenge to the informal US-German 'non-aggression pact' in which each side agreed to exempt the other from trade sanctions in the US-EC dispute over public procurement. ..TX.- Germany has come under renewed pressure to implement EC trade sanctions against the US in the transatlantic row over government telecommunications contracts. ..TX.- Germany maintains that a 1954 trade treaty with the US prevents application of Article 29 of the EC's Utilities Directive which establishes a preference for EC companies on procurement contracts. ..TX.- So far, Bonn has refrained from exchanging letters to confirm the deal with Washington. The Commission's latest move may inflame matters; but Sir Leon Brittan, the EC commissioner responsible for external economic relations, is ready to take Germany to the European Court of Justice if necessary, according to EC officials. ..TX.- The Commission has proposed that Belgium, Denmark, Germany, Ireland, Italy, Luxembourg and the Netherlands give one year's notice to the US that they intend to modify bilateral friendship, commerce and navigation treaties to accommodate Article 29. ..TX.- Only Germany considers itself exempt from Article 29, because its treaty with the US predates the Treaty of Rome. Commission officials said they were taking a hard line, in case member states with similar treaties further undermine the EC's united trade policy. ..TX.- On the Uruguay Round Gatt negotiations, Sir Leon assured the European Parliament yesterday that television broadcasts, films and other audio visual products needed special treatment. ..TX.- Mr Willy Claes, Belgian foreign minister, said the EC should not be the 'victim of a naive and free trade liberalism'. ..TX.- But Mr Claes made clear he was not in a hurry to reach agreement on proposals which would make it easier for the Commission to impose anti-dumping measures. This issue has divided the EC between protectionist-minded countries and free traders. Mr Claes said it would be better to wait until after an outline agreement in the newly-resumed Gatt trade talks in Geneva. ..TX.- Japanese officials have agreed that Japan's car exports to the EC this year should be lowered further from the earlier agreed levels, to take into account the fall in EC demand, a European Commission source said yesterday. ..CN.- Countries: BE Belgium, EC. US United States of America. DE Germany, EC. DK Denmark, EC. IT Italy, EC. IE Ireland, EC. LU Luxembourg, EC. NL Netherlands, EC. ..IN.- Industry: P9631 Regulation, Administration of Utilities. P9721 International Affairs. P3711 Motor Vehicles and Car Bodies. ..TP.- Types: NEWS General News. MKTS Foreign trade. ..IX.- P9631, P9721, P3711. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGOCUABEFT ..HL.- 930715FT 930715 Italy shocked by demand to recall general (451) ..BL.- By ROBERT GRAHAM ..DL.- ROME ..TX.- THE ITALIAN government yesterday reacted with a mixture of astonishment and wounded pride at the demand by the United Nations for the recall of General Bruno Loi, commander of Italy's 2,400-strong contingent in Somalia. ..TX.- The call for the general's withdrawal promised to set Italy on its most public diplomatic row with its major allies in recent years. In parliament there were demands for an immediate response and further questions about the possible recall of the entire Italian peacekeeping force in Somalia. ..TX.- Mr Beniamino Andreatta, the foreign minister, said he was 'astounded' by the behaviour of Mr Kofi Annan, the official in charge of all UN peacekeeping operations, who demanded the removal of Gen Loi in a New York press conference. ..TX.- The foreign minister indicated Mr Annan spoke in direct contradiction to an understanding agreed with Mr Boutros Boutros Ghali, the UN secretary-general. Mr Andreatta told parliament he had discussed the position of Gen Loi in a telephone conversation with Mr Boutros Ghali on Tuesday. ..TX.- He said it was clear the UN secretary-general wanted to bring forward the rotation of Gen Loi, and they had both talked about this being done in August. This would then give the Italian government time to study the situation, Mr Andreatta told parliament. ..TX.- However, the Ciampi government was last night being forced to choose between obliging the UN and the US, the main power behind the peacekeeping operation in Somalia, and closing ranks behind Gen Loi and behind the increasingly divergent Italian view of how to handle matters in the former colony. ..TX.- On Tuesday, the government indicated that Italian forces should be withdrawn from Mogadishu, the Somali capital. This was to avoid being seen as an 'occupation force'. ..TX.- The Italian authorities insist that the operation in Somalia has lost sight of its original humanitarian and peacekeeping mission. At the same time the Italian troops are not fully equipped for combat roles in peace enforcement. ..TX.- Gen Loi was quoted as saying: 'I am perfectly at ease with my conscience. I have acted according to the spirit and letter of the UN mission.' ..TX.- In private, there is some admission from officials that Gen Loi may not have acted in consultation with the UN command, Unisom. But they also point out the Americans themselves have consulted little. ..TX.- The Italian government is also sensitive to international criticism of the role of its troops since this is their first combat mission since the second world war. So far three Italian soldiers have been killed and more than 20 wounded. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGOCUABDFT ..HL.- 930715FT 930715 Hong Kong reserves at Dollars 35bn (108) ..BL.- By SIMON HOLBERTON ..DL.- HONG KONG ..TX.- Hong Kong's foreign currency reserves rose by Dollars 6bn to Dollars 35.2bn (Pounds 23.7bn) at the end of 1992, Mr Hamish Macleod, the colony's financial secretary said yesterday, Simon Holberton writes from Hong Kong. At the end of last year Hong Kong had the ninth largest stock of foreign currency reserves. Taiwan's reserves were USDollars 83bn, while China's - excluding the external assets of Bank of China - were about USDollars 20bn. ..CN.- Countries: HK Hong Kong, Asia. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: MKTS Market data. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGOCUABCFT ..HL.- 930715FT 930715 Pakistan cleared of terrorism (86) ..BL.- By REUTER ..DL.- WASHINGTON ..TX.- Pakistan will not be placed on the US list of countries sponsoring international terrorism, despite reports of official Pakistani support for militants in Kashmir, the State Department said yesterday, Reuter reports from Washington. The department said Secretary of State Warren Christopher had determined that available information did not warrant a finding for now that Pakistan had supported terrorism. ..CN.- Countries: PK Pakistan, Asia. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGOCUABBFT ..HL.- 930715FT 930715 US-North Korean talks 'useful' (109) ..BL.- By FRANCES WILLIAMS ..DL.- GENEVA ..TX.- Senior US and North Korean officials held seven hours of talks in Geneva yesterday in a second attempt to head off confrontation over Pyongyang's refusal to allow international inspection of suspect nuclear sites, writes Frances Williams in Geneva. Mr Robert Gallucci, US assistant secretary of state, called the talks 'useful'. Mr Kang Sok-ju, North Korea's first vice-minister for foreign affairs, said they had been 'intensive, productive and useful.' The two sides meet again tomorrow. ..CN.- Countries: FR France, EC. ..IN.- Industry: P2819 Industrial Inorganic Chemicals, NEC. P4911 Electric Services. ..TP.- Types: NEWS General News. ..IX.- P2819, P4911. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGOCUABAFT ..HL.- 930715FT 930715 Russia on alert over Afghan clash (264) ..BL.- By JOHN LLOYD ..DL.- MOSCOW ..TX.- GENERAL Konstantin Kobets, the Russian deputy defence minister, yesterday demanded the right to use 'all possible force', including aircraft and rockets, in the escalating conflict on the border between the former Soviet republic of Tajikistan and Afghanistan, writes John Lloyd in Moscow. ..TX.- Gen Kobets' call, which comes three years after Russian troops pulled out of Afghanistan, followed an attack on a border post manned by a joint unit of Russian and Tajik interior troops which left 20 Russians dead. The Tajik foreign ministry said a village eight miles from the border with Afghanistan was destroyed and between 100 and 200 Tajiks killed. ..TX.- In a second appearance before the parliament after it had postponed a decision on legalising the actions of Russian troops in Tajikistan, Gen Kobets said 'the twelfth border post fell today - I cannot guarantee that the thirteenth will hold. The way in to Tajikistan lies open.' ..TX.- Gen Pavel Grachev, defence minister, told the official Itar-Tass agency that extra units of the Russian 201st division stationed in Tajikistan would be sent to the Afghan border. ..TX.- Refugees from the civil strife which devastated parts of the republic last year are massed in camps within Afghanistan, which now function as bases for trans-border guerrilla actions supported by Afghan mujahideen. The Tajik government, formed by forces supported by the former Communists, invited Russian troops earlier this year to assist in guarding the borders. ..CN.- Countries: RU Russia, East Europe. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGOCUAA9FT ..HL.- 930715FT 930715 Japanese Elections: Japanese 'madonnas' sing rival tunes - Robert Thomson watches the top two female candidates square off in the election campaign (934) ..BL.- By ROBERT THOMSON ..TX.- In the cloying drizzle of a Japanese wet season, a white plastic grocery bag tied around the cast on a broken foot, Ms Yuriko Koike, star of television and the Japan New party, hobbled forth to deliver one more speech in praise of a JNP-backed candidate. ..TX.- 'If I was paid by the hour for this sort of stuff, I'd be a very rich woman,' said Ms Koike, confident enough of voter support in her home prefecture of Hyogo to give time to other candidates hopeful that a bit of Koike charisma will rub off on their campaigns. ..TX.- But, before next Sunday's general election, Ms Koike cannot afford to venture too far from Hyogo, in western Japan, where she is engaged in symbolic battle with Ms Takako Doi, the 'iron butterfly' and former head of the Japan Socialist party, now known as the Social Democratic party. ..TX.- The local media have dubbed the Koike-Doi bout the 'madonna showdown'. Ms Doi was supposed to lead Japanese politics and women into a new era, but the expectations have shifted to Ms Koike, whose past life as a television commentator has given her the off-camera confidence to keep a political gathering amused. ..TX.- There are 70 women candidates, up from 66 in the 1990 poll and 35 in 1986, and it is pure coincidence that Hyogo is home to the two best known. The 'madonna boom' was an important theme during the last campaign, although only 12 of the 512 members elected in 1990 were women, and the Japanese media have moved on to other subjects. ..TX.- Hyogo has another symbol of the need for change: Mr Kenzaburo Hara, 86, running for the Liberal Democratic party for the nineteenth time, and the country's oldest candidate. He was politely advised by the party to make way for a younger candidate, but insisted that 'this is the most important campaign of my life'. ..TX.- The congenial Mr Hara, who sees himself as a crusader against 'confusion', is bewildered by more than just the plethora of new parties. Arriving for a speech at the Matozaki Gumi construction company, he was carefully guided into the building where construction workers, the LDP faithful, were to hear his faltering speech. ..TX.- Matozaki has Mr Hara's posters plastered on the office walls and presumes another win will be good for business. The campaign posters show a strong-boned man, apparently in his late 50s, but the reality is that Mr Hara, hands and forehead freckled with age, has been unable to defy nature. ..TX.- Some LDP candidates are wary of being seen as too close to the construction industry, accused of illegal funding of politicians and bid-rigging. But Mr Hara is comfortable in the company of his friends at Matozaki, where the corporate slogan is 'More, most'. ..TX.- 'What will happen to Japan if the LDP does not win? If opposition parties form a coalition government, they will not be able to agree with each other because their policies are so different. It will be chaotic for the country,' said Mr Hara, who still has a sense of the issues and a politician's handshake. ..TX.- If an opposition coalition is formed, much will depend on Ms Doi and Ms Koike, who is second-in-command at the JNP. In Hyogo No. 2 constituency, where they are competing, there are seven candidates and five seats. It appears that both will be elected, while Mr Hara may be defeated, though 35 per cent of Japanese voters are still 'don't knows'. ..TX.- For Ms Doi, winning more votes than Ms Koike is a matter of honour, as is rousing support for the SDP, which is expected to have its tally of seats cut from 140 to less than 100. Voters are unhappy with the LDP but now have a wider choice in casting a protest vote, which has generally gone to the SDP in the past. ..TX.- After arriving in the 'Takako-mobile', a van festooned with slogans and high-decibel loudspeakers, Ms Doi attempted to inspire shoppers in a mall at Takarazuka, a Hyogo city famed for an all-women theatre company which performs 'Gone with the Wind' and 'Grand Hotel' to permanently sold-out houses. ..TX.- Introduced as the woman who can save Japan from the LDP, she told 200 people the SDP would not fail at the polls 'in spite of the predictions of the media'. Like Mr Hara, she is contemptuous of the newly-emerged parties and their 'lack of beliefs and ideas'. ..TX.- But Ms Doi is one of her party's greatest contradictions. An impressive speaker who seems to want the SDP to be a genuine alternative to the LDP, she remains an unrepentant ideologue. ..TX.- As leader, Ms Doi maintained the traditional support for totalitarian North Korea, and was unable to draft a coherent economic policy. ..TX.- 'I don't vote for the Socialist party, but I do vote for Doi san,' explained a 34-year-old woman standing in the Takarazuka mall. 'I think she is a wonderful person. I trust her and, for me, that is the most important thing. I believe that she will try to do the right thing, even if her party does the wrong thing.' ..TX.- ------------------------------------- WOMEN CANDIDATES AND ELECTED MEMBERS ------------------------------------- Candidates Elected ------------------------------------- 1972 20 7 1976 25 6 1979 23 11 1980 28 9 1983 28 8 1986 35 7 1990 66 12 1993 70 - ------------------------------------- ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P9199 General Government, NEC. P8651 Political Organizations. ..TP.- Types: GOVT Government News. ..IX.- P9199, P8651. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGOCUAA8FT ..HL.- 930715FT 930715 Japanese Elections: Opinion polls predict big socialist loss (479) ..BL.- By ROBERT THOMSON ..DL.- TOKYO ..TX.- JAPAN'S ruling Liberal Democratic party will not gain a parliamentary majority in Sunday's election but the Social Democratic party, the largest opposition group, will be a bigger loser, according to opinion polls released yesterday. ..TX.- The results of the newspaper-sponsored polls, the largest of which sampled 110,000 voters, reflected increasing support for newer, pro-reform parties such as the Japan New party and the Japan Renewal party, both of which could win 40-50 seats in the 511-seat parliament. ..TX.- But the LDP, which entered the election with 227 seats after losing the support of one of its factions, may not be as battered as was predicted when the government of Mr Kiichi Miyazawa fell after losing a no-confidence motion late last month. ..TX.- It is now expected to secure 220-230 seats. ..TX.- The polls - published by the Nikkei Shimbun, the Yomiuri Shimbun, the Asahi Shimbun and the Mainichi Shimbun daily newspapers - indicated many voters had yet to decide. But they suggested the LDP would form a coalition government, with the JNP likely to have enough seats to make it an influential partner. ..TX.- There is also a possibility that the JNP could form a coalition with opposition parties, but Mr Morihiro Hosokawa, the party's leader, has suggested a coalition with the LDP is more likely. ..TX.- However, Mr Hosokawa has also suggested a coalition government is likely to collapse quickly. This would force another election within a year, giving his party and other new groups more time to prepare for a campaign and select candidates. ..TX.- The snap poll has put pressure on the new parties; the JRP has been able to muster only 69 candidates, the JNP 57 and the New Party Harbinger 16. JRP officials are already planning for the next election, which they expect early next year. ..TX.- Each of the polls indicated that the SDP, which now has 140 seats and has traditionally won the protest vote, would be badly bruised on Sunday. Estimates put the number of seats it is likely to win at between 69 to 100. ..TX.- The party appears to have alienated old supporters through a last-minute attempt to overhaul a foreign policy more appropriate to the 1970s, but it has also put off other potential voters by not reforming the policies quickly enough. ..TX.- On average, the four polls found that the Japan Communist party would keep its present total of 16 seats, and could take as many as 20 seats. ..TX.- Meanwhile, the Komeito, backed by the Soka Gakkai religious movement, is expected to keep its 46 seats. ..TX.- If the polls are accurate, a coalition among the Komeito, SDP, JNP and JRP could form a new government. But policy differences should ensure their administration was short-lived. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P8651 Political Organizations. ..TP.- Types: NEWS General News. ..IX.- P8651. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGOCUAA7FT ..HL.- 930715FT 930715 Industrial earnings in China surge (199) ..BL.- By REUTER ..DL.- BEIJING ..TX.- CHINESE industry more than doubled its earnings in the first five months of 1993, according to figures released yesterday, Reuter reports from Beijing. ..TX.- The State Statistics Bureau said the country's 357,000 industrial enterprises earned nearly Yn51.3bn (Pounds 5.9bn) from January to May, a 110 per cent increase over the same period last year, the official China Daily newspaper reported. Sales were up nearly 40 per cent to Yn1,104bn and pre-tax profits rose nearly 50 per cent to Yn129.6bn. ..TX.- 'The impressive gains concealed problems that, if not resolved in good time, might drain the economy and stifle market demand,' the bureau was quoted as saying. 'The speed-up in industrial production has been excessive and has created tension between sectors of the economy.' ..TX.- The official Xinhua news agency said efficiency at large and medium-size state enterprises was up 17 per cent. It attributed this to more autonomous management, growth of heavy industry and rising consumption in coastal provinces. Much of the earnings gain came from the enterprises. ..CN.- Countries: CN China, Asia. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Industrial production. MKTS Sales. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGOCUAA6FT ..HL.- 930715FT 930715 Israeli ban on PLO links under review (602) ..BL.- By JULIAN OZANNE ..DL.- JERUSALEM ..TX.- ONE of Israel's greatest taboos - a ban on direct contacts with the Palestine Liberation Organisation - is under serious review. ..TX.- Since Mr Yitzhak Rabin's government came to power last year unofficial contacts between Israelis and the Tunis-based PLO, long castigated as terrorists bent on the destruction of the Jewish state, have mushroomed. There is an increasing number of senior Israeli politicians who now believe a durable peace with Palestinians will not be possible without face-to-face talks with the PLO. ..TX.- 'If you are going to talk business you had better talk with the boss,' said Mr Benny Temkin, an MP from the Meretz party, Mr Rabin's most important coalition partner. ' ..TX.- Despite government statements this week denying that officials have recently met the PLO, the belief that there is a secret dialogue refuses to go away. ..TX.- The respected daily Haaretz newspaper said yesterday a senior Arabic-speaking Labour party official had had five or six meetings with PLO officials including Mr Nabil Shaath and Mr Bassam Abu Sharif in Egypt and the US. Haaretz said that after each meeting Mr Rabin was briefed in writing. ..TX.- Mr Gad Ben-Ari, Mr Rabin's spokesman, denied the contacts again yesterday but, whatever the truth, it is clear there is a growing body of opinion in favour of direct dialogue with the PLO. ..TX.- In January, the government repealed a law banning contact between individual Israelis and PLO officials. Several MPs have since held public meetings with PLO officials and one radical Labour MP Ms Yael Dayan met Mr Yassir Arafat, the PLO chairman, in Tunis. ..TX.- Meretz, which has 12 MPs in the 120-strong Knesset and four cabinet posts, is publicly committed to direct contacts with the organisation. Mr Temkin said the coalition agreement allows Meretz to raise the issue and 'we are doing it now.' ..TX.- At least one Labour party minister, Mr Uzi Baram, has also come out in favour of direct talks and a Labour MP claimed last week a further seven Labour party ministers privately supported the idea, which, if true, would mean an 11-7 majority in the cabinet. ..TX.- Furthermore, critics of the government say Mr Rabin's acceptance of the inclusion in the Palestinian peace delegation of Mr Faisal Husseini, who is close to Mr Arafat, was a tacit acceptance of a PLO role. ..TX.- The issue has become more critical as the peace talks have faltered, especially over whether east Jerusalem should be included in the interim phase of Palestinian self-rule. ..TX.- Other issues critical to a peace deal, such as territorial concessions on the occupied West Bank and security guarantees, need PLO involvement, say experts. ..TX.- However, an official change of policy will have to overcome two considerable obstacles. The first, according to Mr Ben-Ari, is that 'Arafat personally is viewed as a vicious, anti-Semitic demon and a symbol of so many things Israelis despise.' ..TX.- Opening a dialogue would be politically dangerous and play into the hands of the right-wing opposition Likud party. ..TX.- The second is that the Israeli government believes that a formal inclusion of the PLO in the peace process will lead the talks away from the interim phase of self-rule and towards the much more sensitive issue of an independent Palestinian state. ..TX.- Most observers believe that any change in government policy will be gradual. But they say that progress on the peace talks will be difficult if not impossible without the PLO's official involvement in some shape. ..CN.- Countries: IL Israel, Middle East. ..IN.- Industry: P9711 National Security. P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9711, P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGOCUAA5FT ..HL.- 930715FT 930715 Hong Kong reserves at Dollars 35bn (201) ..BL.- By SIMON HOLBERTON ..DL.- HONG KONG ..TX.- Hong Kong's foreign currency reserves rose by Dollars 6bn to Dollars 35.2bn (Pounds 23.7bn) at the end of 1992, Mr Hamish Macleod, the colony's financial secretary said yesterday, Simon Holberton writes from Hong Kong. At the end of last year Hong Kong had the ninth largest stock of foreign currency reserves. Taiwan's reserves were USDollars 83bn, while China's - excluding the external assets of Bank of China - were about USDollars 20bn. ..TX.- Hong Kong disclosed its external position for the first time a year ago. The colony's reserves are managed by the newly created Monetary Authority - a central bank in all but name. The Authority is responsible for maintaining the Hong Kong dollar's fixed link with the dollar - at HKDollars 7.8 - and regulates the colony's banking system and money market. ..TX.- The development of the money market is one of the Authority's prime aims. In 1992 the stock of outstanding short-term money market instruments rose to HKDollars 19.3bn from HKDollars 13.6bn in 1992. ..CN.- Countries: HK Hong Kong, Asia. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGOCUAA4FT ..HL.- 930715FT 930715 Tension rises in south Lebanon security zone (245) ..BL.- By JULIAN OZANNE ..DL.- JERUSALEM ..TX.- ISRAEL sent 1,000 soldiers and a fleet of tanks and armoured vehicles to its self-declared security zone in southern Lebanon yesterday, sparking renewed speculation of an imminent attack against Arab guerrillas, writes Julian Ozanne in Jerusalem. ..TX.- Israeli aircraft flew mock raids over both south and eastern Lebanon and the inner cabinet discussed a list of possible military actions against Arab guerrillas operating in Lebanon as retaliation for the killing of five Israeli soldiers last week. ..TX.- In Beirut Mr Rafik Hariri, the Lebanese prime minister, said the escalation in tension was aimed at putting pressure on his government to make concessions in the Arab-Israeli peace talks to the detriment of Lebanese sovereignty and dignity. 'We will not submit to any blackmail from Israel,' he said. ..TX.- Mr Yitzhak Rabin, the Israeli prime minister, has vowed to strike back against the Palestinian and pro-Iranian Hizbollah guerrillas, responsible for last weeks' deaths. ..TX.- Senior Israeli officials, however, played down the possibility of a serious strike especially while Mr Dennis Ross, the US peace talks coordinator, was in the region. Mr Ross left for Washington yesterday. ..TX.- Syria, which Israel blamed for the surge in violence, also called yesterday for the US to discourage an Israeli retaliation. ..TX.- It said such action could jeopardise the next round of peace talks. ..CN.- Countries: IL Israel, Middle East. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGOCUAA3FT ..HL.- 930715FT 930715 Japanese Elections: Kiichi Miyazawa inspects damage on Okushiri island (70) ..TX.- Kiichi Miyazawa, Japan's prime minister, wearing a security outfit, inspects damage on Okushiri island. Mr Miyazawa said temporary housing was urgently needed for evacuees after Monday's earthquake off Hokkaido. The ministry of home affairs said it would provide relief grants. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGOCUAA2FT ..HL.- 930715FT 930715 Japanese Elections: Kirin chiefs on charges of paying gangsters (262) ..BL.- By EMIKO TERAZONO ..DL.- TOKYO ..TX.- JAPANESE police yesterday arrested four executives of Kirin Brewery, the country's leading beer and food maker, on charges of making illegal payments to gangsters. ..TX.- Kirin is alleged to have paid about Y33m (Pounds 203,700) to gangsters to ensure order at their shareholders' meeting held last March. It is common for gangsters to appear at shareholders' meetings to ask awkward questions and embarrass a company's board. ..TX.- Corporate payments to stop disruption of shareholders' meetings are seen as an easy source of income. However, the police have been tightening their grip over such violations of the commercial code. ..TX.- Last October, Mr Masatoshi Ito, the president of Ito-Yokado, a leading retailer which also controls Southland of the US, was forced to resign following arrests of company executives who had allegedly made illegal payments of over Y27m to gangsters. ..TX.- The police yesterday also arrested eight members of Rondan Doyukai, a gangster group also linked to the Ito-Yokado case. They said the payments to Rondan allowed Kirin to conclude its most recent shareholders' meeting in March within 24 minutes. ..TX.- The arrests come ahead of the government's scheduled reform of the commercial code in October aimed at providing more information to shareholders and making it easier for shareholders to sue corporate management. ..TX.- Many companies fear that the changes could encourage gangsters to threaten corporations. ..CO.- Companies: Kirin Brewery. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P2082 Malt Beverages. P9222 Legal Counsel and Prosecution. ..TP.- Types: MGMT Management & Marketing. ..IX.- P2082, P9222. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGOCUAA1FT ..HL.- 930715FT 930715 Italy told to recall Somali force chief (557) ..BL.- By MICHAEL LITTLEJOHNS and LESLIE CRAWFORD ..DL.- NEW YORK, NAIROBI ..TX.- THE United Nations has demanded the recall to Rome of the freewheeling commander of Italian troops in Somalia and may have to consider removing his entire contingent, a senior UN official disclosed last night. ..TX.- Mr Kofi Annan, who is in charge of all UN peacekeeping operations, told a press conference that General Bruno Loi would soon be 'rotated' home, at the express request of Mr Boutros Boutros Ghali, the secretary-general. ..TX.- Italian soldiers serving with the UN would probably be redeployed north of Mogadishu, away from the scene of recent bloody clashes. ..TX.- Alluding to Gen Loi's reported defiance of orders by Gen Civek Bir, the Turkish commander of all UN troops in Somalia, Mr Annan said the option of removing a national contingent altogether might have to be considered when it placed an entire enterprise in jeopardy. ..TX.- He warned other governments that had presumed to dictate to their troops over the heads of Gen Bir and former US Admiral Jonathan Howe, the secretary-general's special envoy, that this behaviour was unacceptable. ..TX.- One contingent had even refused to accept assignments for a month, placing an extra burden on other troops who were not so well equipped, he revealed, without identifying the recalcitrant unit. ..TX.- He denied reports that the UN refused to negotiate with Gen Mohamed Farah Aideed, the fugitive Somali warlord or that the warlord, whose arrest and detention have been ordered, was singled out as a special villain. The UN was prepared to deal similarly with any other rebel faction, if necessary. ..TX.- He observed that the governments that committed troops to the UN command knew what they were getting into and that it was an enforcement operation, not the traditional peacekeeping mission. ..TX.- Violence was mainly in southern Mogadishu, the Aideed stronghold, while much of the rest of Somalia including the northern part of the capital, had been pacified and was co-operating with the UN. ..TX.- Somali militants yesterday distributed leaflets in the streets of south Mogadishu in which they vowed to kill all US troops serving with the UN mission and called on Moslems worldwide to kill Americans in their countries. ..TX.- The 'fatwah', a Moslem death warrant, was a clear sign that Gen Aideed's militias are steeling themselves for a protracted struggle against the 14,000 UN troops stationed in the capital. ..TX.- It also appeared to be an attempt to drive a wedge between the 4,000 American soldiers and other contingents fighting under the UN flag. ..TX.- 'We appeal to all countries of the multinational force to stay far from the American sites in Mogadishu,' the leaflet, signed by The Moslem Voice, said. 'We are going to launch an attack to the American compounds in Mogadishu,' it said. ..TX.- Mr Barry Walkley, the UN spokesman in Mogadishu, said he had not seen the pamphlets, but placed little importance on them. 'It sounds like a plea of desperation to me. I don't think we will see massive attacks against US installations,' he said. ..TX.- Meanwhile, the death toll from Monday's Cobra assault on an Aideed compound continued to rise. ..TX.- The International Committee of the Red Cross, which has access to Mogadishu's primitive hospitals, said 50 people were killed. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGOCUAA0FT ..HL.- 930715FT 930715 Property groups agree Dollars 500m Mexican project (351) ..BL.- By DAMIAN FRASER ..DL.- MEXICO CITY ..TX.- REICHMANN International and Soros Realty, the property companies run by Mr Paul Reichmann and Mr George Soros, have agreed in principle to develop a new stage of the huge Santa Fe real estate scheme in Mexico City, in a project that could be worth about Dollars 500m (Pounds 337.8m). ..TX.- The companies, which formed a joint venture in February, are also negotiating property developments that could be worth up to Dollars 500m in the Alameda district in the city centre, and up to Dollars 300m in the construction of two tower blocks on the city's main avenue, Paseo de la Reforma. ..TX.- They are looking for partners to spread the cost. Sources close to Mr Soros said the sums mentioned would 'only represent the total value over a long time and would not represent any specific investment laid out'. They said talks over the Alameda shopping and residential project were 'nowhere near complete'. ..TX.- Mr Juan Enriquez Cabot, the city government official in charge of the Santa Fe development, said the investment was a vote of confidence in Mexico and its economic future. ..TX.- Observers may also interpret Mr Soros's interest as his blessing for the peso, which is considered vulnerable to the sort of speculative attack favoured by the US financier and his hedge funds. ..TX.- The Soros and Reichmann companies had agreed in principle to buy about 120,000 square metres of land in Santa Fe on the western outskirts of Mexico City, Mr Enriquez Cabot said. The companies will develop the fourth stage of the Dollars 5bn-Dollars 10bn project, building houses, office blocks, and shopping centres in what was once a rubbish dump and strip mine. ..TX.- Mr Soros's Quantum Realty Fund will not take a stake in the proposed investments. While the fund is advised by Reichmann International and Soros Realty, its purpose is to invest in finished developments in the US and Canada. ..CO.- Companies: Reichmann International. Soros Realty. ..CN.- Countries: MX Mexico. ..IN.- Industry: P6552 Subdividers and Developers, Ex Cemeteries. ..TP.- Types: COMP Company News. ..IX.- P6552. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGOCUAAZFT ..HL.- 930715FT 930715 Energy tax plan may change (452) ..BL.- By GEORGE GRAHAM ..TX.- CONGRESSIONAL Democrats met yesterday to discuss their strategy for hammering out a compromise US budget bill, amid signs of a move towards a new variant on the proposed energy tax, which would raise money from both transportation fuels and utilities. ..TX.- The energy tax proposal, suggested by Mr Dan Rostenkowski, who as chairman of the House of Representatives ways and means committee is Congress's principal tax writer, is being floated as a way out of the impasse between the two different levies passed by the House and the Senate. ..TX.- While the House kept the outlines of the energy tax originally proposed by President Bill Clinton, to be calculated at 26.8 cents per million British thermal units, the Senate adopted a much more modest proposal to tax petrol and diesel fuel at 4.3 cents per gallon. ..TX.- The Btu tax appears to be dead, but House representatives are expected to insist that its replacement raise something much closer to the Dollars 72bn (Pounds 48.6bn) they expected from it than to the Dollars 23bn the Senate fuel tax would raise. It is unclear at what rates the Rostenkowski tax would apply, but by adding electricity it would spread some of the burden of the transportation tax, which falls disproportionately on western states. ..TX.- One rival proposal would scrap energy taxes altogether but stiffen the increases already planned in company and upper income tax rates. ..TX.- The conference between House and Senate delegates to resolve the differences between their versions of the budget bill is expected to prove particularly difficult because of the narrow margins by which the original bills passed in each chamber. ..TX.- Mr Clinton cannot expect a single Republican vote in either chamber, but Democratic whips say he can count on little more than 200 of the 258 Democrats in the House, and perhaps no more than 40 of the 56 Democrats in the Senate. ..TX.- Every adjustment to the bill threatens to cost him support from either the right or the left: if spending is increased too much, he will lose conservatives, and if it is increased too little, he will lose liberals. ..TX.- One thing the House and the Senate had seemed to agree on was the overall target of reducing the US budget deficit from its current trend by Dollars 500bn over five years. Even this, however, has now been called into question, with Senator John Breaux of Louisiana suggesting a more modest deficit reduction goal of Dollars 400bn. ..CN.- Countries: US United States of America. ..IN.- Industry: P4911 Electric Services. P1311 Crude Petroleum and Natural Gas. P4923 Gas Transmission and Distribution. P2911 Petroleum Refining. ..TP.- Types: GOVT Taxes. ..IX.- P4911, P1311, P4923, P2911. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGOCUAAYFT ..HL.- 930715FT 930715 Clinton to seek Dollars 2.5bn aid for flooded states (442) ..BL.- By GEORGE GRAHAM ..DL.- WASHINGTON ..TX.- PRESIDENT Bill Clinton will propose Dollars 2.48bn (Pounds 1.7bn) of aid for the six states in the Mississippi and Missouri basins devastated by record floods, White House officials said yesterday. ..TX.- The money is expected to be included in an emergency bill to go to Congress shortly. ..TX.- Mr Clinton cut short his holiday in Hawaii to fly back for his second visit to the flooded area yesterday, inspecting relief efforts in Des Moines, Iowa, where the swollen Raccoon River has knocked out the city's water purification plant and cut off clean water supplies to 250,000 people. ..TX.- The tide of grandees visiting the region - Vice-President Al Gore visited on Monday and Mr Clinton may return this weekend to St Louis - places its own logistical burden on emergency workers already stretched thin. However, the White House appears desperately keen to signal its close involvement with the disaster. ..TX.- Some political commentators have gone as far as to suggest that Mr Clinton, by attending the Group of Seven industrial nation's summit in Tokyo last week, was allowing himself to be turned into a foreign policy president no different from his predecessor, Mr George Bush. ..TX.- Others had noted the contrast between pictures of Mr Clinton frolicking in the surf during his holiday and the Iowans and Missourians up to their necks in floodwater. ..TX.- However, there is little evidence that the US public at large begrudges Mr Clinton his few days of holiday, but political pundits recall the difficulties that Mr Bush's holiday habits brought on him. ..TX.- Ms Dee Dee Myers, White House press secretary, said the relief aid request would cover the rest of fiscal 1993, to September 30, and would be part of an emergency supplemental spending request. ..TX.- Democratic congressional leaders have said they would try to speed action on any proposed flood relief. Mr Clinton was expected to discuss the matter with bipartisan members of Congress during a visit to Capitol Hill today. ..TX.- Damage estimates from Illinois, Iowa, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin put the flood's cost so far at around Dollars 3bn - Dollars 2bn for destruction of crops and Dollars 1bn in other property damage. Even before Mr Clinton arrived, Iowa Governor Terry Branstad said he doubted that the federal aid would be enough. ..TX.- The US budget director, Mr Leon Panetta said yesterday he would not be surprised if aid eventually reached Dollars 5bn. ..CN.- Countries: US United States of America. ..IN.- Industry: P9721 International Affairs. P9229 Public Order and Safety, NEC. ..TP.- Types: NEWS General News. RES Natural resources. ..IX.- P9721, P9229. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGOCUAAXFT ..HL.- 930715FT 930715 Rise in US retail sales: Modest growth expected as inflationary pressures ease (351) ..BL.- By MICHAEL PROWSE ..DL.- WASHINGTON ..TX.- US consumer spending rose significantly in the second quarter while inflationary pressures moderated, official figures indicated yesterday. ..TX.- This suggests that the US economy, after sharp price increases and negligible growth in an erratic first quarter, is returning to last year's path of moderate growth and subdued inflation. Fears that the Federal Reserve, the central bank, would push up interest rates in the near future have all but evaporated. ..TX.- The Commerce Department said retail sales rose 0.4 per cent between May and June and sharply revised upwards estimates of spending in previous months. The Labour Department said consumer prices were flat last month after a marginal 0.1 per cent increase in May. ..TX.- Official figures earlier this week showed a 0.3 per cent decline in wholesale prices last month, the biggest in two years. ..TX.- In May the Fed reacted to signs of rising inflationary pressures by shifting from a neutral monetary stance to a bias toward raising short-term rates. However, it is now expected to take a more relaxed attitude towards pressures and to postpone a tightening of monetary policy at least until the autumn, perhaps until next year. ..TX.- Retail sales in April and May were revised up sharply to show monthly gains of 1.9 per cent and 0.4 per cent respectively, against previous estimates of 1.5 per cent and 0.1 per cent. ..TX.- The latest figures suggest that real consumer spending grew at an annual rate of about 3 per cent in the second quarter, a sharp rebound after growth of less than 1 per cent in the first quarter. The recovery was led by big increases in car sales. Sales of clothing and general household goods also improved noticeably. ..CN.- Countries: US United States of America. ..IN.- Industry: P6141 Personal Credit Institutions. P5511 New and Used Car Dealers. P53 General Merchandise Stores. P54 Food Stores. P56 Apparel and Accessory Stores. P57 Furniture and Homefurnishings Stores. P5999 Miscellaneous Retail Stores, NEC. ..TP.- Types: MKTS Sales. ..IX.- P6141, P5511, P53, P54, P56, P57, P5999. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGOCUAAWFT ..HL.- 930715FT 930715 City seethes in summit shadow: Prospects and problems for the Ibero-American conference, opening in Brazil today (396) ..BL.- By VERONICA BARUFFATI ..TX.- LEADERS began gathering in north-eastern Brazil yesterday for the third Ibero-American conference, which will focus on economic development and social justice. ..TX.- The two-day summit, which starts today in the city of Salvador, brings together Latin American heads of state and those of the region's former colonial powers, Spain and Portugal. ..TX.- Much of the two days will be spent drafting a document - An Agenda for Development, with emphasis on social development - to be presented to Mr Boutros Boutros Ghali, UN secretary general, for further discussion at the UN. ..TX.- Most of the participating countries share urgent problems, such as high infant mortality, poor access to basic health and education services, illiteracy, malnutrition and endemic disease. Since May, ministerial meetings have been drawing up working papers aimed at tackling some of the issues. ..TX.- Away from the conference's main agenda, President Alberto Fujimori of Peru is expected to use the gathering to further his international rehabilitation following criticism of his dissolution of Congress and seizure of wide powers in April last year. ..TX.- Admiring Brazilian press articles on Peru's economic progress under Mr Fujimori pushed Brazil's President Itamar Franco to pledge this week that there would be no 'Fujimorisation' of Brazilian society. ..TX.- Citizens of the habitually languorous city of Salvador, Brazil's first capital, have been sharply critical of preparations for the conference and the accompanying facelift. ..TX.- Many claim the meeting will do little to solve everyday problems. ..TX.- In recent weeks the city has seen feverish activity to spruce up areas between the airport, the convention centre and the hotels where 21 leaders, including Cuba's President Fidel Castro, will be staying. ..TX.- Armies of otherwise unemployed men have donned bright yellow uniforms to resurface and paint the city's two main arteries and to clear up years of rubbish dumped alongside the roads and washed up on the city's beaches. ..TX.- Hotels have rebuilt suites, and restaurants near the conference area have been subjected to weeks of rigorous inspection. ..TX.- In recent years parts of the historical centre, Pelourinho, with its magnificent churches and colonial architecture, have been restored, becoming one of Brazil's main tourist attractions. ..CN.- Countries: BR Brazil, South America. ..IN.- Industry: P9721 International Affairs. P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9721, P9311. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGOCUAAVFT ..HL.- 930715FT 930715 Regional aid rules approved (238) ..BL.- By LIONEL BARBER ..DL.- STRASBOURG ..TX.- MEPs last night over-whelmingly approved new rules for the EC's 1994-99 regional development and structural aid programme, removing a major hurdle for disbursement of around Ecu141.5bn (Pounds 107.96bn) in the new year. ..TX.- The favourable parliamentary opinion paves the way for the final go-ahead of the biggest-ever EC development programme at a meeting of EC foreign ministers next Monday, barring last-minute objections from Ireland and Greece. ..TX.- Under the deal the UK will receive special aid for Merseyside and the Scottish Highlands, including Argyll, Bute and West Moray. ..TX.- With this and other funding, the UK could receive between Ecu5bn and Ecu6bn over the next six years. ..TX.- Prospects for a comprehensive deal rose earlier this week after the Irish government lifted its veto, despite its claim to IPounds 8bn which it claims was guaranteed in last December's EC summit in Edinburgh. ..TX.- Mr Albert Reynolds, Irish prime minister, has been in close touch with Mr Jacques Delors, president of the European Commission, and Mr Bruce Millan, EC commissioner responsible for regional affairs, in an effort to resolve outstanding differences. ..TX.- MEPs voted 317 to 8, with only four objections, and generally welcomed the new aid programme. ..CN.- Countries: QR European Economic Community (EC). GB United Kingdom, EC. IE Ireland, EC. ..IN.- Industry: P9532 Urban and Community Development. P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9532, P9311. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGOCUAAUFT ..HL.- 930715FT 930715 Abkhazia rebels scorn ultimatum (88) ..BL.- By JOHN LLOYD ..DL.- MOSCOW ..TX.- Leaders of the breakaway Georgian province of Abkhazia yesterday scorned an ultimatum to withdraw from villages near the provincial capital, Sukhumi, John Lloyd reports from Moscow. ..TX.- Mr Sultan Sosnaliyev, Abkhazian defence minister, called the ultimatum a bluff. Abkhazian positions based in the villages shelled Sukhumi early yesterday morning, hours after the midnight deadline for the ultimatum had expired. ..CN.- Countries: RU Russia, East Europe. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGOCUAATFT ..HL.- 930715FT 930715 Ukraine demand over Sevastopol (113) ..BL.- By CHRYSTIA FREELAND ..DL.- KIEV ..TX.- Ukraine's parliament yesterday demanded Russia withdraw its claim to the Crimean port of Sevastopol, writes Chrystia Freeland in Kiev. ..TX.- MPs described the Russian parliament's claim on Sevastopol, in the Ukrainian region of Crimea, as 'an aggressive political action' and demanded that the decision be formally repealed. They said it was unacceptable for the unilateral Russian claim on part of their territory to remain on the law-books. ..TX.- President Boris Yeltsin has condemned his parliament's move. ..CN.- Countries: UA Ukraine, East Europe. RU Russia, East Europe. ..IN.- Industry: P9721 International Affairs. P9199 General Government, NEC. ..TP.- Types: GOVT Government News. ..IX.- P9721, P9199. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGOCUAASFT ..HL.- 930715FT 930715 Walesa says no plan to run in poll (116) ..BL.- By CHRISTOPHER BOBINSKI ..DL.- WARSAW ..TX.- PRESIDENT Lech Walesa yesterday denied that he was intending to run in Poland's parliamentary election next September, Christopher Bobinski reports from Warsaw. ..TX.- He said he had suggested a new political grouping be formed in order to avoid anarchy and disorder. Poles 'no longer believed in political parties'. ..TX.- He was responding to Mr Adam Michnik, editor of Gazeta Wyborcza newspaper, who attacked the 'new type of party made up of those merely interested in holding on to power'. ..CN.- Countries: PL Poland, East Europe. ..IN.- Industry: P9199 General Government, NEC. P8651 Political Organizations. ..TP.- Types: GOVT Government News. ..IX.- P9199, P8651 ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGOCUAARFT ..HL.- 930715FT 930715 West Europe car sales plummet (693) ..BL.- By KEVIN DONE, Motor Industry Correspondent ..TX.- NEW CAR sales in western Europe plunged by 1.3m to 6.091m in the first half of the year - a fall of 17.2 per cent. Demand declined steeply in all the main markets except Britain's. . ..TX.- Sales last month fell by an estimated 16.4 per cent to 950,000, the sixth steep monthly fall in succession. The situation was worst in Italy, where year-on-year registrations dropped by 29.5 per cent. ..TX.- Overall sales last month were lower than a year ago in 14 of 17 European markets. There were marginal rises in Denmark and Portugal, and stronger growth in Britain, where sales rose by 11.1 per cent. The UK, recovering from recession, has seen sales increase year-on-year in 12 of the past 15 months. ..TX.- West Europe has suffered its steepest six-monthly fall in new car sales for more than a decade, with first-half demand lower in 15 of 17 markets. ..TX.- The decline was led by a 19.9 per cent fall in Germany, Europe's biggest single market. Sales fell to an estimated 1.75m from 2.19m in the same period last year. First half sales in Spain were down by 29.3 per cent, in Italy by 22.5 per cent, and in France by 17.9 per cent. ..TX.- Only Britain made a significant gain - of 9.1 per cent, albeit from a depressed level. ..TX.- Volkswagen, Fiat and Ford suffered steep falls. The Fiat group, which includes Lancia and Alfa Romeo, lost most ground in the first six months. Sales plunged by an estimated 22.1 per cent compared with the 17.2 per cent drop in the overall west European market. ..TX.- General Motors, which includes Opel/Vauxhall and Saab, gained market share helped by the successful launch earlier this year of its Corsa small car range. ..TX.- Rover, the subsidiary of British Aerospace, is the only significant carmaker in Europe to have lifted sales despite the decline in the overall market. Volume rose by 10.5 per cent, increasing Rover's share to 2.8 per cent from 2.1 per cent in the same period a year ago. ..TX.- Japanese carmakers have increased their share significantly from 11.6 per cent to 12.5 per cent, heightening tensions between the European Community and Tokyo over the level of Japanese car exports to the EC. ..TX.- Nissan, Toyota and Suzuki have performed strongly this year helped by local production in Britain and Spain, which has enabled them to penetrate protected markets in southern Europe. ..TX.- ------------------------------------------------------------------------ WEST EUROPEAN NEW CAR REGISTRATIONS January-June 1993 Volume Volume Share (%) Share (%) (Units) Change (%) Jan-Jun 93 Jan-Jun 92 ------------------------------------------------------------------------ TOTAL MARKET 6,091,000 -17.2 100.0 100.0 MANUFACTURERS: Volkswagen* (incl. 1,034,000 -20.7 17.0 17.7 Audi, SEAT & Skoda) General Motors 782,000 -14.4 12.8 12.4 (Opel/Vauxhall, US? & Saab) - Opel/Vauxhall 750,000 -14.0 12.3 11.9 - Saab** 21,000 -28.8 0.3 0.4 Peugeot (incl. 724,000 -17.2 11.9 11.9 Citroen) Fiat (incl. Lancia, 716,000 -22.1 11.8 12.5 Alfa Romeo, Ferrari Innocenti, Maserati) Ford (Europe, 700,000 -17.5 11.5 11.5 US? & Jaguar) - Ford Europe 694,000 -17.6 11.4 11.4 - Jaguar 5,000 -4.9 0.1 0.1 ..TX.- Renault???? 631,000 -17.4 10.4 10.4 Nissan 214,000 -9.0 3.5 3.2 BMW 198,000 -17.2 3.3 3.3 Rover?? 173,000 +10.5 2.8 2.1 Toyota 170,000 -0.7 2.8 2.3 Mercedes-Benz 164,000 -29.3 2.7 3.1 Mazda 113,000 -24.5 1.8 2.0 Volvo???? 89,000 -23.0 1.5 1.6 Honda?? 81,000 -15.4 1.3 1.3 Mitsubishi 79,000 -13.3 1.3 1.2 Total Japanese 762,000 -11.1 12.5 11.6 MARKETS: Germany 1,752,000 -19.9 28.8 29.7 Italy 1,086,000 -22.5 17.8 19.0 United Kingdom 839,000 +9.1 13.8 10.4 France 813,000 -17.9 13.4 13.5 Spain 380,000 -29.3 6.2 7.3 ------------------------------------------------------------------------ ?Cars imported from US and sold in western Europe. *VW holds 31 per cent and management control of Skoda. **GM holds 50 per cent and management control of Saab Automobile. ??Honda holds a 20 per cent stake in Rover vehicle operations. ????Renault and Volvo are linked through minority cross-shareholdings. ------------------------------------------------------------------------ Source: industry estimates ------------------------------------------------------------------------ ..CN.- Countries: IT Italy, EC. DK Denmark, EC. PT Portugal, EC. DE Germany, EC. FR France, EC. GB United Kingdom, EC. ..IN.- Industry: P3711 Motor Vehicles and Car Bodies. P5511 New and Used Car Dealers. ..TP.- Types: MKTS Sales. ..IX.- P3711, P5511. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGOCUAAQFT ..HL.- 930715FT 930715 Garofano to be questioned today (339) ..BL.- By HAIG SIMONIAN ..DL.- MILAN ..TX.- MR Giuseppe Garofano, the most important businesman sought in Italy's political corruption scandal, is expected to be interrogated by Milan magistrates in Geneva today. ..TX.- Mr Garofano was arrested by Swiss police on Tuesday evening as he arrived at Geneva airport from Paris. Unconfirmed reports say he was planning to go to Milan to give himself up following contacts between his lawyers and Milan judges. Last night, Mr Garofano was reported to have asked for a week's 'reflection' to decide whether to accept extradition to Italy. ..TX.- Magistrates want to question Mr Garofano, formerly the most senior executive in the troubled Ferruzzi group outside the Ferruzzi family, on three matters. ..TX.- The first is a L250m (Pounds 107,000) donation to the Christian Democrat party, the issue which apparently triggered Mr Garofano's decision to flee. Mr Garofano maintained the money was a personal contribution. ..TX.- However, Milan magistrates, suspecting the money may have come from Ferruzzi, issued a warrant for illegal funding of political parties. Mr Garofano's name has come up in two other investigations since his disappearance. Milan magistrates monitoring the Ferruzzi rescue plan have been investigating the finances of some foreign subsidiaries. ..TX.- Last month, Montedison, Ferruzzi's main industrial arm, shocked shareholders with a L435bn increase in its 1992 group loss to L1,679bn on account of mysterious credits, deemed irrecoverable, by a small Curacao subsidiary. ..TX.- Magistrates may also want to interrogate Mr Garofano on the now-defunct Enimont chemicals joint venture between Montedison and the state-owned Eni energy and chemicals group. A number of executives involved in Enimont, including Mr Raul Gardini, Montedison's former boss, have already been told that they are under investigation. ..TX.- Mr Garofano's detention marks the first time a leading suspect in the corruption scandal has been arrested on an international warrant. Previous suspects have returned to Italy from hiding after lengthy negotiations between the judges and their lawyers. ..CO.- Companies: Ferruzzi Finanziaria. ..CN.- Countries: CH Switzerland, West Europe. ..IN.- Industry: P9211 Courts. ..TP.- Types: PEOP People. ..IX.- P9211. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGOCUAAPFT ..HL.- 930715FT 930715 Community prepares for enlargement (430) ..BL.- By LIONEL BARBER ..DL.- STRASBOURG ..TX.- EUROPEAN Community foreign ministers will discuss a proposal to create a committee of 'wise men' to examine streamlining EC institutions in order to deal with enlargement, the Belgian Presidency of the EC announced yesterday. ..TX.- The proposal could serve as the platform for a new constitutional debate on the future of the EC, raising sensitive questions such as the balance of power between large and small states and a reorganisation of the European Commission and rotating EC presidency. ..TX.- The idea of opening up a 'post-Maastricht' debate has been circulating for several months in the European parliament and among European think-tanks. ..TX.- Proponents suggest a high-powered independent committee could be modelled on the 'Dooge committee' which paved the way for the 1986 Single European Act creating an integrated market by 1992. ..TX.- Mr Willy Claes, Belgium's foreign minister, made clear that the Belgian presidency was not endorsing the idea which was put forward in the parliament yesterday by Mr Willy De Clerq, a Belgian MEP and former EC Commissioner. But he agreed to submit it for ministerial discussion. ..TX.- Under the Danish and UK presidencies, ministers agreed that minimal change only was required to cope with the four new applicants, Austria, Finland, Sweden and Norway. ..TX.- Last year, a European Commission paper suggesting that smaller states may lose out in a future reorganisation of the Commission created a furore. The mere hint that not every state might run its own EC presidency or send its own commissioner to Brussels may have helped to trigger the narrow Danish rejection of the Maastricht treaty. ..TX.- Mr Claes declined to answer how broad a mandate might be given to a putative committee of wise men. But some institutional questions would have to be examined before a final decision on the admission of the four applicant countries, notably their allocation of MEPs and the number of votes in the Council of Ministers. ..TX.- A UK official said the government was 'relaxed' about an institutional discussion before the 1996 intergovernmental conference to review the Maastricht treaty, providing it took a narrow definition of the need for change. ..TX.- Mr Claes told MEPs that the Belgian presidency was determined to restore the authority of the European Commission and improve relations with the European Parliament. ..TX.- He added: 'The treaty of Maastricht is (thereby) not an endpoint but rather a point of departure for further deepening and democratisation.' ..CN.- Countries: BE Belgium, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P9611 Administration of General Economic Programs. ..TP.- Types: NEWS General News. ..IX.- P9311, P9611. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGOCUAAOFT ..HL.- 930715FT 930715 New test for ERM parities (287) ..BL.- By PETER NORMAN and STEPHANIE FLANDERS ..DL.- LONDON ..TX.- YESTERDAY'S Bastille Day holiday in France provided no respite for the European exchange rate mechanism, with the French and Danish currencies under renewed pressure. ..TX.- Central banks in the Netherlands and Denmark intervened in support of the Danish krone as it reached its lower intervention point against the guilder in the ERM, while the Bundesbank again bought French francs in an attempt to limit its slide. ..TX.- Hopes of more substantial support through a cut in official interest rates at today's Bundesbank council meeting were damped after the bank said it would not be holding a press conference. The terms at which it elected to lend funds to the German domestic money market yesterday also did little to encourage expectations of lower rates. ..TX.- The volume of funds provided as a result of the Bundesbank's latest repurchase tender was at the upper end of expectations. But the rate at which the money was provided - 7.28 per cent - was only marginally lower than the 7.30 per cent charged previously. ..TX.- There is no reason to doubt that German, French and EC monetary officials have been sincere this week in declaring that they see no fundamental reason for speculative pressure against the franc. But if the Bundesbank relaxes its policy in response to external pressure, it could damage its long-term credibility as an inflation fighter. ..TX.- The krone closed at DKr3.8951 to the D-Mark, close to its floor of DKr3.9016, while the franc closed in London at FFr3.417, down from the previous day's FFr3.414. ..CN.- Countries: FR France, EC. DK Denmark, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Inflation. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGOCUAANFT ..HL.- 930715FT 930715 Recession stalks new Gonzalez team: There are doubts the cabinet has the stomach for the fight (758) ..BL.- By TOM BURNS ..TX.- THE NEW Spanish government of Mr Felipe Gonzalez took office yesterday and was greeted with a degree of scepticism by the financial community. Doubts were cast on its stability and on its willingness to apply measures to curb Spain's worsening recession. ..TX.- Mr Gonzalez's Socialist party (PSOE) failed to win an overall majority in last month's general election, and despite extensive talks with leaders of the Basque and Catalan nationalist parties, the prime minister has failed to persuade either group to join his government as a junior partner. ..TX.- The absence of the nationalist parties, which would have assured Mr Gonzalez of firm parliamentary support, lends a provisional look to the new government. Both groups may change their minds, however, and try to join the cabinet after the 1994 budget is approved following the the summer recess. ..TX.- Mr Gonzalez's new team is built around Mr Narcis Serra, the deputy prime minister in the previous government who is now given the additional responsibility of co-ordinating economic policy. Mr Pedro Solbes, a technocrat and a non-Socialist, has been promoted from the agriculture ministry to run the economy and finance ministry. ..TX.- Neither Mr Serra, a plodding consensus politician, nor Mr Solbes, who has a record as an interventionist in defence of state industry, is viewed as a tough personality willing to take on the challenges of a recession. A senior Madrid corporate lawyer likened the new economic team yesterday to 'an aspirin to cure a cancer'. ..TX.- The difficulties facing the domestic economy have been underlined this week by estimates which put the general budget deficit at 7 per cent of gross domestic product. That is double the figure outlined in Spain's Emu convergence plan and compares with 4.4 per cent last year. Year-on-year GDP rose by 0.5 in the first quarter and growth forecasts for 1993 range between zero and minus 1 per cent. ..TX.- Inflation is nevertheless rising - it was up by 0.4 per cent in June to give an underlying 12 month rate of 5.9 per cent - despite the recession and a steep rise in unemployment. The number of registered jobless rose last month by 35,351, the first June increase for 10 years, and the total number of job seekers now stands at more than 2.5m, representing 16.6 per cent of the working population. ..TX.- Echoing a widely shared view in the financial community, Madrid stockbroker FG forecast that the new government would avoid head-on collisions with the unions, would do little to reduce the budget deficit and would deregulate only under direct pressure from Brussels. ..TX.- The one positive signal to the markets in the new government is the exclusion from the cabinet of the left wing of the PSOE which is championed by the deputy party leader, Mr Alfonso Guerra. This is a second humiliation suffered by the so-called guerristas. Mr Gonzalez has already foisted Mr Carlos Solchaga, the former economy minister and a bitter foe of the leftwing Socialists, on to the PSOE, as the party's leader and chief spokesman in parliament. ..TX.- Mr Gonzalez has retained as foreign minister Mr Javier Solana, who is no friend of Mr Guerra, and he brought into the cabinet minor-ranking social democrats, identified with the moderate wing of the party, as well as a total of six independents, three of them women. ..TX.- It is likely now that the prime minister will continue to wage his war on the left wing by calling a party congress later this year or early in 1994. The guerrista faction, which holds most of the senior positions within the party, has been at the centre of scandals over illicit campaign funds that have severely embarrassed Mr Gonzalez. ..TX.- Should the latter deal a definitive blow to Mr Guerra's camp, and also meet home rule demands made by the nationalists when he draws up next year's budget, the way will be smoothed for the entry of the Basques and Catalans into the cabinet. ..TX.- A broad-based coalition government would have its stability assured over the next four years. Given the more market-orientated policies of both the Basques and the Catalans, such a government would help to boost confidence about the economic policies that Mr Gonzalez may pursue in his fourth term in office. ..CN.- Countries: ES Spain, EC. ..IN.- Industry: P9199 General Government, NEC. P8651 Political Organizations. P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: GOVT Government News. ECON Inflation. ECON Gross domestic product. ..IX.- P9199, P8651, P9311. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGOCUAAMFT ..HL.- 930715FT 930715 Mitterrand urges caution on sell-offs (423) ..BL.- By JOHN RIDDING ..DL.- PARIS ..TX.- PRESIDENT Francois Mitterrand yesterday said that the conservative government of prime minister Edouard Balladur must exercise 'extreme caution' in the privatisation of state-owned companies important to national interests. ..TX.- Speaking in a televised interview, traditional on France's Bastille day holiday, the Socialist president also said that the franc must be defended and that the maintenance of its parity with the D-Mark in the the European exchange rate mechanism was 'a necessity above all others.' ..TX.- Mr Mitterrand cited Elf-Aquitaine, the oil group, Aerospatiale, the aerospace company, and Snecma, the aero-engine maker, as examples where caution was needed. Elf is expected to be one of the first companies to be privatised as part of the government's programme commencing this autumn. ..TX.- Stressing that there was no constitutional power to block the privatisation law passed by parliament, he said: 'Once it has been passed I become a notary. It is my duty to sign and I sign.' ..TX.- But his comments reflect a debate within the ruling RPR and UDF parties concerning the privatisation of sensitive industries and suggest that the government may retain a 'golden share' to maintain control of companies involved in defence, high technology and energy industries. ..TX.- Mr Mitterrand appeared satisfied with his relations with the centre-right government but refused to be drawn on his relations with Mr Balladur. ..TX.- 'I am in favour of applying the constitution. The people voted and that is all,' he said, referring to the March general elections in which the Socialists suffered a crushing defeat. ..TX.- In a wide-ranging interview, Mr Mitterrand said that he was in favour of a Gatt agreement on the liberalisation of international trade but that any agreement 'must be fair.' He said that problems remained in the sphere of agricultural trade despite greater than expected progress at the G7 summit in Tokyo earlier this month. ..TX.- The French president called for measures to stimulate consumption and to revive the economy. He said that 'everything had been tried' in the fight against unemployment, but that the government should continue to search for new remedies. Mr Mitterrand, appearing relaxed and sharp during the interview, said he had 'recuperated while working' following surgery for prostate cancer last September. ..CO.- Companies: Elf-Aquitaine. Aerospatiale. Societe Nationale d'Etude et de Construction de Moteurs d'Aviation. ..CN.- Countries: FR France, EC. ..IN.- Industry: P9611 Administration of General Economic Programs. P1311 Crude Petroleum and Natural Gas. P3721 Aircraft. P3724 Aircraft Engines and Engine Parts. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9611, P1311, P3721, P3724. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGOCUAALFT ..HL.- 930715FT 930715 Croat plan 'likely to restart war' (284) ..BL.- By LAURA SILBER ..DL.- BELGRADE ..TX.- CROATIA'S plan to re-open a strategic bridge this weekend risks re-igniting the Serbo-Croat war, a senior UN official warned yesterday, writes Laura Silber in Belgrade. ..TX.- Mr Cedric Thornberry, deputy chief of the UN mission in former Yugoslavia, said: 'Both sides are armed to the teeth, and both have brought up reinforcements. Both are preparing for an escalating conflict. ..TX.- 'In these circumstances, the risk of war breaking out again becomes really very high.' ..TX.- Frustrated by Serb intransigence on the opening of Maslenica bridge, which links the main coastal motorway with central Croatia, and the nearby Zemunik airport, Croat authorities are poised to re-establish the vital road link. ..TX.- Serb forces from the self-styled state of Krajina have warned they will bombard the bridge if the Croats go ahead with a temporary pontoon bridge. Serbs have trained three Frog missiles on Zagreb, the Croatian capital, say UN officials posted in the region. ..TX.- 'The Croat authorities and the territorial defence forces of the Serbian Krajina are engaging in brinkmanship around Maslenica and the Zemunik airport,' Mr Thornberry said in Belgrade. ..TX.- Croat forces seized control of the area in their offensive on January 22 across UN lines. Since then, they have ignored a UN Security Council resolution calling for their withdrawal to the ceasefire line agreed on January 3, 1992. ..TX.- Croatia wants to re-assert authority over Serb-held parts which comprise the four UN zones. Resentment has mounted against UN peacekeepers for failing to fulfil the peace plan to allow the return of Croat refugees to UN zones. ..CN.- Countries: KR South Korea, Asia. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGOCUAAKFT ..HL.- 930715FT 930715 Hurd hints at Croatia sanctions (288) ..BL.- By DAVID OWEN and LAURA SILBER ..DL.- LONDON, BELGRADE ..TX.- MR Douglas Hurd, the British foreign secretary, yesterday hinted that the EC could decide as soon as next Monday to implement sanctions against Croatia. The time had come for the EC to 'consider economic measures' against the Croatians, he told members of parliament, write David Owen in London and Laura Silber in Belgrade. ..TX.- Mr Hurd said he thought there was a 'strong case' for having a Moslem 'contingent' among UN troops stationed in Bosnia. He believed, however, that Iran would not be a 'suitable candidate' for providing such troops. ..TX.- Nato yesterday agreed that US, French, British and Dutch strike aircraft could start protecting UN forces in Bosnia, including those in Moslem safe areas, from next week. ..TX.- A meeting of the alliance's ambassadors decided the mission could start from July 22 but left any decision on timing to the UN. ..TX.- The mainly Moslem Bosnian army yesterday appeared to strike back from the air for the first time in the 16-month war in Bosnia when three aircraft dropped bombs on Serb-held targets. ..TX.- If yesterday's incident is confirmed, it would be a violation of the no-fly zone in force over the whole of Bosnia since last October. ..TX.- Tanjug, the Serb news agency, said three aircraft bombarded Serb-held positions near Olovo in central Bosnia. ..TX.- In a bid to raise Dollars 200m, the mininum amount needed to keep the relief operation going, Mrs Sadako Ogata, UN High Commissioner for Refugees, met Bosnian President Alija Izetbegovic to discuss to the plight of 380,000 people trapped in the Bosnian capital. ..CN.- Countries: HR Croatia, East Europe. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGOCUAAJFT ..HL.- 930715FT 930715 Pressure on franc, krone (123) ..BL.- By STEPHANIE FLANDERS and PETER NORMAN ..TX.- THE French franc and the Danish krone came under renewed selling pressure within the European exchange rate mechanism yesterday, in spite of the Bastille Day holiday in France, write Stephanie Flanders and Peter Norman. ..TX.- Dutch and Danish central banks intervened in support of the krone, while the Bundesbank again bought francs. ..TX.- The krone closed at DKr3.8951 to the D-Mark in London, near its floor of DKr3.9016. The franc closed at FFr3.417 to the D-Mark, down from FFr3.414 previously. ..TX.- Mitterrand urges caution, Page 2 ..TX.- Currencies, Page 29 ..CN.- Countries: DK Denmark, EC. FR France, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGOCUAAIFT ..HL.- 930715FT 930715 Stock and Currency Markets (239) ..TX.- --------------------------------------------------------------- STOCK MARKET INDICES --------------------------------------------------------------- FT-SE 100: 2832.3 (- 4.8) Yield 4.04 FT-SE Eurotrack 100 1,237.14 (+1.23) FT-A All-Share 1,405.97 (-0.2%) FT-A World Index 160.92 (+0.5%) Nikkei 20,139.11 (-41.31) New York: Dow Jones Ind Ave 3,542.55 (+27.11) S&P Composite 450.08 (+1.99) --------------------------------------------------------------- US CLOSING RATES --------------------------------------------------------------- Federal Funds: 2 15/16% (2 15/16%) 3-mo Treas Bills: Yld 3.055% (3.085%) Long Bond 107 5/16 (106 19/32) Yield 6.559% (6.611%) --------------------------------------------------------------- LONDON MONEY --------------------------------------------------------------- ..TX.- 3-mo Interbank 6% (same) Liffe long gilt future: Sep 108 29/32 (Sep107 31/32) --------------------------------------------------------------- NORTH SEA OIL (Argus) --------------------------------------------------------------- Brent 15-day (Sep) dollars 16.675 (17.025) --------------------------------------------------------------- Gold --------------------------------------------------------------- New York Comex (Aug) dollars 391.4 (394.5) London dollars 392.25 (393.75) --------------------------------------------------------------- STERLING --------------------------------------------------------------- New York: Dollars 1.5035 (1.49775) London: Dollars 1.5025 (1.4935) DM 2.5775 (2.57) FFr 8.805 (8.775) SFr 2.27 (2.27) ..TX.- Y 161.25 (161.75) Pound Index 81.7 (81.2) --------------------------------------------------------------- DOLLAR --------------------------------------------------------------- New York: DM 1.71605 (1.7185) FFr 5.8595 (5.86825) SFr 1.511 (1.5177) Y 107.125 (107.95) London: DM 1.7155 (1.72) FFr 5.86 (5.875) SFr 1.5105 (1.52) Y 107.35 (108.3) Dollar Index 66.0 (66.1) Tokyo open: Y 107.265 --------------------------------------------------------------- ..CN.- Countries: GB United Kingdom, EC. US United States of America. DE Germany, EC. FR France, EC. SE Sweden, West Europe. JP Japan, Asia. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. P3339 Primary Nonferrous Metals, NEC. P6231 Security and Commodity Exchanges. ..TP.- Types: COSTS Commodity prices. COSTS Equity prices. ..IX.- P1311, P3339, P6231. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGOCUAAHFT ..HL.- 930715FT 930715 Italy told to recall commander in Somalia (571) ..BL.- By MICHAEL LITTLEJOHNS, ROBERT GRAHAM and LESLIE CRAWFORD ..DL.- NEW YORK, ROME, NAIROBI ..TX.- THE ROW between the United Nations and Italy over Somalia deepened last night after the UN demanded the recall to Rome of the commander of Italian troops there and signalled that it may request the removal of the country's entire contingent. ..TX.- Mr Beniamino Andreatta, the Italian foreign minister, told parliament he was 'outraged' at the decision that General Bruno Loi, who is alleged to have defied the orders of the overall UN commander in Somalia, would soon be rotated home. ..TX.- The move, ordered by Mr Boutros Boutros Ghali, UN secretary general, was announced at a press conference in New York by Mr Kofi Annan, who is in charge of UN peacekeeping operations. ..TX.- Alluding to Gen Loi's reported defiance of orders from General Civek Bir, the Turkish commander of UN troops in Somalia, Mr Annan said the option of removing a national contingent altogether might have to be considered when it placed an entire enterprise in jeopardy and other contingents at risk. Italian soldiers serving with the UN would probably be redeployed north of Mogadishu, away from the scene of recent clashes, he added. ..TX.- Yesterday's exchange between Rome and New York deepened the sense of disarray surrounding the UN military intervention in Somalia, as Somali militants stepped up their campaign against the international force in the capital, Mogadishu. Mr Annan warned other governments that had dictated to their troops over the heads of Gen Bir and former US Admiral Jonathan Howe, the secretary-general's special envoy, that this behaviour was unacceptable. ..TX.- One contingent had even refused to accept assignments for a month, placing an extra burden on other troops who were not so well equipped, he said without identifying the recalcitrant unit. ..TX.- He denied the UN refused to negotiate with General Mohamed Farah Aideed, the fugitive Somali warlord, or that the warlord, whose arrest and detention have been ordered, was singled out as a special villain. The UN was prepared to deal similarly with any other rebel faction, if necessary. ..TX.- He said governments that had committed troops to UN command knew what they were getting into and that it was an enforcement operation, not a traditional peacekeeping mission. Much of Somalia including the northern part of the capital was co-operating with the UN. ..TX.- Somali militants yesterday distributed leaflets in the streets of south Mogadishu in which they vowed to kill all US troops serving with the UN mission and called on Moslems worldwide to kill Americans in their countries. ..TX.- The fatwa, a Moslem death warrant, was a clear sign that Gen Aideed's militias are steeling themselves for a protracted struggle against the 14,000 UN troops stationed in the capital. It also appeared to be an attempt to drive a wedge between the 4,000 American soldiers and other national contingents fighting under the UN flag. ..TX.- Somali forces later launched an attack on the airport, in the south of the city, firing rocket-propelled grenades and small arms. ..TX.- UN military headquarters said Somali snipers also fired on Tunisian troops at the headquarters compound, while Italian forces were also reported to have come under attack at a checkpoint to the north of the city. ..TX.- There were no reports on casualties. ..TX.- Italy shocked, Page 4 ..CN.- Countries: IT Italy, EC. SO Somalia, Africa. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGOCUAAGFT ..HL.- 930715FT 930715 SFO to probe Gooda Walker syndicates (532) ..BL.- By RICHARD LAPPER ..TX.- LLOYD'S OF LONDON, hit by record losses and troubled by legal action, faced fresh controversy yesterday when the Serious Fraud Office launched a formal investigation into the insurance market's biggest loss-making syndicates. ..TX.- The investigation into the affairs of insurance syndicates formerly managed by the Gooda Walker agency at Lloyd's presents the market with further difficulties just as it is trying to attract corporate investors. ..TX.- Gooda Walker syndicates lost more than Pounds 900m between 1987 and 1990, nearly a sixth of the market's overall losses of more than Pounds 6bn in the past six years. ..TX.- The SFO decision to investigate follows its review of a report into the four Gooda Walker syndicates by Mr Ken Randall, a director of the insurance agency now managing their affairs. ..TX.- The Randall report, handed to the SFO in April, alleged that Gooda Walker syndicates artificially inflated their profits during the 1980s by improper use of 'time and distance' policies. These are reinsurance policies that allow Lloyd's syndicates to manage their reserves against so-called 'long-tail' claims more effectively. Long-tail claims come many years after the start of policies. ..TX.- Mr Randall is examining other areas of the syndicates' business, in particular other reinsurance transactions. ..TX.- Mr David Rowland, Lloyd's chairman, said he had decided to publicise the investigation which he said ran parallel to Lloyd's own inquiries. 'I was determined to get it into the public arena. We want to deal with this rigorously.' ..TX.- Mr Rowland, however, conceded that the announcement could damage confidence in the market and make it more difficult to attract corporate capital. ..TX.- Although Lloyd's new leadership has made considerable progress in improving the market's efficiency and its image in recent months, some would-be investors have been affected by recent publicity over loss-making Names - the individuals whose assets support the market. ..TX.- The investigation also looks certain to lead to a deterioration in relations between Lloyd's and Gooda Walker Names. Following news of the investigation the Names are pressing Lloyd's to suspend moves to draw down their assets. ..TX.- Some 4,500 Gooda Names are expecting to pay cash calls totalling some Pounds 157m at the end of this month, which represents an average burden of about Pounds 35,000 for each of the Gooda Names. ..TX.- 'Many Names are near destitution and any further cash demands on them against a background of fraud investigation would be wholly wrong and offend natural justice,' said Mr Tom Benyon, vice-chairman of the Gooda Walker Action Group. ..TX.- Mr Rowland insisted that Lloyd's would go ahead with its plans to issue cash calls and draw down the deposits of Gooda Walker Names. ..TX.- 'We have a duty to pay claims,' he said. ..TX.- Mr Michael Deeny, chairman of the action group, said despite support for efforts to achieve an out-of-court settlement the Gooda Walker Names intended to press ahead with their legal action alleging negligence by their agents. ..TX.- The case could come to court in the first half of next year. ..TX.- Names reverse Norman conquest, Page 6 ..CO.- Companies: Lloyd's of London. Gooda Walker. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6411 Insurance Agents, Brokers, and Service. ..TP.- Types: COMP Company News. ..IX.- P6411. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGOCUAAFFT ..HL.- 930715FT 930715 World News in Brief: Transfer record (66) ..TX.- England captain David Platt became the most expensive player in soccer history when Juventus agreed to sell him to another Italian club, Sampdoria, for Pounds 5.2m. Platt has now been involved in deals totalling Pounds 17.4m. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P7941 Sports Clubs, Managers, and Promoters. ..TP.- Types: NEWS General News. ..IX.- P7941. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGOCUAAEFT ..HL.- 930715FT 930715 World News in Brief: Iraqi oil talks stall (50) ..TX.- Talks at the UN in New York to grant Iraq limited oil sales were suspended without agreement. ..CN.- Countries: US United States of America. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. ..TP.- Types: MKTS Sales. ..IX.- P1311. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGOCUAADFT ..HL.- 930715FT 930715 World News in Brief: Wall Street sharply higher (83) ..TX.- US share prices posted strong gains as bond yields fell to record lows following another set of bullish inflation figures. At the close the Dow Jones Industrial Average was up 27.11 at 3,542.55. US stocks, Page 35; US consumer spending up, Page 3; Energy tax plan may change, Page 3 ..CN.- Countries: US United States of America. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGOCUAACFT ..HL.- 930715FT 930715 World News in Brief: Bomb suspect held (76) ..TX.- A man was being questioned in London after he was arrested carrying a bomb near Staples Corner, the scene of an IRA bombing last year. In a co-ordinated operation, Scottish police arrested seven people in the Stirling area under the Prevention of Terrorism Act. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: NEWS General News. ..IX.- P9229. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGOCUAABFT ..HL.- 930715FT 930715 Peers reject call for referendum on Maastricht treaty (517) ..BL.- By ALISON SMITH ..TX.- THE GOVERNMENT last night delivered a crushing blow to a last-ditch attempt to force a referendum on Maastricht, as the House of Lords rejected a passionate plea from Lady Thatcher to allow the British people to decide whether to surrender more of their powers to the European Community. ..TX.- But Mr John Major still faces a strong challenge next Thursday in the Commons debate on the social chapter. A coalition of opposition parties in favour of the social agreement and Tory rebel MPs still seeking to frustrate ratification threatens to defeat the government. ..TX.- Some Tory Euro-sceptics plan to support a Labour move to prevent the UK ratifying the treaty until it has committed itself to the social agreement. ..TX.- Ministers welcomed peers' decisive rejection of a referendum by 445 votes to 176. Government business managers hailed it as the highest turnout ever for a Lords vote. Their efforts to ensure supporters attended was a sign of the determination to crush the move for a referendum despite its high-profile campaigners. ..TX.- Lady Thatcher told a packed House that EC institutions were diminishing the UK's parliamentary sovereignty so far and so fast that the people should be asked if this was what they wanted. ..TX.- 'It is the people's turn to speak. It is their powers of which we are the custodian,' she said. ..TX.- But the idea of a referendum on Maastricht was firmly rejected by the government and opposition front benches, as well as in a series of speeches from former members of the Thatcher cabinet. ..TX.- Lord Lawson used his maiden speech in the upper house to argue that the UK's 'opt-out' on monetary union meant a referendum was not needed. The former chancellor added, however, that since in his view monetary union implied a loss of national sovereignty, if the UK were ever to opt for monetary union, a referendum should be held at that point. ..TX.- Many peers, including Lord Wakeham, leader of the Lords, said embarking on a referendum so long after signing the treaty and after going through so much of the parliamentary process would do 'the greatest possible damage to Britain's reputation' in the Community. ..TX.- Yesterday's debate marked the climax of the Lords' consideration of the Maastricht bill. Although a further stage remains, it will not provide the same opportunity for a set-piece occasion, which saw peers crowding into the chamber. ..TX.- In a speech which again raised the profile of the Euro-sceptic cause, Lady Thatcher painted a picture of a parliament in which representatives were no longer accountable to those who had elected them because they had passed decision-making powers to the European Commission and had failed to prevent the European court extending its powers. ..TX.- The UK had 'surrendered too many powers already. We should surrender no more unless the people wish it,' she said. ..TX.- Thatcher rebuffed in massive referendum vote, Page 8 ..TX.- Editorial Comment, Page 19 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9611 Administration of General Economic Programs. P9199 General Government, NEC. ..TP.- Types: GOVT Government News. ..IX.- P9611, P9199. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGOCUAAAFT ..HL.- 930715FT 930715 Inflation nears 30-year low: Sterling gains against dollar and D-Mark as hopes are raised for sustained recovery (580) ..BL.- By EMMA TUCKER, Economics Staff ..TX.- INFLATION DROPPED to its lowest rate for almost 30 years last month, stimulating hopes that the UK can sustain economic recovery while keeping price rises under control. ..TX.- Retail prices fell 0.1 per cent in June to bring the headline inflation rate down to 1.2 per cent from 1.3 per cent in May. This was the lowest year-on-year rate of inflation since February 1964. ..TX.- Underlying inflation - the RPI excluding mortgage interest payments - was steady at 2.8 per cent, the lowest 12-month rate since the series began in 1975. ..TX.- The sluggishness of price rises, along with robust manufacturing output, announced earlier this week, appeared to offer Mr John Major, the prime minister, a chance to achieve low-inflation growth and revive his government's fortunes. ..TX.- The figures, which boosted the pound, will also support the government's contention that the UK will be able to hold on to the competitive gains of devaluation. ..TX.- However, economists warned that inflation does not have much further to fall. Although few expect underlying inflation to breach the ceiling of the government's 1-4 per cent target range before the end of the year, many believe that price pressures are starting to build slowly as demand for consumer goods recovers and the higher cost of imports is passed on by retailers. ..TX.- The figures, which followed a string of encouraging economic data, boosted the spirits of the Tory government and raised expectations of an early cut in interest rates. However, Mr Kenneth Clarke, the chancellor, said it would be wrong to leap to any conclusions about further monetary easing. ..TX.- 'At the moment, the economy is recovering perfectly sensibly. I don't expect us to have good news all the time but at the moment the recovery isn't looking fitful,' he said. 'In the last day or two it looks as though it is strengthening a little.' ..TX.- The Central Statistical Office said the latest fall was mainly due to an early start to the summer sales. These were brought forward from July in an attempt to underpin weak retail sales. There were also drops in telephone and electricity charges. ..TX.- Inflation has rarely been lower than 1.2 per cent since the end of the 1950s. On two occasions in 1963 it dropped below the current figure, and it was once lower in 1964. ..TX.- The City reacted well to the news, which came only a day after the announcement that manufacturing output rose 1.8 per cent month-on-month in May. Long dated bond yields, which reflect the market's expectations of future inflation, fell below 8 per cent for the first time since early 1972. ..TX.- The pound climbed against the D-Mark, closing up 3/4 of a pfennig at DM2.5775. It was also slightly stronger against the dollar, ending the day at Dollars 1.5025 compared with a previous close of Dollars 1.4935 and trading later in New York at Dollars 1.5035. The figures had little impact on share prices, however. The FT-SE share index closed down 4.8 at 2,832.3. ..TX.- Commenting on the results, Mr Major said: 'The figures, taken together, show we are in sight of our long-term goal: growth without inflation.' ..TX.- Details, Page 7 Lex, Page 20 Bonds, Page 27 Currencies, Page 29 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Inflation. ECON Industrial production. CMMT Comment & Analysis. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGOCUAHJFT ..HL.- 930714FT 930715 International Company News: Banco de Portugal posts first loss (164) ..BL.- By PETER WISE ..DL.- LISBON ..TX.- THE Banco de Portugal lost Es81.8bn (Dollars 531m) in 1992 as it spent heavily to shore up the escudo and mop up liquidity in the domestic money market, according to the central bank's annual report. ..TX.- Only the transfer of Es71bn in reserves enabled the bank to record an official loss of Es9.8bn for 1992, the report said. This was the bank's first loss. The report said the bank had suffered losses since 1988 that had been covered by transferring provisions. ..TX.- In the autumn of 1992, the escudo came under strong speculative pressure and the bank was forced to spend foreign currency reserves on escudos at prices above the level to which the currency fell after a 6 per cent devaluation in November. ..CO.- Companies: Banco de Portugal. ..CN.- Countries: PT Portugal, EC. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: FIN Annual report. ..IX.- P6081. ..DS.- The Financial Times ..XP.- International Page 16 ***************************************************************** ..AN.-00DGOCUAHIFT ..HL.- 930714FT 930715 International Company News: Sales at Roche rise 8% (354) ..BL.- By PAUL ABRAHAMS ..DL.- LONDON ..TX.- ROCHE, the Swiss healthcare and chemicals group, yesterday reported sales for the first six months up 8 per cent to SFr7.15bn (Dollars 5.1bn) from SFr6.62bn. In local currencies the increase was 10 per cent. The company does not publish half-year profit figures. ..TX.- The company said it expected sales to continue to improve during the second half of the year and that barring unforeseen circumstances, particularly in foreign exchange rates, the group should post a significant increase on last year's net income of SFr1.9bn. ..TX.- Much of the first-half growth was generated by the pharmaceuticals division which reported sales up 12 per cent to SFr1.59bn from SFr1.56bn. Excluding exchange rates, the increase was 14 per cent. ..TX.- The company said the German healthcare reforms introduced in January - which have led to a 13 per cent fall in the market for the first four months - had little impact. Turnover in Italy during the first half improved in spite of the fall in the market following reforms introduced in April. Roche said it expected sales in both Italy and Germany to increase this year. ..TX.- The vitamins and fine chemicals unit lifted sales 2 per cent to SFr1.59bn from SFr1.56bn. Roche said the vitamins business performed well. But the division's results were held up by fine chemicals, and in particular the manufacture of one agrochemical fungicide without which sales would have been up 5 per cent. ..TX.- The diagnostics division posted turnover up 8 per cent to SFr867m from SFr799m. The business profited from the introduction of PCR (polymerase chain reaction) technology for HIV and Chlymidia, which had been well received in both the US and Europe. ..TX.- Sales of the fragrances and flavours division increased 4 per cent to SFr749m from SFr723m. ..TX.- Fragrances suffered from poor demand from the luxury perfume sector. Flavours were not affected by the recession and continued to post increases. ..TX.- Lex, Page 14 ..CO.- Companies: Roche Holding. ..CN.- Countries: CH Switzerland, West Europe. ..IN.- Industry: P2834 Pharmaceutical Preparations. P2899 Chemical Preparations, NEC. ..TP.- Types: FIN Interim results. ..IX.- P2834, P2899. ..DS.- The Financial Times ..XP.- International Page 16 ***************************************************************** ..AN.-00DGOCUAHHFT ..HL.- 930714FT 930715 IRI plans telecoms sector merger (451) ..BL.- By HAIG SIMONIAN ..DL.- MILAN ..TX.- IRI, Italy's biggest state holding company, yesterday revealed plans to rationalise the telecommunications sector, starting with the merger of Sip and Italcable by the end of this year. ..TX.- Sip is Italy's main telecoms utility, while Italcable handles intercontinental traffic. Both companies are quoted. ..TX.- The union will be the first step towards grouping Italy's public sector telecoms activities, split between seven main companies, into a single concern. The new organisation, expected to be called Telecom Italia, should be operational by 1995-96, by which time the entire sector could be largely privatisated. ..TX.- Pressure for rationalisation and privatisation has come from the government and IRI itself. IRI's new management, facing a cash crisis, has identified telecoms, controlled by the Stet holding company, obvious privatisation candidate. ..TX.- Last night, Stet announced it was issuing a L565bn Eurolira bond, convertible into Sip savings shares, in a further step in the slow privatisation process. The deal could cut Stet's stake in Sip savings shares from 32 to 18 per cent. ..TX.- The government has set IRI a June 30 deadline to prepare rationalisation plans. IRI intends to start by merging the main providers of services, while keeping manufacturing and mobile telecoms apart. ..TX.- About 40 per cent of Sip's ordinary shares and 47 per cent of those in Italcable are floating. ..TX.- Telecom Italia will subsequently absorb Telespazio and Sirm, Stet's satellite and maritime communications subsidiaries. Telecom Italia will also comprise Iritel, formerly ASST, the unit responsible for domestic trunk communications and short-distance international calls. ..TX.- The future of Stet's equipment manufacturing (Italtel) and network service (Sirti) businesses is less clear. Stet has been looking for foreign investors in Italtel, in which AT&T has a 20 per cent stake. Talks with leading telecoms groups, including the US company, are under way. ..TX.- The highly profitable mobile telecoms business, run by Sip, will be hived off into a separate company, in which Telecom Italia will retain a minority stake. The rest is likely to be floated. Shares in Stet have risen sharply in recent weeks ahead of bullish forecasts about tariff deregulation and restructuring. The Italian government hopes to float about 20 per cent of the IMI financial services group and 30-35 per cent of the big Ina state insurance company this year. Investors will be able to swap medium and long-term government bonds for shares in the two companies. ..CO.- Companies: Istituto per la Ricostruzione Industriale. Societa Italiana per l'Esercizio della Telecommunicazioni. Societa Finanziaria Telefonica per Azione. Telecom Italia. Italcable. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P4812 Radiotelephone Communications. P6719 Holding Companies, NEC. P4813 Telephone Communications, Ex Radio. ..TP.- Types: COMP Mergers & acquisitions. COMP Shareholding. ..IX.- P4812, P6719, P4813. ..DS.- The Financial Times ..XP.- International Page 15 ***************************************************************** ..AN.-00DGOCUAHGFT ..HL.- 930714FT 930715 Provinces to benefit at expense of Paris (211) ..BL.- By DAVID BUCHAN ..DL.- PARIS ..TX.- THE French government plans to give more money to poorer regions of the country and relatively less to Paris over the next five years in an attempt to restrain the capital's congestion and economic dominance. ..TX.- Approximately 10.6m people live in greater Paris, nearly a fifth of the population. As part of a five-year planwhich it will legislate in the autumn, the government said this week it aimed to limit the greater Paris population to 11.8m by the year 2015, and to redeploy up to 30,000 civil servants to the provinces by the year 2000. ..TX.- A French appeal court yesterday confirmed a four-year prison sentence on the former head of the national blood bank, Mr Michel Garretta, for knowingly distributing Aids-contaminated blood products to haemophiliacs. ..TX.- The court, ruling after an appeal by former health officials accused of involvement in France's worst modern health scandal, also confirmed that Mr Jean-Pierre Allain, ex-director of transfusion research, should serve four years with two suspended. About 1,250 haemophiliacs were infected over a period up to the end of 1985. More than 300 have died. ..CN.- Countries: FR France, EC. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- International Page 2 ***************************************************************** ..AN.-00DGOCUAHFFT ..HL.- 930714FT 930715 Russia tells Asian states to decide on allegiance (415) ..BL.- By JOHN LLOYD ..DL.- MOSCOW ..TX.- RUSSIA yesterday told the central Asian states of the former Soviet Union to 'choose between north and south' for their economic and political orientation. The warning was the clearest yet that Russia is not prepared to tolerate the indiscipline and indecisiveness within the Commonwealth of Independent States that marked its first 18 months of existence. ..TX.- Mr Alexander Shokhin, the deputy prime minister, said yesterday that the recent agreement by Russia, Ukraine and Belarus to form a close economic union was partly a reaction to the participation by Kazakhstan, Uzbekistan, Kyrgyzstan and other states in the meeting of the Organisation for Economic Co-operation convened by Turkey in Istanbul 10 days ago. ..TX.- Mr Shokhin said that conference decisions to create a customs union and common market and declare that Armenia was the aggressor in the struggle with Azerbaijan for control of Nagorno Karabakh were incompatible with membership of the CIS. The three Slav states of Russia, Ukraine and Belarus comprise about 80 per cent of the commonwealth's population. ..TX.- 'If our friends in the CIS, in their search for a better life, are looking towards the south, then they will have to choose between integration with Russia or with their southern neighbours,' Mr Shokhin said. ..TX.- He said Mr Nursultan Nazarbayev, the Kazakh president, had given a 'very weak reason' for participation in the conference, in which he cited Russia's reluctance to advance credits to Kazakhstan. Mr Shokhin said that Russia had put aside Rbs800bn in inter-state credits to the CIS members in 1993, including Rbs150bn for Kazakhstan, but that no agreement had yet been reached on the use of these funds. ..TX.- The idea for the agreement between the three Slav states, Mr Shokhin said, had been worked out largely between Russia and Belarus. However, Ukraine decided to join because of its concern over the apparent defection of Kazakhstan. However, Mr Tulegen Zhukeyev, the state adviser to Kazakhstan, yesterday told the Interfax news agency that the decision to participate in the conference did not exclude continued participation in the CIS. 'The markets of these countries are quite comparable and could supplement each other,' he said. ..TX.- Mr Zhukeyev said that the idea of forming a closer economic union within the CIS had been long advocated by Mr Nazarbayev. ..CN.- Countries: RU Russia, East Europe. ..IN.- Industry: P9199 General Government, NEC. P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9199, P9311. ..DS.- The Financial Times ..XP.- International Page 2 ***************************************************************** ..AN.-00DGOCUAHEFT ..HL.- 930714FT 930715 Serra to be economy minister (269) ..BL.- By TOM BURNS ..DL.- MADRID ..TX.- SPANISH prime minister Felipe Gonzalez yesterday gave his deputy premier Narcis Serra overall responsibility for economic policy and appointed Mr Pedro Solbes, a technocrat with an EC background, to head the finance ministry. ..TX.- The appointments, which follow last month's narrow election win by Mr Gonzalez's socialist party (PSOE), were part of a wide-ranging government reshuffle that brought eight new members into the 17-strong cabinet. ..TX.- Facing what amounts to Spain's worst recession for 30 years, the new economic team is unlikely to apply harsh measures to lower wage costs, cut government spending and deregulate the economy. ..TX.- Mr Gonzalez excluded representatives of the PSOE's left wing from the cabinet, gave minor cabinet jobs to six independents, three of them women, and kept Mr Javier Solana as foreign minister. Mr Solana is, like Mr Serra, a stalwart of the ruling party's social democrat wing and both ministers have served in all Mr Gonzalez's governments since 1982. ..TX.- The challenges facing the new government were underlined by CPI figures released yesterday. Year on year inflation was up 0.2 per cent to 4.9 per cent. The rise reflected the impact of the peseta's mid-May devaluation - the third in the space of nine months - on energy costs. ..TX.- Mirroring an excessive wage growth that has become one of the economy's chief weaknesses, underlying inflation, excluding food and energy prices, rose 0.4 in June to post a year on year figure of 5.9 per cent. ..CN.- Countries: ES Spain, EC. ..IN.- Industry: P9199 General Government, NEC. ..TP.- Types: GOVT Government News. ..IX.- P9199. ..DS.- The Financial Times ..XP.- International Page 2 ***************************************************************** ..AN.-00DGOCUAHDFT ..HL.- 930714FT 930715 MEPs snub Khasbulatov (299) ..BL.- By LIONEL BARBER ..DL.- STRASBOURG ..TX.- THE speaker of the Russian parliament, Mr Ruslan Khasbulatov, was unexpectedly snubbed by the European parliament yesterday after a cross-party revolt in favour of President Boris Yeltsin. ..TX.- Mr Khasbulatov, flanked by armed bodyguards, arrived in Strasbourg on Monday in search of international recognition. The long-planned visit came just after Mr Yeltsin was feted at the Group of Seven summit in Tokyo. ..TX.- But the Russian's campaign ran into opposition from MEPs who denounced him as an enemy of democracy and called for a boycott of all contacts with the delegation of visiting Russian parliamentarians. ..TX.- Criticism proved so fierce that Mr Egon Klepsch, president of the European parliament, cancelled a meeting with Mr Khasbulatov due to take place yesterday morning. However, a separate meeting between MEPs and the Russian delegation took place in the afternoon. ..TX.- Lord Bethell, a British Conservative and long-standing critic of human rights abuses in the former Soviet Union, led the anti-Khasbulatov campaign in favour of Mr Yeltsin. 'Our sympathies are with the elected president of Russia. Khasbulatov is a proven enemy of democracy,' he said. ..TX.- He was joined by Count Otto von Hapsburg, the German Christian Socialist and descendant of the imperial family. Mr Khasbulatov was pursuing Communist goals in league with extremist forces of national bolshevism, he said. ..TX.- The European parliament invited members of the Russian parliament to come to Strasbourg as part of its expanding contacts with legislatures in the former Communist countries of eastern and central Europe. ..TX.- Mrs Magdalene Hoff, a German SPD member of the parliament, defended the invitation. 'We are not under any illusions here. But I believe in dialogue, not monologue.' ..CN.- Countries: RU Russia, East Europe. ..IN.- Industry: P9199 General Government, NEC. ..TP.- Types: GOVT Government News. ..IX.- P9199. ..DS.- The Financial Times ..XP.- International Page 2 ***************************************************************** ..AN.-00DGNB5AGNFT ..HL.- 930714FT 930714 London Stock Exchange: Equity Futures and Options Trading (262) ..BL.- By CHRISTINE BUCKLEY ..TX.- A LACK of vitality continued to prevail in stock index futures, although the September contract on the FT-SE 100 did manage to muster a steady day's trading, writes Christine Buckley. ..TX.- The contract opened at 2,841 and closed at 2,845. It weakened to 2,835 about half an hour into trading before finding an upward path. The day's high came at 3pm when it nudged 2,852, but the syndrome of dealers selling when the 2,850 level is breached struck again and the last hour saw a 7-point decline. ..TX.- Volume was respectable at 7,069 contracts and activity was stimulated by the better than expected factory output figures, which spread optimism for the longer term recovery outlook. That activity was, however, tempered by the double-edged element to the output figures - the fading hopes for interest rate cuts. ..TX.- One trader also felt the slight futures revival was helped by investors returning to the market and creating a bounce after several weak days. September was 2 points ahead of its fair value premium to cash, which is 7 points. ..TX.- Traded options moved with conviction and their volume put the previous day's dismal performance firmly in the shadows. Total volume was 29,437, against the previous day's 16,553. Index options took the lion's share, with 8,333 lots in the FT-SE 100 and 4,107 in the Euro FT-SE 100. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. P6221 Commodity Contracts Brokers, Dealers. ..TP.- Types: MKTS Market data. ..IX.- P6231, P6221. ..DS.- The Financial Times ..XP.- London Page 44 ***************************************************************** ..AN.-00DGNB5AGMFT ..HL.- 930714FT 930714 London Stock Exchange: L&G in demand (973) ..BL.- By STEVE THOMPSON, JOEL KIBAZO, CHRISTOPHER PRICE and CHRISTINE BUCKLEY ..TX.- General and life insurance group Legal & General moved sharply ahead on a squeeze and positive sentiment from several brokers, ahead of the imminent publication of new business figures. The stock closed 13 ahead at 500p after relatively heavy turnover of 2m shares. ..TX.- Specialists expect the figures to be positive and Charterhouse Tilney yesterday joined other brokers in reiterating its positive stance on the stock. The good sentiment in the sector also boosted several other life stocks. These included London & Manchester, which advanced 10 to 343p, and Prudential, 4 better at 339p. ..TX.- Bargain hunters in both General Accident and Commercial Union helped the shares bounce 9 to 622p and 11 to 615p respectively. Cazenove was also reported to have recommended both stocks. ..TX.- In a perky drinks sector, Bass was the outstanding performer, advancing 11 to 460p in good turnover of 3.4m. The shares had fallen heavily at the end of last week on derisory talk that a promotion by the company's Holiday Inn subsidiary had sparked a Hoover-type situation. But yesterday Bass was reassuring the market that the offer - involving discounts for US visitors to Europe - was going well and the shares responded accordingly. ..TX.- Storms in the US pushed corn prices higher and cheered Grand Metropolitan, the shares rising 7 to 415p. Greene King continued to respond to favourable comment after last week's results, closing 7 to the good at 415p. ..TX.- The White Paper on Sunday trading had little effect on consumer shares, with most of those affected already factoring in the government's positive stance. ..TX.- Rank Organisation lost 4 to 759p, with Hoare Govett underlining its caution on the stock ahead of tomorrow's interim figures. The market is forecasting a range of Pounds 88m to Pounds 94m. ..TX.- The expectation of a success on the BT3 sale attracted investors to SG Warburg, the global co-ordinator of the sale. The shares jumped 16 to 734p. Abbey National gave up 3 to 414p, with SG Warburg Securities said to have taken the stock off its buy list. ..TX.- Turnover in conglomerate Tomkins jumped to 10m as several brokers issued 'buy' recommendations on the shares. The stock, which on Monday achieved the dubious honour of being the biggest faller in the FT-SE 100 Index, after it reported figures, rallied 6 1/2 to 219p. NatWest Securities said: 'The continuing cost reductions in RHM should help to ensure good profits growth over the next two to three years.' ..TX.- Profit-taking in Lonrho left the shares 3 lighter at 131p. ..TX.- Water issues were mixed following the publication of the report by regulatory body Ofwat on water charges. Analysts said the 7 per cent real return on capital seen as necessary to secure adequate financial ratios in the sector could imply greater long-term profits in the sector than previously expected. There was relief that the timescale for costly improvements is likely to be longer than previously supposed. Among those staying in positive territory, Northumbrian added 5 at 573p and Yorkshire 7 at 497p. ..TX.- Strong bargain hunting lifted Tiphook ahead of today's eagerly awaited figures. The shares gained 12 at 286p. ..TX.- Solid demand from UK institutions saw British Steel put on 3 at 96 1/2 p in trade of 7.9m. Continued hopes that an order for Airbus aircraft will be accompanied by an order for Rolls-Royce engines to power the aircraft boosted the shares 1 1/2 to 144p. ..TX.- Worries over its European markets mentioned at the company's annual meeting hurt Johnson Matthey, discounting a recommendation from Hoare Govett. The shares eased a penny to 455p. ..TX.- The Sun's aggressive pricing campaign continued to inflict injuries on its competitors, with United Newspapers proving the market's main casualty. The publisher of the Daily Star and Daily Express lost 14 to close at 521p, while Mirror Group Newspapers dipped 2 to 151p. News International, owner of The Sun, moved up a penny to 216p. ..TX.- The successful outcome in the rights issue by Hammerson generated upward movement in property issues. ..TX.- The 97 per cent take-up of the Hammerson issue spurred the 'A' shares upwards by 7 to 305p. British Land appreciated 4 to 337p, Land Securities also moved up 4, taking it to 586p, and MEPC added 7 at 434p. One specialist said the take-up was a little better than expected after slight hesitation that Hammerson's offer would match those from other property companies in a long series of cash calls. ..TX.- Investors were unmoved by Great Portland Estates' plans to review its relationship with its managing agents after negative press reports on the arrangement. Its share price had moved ahead a penny to 173p in early trading on the Hammerson wave and stuck at that level after the plan was announced at the company's annual meeting. ..TX.- A buy note from James Capel stirred up brisk activity in Taylor Woodrow, which moved forward 5 to 100p in volume of 3m. ..TX.- In textiles, Jacques Vert, the women's fashions designer and retailer, strengthened 13 to 100p on the back of a bounce in profits and a large increase in the dividend. ..TX.- Sherwood Group dropped 11 to 136p. Recent downgradings and fears over its lace sales in Europe and performances in its sock division were blamed. ..CO.- Companies: Legal and General Group. General Accident. Commercial Union. Northumbrian Water. Yorkshire Water. Johnson Matthey. Hammerson Property Investment and Development Corp. Rank Organisation. Abbey National. Tomkins. Taylor Woodrow. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6331 Fire, Marine, and Casualty Insurance. P7812 Motion Picture and Video Production. P6021 National Commercial Banks. P6719 Holding Companies, NEC. P4941 Water Supply. P2865 Cyclic Crudes and Intermediates. P3341 Secondary Nonferrous Metals. P6552 Subdividers and Developers, Ex Cemeteries. P1521 Single-Family Housing Construction. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P6331, P7812, P6021, P6719, P4941, P2865, P3341, P6552, P1521. ..DS.- The Financial Times ..XP.- London Page 44 ***************************************************************** ..AN.-00DGNB5AGLFT ..HL.- 930714FT 930714 London Stock Exchange: BAe strong (178) ..BL.- By STEVE THOMPSON, JOEL KIBAZO, CHRISTOPHER PRICE and CHRISTINE BUCKLEY ..TX.- Positive news from Taiwan, along with the upgrading of profits expectations by BZW, once again led to strong demand for British Aerospace, sending the stock up a further 7 to 427p. ..TX.- As speculation continued about a lucrative order for Airbus Industrie, in which it has a 20 per cent holding, demand for the stock was boosted by news that Taiwan's Economics Ministry and a local banking consortium had agreed on financing for the planned regional jets venture with BAe. ..TX.- Sentiment was further enhanced by BZW, which increased its estimate of current year profits by Pounds 30m to Pounds 125m. It also raised the following year's forecast by Pounds 30m to Pounds 235m. The 1995 prediction is now at the top of the range. BZW cited the improvement of sales at Rover Group, BAe's carmaking subsidiary, for the change. ..CO.- Companies: British Aerospace. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3721 Aircraft. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P3721. ..DS.- The Financial Times ..XP.- London Page 44 ***************************************************************** ..AN.-00DGNB5AGKFT ..HL.- 930714FT 930714 London Stock Exchange: Court disappoints (203) ..BL.- By STEVE THOMPSON, JOEL KIBAZO, CHRISTOPHER PRICE and CHRISTINE BUCKLEY ..TX.- The recent run of successful market debuts came to a sudden halt as shares in Court Cavendish, the nursing home company, closed at a hefty discount to their 225p issue price, which had valued the company at Pounds 51m. ..TX.- Dealers blamed a number of factors for the drop, which saw the shares open at 210p and drift back to 204p, before finishing at 207p. Turnover came to 1.6m. ..TX.- One factor cited was the Pounds 33m cash call made last week by rival operator Crestacare, with institutions which would have given the Court shares more support holding back until the allocation of the rights issue is known. In April, Westminster Health Care completed a Pounds 63m rights issue. ..TX.- Another rumour being heard was that Takare, the nursing home market leader, would also return to shareholders for a cash injection in the autumn. Takare shares were steady at 240p, Westminster a penny ahead at 297p and Crestacare level at 43p. ..CO.- Companies: Court Cavendish Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8059 Nursing and Personal Care, NEC. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P8059. ..DS.- The Financial Times ..XP.- London Page 44 ***************************************************************** ..AN.-00DGNB5AGJFT ..HL.- 930714FT 930714 London Stock Exchange: Procter move hits Unilever (147) ..BL.- By STEVE THOMPSON, JOEL KIBAZO, CHRISTOPHER PRICE and CHRISTINE BUCKLEY ..TX.- REPORTS OF an aggressive pricing campaign by Procter and Gamble, the US household chemicals group, hurt Unilever and the shares tumbled 25 to 977p in hefty turnover of 4.7m. It was the stock's lowest level since mid-September last year. ..TX.- Analysts said the reports emanating from the US suggested that P & G, which had mounted a vociferous promotion strategy on its detergents, had now decided to extend the campaign in North America and incorporate other products in its detergents range. With margins already squeezed in the detergents business, the P & G move is seen as an escalation of an already difficult situation. ..CO.- Companies: Unilever. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2841 Soap and Other Detergents. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P2841. ..DS.- The Financial Times ..XP.- London Page 44 ***************************************************************** ..AN.-00DGNB5AGIFT ..HL.- 930714FT 930714 London Stock Exchange: Economic data boost equity market (578) ..BL.- By STEVE THOMPSON ..TX.- A NUMBER of programme trades, said to have been weighted to the buy side, plus some highly encouraging economic data and another resolute opening performance by Wall Street, helped London's equity market regain its composure yesterday. ..TX.- The FT-SE 100 Index ended a net 6.2 up at 2,837.1, while the FT-SE Mid 250 Index did little more than mark time, closing only 1.4 firmer at 3,230.0. ..TX.- But the view around some of the City's dealing desks was that yesterday's performance may well have been no more than a technical bounce, after the near 70-point fall since the start of the month, and that the market's rally might well be followed by a more severe sell-off. ..TX.- Wall Street's steady showing on Monday saw London off to a bright start with the FT-SE 100 opening almost two points higher, and after a brief flurry of selling pressure which took the Footsie down to a net decline of 3.4 at one point, it traded in positive territory for the rest of the day. ..TX.- Sentiment was given a strong boost in mid-morning by news that industrial prod-uction during May had risen by 2 per cent, month on month, compared with market expectations of an increase in the region of 0.5 per cent, and 3.9 per cent on the year. ..TX.- 'The 2 per cent rise is a big number and shows that the recovery is in place,' said Mr Robin Aspinall at Panmure Gordon, the stockbroker. He added that the market was now getting keyed up for today's inflation figures for June and tomorrow's unemployment numbers. ..TX.- After a brief period of reflection on the output numbers, the market gradually moved up a gear, with dealers reporting an increased willingness by the big institutions to get involved in the market. 'After the news, it felt much better and the institutions were happy to sort out some of their positions,' noted one marketmaker. ..TX.- Another view in the market was that the output figures, which were seen as confirming the economic recovery, could well have reduced the chances of a cut in UK interest rates in the short term, a view reinforced by sterling's show of strength late in the session. ..TX.- Turnover, which struggled at minimal levels during the early part of the day, picked up as the session drew to a close, finishing at 592.4m shares. ..TX.- This was well up from Monday's 448.1m shares which, as brokers gloomily reported, provided customer business worth only Pounds 796.2m. ..TX.- The value of daily retail business, commonly above the Pounds 1bn mark since the second half of last year, has contracted sharply in the last two weeks. The value of customer business dropped below Pounds 1bn on two days last week and threatens to do so this week. ..TX.- Next Monday will see a dramatic transformation in customer turnover, however, with trading in BT3 certain to give activity levels a very strong boost. ..TX.- BT was among the more active stocks yesterday and continued to underperform the market as bearish circulars from two broking houses, Kleinwort Benson and Carr Kitcat & Aitken, continued to unsettle nerves. ..TX.- There was no nervousness surrounding shares in SG Warburg, which raced higher on the prospect of hefty fees and commission income generated by the merchant bank's handling of the BT3 flotation. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 44 ***************************************************************** ..AN.-00DGNB5AGHFT ..HL.- 930714FT 930714 London Stock Exchange: New highs and lows for 1992 (413) ..TX.- NEW HIGHS (123). ..TX.- BRITISH FUNDS (24), OTHER FIXED INTEREST (10), AMERICANS (7) Amer. T & T, Citicorp, Echlin, General Electric, Merrill Lynch, Morgan (JP), Tenneco, CANADIANS (3) Canadian Imp. Bank, Toronto-Dom. Bank, Trans Can. Pipe., BANKS (7) Dai Ichi, Fuji, Mitsubishi, Sanwa, Standard Chartered, Sumitomo, Westpac, BREWERS (3) Fuller Smith & Turner, Marston Thompson, Matthew Clark, BLDG MATLS (2) Heiton, Heywood Williams, BUSINESS SERVS (1) Bridgend, CHEMS (1) Halstead (J), CONTG & CONSTRCN (1) Ashtead, ELECTRICALS (1) Dewhurst A, ELECTRONICS (2) Electron House, Polar, ENG AERO (1) AIM, ENG GEN (4) Carclo, Dyson (J & J), Do. A, SKF, FOOD MANUF (1) Avonmore A, FOOD RETAILING (1) Farepak, HOTELS & LEIS (2) Friendly, Prism, INSCE BROKERS (1) Lowndes Lambert, INSCE COMPOSITE (2) Amer. Intl., GRE, INSCE LIFE (1) Legal & Gen., INV TRUSTS (16) Abtrust Prfd. Inc., County Smllr., Euro. Assets, Fidelity Euro. Values Wrrts., Finsbury Smllr Co's, Fleming Intl. High Zero Div. Pf., German Wrrts., I & S Opt. Inc. Zero Div., M & G Recovery, Med. Fd., Merlin Intl. Green, New Zealand, O'seas. Wrrts., Primadona, Sphere Inc., TR Euro. Growth, MEDIA (1) Abbott Mead Vickers, MTL & MTL FORMING (1) Thyssen, MISC (2) Nobo, Norbain, MOTORS (4) Euro. Motor, Lookers, Sanderson Murray Elder, Vardy (Reg), OTHER FINCL (2) Mercury Asset Mgmt., Perpetual, OTHER INDLS (1) Tex, PACKG, PAPER & PRINTG (3) Low & Bonar, Shelton (Martin), Somic, PROP (2) Brit. Land, Daejan, STORES (4) Essex Furniture, Fine Art Devs., French Connection, Gt. Universal, TEXTS (3) Allied Text., Ingham, Jacques Vert, TRANSPORT (2) Bergesen A, Forth Ports, WATER (1) Sth. Staffs., MINES (6) Anglo Am. Coal, Europa Mins., Kidston, Nth. Broken Hill, Sons Gwalia, St. Barbara. ..TX.- NEW LOWS (23). ..TX.- BRITISH FUNDS (3) Ex. 13 1/2 pc 1994, Tr. 10pc 1994, Tr. 14 1/2 pc 1994, BREWERS (1) Wolv. & Dudley, CONTG & CONSTRCN (3) Birse, EBC, Smart (J), ELECTRONICS (1) Micro Focus, FOOD MANUF (3) Cranswick, Everest, Unilever, FOOD RETAILING (1) Low (Wm), HEALTH & HSEHOLD (1) Intercare, MEDIA (1) Hodder Headline, MISC (2) BAT Inds., Cosalt, OIL & GAS (1) New London, OTHER INDLS (1) Tomkins 6 1/4 pc Pf., PACKG, PAPER & PRINTG (2) Bowater 7 3/4 pc Pf., Microgen, PROP (1) Embassy, STORES (1) Country Casuals, TEXTS (1) Sherwood. ..CN.- Countries: GB United Kingdom, EC. US United States of America. CA Canada. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 44 ***************************************************************** ..AN.-00DGNB5AGGFT ..HL.- 930714FT 930714 World Stock Markets (Europe): Roche takes Zurich to a high for 1993 (944) ..BL.- By Our Markets Staff ..TX.- FRANKFURT quietened a little, more in share price than in turnover terms, but there were pockets of good performance elsewhere, writes Our Markets Staff. ..TX.- ZURICH rose again on a good progress report from Roche, and further strength in banks. The SMI index rose 10.1 to 2,419.0, a new closing high for the year. ..TX.- Roche's 8 per cent rise in first half sales took in 14 per cent local currency growth in pharmaceuticals and a strong performance in diagnostics, said Mr Mark Tracey at Goldman Sachs, which has revised its earnings forecasts from SFr273 to SFr284 a share for 1993, and from SFr324 to SFr346 for 1994. The certificates rose SFr40 to SFr5,170. ..TX.- In banks, UBS bearers added SFr22 to SFr1,185, and CS Holding SFr40 to SFr2,895. ..TX.- AMSTERDAM slipped back a little at the close as some profits were locked in and the dollar weakened. The CBS Tendency index slipped 0.4 to 116.9, after an earlier high of 117.6. ..TX.- Cyclical stocks continued to attract interest, although most fell back from their intraday peaks. Hoogovens, which crossed the Fl 41 barrier at one stage, closed down 10 cents at Fl 39.20, and DSM, up to Fl 101.20 during the session, retreated Fl 1.50 to Fl 97.80 at the close. ..TX.- Goldman Sachs has recently recommended taking an overweight position in Dutch cyclicals, generating interest particularly from US and UK investors. However, Amsterdam brokers, Pierson, believe that it is still too earlier to take a position in cyclicals, given forecasts of economic recovery no sooner that the end of 1994. The brokers also comment that the recent gains in DSM have been overdone, as it does not expect the chemicals group to pay a dividend when it announces results later this month. ..TX.- KLM rose Fl 1.20 or 4 per cent to Fl 30.70 helped by a good recent performance in Lufthansa and expectations of progress in its cooperation talks with other European operators. ..TX.- Unilever lost Fl 3.70 to Fl 197.50 on news that competitor Proctor & Gamble was expected to cut the price on some of its products. ..TX.- PARIS fell back towards the close. Uncertainty prevailed as to whether the Bundesbank would cut interest rates this week. The CAC-40 index ended down 1.07 at 1,991.15, having breached the 2,000 level during the session. Turnover was FFr3bn. ..TX.- The French market is closed today for Bastille Day. Most analysts expect the franc to weather the current crisis in the currency markets, and there was less pressure seen on the currency yesterday. ..TX.- Valeo was one of the day's strongest performers in high volume on rumours of a possible financial restructuring, the shares adding FFr35 or 4 per cent to FFr884. Its holding company, Cerus, gained FFr3.60 to FFr88.20. ..TX.- Casino improved FFr4.00 to FFr146.90 on reports that it might be about to sell a US division. ..TX.- FRANKFURT fell on profit taking, but its losses were relatively light at blue chip level and the DAX index stayed above 1,800 at the close, ending 11.01 lower at 1,807.16. ..TX.- Turnover eased from DM10.6bn to DM9.7bn. There was no obvious pressure on cyclicals, a recent support for the market. Indeed, Daimler only fell DM2 to DM664 after Monday's DM16 gain and, in steels, Thyssen actually rose DM1.30 to DM206.80. ..TX.- However, there were pockets of punishment, mostly lower down the size scale where illiquidity has persisted. In chemicals, for example, Rutgerswerke dropped DM23, or 7.2 per cent to DM296. ..TX.- Meanwhile, the German depression was reflected in a warning of worsening business from Linotype, the printing technology company; its shareholders paid, too, with a fall of DM40, or 8.3 per cent to DM440. ..TX.- MILAN was largely dominated by technical trading as options expired. The market is expected to remain subdued aheads of tomorrow's close of the monthly account. The Comit index eased 0.27 to 545.73. ..TX.- Stet put on L16 to L3,646 at the fix, and moved on to L3,790 on the kerb as foreign interest in the telecommunications sector continued to develop. There are rumours that Stet is planning a L600bn bond issue, convertible into Sip savings shares. Sip was L14 higher at L2,704 and L2,725 in after hours trading. ..TX.- BRUSSELS ended at a record high for the third consecutive day Tuesday, the Bel-20 index climbing 10.21 to 1,328.54. ..TX.- STOCKHOLM's rally accelerated with the Affarsvarlden index gaining 7.0 to 1,134.6. Turnover advanced to SKr947m from SKr755m. Demand for Ericsson B shares continued, rising SKr1 to SKr353. Telecommunications also featured in HELSINKI where Nokia put on FM6 to FM213 and the HEX index gained 11.7 to 1,257.2. ..TX.- TEL AVIV rebounded after a week of losses on a Bank of Israel interest rate cut, the blue chip index rising 5.23, or 2.8 per cent to 191.84. ..TX.- ------------------------------------------------------------------------ FT-SE Actuaries Share Indices July 13 THE EUROPEAN SERIES ------------------------------------------------------------------------ Hourly changes ------------------------------------------------------------------------ Open 10.30 11.00 12.00 FT-SE Eurotrack 100 1234.15 1233.10 1232.97 1235.27 FT-SE Eurotrack 200 1277.12 1278.05 1277.69 1279.51 13.00 14.00 15.00 Close FT-SE Eurotrack 100 1236.10 1236.22 1236.12 1235.91 FT-SE Eurotrack 200 1280.83 1280.64 1279.95 1279.32 ------------------------------------------------------------------------ Jul 12 Jul 9 Jul 8 Jul 7 Jul 6 FT-SE Eurotrack 100 1232.90 1230.56 1225.73 1211.33 1203.04 FT-SE Eurotrack 200 1274.63 1274.12 1270.80 1260.04 1257.80 ------------------------------------------------------------------------ Base value 1000 (26/10/90) High/day: 100 - 1236.72; 200 - 1283.22 Low/day: 100 - 1232.61 200 - 1275.76. ------------------------------------------------------------------------ ..CN.- Countries: CH Switzerland, West Europe. NL Netherlands, EC. FR France, EC. DE Germany, EC. IT Italy, EC. BE Belgium, EC. SE Sweden, West Europe. FI Finland, West Europe. IL Israel, Middle East. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 41 ***************************************************************** ..AN.-00DGNB5AGFFT ..HL.- 930714FT 930714 World Stock Markets (America): Inflation news fails to lift equity sentiment (580) ..BL.- By PATRICK HARVERSON ..DL.- NEW YORK ..TX.- Wall Street ..TX.- GOOD NEWS on inflation failed to lift stock market sentiment yesterday, and prices ended little changed in thin summer trading, writes Patrick Harverson in New York. ..TX.- The Dow Jones Industrial Average closed 8.94 down at 3,515.44. The Standard & Poor's 500 eased 0.89 to 448.09, while the Nasdaq composite firmed 0.80 to 708.47. Trading volume on the New York SE amounted to 237m shares. ..TX.- Although the morning's news on inflation - the June producer prices index fell by 0.3 per cent - was bullish for equities, investors appeared uninterested in the data. ..TX.- Dealers attributed the lack of a more positive reaction to two factors: firstly, that the markets had expected a good PPI number, so it was already priced into stocks; secondly, that investors and dealers may have been slightly disappointed at the 0.1 per cent decline in the 'core' PPI, which excludes the volatile food and energy components of the headline PPI. Analysts had been looking for a bigger decline in the core measure. ..TX.- Share markets may also have been disappointed by the lack of a move upwards in bond prices. By early afternoon the Treasury market had shrugged off the PPI data, and the benchmark 30-year bond was down slightly, yielding 6.625 per cent. ..TX.- The first batch of second-quarter corporate earnings began to arrive in earnest yesterday. Among the busiest sectors was the brokerage stocks. Merrill Lynch reported record quarterly profits of 345m, which temporarily lifted the shares to an all-time high of Dollars 86 1/8 . Profit-takers then moved in and the selling pushed Merrill's stock to an early afternoon low of Dollars 84 5/8 , at which it closed, down Dollars 1 on the day. ..TX.- PaineWebber, another big Wall Street securities house, also met profit-taking, losing Dollars 1/8 at Dollars 29 in spite of another strong quarter, with profits climbing 30 per cent to Dollars 59.3m. Finally, Bear Stearns firmed Dollars 5/8 to Dollars 23 1/2 on news that Mr James Cayne, its president, has been appointed to the additional post of chief executive. ..TX.- Home Shopping Network was the market's most heavily traded stock for the second day running, rising Dollars 1 1/8 to Dollars 14 3/4 in volume of 3.9m shares as investors continued to react favourably to news of a merger offer from rival QVC Network. QVC, traded on the Nasdaq market, jumped a further Dollars 3 3/4 to Dollars 71 1/2 . ..TX.- Motorola climbed Dollars 2 3/8 to Dollars 89 1/4 following the company's announcement, late on Monday, of a 57 per cent increase in second-quarter profits to Dollars 224m. ..TX.- Hilton Hotels retreated Dollars 1 1/4 to Dollars 44 3/4 after reporting a 17 per cent decline in second-quarter profits to Dollars 26.8m and warning that the remainder of the year would be 'challenging' for the company. ..TX.- Canada ..TX.- TORONTO stocks also traded within a narrow range and closed with mixed movements, although turnover was fairly heavy. ..TX.- The TSE 300 index was finally up 1.2 at 3,951.7, while declining issues held a slight edge over rises by 365 to 354. Volume totalled 59.1m shares valued at CDollars 664m. ..TX.- Among the sub-indices, golds lost 0.92 per cent as the New York gold bullion price eased 25 US cents an ounce. ..CN.- Countries: US United States of America. CA Canada. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 41 ***************************************************************** ..AN.-00DGNB5AGEFT ..HL.- 930714FT 930714 World Stock Markets (Asia Pacific): Election hopes push Nikkei above 20,000 (700) ..BL.- By EMIKO TERAZONO ..DL.- TOKYO ..TX.- HOPES OF a further stimulus to the economy after elections to the lower house took the Nikkei average to a close above 20,000 for the first time since June 15, writes Emiko Terazono in Tokyo. ..TX.- The index rose for the third consecutive day, ending 200.42, or 1 per cent, higher at 20,180.42. It registered a low for the day of 19,967.60 at the beginning of the session; but institutional and individual investors bought interest rate-sensitive issues on hopes of lower interest rates, while arbitrage-related demand during the last half-hour of trading pushed it up to a high of 20,243.02. ..TX.- Volume rose to 320m shares from 229m. Advances led falls by 825 to 190, with 127 issues unchanged. The Topix index of all first section stocks put on 21.63 at 1,635.31 and, in London, the ISE/Nikkei 50 index firmed 1.75 to 1,244.73. ..TX.- Aside from arbitrage-related buying, which had led trading in recent days, traders said banks and some life assurers were buying interest rate-sensitive issues. Mr Chris Newton at James Capel commented: 'Some investors are starting to believe that the market will firm after the weekend elections.' ..TX.- Interest rate-sensitive financial issues were higher on hopes of monetary easing. Industrial Bank of Japan moved ahead Y90 to Y3,150 and Bank of Tokyo Y90 to Y1,660. Traders said the Long Term Credit Bank's decision to end its financial support for EIE International, the unlisted property developer, prompted hopes that other banks will follow suit in cutting off restructuring support. ..TX.- Companies linked to EIE International drew heavy selling orders. Sea-Com, listed on the second section, closed at an offered price of Y385, down Y80, and Electronic & International Enterprises closed on the over-the-counter market at an offer price of Y850, a fall of Y100. ..TX.- Interest rate-sensitive, large-capital stocks were firm, Nippon Steel adding Y9 at Y372 and Kawasaki Steel Y4 at Y341. ..TX.- Nippon Telegraph and Telephone jumped Y37,000 to Y915,000, regaining the Y900,000 level for the first time since June 24. ..TX.- In Osaka, the OSE average rose 230.68 to 22,188.90 in volume of 16.2m shares. The index advanced for the fourth consecutive trading day, exceeding the 22,000 level for the first time since June 16. ..TX.- Roundup ..TX.- DISCERNIBLE trends were hard to find among the region's markets yesterday as a general period of consolidation took hold. ..TX.- HONG KONG ended marginally higher, supported by the banking and utilities sectors. The Hang Seng index gained 3.51 at 6,956.10. ..TX.- Property issues were sold partly on fears that mainland investors might sell holdings because of China's tightened credit policies. Cheung Kong retreated 50 cents to HKDollars 25.60 and Henderson Land 20 cents to HKDollars 20.90. ..TX.- SEOUL was lower for the third straight session on institutional selling. The composite index lost 6.13 to 762.94 in turnover down to Won478bn from Monday's Won505bn. ..TX.- Lucky-Goldstar group shares went against the trend on an announcement that the group planned to sell eight subsidiaries and merge five units by the end of 1995. Goldstar Instrument and Electric rose Won400 to Won22,900. ..TX.- TAIWAN continued its downward trend in the absence of positive news. The weighted index fell 65.53, or 1.6 per cent, to 4,013.18. Turnover came to TDollars 17.2bn, against TDollars 16.3bn. ..TX.- AUSTRALIA was supported by brisk trading in Woolworths, but easier gold shares later in the day dampened sentiment. The All Ordinaries index finished a net 2.4 up at 1,804.2. The golds index receded 8 full points to 2,215.7. ..TX.- About 17.4m Woolworths shares were traded after Monday's ADollars 2.5bn flotation, and the stock lost a cent at ADollars 2.80 after reaching ADollars 2.83 earlier. ..TX.- NEW ZEALAND retreated from Monday's three-year high to close slightly lower. ..TX.- The NZSE-40 index slipped 3.12 to 1,723.73 in a turnover of NZDollars 767m. ..TX.- KARACHI ended sharply higher after a positive round of meetings between President Ghulam Ishaq Khan and Prime Minister Nawaz Sharif lifted sentiment. The KSE index rose 15.67 to 1,259.85. ..CN.- Countries: JP Japan, Asia. HK Hong Kong, Asia. KR South Korea, Asia. TW Taiwan, Asia. AU Australia. NZ New Zealand. PK Pakistan, Asia. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 41 ***************************************************************** ..AN.-00DGNB5AGDFT ..HL.- 930714FT 930714 World Stock Markets: South Africa (75) ..TX.- GOLD shares fell as the price of bullion declined, the index closing 26, or 1.3 per cent down at 1,950. Industrials shed 7 to 4,631 and the overall index lost 13 to 4,090. De Beers dipped 75 cents to R82.25 but Anglos gained R2 at R141. ..CN.- Countries: ZA South Africa, Africa. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 41 ***************************************************************** ..AN.-00DGNB5AGCFT ..HL.- 930714FT 930714 World Stock Markets: Indian foreign initiative reaps limited rewards - A disappointing inflow of orders (756) ..BL.- By RC MURTHY ..TX.- India's securities scandal is only one reason why, nine months since the market was opened to foreign portfolio investment, there has been a flood of enquiries but no big inflow of orders. ..TX.- So far, less than Dollars 20m has come in, disappointing the Securities and Exchange Board of India, the market watchdog which also keeps track of capital flows. ..TX.- For decades, foreigners were kept out of India, by official fiat; and last September, when foreign investors were given permission to hold up to 5 per cent of quoted Indian companies, they were discouraged by archaic trading practices, and share prices which moved more on rumours than on facts and fundamentals. ..TX.- No official target was set for foreign involvement. The authorities in New Delhi were hoping for Dollars 2bn in foreign direct capital inflow, including Dollars 1bn of portfolio investment, this year; but even this objective is proving as tough as Mount Everest to scale. ..TX.- Mr Stephen Barnes, at the Bombay office of BZW, says: 'One should talk of hundreds of millions, not billions', for the next couple of years. ..TX.- It will be a long haul at this rate for overseas investors to reach their 5 per cent quota, which works out to Rp58bn (Dollars 1.84bn), taking the market capitalisation of the top half of the 650 companies listed on the Bombay Stock Exchange. ..TX.- Foreign fund managers have had a lot of bad news to contend with. Early last December they were pondering the outbreak of communal riots, triggered by the destruction of the Babri mosque at Ayodhya. ..TX.- Subsequent events have included pre-budget blues in February; a series of bomb blasts on March 12, which upset commercial activity in major Indian cities; and, finally, the bombshell dropped last month by Mr Harshad Mehta, the stockbroker at the centre of India's Rp50bn securities scandal, alleging a Rp10m pay-off to Mr PV Narisimha Rao, the Indian prime minister, who denied the accusation. ..TX.- The stock market has reacted bearishly. The BSE 30-share index hit its 14-month low of 2,036 at the end of April, down by 55 per cent from the peak of 4,500 a year ago. ..TX.- A ban on short sales by BSE authorities last month took the bears' teeth away, but share prices have since moved in a narrow range, the index closing yesterday at 2,187.81 after a downward flutter on Monday. ..TX.- Foreign investors now have a feel for the environment. They are able to identify quite a few companies with price/earnings multiples of less than 25, and this makes an attractive change. ..TX.- The market was governed until recently by Mr Mehta's theory that p/e ratios were less important in valuing companies than the cost of replacing existing assets. On this basis, ACC, India's biggest cement producer, was bought up to Rp10,000 in April 1992. It is now down to a realistic Rp1,660 and a p/e of just under 19. ..TX.- Fundamentals have improved. Inflation is running at a six-year low of 5.8 per cent per annum; and interest rates at commercial banks are down by 2 percentage points over the past four months and are poised to fall further. ..TX.- Monsoon rains this season so far have been timely, and evenly spread throughout the country. If the weathermen's predictions come true, agricultural production will see strong growth, laying the foundation for a sharp rise in gross national product this year. ..TX.- The stock market has now focused on around half a dozen companies with strong fundamentals, such as ICICI, the finance house, Great Eastern Shipping, SCICI (basically shipping finance) and the Housing Development Finance Corporation, all of which are in the p/e range of 9 to 17. ..TX.- Foreigners have devised a dual strategy, testing the market with small orders and then striking bilateral deals with local institutional investors. 'It is possible to get discounts on large orders,' says Mr Barnes, justifying the bilateral approach. ..TX.- On the sell side, the Unit Trust of India is interested in selling part of its portfolio because it needs to generate Rp50bn in cash to service dividends in July. ..TX.- Mr P Sankaran, of Ind-Global Financial Services, expects the tempo of foreign portfolio investment to accelerate over the next two months, if there is no major setback to the equity market over the same period. 'The immediate problem,' emphasises Mr Sankaran, 'is political stability.' ..CN.- Countries: IN India, Asia. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 41 ***************************************************************** ..AN.-00DGNB5AGBFT ..HL.- 930714FT 930714 Money Markets: French rates unsettled (399) ..BL.- By STEPHANIE FLANDERS ..TX.- THE uncertainty surrounding the franc continued to unsettle the outlook for French money market rates yesterday, writes Stephanie Flanders. ..TX.- In a widely expected move, the Bundesbank yesterday set a variable 14-day repo tender, switching back from last week's fixed rate pact. Traders now expect the German central bank to allow some fall from last week's 7.30 per cent rate, in order to support the French authorities. ..TX.- Few traders now consider a cut in the German Lombard or discount rates to be very likely tomorrow, especially since the pressure on the franc seems to have lost some of its earlier momentum. ..TX.- Once again, French money market rates caught some of the uncertainty. Three-month rates ended at around 7.50 per cent, down from the previous close of 7.87 per cent. Earlier, trading had taken rates as low as 7.37 per cent. ..TX.- Some considered the fall in three-month money to reflect a realisation that there was little sense expecting France to increase interest rates at present, given the country's economic weakness. ..TX.- This view was supported in a poll taken by IDEA, the London-based financial information company, showing that 78 per cent of the dealers polled did not think that the French would raise interest rates. ..TX.- The Bank of England took the sting out of a moderate Pounds 900m shortfall in early round discount market dealing. The remaining shortage took somewhat longer to despatch, with the markets trading at close to 6 per cent throughout the day. Overnight rates conformed with this pattern, at 5 7/8 per cent. ..TX.- Further out, the London money markets reacted with guarded optimism to the favourable domestic output figures announced in the morning. The 2 per cent rise in May industrial production and 1.8 per cent increase in manufacturing output were significantly higher than pre-dicted. Although wary of reading too much into one, possibly rogue, figure, traders felt that the data had dented hopes of an imminent cut in interest rates. ..TX.- 'Optimists have looked forward with almost tunnel vision to a cut in rates, no matter what,' said one London trader. 'It is healthy that this has been punctured, but one output figure does not change the belief that rates will eventually fall.' ..CN.- Countries: FR France, EC. GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 35 ***************************************************************** ..AN.-00DGNB5AGAFT ..HL.- 930714FT 930714 Foreign Exchanges: Lull in French franc drama (499) ..BL.- By STEPHANIE FLANDERS ..TX.- ALL EYES were on the French franc when the European markets opened yesterday, but those expecting high drama were disappointed, writes Stephanie Flanders. ..TX.- The currency was still weak in early European trading, but was able to fluctuate between FFr3.410 and FFr3.415 to the D-Mark for most of the day without any concerted effort by speculators to take it lower. The franc ended at FFr3.414, slightly better than Monday's close of FFr3.416. ..TX.- The only visible move by either the French or the German authorities was the Bundesbank's announcement of a variable repo rate for today's German market trading. This had been widely expected, leaving the markets to wait to see whether the German central bank would ease policy in the coming days. ..TX.- Most traders thought that there would have been little point in further interventions yesterday by the Bank of France or the Bundesbank. This was because pressure on the franc was not at a critical point where strategic defensive purchases by the authorities could turn a currency's prospects around. If anything, speculators were suspending judgment on the franc until later in the week. ..TX.- 'What we are seeing is the same old war of attrition between the markets and the authorities,' said Ms Alison Cottrell at Midland Global Markets. Many traders expect the Bundesbank to reduce the repo rate tomorrow by 4 to 5 basis points, but Ms Cottrell does not think that many traders are lining up to make dramatic assaults on the franc before the Bundesbank council meeting tomorrow. 'There is too much chance of getting one's fingers burnt,' she said. ..TX.- Sterling received an unexpected boost yesterday from favourable domestic output figures released during the morning. Immediately following the announcement, the British currency gained more than a pfennig against the D-Mark, and it closed even higher at DM2.5700, against the previous day's DM2.5550 finish. It was also strong against the dollar, climbing more than 1 1/2 cents to close at Dollars 1.4935, against Dollars 1.4780 previously. ..TX.- Meanwhile, the dollar had lost ground during the day, thanks to some relaxing of tensions within the ERM and official data showing a surprise 0.3 per cent decline in US wholesale prices for June. ..TX.- 'The US data showed that concerns about an imminent tightening by the Federal Reserve were misplaced,' said Mr Julian Callow of Kleinwort Benson in London. 'This has taken some of the gloss off the dollar, but the knowledge that European rates are set to fall makes a bigger fall against the D-Mark unlikely.' The US unit closed at DM1.7200, down from Monday's DM1.7285. In New York it ended at DM1.7185. ..TX.- The Danish krone suffered alongside the French currency. Dealers in Denmark said they did not expect central bank intervention unless the krone fell to its floor. ..CN.- Countries: FR France, EC. GB United Kingdom, EC. US United States of America. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 35 ***************************************************************** ..AN.-00DGNB5AF9FT ..HL.- 930714FT 930714 Survey of Birmingham and West Midlands (7): A good place to be - Inward investment has been impressive (1034) ..BL.- By STEWART DALBY ..TX.- The 1980s was a good decade for inward investment inthe West Midlands, a region covering the shire counties of Shropshire, Staffordshire, Hereford, Worcester and Warwickshire, and the seven metropolitan areas of Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton. ..TX.- When the West Midlands Development Agency (WMDA) was established in 1984 it was attracting 4 per cent of total inward foreign investment to the UK (measured in terms of projects). By 1990 the West Midlands was drawing 24 per cent of the UK total - a level matched only by Wales. Nearly 900 foreign companies had invested a cumulative total of Pounds 1bn in the area. ..TX.- Domestic relocations and expansions are more difficult to quantify because the WMDA deals only with foreign investment. But Mr Chris Tillett, senior economist at Coopers & Lybrand in Birmingham, estimates that the foreign investment would easily have been matched by domestic relocations, start-ups and expansions. ..TX.- Telford, a new town corporation until 1991, was at the forefront in attracting foreign companies. Using liberal government financing and aggressive marketing it attracted 120 foreign companies into the town - and 1000 relocations or start-ups. ..TX.- Thirty-three of these companies came from the US, including Johnson Controls and Fruit of the Loom. Twenty-four were Japanese, including NEC Technology and Makita, a power tools concern. ..TX.- Other parts of the West Midlands also did well. In Wolverhampton, the Connecticut-based Elm Energy and Recycling is building a Dollars 86m waste tyre to energy power station. ..TX.- The investments have not been confined to manufacturing. Barclays Bank set up a back office operation in Coventry employing 700 people. The TSB has established a presence in Birmingham itself - also employing about 700 people. ..TX.- New investment has either created or protected more than 100,000 jobs. ..TX.- The West Midlands is an intermediate development area, and therefore it qualifies for regional selective assistance from the UK Government and funding from some of the European Community programmes. But apart from Telford and Redditch in Hereford and Worcester there has been no extra aid in the form of generously funded specialised bodies such as the Welsh Development Agency or Locate in Scotland. ..TX.- The attractions have been: good central location in the middle of the UK; and the perception of a skilled labour force and the availability of modern greenfield, B1 light-industrial factories and offices. While manufacturing and new high-technology industries have gone, on the whole, to business parks, some attached to the six universities in the area (such as Warwick University outside Coventry and Aston University in Birmingham), service industries have found abundant office space in Birmingham. ..TX.- Plenty of space remains. The Telford Development Agency says it has 1,000 acres of industrial space outstanding. Only 60 per cent of the 150 acre Birmingham Business Park has been occupied, and other business areas are being established. ..TX.- Filling the space, however, looks like being a more difficult struggle than in the past. Recession has hit relocations, just as it has affected other industries. Although figures for inward foreign investment for 1992 have not been officially released, Mr Tillett estimates that the West Midlands share of the cake dropped to 13 per cent (measured by number of projects). Domestic relocations probably slumped more severely, he thinks, because fewer companies moved out of the hard pressed south-east. ..TX.- But even without recession the 1990s were bound to be harder because competition for investment both domestically and internationally is becoming more intense. ..TX.- Mr David Rogerson, chief executive of the Telford Development Agency, says: 'A lot of the big US and Japanese companies wanted to be in Europe before the single market of 1992. These large investments are not going to come along again. It is now a question of finding smaller companies from places like Taiwan.' ..TX.- The British government is redrawing the regional assistance map. There is a distinct possibility that Telford will lose its development status and that areas in the south-east, in Dorset, Kent and East Sussex, will receive assistance. This will probably mean more development agencies chasing mobile investment. ..TX.- Mr Rogerson says: 'At the moment we are competing with about 100 agencies domestically, and something like 1,000 internationally. When we launch an initiative in Japan we often find ourselves following a group of Dutch people around, who stress how well they speak English. English speaking countries are attractive to Japanese businessmen because they have a low level of competence in other European languages.' ..TX.- Mr Tillett agrees with Mr Rogerson. He says: 'Most of the big players such as Toyota and Nissan are in the UK. The West Midlands needs to continue as a manufacturing centre because there are not enough service jobs to go round. It is a question of 'upskilling' and attracting small high-technology companies and automotive component concerns. These will often be joint ventures.' ..TX.- Mr Paul Richards, chief executive of WMDA, agrees that the going is getting tougher. But he believes that the West Midlands could enjoy another good decade of inward investment - it will be different kinds of investment. ..TX.- He says: 'We will be looking for smaller companies which will be involved in international strategic alliances, technology transfer arrangements, joint ventures for research. and so on. I believe the diversity of the industry we have built up will help us. We never got the humdingers, like Toyota, which went to the east Midlands. But with our skills base we attracted a broad range of industries from automotive components to electronics to food processing.' ..TX.- Great emphasis is placed on attracting automotive components companies - partly because Toyota, near Derby, will provide a ready market for them. ..TX.- A favourable sign came last month when Johnson Controls announced that it is to become the first tenant on the Black Country Development Corporation's new 115-acre Automotive Component Park. The US-based company is making a Pounds 10m investment which will create 160 new jobs. The development corporation is hoping that this move is the first of many. ..CO.- Companies: West Midlands Development Agency. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9532 Urban and Community Development. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9532. ..DS.- The Financial Times ..XP.- London Page 34 ***************************************************************** ..AN.-00DGNB5AF8FT ..HL.- 930714FT 930714 Survey of Birmingham and West Midlands (8): Need is not always enough - The region's urban renewal programmes (1293) ..BL.- By HAZEL DUFFY ..TX.- THE Government's efforts to enhance the West Midlands urban canvas sound generous: two urban development corporations; four City Challenges; a new Housing Action Trust; Estate Action; City Grant totalling Pounds 8m; derelict land grant amounting to Pounds 20m. ..TX.- Such is the heritage of physical neglect, however, and the social problems associated with a neglected environment, that even this panoply of schemes cannot transform a highly urban region. ..TX.- For nearly 200 years, the swathe of towns that grew into the West Midlands conurbation has been the scene for coal mining, minerals extraction, metal bashing and manufacturing. They have not just left their scars above the ground. All the many phases of industrial workings have left their mark below the surface. ..TX.- Fortunately, with each new discovery of the horrors that were left by industry, new methods of dealing successfully with the problem are being worked out. ..TX.- In the Black Country, for instance, nearly 2,000 private sector new houses have been built on reclaimed sites. In the east Birmingham area about 500 new houses have been built or are about to be started; sites are being prepared for another 500. ..TX.- In Stoke-on-Trent, a complex of offices, retail, leisure and industrial development covers part of the once derelict site which was reclaimed for the Garden Festival. Derelict land in the Stoke ribbon of urban development has been dealt with steadily over the years. Much of the land, however, has been greened, because reclamation of land for redevelopment is much more expensive. ..TX.- The city is now coming to terms with the urgent need to assemble packages of land to be made suitable for industry. This will depend on successful deals being worked out with the owners - which include industry, the utilities and British Coal. ..TX.- The motivating factor in restoring derelict and run-down tracts of land is this need to be able to offer new sites for potential incoming companies, and for existing companies to expand. While developers keep up pressure to bite into green belt land, the towns and cities in the region must find alternative urban sites. Without this land, prospects are poor for towns and cities being able to provide urban living standards better than now. ..TX.- Packaging sizeable sites can be a lengthy and costly procedure; existing users must be bought out and relocated. In the current climate, developers and financial institutions are sceptical - unreasonably - about the finished product. The abandonment by the government of the proposed contaminated land register, at least for the time being, has not allayed the private sector's fears. ..TX.- The Black Country Development Corporation, set up in 1987, is finding the costs of extensive reclamation more than it can afford. Funding has been cut back sharply in the government squeeze on public spending. Increasingly, unreclaimed sites are being put up for sale accompanied by a site investigation report, leaving the developer to carry out the reclamation. ..TX.- Birmingham Heartlands Development Corporation, set up in 1992 to cover part of east Birmingham, is likely to adopt a similar course on the site it bought as part of the Leyland-Daf rescue. The Black Country spine road, now under way, will provide much better access to sites such as that of the old Patent Shaft steelworks, once planned as a huge shopping mall redevelopment, now offered as an automotive components industrial park. ..TX.- A new spine road in Birmingham Heartlands is expected to get the go-ahead in late summer - again improving the marketability of sites. ..TX.- City Challenge schemes in the region were allocated Pounds 29.6m in 1993-94. City Challenge plans to address the social needs of rundown areas more deliberately than urban development corporations, whose brief is primarily property-led. ..TX.- The regional winners are in the Black Country and Birmingham. City Challenge is concentrated in the most deprived neighbourhoods. To be a deprived area, however, does not necessarily lead to the five year City Challenge status and Pounds 37.5m from the Department of the Environment. Coventry and Dudley were losers in the second and (for the present) last round of City Challenge, despite putting in bids for severely deprived neighbourhoods. ..TX.- Coventry has succeeded in getting a Pounds 2.6m slice of the new Urban Partnership fund which will enable two developments in one of the unsuccessful City Challenge wards - a ward which recorded an unemployment rate of 28 per cent in April 1993 - to go ahead. ..TX.- The phasing out by the government of Urban Programme money (down from Pounds 41.1m in 1992-93 to Pounds 27m in 1993-94 in the region) which funded projects across the inner cities through the local authorities, is hard on neighbourhoods which have not been designated for Estate Action, City Challenge or other area-specific programmes. Urban Programme has funded a wide variety of economic, social and training projects in the past. ..TX.- Three housing estates on the outskirts of Birmingham demonstrate the swings and roundabouts of government funding policy. Nobody denies their need. But they did not qualify for the old system of funding, which concentrated on the inner city. ..TX.- Now one of the estates, the most needy, has attracted Estate Action. But one of the two adjoining estates, only slightly less deprived, falls outside old and new funding. ..TX.- The Castle Vale housing estate in the north east of the city accepted the government's terms for money to be pumped in via a Housing Action Trust. The private sector also has a lot of unfit housing; it is more difficult to find the means to upgrade. Current rates of investment in upgrading or replacing this stock do not keep pace with the problem. ..TX.- The quality of life in much of the region's urban areas is poor. East and west Birmingham health authorities have described their territories as among the unhealthiest places in the UK. The number of households with at least one person suffering from long term illness is nearly 50 per cent higher than in a Warwickshire village. In the Black Country's Sandwell district, a new worry is the high incidence of diabetes among people with ethnic minority backgrounds. ..TX.- The quality of the environment is part of the quality of life. Nobody has given it a high priority in the predominantly urban West Midlands. ..TX.- That is just beginning to change. Birmingham has shown that it is possible to improve the urban environment, at least in the centre of the city. ..TX.- A new report* prepared by the West Midlands Forum of local authorities calls on other towns and cities in the region to follow the Birmingham example in a campaign to make the region more attractive. ..TX.- This is just one of the recommendations in a report to the European Commission which aims to convince the West Midlands that its industrial competence will go unrecognised in the wider world unless it addresses a number of related environmental and economic issues. ..TX.- *Development Strategy for the West Midlands: Partners in Europe. ..TX.- ------------------------------------------------------------------------ URBAN REGENERATION ------------------------------------------------------------------------ Expenditure by department of the environment in West Midlands region 1992/93 1993/94 Allocation/ Allocation Grant regime expenditure Pounds m Pounds m ------------------------------------------------------------------------ Urban programme 41,117 26,959 City grant 3,928 8,800 Derelict land grant 22,270 20,600 City action team spec. budget 0,427 0,410 Urban development corporations 67,460 72,000 City challenge 8,250 29,600 Task forces 3,056 2,6452 Urban Partnership fund 3,576 Coalfield ares fund 0,826 Totals 146,508 165,416 ------------------------------------------------------------------------ Notes 1992-93 figures are estimated outturns; actual outturn figures have been used where available. 1993-94 figures are all allocations. UDC figures include Black Country spine road and expenditure of receipts. ------------------------------------------------------------------------ ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9532 Urban and Community Development. P9531 Housing Programs. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9532, P9531. ..DS.- The Financial Times ..XP.- London Page 34 ***************************************************************** ..AN.-00DGNB5AF7FT ..HL.- 930714FT 930714 Survey of Birmingham and West Midlands (6): Some worrying trends - Unemployment statistics analysed (558) ..BL.- By PAUL CHEESERIGHT ..TX.- NOBODY is quite sure why there was a fourth successive monthly fall in the West Midlands unemployment figures in May. In fact - surprisingly, given the level of business - the employment position looked more cheerful than for over a year. ..TX.- More cheerful, that is, because the unemployment position had ceased to deteriorate. Analysis by the West Midlands Enterprise Board shows that over the period between November 1992 and May 1993, unemployment across the region fell by 0.1 per cent. ..TX.- At the same time there have been some more job opportunities. The rough measurement of the unemployment to vacancy ratio (reached by dividing the number of jobless by the number of job centre and careers office vacancies) fell to 29 in May from 32.7 in April. The national ratios were respectively 21.1 and 23. ..TX.- The figures are surprising because, as Mr Martin Booth, the WMEB's chief economist, says: 'One would have expected a stronger output rise before unemployment declines.' But he also notes that, traditionally, 'the West Midlands goes deeper into recession than the national economy and, when it comes out, it comes out faster than the national average.' ..TX.- The difficulty is that the overall figures contain some damaging trends. Not least among them is the high proportion of those who have been without jobs for more than a year and are thus classified as long term unemployed. This proportion has increased in regional terms to 38.5 per cent of the May 1993 total unemployed from 36 per cent in October 1992. The national average is 35.8 per cent. ..TX.- Once the long term unemployed percentages are narrowed down, sharp differences emerge within the region. The area with the highest percentage is that of the old West Midlands county - the Birmingham-Black Country conurbation with Solihull and Coventry. Here the proportion is 43.3 per cent - compared with 29.8 per cent in Shropshire, lowest in the region. ..TX.- A second series of damaging statistics comes from the absolute numbers when they are broken down to ward level. ..TX.- Total unemployment in the region during May was 282,300; or 11.1 per cent, against a national average of 10.4 per cent. ..TX.- But there are 12 wards in the conurbation - five in Birmingham, three in Wolverhampton, two in Coventry and one each in Sandwell and Walsall - where male unemployment rates run at more than 35 per cent. The main thing these wards have in common is that they are inner city areas. ..TX.- Local authorities worry that there are enlarging communities which are moving outside the economic cycle: even when the economy recovers, the unemployment rate in the inner city wards will remain high. It is to these areas, of course, that development programmes are directed. ..TX.- But the effect of areas of unemployment and deprivation on the general business growth of the West Midlands region is not clear; prosperity and poverty have marched hand in hand in the Midlands since the industrial revolution. Moreover, there is a danger that deprivation saps confidence and drives away potential investors whatever the attractions of, say, a city centre. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9441 Administration of Social and Manpower Programs. ..TP.- Types: ECON Employment & unemployment. CMMT Comment & Analysis. ..IX.- P9441. ..DS.- The Financial Times ..XP.- London Page 33 ***************************************************************** ..AN.-00DGNB5AF6FT ..HL.- 930714FT 930714 Survey of Birmingham and West Midlands (4): Need to train more precisely on target - A skills problem (1017) ..BL.- By STEWART DALBY ..TX.- THE West Midlands region is typical of the skills mismatch which bedevils much of Britain. Even in recession, companies report difficulties in acquiring the skilled labour they need. ..TX.- Sandwell demonstrates the problem. In this urban district in the Black Country, 45 per cent of the workforce is employed in manufacturing. Ethnic minorities account for 25 per cent of the population. ..TX.- Mr John Bedingfield, chief executive of the Sandwell Training & Enterprise Council (TEC), says that companies tell him they need to find skilled labour - yet 20,000 people, 17 per cent of the workforce, are without jobs. ..TX.- Asked how many of these would be unemployable even in a buoyant economic climate, Mr Bedingfield replies that it is impossible to say. 'I'd like to think that no-one, or at least very few people are unemployable. But it is important to establish where education ends and training begins. Some young people in the area have low education attainments and aspirations. It is a question of teaching them interview techniques, showing them how to make out a curriculum vitae, motivating people who have never had jobs. Only then can you think about specific vocational training. ..TX.- Sandwell TEC is tackling training through two programmes it inherited from the government's training agency: the youth training programme, and employment training for adult long-term unemployed. ..TX.- Youth training includes a system for the financial support of young people of 16 and 17 upwards. The programme gives them training over two years, either through an approved training provider, or (ideally) a job. The hope is that the trainee will achieve a national vocational qualification. ..TX.- For adult returners the period of training is usually shorter; up to six months. There are about 3,000 people on the two schemes. ..TX.- Over 80 per cent of Sandwell TEC's budget of Pounds 12.5m is allocated to these two projects. But there are many other schemes - Investors in People, for example, in which companies make a public commitment to develop their employees to achieve business objectives, and give counselling in schools. ..TX.- Mr Bedingfield says: 'More precise targeting is the key to training; we are in close touch with 70 companies and try to match training to their needs.' ..TX.- Sandwell is one of 10 TECs in the West Midlands; the biggest is Birmingham TEC, which has a Pounds 50m budget from the government. The Birmingham TEC, like the others, was set up (in 1990) to manage and develop the Department of Employment's training programmes for young people and adults and to support new and developing businesses. The TEC has refined the youth training programme into a system of credits. A printed voucher is issued to a young person, enabling him or her to pay for up to 104 weeks of training. Vouchers can only be cashed with an employer or training provider approved by the TEC. ..TX.- The Employment Training (ET) programme has been renamed Training for Work; an initiative aimed at the adult long-term unemployed. Those eligible must be between 18 and 60 and unemployed for 6 months, but the programme also includes people with disabilities; ex-regular members of the armed forces; people whose first language is not English; people requiring literacy and numeracy training; returners to the labour market and victims of large scale redundancies. ..TX.- The TEC claims that this broader scheme is better than the old ET because it stops 'skills leakage' - that is, people who, made redundant, then join the long term unemployed. It also enables older people, not merely school leavers, to acquire vocational qualifications. Training for Work provides intensive vocational training (usually up to 34 weeks) aimed at achieving a national vocational qualification (NVQ). ..TX.- Birmingham TEC has 5,600 on its youth credits training scheme and between 8,000 and 9,000 on Training for Work. It claims that both are successful. In 1990-91, 1022 participants achieved an NVQ at level 2. In the following year the figure had more than doubled: to 2443. ..TX.- Birmingham TEC believes that it is well on the way to meeting national education and training targets: 80 per cent of young people to have a NVQ to level 2 by 1997; 50 per cent of young people to reach NVQ level 3 or equivalent by 2000. (NVQ level 2 is equivalent to four GCSEs; level 3 to two A-levels. ..TX.- The TEC likes to feel it is doing much more than simply continuing the government's training programmes. Mr Larry Freeman, head of marketing services, says: 'The government schemes we inherited are aimed at the unemployed. It is perfectly proper that we should try to reduce unemployment through training. But I believe we cannot have a real skills revolution in this country unless we combine these programmes with initiatives for the 80 per cent of the available workforce who are in jobs.' ..TX.- Mr Freeman feels it is especially important in an area such as the West Midlands, which depends on advanced manufacturing to do something for those with jobs. He says: 'There is a need for employees in engineering and electronics continually to upgrade their skills.' ..TX.- Accordingly, the Birmingham TEC has introduced a number of programmes for those in work. ..TX.- The Weekend College programme is thought to be unique to Birmingham. This gives vouchers, worth Pounds 60, to adults with no skills or low skills, enabling them to go to college for a certain number of weekends, to upgrade their skills or learn new ones. ..TX.- More significantly, perhaps, Birmingham TEC has launched a Skills Investment Programme which brings together employers in eight different sectors of employment. Together with the TEC, employers research a sector's needs. Initiatives for employees - either on site, or elsewhere - follow. ..TX.- Mr Freeman says: 'These programmes make a start on what has become known as 'up-skilling.' But what is really needed is a national strategy to meet the changing needs of industries.' ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8331 Job Training and Related Services. ..TP.- Types: CMMT Comment & Analysis. PEOP Labour. ..IX.- P8331. ..DS.- The Financial Times ..XP.- London Page 33 ***************************************************************** ..AN.-00DGNB5AF5FT ..HL.- 930714FT 930714 Survey of Birmingham and West Midlands (5): Take an international spin - Roads, air services and Birmingham's infrastructure have improved (1112) ..BL.- By STEWART DALBY ..TX.- BIRMINGHAM promotes itself as a 'truly international city' at the heart of a economically reviving West Midlands region. What exactly does this mean? ..TX.- Mr Bob Moore is a former banker who is now the chief executive of Birmingham 2000, a pressure group representing 250 companies in Birmingham. It wants to develop Birmingham as a business centre on a European and world-wide basis. ..TX.- Mr Moore says: 'The West Midlands is attempting to revive economically by attracting new investment in industry. If we are to further this, we have to make Birmingham a city to which foreign businessmen want to come and work. We must have the full range of professional services and cultural attractions, so that potential investors do not feel they have to operate out of London. That is what we mean by creating an international city.' ..TX.- The West Midlands has been successful in attracting nearly 900 foreign companies in the past decade to places such as Telford, Redditch, Coventry and Birmingham. The attraction has been partly the perception of a skilled workforce, partly the assistance on offer; but mostly, the good location. ..TX.- The West Midlands is at the heart of Britain's motorway network. The opening of the final stretch of the M40 motorway from Oxford to Birmingham in jan 1991 eased the pressure on the M1. The 27-mile northern relief road will be a privately-run toll road) will provide motorists with an alternative to the heavily congested Midlands section of the M6, from junction 4 at Coleshill to junction 11 at Laney Green. ..TX.- The motorway infrastructure has also meant the development of a distribution/warehouse nexus in the so-called 'golden triangle' of the M6, M1 and M42/A42. ..TX.- From this area, 75 per cent of the UK population can be served within a 4 hour drive time, according to Chesterton. the estate agent. This makes it ideal as a national distribution centre; the warehouses of Toys R Us, Asda, Toyota and Jacobs are in the area. ..TX.- The city of Birmingham has improved its internal infrastructure. Mr Alan Wenban-Smith, assistant director of planning at the city council, says: 'It was obvious to us in the 1970s that the city centre was letting us down.' ..TX.- An inner-ring road had acted as a straitjacket around a tiny city centre. The city council has managed to bring break open the straitjacket by lowering the road and building a pedestrian bridge linking the civic centre of the city with Centenary Square and the International Convention Centre. Elsewhere, around the inner ring road, pedestrian crossings have slowed the traffic down. ..TX.- You can now walk from Centenary square through the civic quarter, past the library and museum, as far as the newly pedestrian precinct of New Street, passing a number of bistros and wine bars on the way. ..TX.- The effect of breaking open the road has created a bigger city centre which includes the Jewellery quarter, the Gunsmiths' quarter, and the Chinese quarter and Markets area. ..TX.- Some of the factories in these areas have been turned into offices for the hundreds of bank workers, accountants and lawyers who have moved to the city during the past decade. ..TX.- But the centrepiece of Birmingham's refurbishment so far has been the International Convention Centre (ICC) and the related National Indoor Arena behind it. ..TX.- The ICC grew out of the National Exhibition Centre (NEC), close to the airport on the outskirts of Birmingham. The NEC is owned and financed by the city council. In 1991-92 116 exhibitions were held there, and the NEC Arena staged over 100 concerts. ..TX.- The NEC is managed, on behalf of the city council, through an agency agreement to which the Birmingham Chamber of Commerce is a party. It has been consistently profitable and in the 1992-93 financial year made a contribution to Birmingham city council's fund of Pounds 11.64m after all its operating and financial charges. This profitability enabled the the management company to raise loans to finance the ICC and the indoor arena. The ICC cost Pounds 180m to build, with some Pounds 50m coming from the European Regional Development Fund. ..TX.- The ICC has held 600 conferences and conventions in its eleven halls since it opened two years ago. It is the home of a 2,200-seat concert hall, where the City of Birmingham Symphony Orchestra gives some 60 concerts a year. It does not make an operating profit (it lost several million pounds in 1991-92). But it has become the showpiece for the city's cultural and business life and it has stimulated the building of several first class hotels, notably the Hyatt. The spend in these hotels was put at Pounds 16m in 1991-92. ..TX.- Birmingham still has a bad traffic problem. City planners have decided that there is not enough road capacity for all the traffic seeking to use it. The cost of congestion to the West Midlands economy has been put at Pounds 500m a year. ..TX.- A metro or tram system is thought to be the solution. Metro Midland Line 1 will run from Birmingham Snow Hill to Wolverhampton. The capital cost will be Pounds 100m, some of it coming from the government, some from the EC. Part would come from the private sector. ..TX.- A second line from the city centre out to the airport is costed at Pounds 250m, and plans for a third line are well advanced. ..TX.- It was hoped that work could start in 1994, but Birmingham will have to wait. The starting date is now likely to be 1996. ..TX.- Birmingham's international airport has not matched Manchester airport's growth - partly because Birmingham is that much closer to London, but also because civil aviation policy specified the growth of Manchester as England's largest airport. But Birmingham airport has expanded rapidly. It now handles nearly 4m passengers and serves 37 destinations in the UK, Europe and the US. ..TX.- Mr Bob Taylor, managing director of Birmingham International Airport says: 'Business travellers found it easy to go the London airports if they wanted to fly to the US. I feel a landmark was reached in March when BA started its daily flight from Birmingham to New York. ..TX.- 'We are not trying to keep up with Manchester, but I feel more and more business people will want to use Birmingham as a starting point.' ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4512 Air Transportation, Scheduled. P1611 Highway and Street Construction. P7999 Amusement and Recreation, NEC. P4581 Airports, Flying Fields, and Services. P4111 Local and Suburban Transit. ..TP.- Types: RES Facilities. CMMT Comment & Analysis. ..IX.- P4512, P1611, P7999, P4581, P4111. ..DS.- The Financial Times ..XP.- London Page 33 ***************************************************************** ..AN.-00DGNB5AF4FT ..HL.- 930714FT 930714 Survey of Birmingham and West Midlands (3): Regional effort works - Business is picking up in the financial sector (1065) ..BL.- By PAUL CHEESERIGHT ..TX.- SHORTLY before his departure from the government, Mr Norman Lamont, then the chancellor of the exchequer, spoke at a banquet to senior West Midlands executives. The response was publicly polite and privately indifferent. But when a local speaker mentioned the management buyout of the Leyland Daf van plant, a wave of enthusiasm and applause swept through the room. ..TX.- Just as Leyland Daf has seemed a totem of West Midlands industry - its future a matter of emotional significance - so the way in which the buyout was arranged has become a rallying point for the financial community. No London players here, but regional funding regionally organised, denoting an ability to provide services across the board. ..TX.- Coopers & Lybrand organised the financial package for the buyout. The regional office of 3i provided the main tranche of equity capital and the senior debt came from the Bank of Scotland. The Birmingham office of Arthur Andersen, the accountancy firm, whose London office had been the Leyland Daf receivers, claims a role in facilitating the buyout, by creating the environment in which 3i could invest money. ..TX.- It shows increasing activity in a sector hit, as manufacturing was hit, by both recession and technological change. The flow of deals is high and 'activity levels have moved significantly in the last three months,' says Mr Bob Moore, chief executive of Birmingham City 2000, the financial and professional lobby group. ..TX.- 'Generally business is picking up,' agrees Mr Roman McAlindon, managing partner of Arthur Andersen in Birmingham. 'There is a string of opportunities coming up, with investment into the Midlands from outside, and management buyouts are beginning to emerge. But there's been a downturn in formal receivership appointments; there are not as many of them around now,' he says. ..TX.- This could mean some revival of employment opportunities, but growth may remain more constricted than in the 1980s, because of technological changes (increased office automation through the use of computers and so on) which are rushing through the financial services sector. ..TX.- Between 1981 and 1991, according to analysis by Birmingham City Council's economic development department, 'financial and professional services expanded employment by more than a third, creating an additional 16,000 opportunities in the city. However, even this rate of job growth was significantly lower than the more than 50 per cent growth experienced both regionally and nationally.' ..TX.- This increase - to 62,650 jobs, 13.5 per cent of jobs in the city - made the financial and professional sector the single most important source of private sector jobs in Birmingham - the region's dominant services centre. ..TX.- Whether the recession has weakened the strength of this centre is not clear. To be sure, expansion stopped and the number employed declined to 59,800 last year, but the number of lay-offs in the legal profession, for example, was tiny compared with what has happened in London law firms. ..TX.- Within the sector there have been changes. Although there is the full range of clearing banks (together with their subsidiary companies in areas such as lease finance, acting under separate names), more than 20 overseas banks, building societies and insurance companies, the specialist activity of merchant banking has declined. ..TX.- Although groups independent of the clearing banks, such as Singer & Friedlander, remain, Kleinwort Benson and Barclays de Zoete Wedd have withdrawn. This has left gaps in the market which the accountants have been keen to fill - as in the Leyland Daf management buyout arrangements - trading on their easy accessibility, extensive networks and, increasingly, a willingness to negotiate smaller deals. ..TX.- But if the choice of companies to negotiate deals and offer financial advice has declined, there is no shortage of institutions willing to advance equity funding in sums over Pounds 50,000. The regional office of the department of trade and industry, seeking to compile a register of finance sources, found more than 40 of them. More generally, it is agreed in the business community that there is no shortage of money available. ..TX.- The key question is the conditions under which it will be advanced - given that the clearing banks have adopted very cautious lending policies. In present economic circumstances this bears down critically on the smaller businesses whose lack of physical assets causes the clearing banks to exercise even greater caution. ..TX.- As the debate about funding a way out of recession has continued, attention has increasingly been paid to devising financial mechanisms for aiding small companies with soft loans; for addressing financial problems where Pounds 5000, not Pounds 50,000, is the difference between survival and expiry. Thus the Walsall Enterprise Agency, backed by a finance house, is setting up a loan fund, modelled on the earlier experience of Sandwell, and Birmingham Settlement, a voluntary group, is planning a community investment bank. ..TX.- It is difficult, however, to measure the significance of Birmingham as a financial centre. While the city is the hub of the region, it is not automatic that businesses in Coventry or Stoke-on-Trent will look to Birmingham for services - as opposed to, respectively, London or Manchester. ..TX.- This uncertainty about its own position pushes the Birmingham financial community, out of self-interest, to support the city council's attempts to make Birmingham a cultural centre and to make the centre of the city more welcoming. ..TX.- There are local claims that Birmingham is the UK's second largest centre for financial services - a claim that is repeated in half a dozen other cities. It has its strengths as a regional centre (as Manchester Business School established in a 1991 study): for example, in corporate stockbroking through Albert E. Sharp, Smith Keen Cutler and Sharelink, and in the provision of legal services through partnerships such as Eversheds, Edge & Ellison, Wragge and Pinsent. ..TX.- Manchester Business School makes the point that the Big Six accountancy practices employed more people in Birmingham than in any other regional centre, but concluded that 'Manchester is the biggest regional centre in terms of overall employment in banking, finance, insurance, business services and leasing.' ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8721 Accounting, Auditing, and Bookkeeping Services. P6021 National Commercial Banks. P6399 Insurance Carriers, NEC. P6162 Mortgage Bankers and Correspondents. P6029 Commercial Banks, NEC. P6799 Investors, NEC. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P8721, P6021, P6399, P6162, P6029, P6799. ..DS.- The Financial Times ..XP.- London Page 32 ***************************************************************** ..AN.-00DGNB5AF3FT ..HL.- 930714FT 930714 Survey of Birmingham and West Midlands (2): Quite a lot of catching up to do - Manufacturing industry beginning to pull out of the second recession in 10 years (1162) ..BL.- By PAUL CHEESERIGHT ..TX.- INDUSTRIAL groups in the region mostly show improved profits, as the economy starts its move out of recession. But the higher level of earnings usually owes more to the cost savings brought about by retrenchment and higher productivity than to recovery of demand. ..TX.- In short, manufacturing in the West Midlands is emerging from its second bout of severe surgery in 10 years. The recession of the early 1980s set off a slimming-down process, as companies came to terms with bloated costs and began to change their market positions. Manufacturing employment continued to decline even when the national economy was at its strongest during the second half of the 1980s. The 1990s recession accelerated an already established trend. ..TX.- Cambridge Econometrics, consultants, calculated a 19.2 per cent fall in manufacturing employment in the West Midlands between 1990 and 1993 and forecast a further decline of 6.2 per cent - 35,000 jobs - between 1993 and 2000. ..TX.- But such forecasts do not imply any diminution in the importance of manufacturing to the regional economy. Indeed, technological change and increased investment, leading to higher output, generally need fewer people to do the work. In any case, manufacturing still accounts for 33.1 per cent of regional gross domestic product, against a national average of about 25 per cent; and for 29.1 per cent of total employment. ..TX.- The accompanying table demonstrates that the West Midlands' traditional role as the industrial heart of the UK has not been eroded by the economic difficulties since 1980. According to the Confederation of British Industry, the most important sectors in terms of output are: electrical engineering, motor vehicles and mechanical engineering. ..TX.- But the regional figures disguise the signal importance to particular localities of particular industries: ceramics to Stoke-on-Trent; crystal to the Brierly Hill area of the Black Country; electronics - latterly - to Telford; leather to Walsall. ..TX.- Notwithstanding such specialised interests, there have been significant changes in the industrial structure. ..TX.- 'Figures for the last decade show a shift of emphasis away from metal manufacturing and other metal goods to motor vehicles and mechanical engineering. Such movement towards higher value-added industries should provide potential for future growth and prosperity in the region,' says Albert E. Sharp, stockbrokers. ..TX.- An example of this was the disappearance of basic steelmaking from the region on the one hand, and the gathering power of the automotive components sector on the other. ..TX.- But the immediate market prospects for realising this potential are not encouraging. During the 1980s, the large and medium-sized engineering groups, especially, built up positions in continental European markets to such a successful extent that they were protected from the first impact of the domestic recession. ..TX.- The latest surveys of both the Engineering Employers' Federation West Midlands, and the regional group of the Chambers of Commerce, showed that increased demand for manufactured exports, apparent in the first quarter of the year, had flattened out in the second quarter. ..TX.- While the devaluation of sterling offered Midlands manufacturers an immediate competitive stimulus, the effect was limited. ..TX.- First, the downturn in continental European markets, especially Germany, reduced demand. Second, European customers generally demanded a share of the margin gain which the devaluation offered exporters. Third, the combination of these two factors increased pressure on export prices, rather than relieved it. Fourth, there is now some evidence that imported material costs are rising. ..TX.- All this has meant that the movement towards recovery has been slow, and is likely to remain dependent - at least for the rest of this year - on the Far East and dollar markets and on the domestic market. Both survey and corporate reports suggest that there has been recovery in both these market sectors. ..TX.- Corporate fortunes are unlikely to improve dramatically except when cost reductions flow through. All the available measurements point to industry working well beneath capacity. The chambers of commerce report that only 14 per cent of manufacturing companies are working at full capacity - 43 per cent are under 80 per cent capacity. ..TX.- Given, too. that the recession has led to reduced investment, there is bound to be some catching up to do before the full potential of higher valued-added manufacturing can be realised. The opportunity is available. The arrival of Honda, Nissan and Toyota has increased UK car-making capacity and offered new markets to the component makers. ..TX.- The prosperity of the component companies causes ripples through the Midlands. But their prosperity will not be easily gained. The motor manufacturers have been seeking both to reduce the number of their suppliers and to change their relationship with them, thrusting out research and development. So the component makers are in some turmoil, even as their markets appear to widen. Not only that. With the downturn in continental European car markets, and the truck market in the doldrums, domestic motor manufacturers - Ford, Rover, Vauxhall - have been bearing down on suppliers, demanding price cuts. ..TX.- However, the pressure to manufacture at low prices has drawn the German motor manufacturers such as Mercedes-Benz, Volkswagen and BMW to start buying more of their components in the UK, again widening the potential market for Midlands manufacturers. ..TX.- Against the offsetting factors, confidence in the manufacturing sector has risen. More companies are confident about future trends of turnover and profitability than for the last three years. But the striking point about recent business surveys is that confidence is related to future rather than actual performance. ..TX.- Once recovery takes hold, manufacturers will have to contend with skill shortages. Price Waterhouse, in association with the Warwick and Wolverhampton Business Schools, has already detected the first signs, warning that 'a real skills shortfall could be in prospect when the recession ends finally, and it could have a serious impact on our competitiveness. Lack of fundamental reskilling policy during the recession will be to blame.' ..TX.- ------------------------------------------------------------------------ SEASONALLY ADJUSTED UNEMPLOYMENT IN THE WEST MIDLANDS AND UK IN MAY 1993 ------------------------------------------------------------------------ Males % Females % Total % ------------------------------------------------------------------------ W Midlands 216,500 14.5 65,808 6.2 282,300 11.1 UK 2,238,900 14.0 674,900 5.6 2,913,800 10.4 ------------------------------------------------------------------------ Source: WMEB Labour Market Briefing ------------------------------------------------------------------------ ..TX.- ------------------------------------------------------------------------ WEST MIDLANDS MANUFACTURING: A regional perspective ------------------------------------------------------------------------ 1980 1990 Location % of UK Location % of UK quotient output quotient output ------------------------------------------------------------------------ All manufacturing 1.3 11.2 1.5 11.8 - Motor vehicle and parts 2.9 26.2 3.4 30.5 - Mechanical engineering 1.4 11.6 1.7 14.0 - Other metal goods 3.7 31.6 3.4 28.5 - Metal manufacture 2.3 19.0 2.2 16.7 - Manufacture (Non metal minerals) 2.5 16.5 2.6 18.1 ------------------------------------------------------------------------ Source: Albert E. Sharp (location quotient: UK quotient=One) ------------------------------------------------------------------------ ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9441 Administration of Social and Manpower Programs. P9311 Finance, Taxation, and Monetary Policy. P9611 Administration of General Economic Programs. ..TP.- Types: ECON Employment & unemployment. CMMT Comment & Analysis. ..IX.- P9441, P9311, P9611. ..DS.- The Financial Times ..XP.- London Page 32 ***************************************************************** ..AN.-00DGNB5AF2FT ..HL.- 930714FT 930714 Survey of Birmingham and West Midlands (1): Step by cautious step to recovery - The region is reviving, with its industrial competitiveness enhanced by devaluation. The services sector has suffered a shake-out, but growth is expected to resume (1328) ..BL.- By PAUL CHEESERIGHT ..TX.- THE fundamental question about the West Midlands is not whether the regional economy will revive after recession. That revival, in erratic fashion, has started. Rather the question is whether the second recession in 15 years has pushed the economy towards atrophy. ..TX.- The difficulties of recent years, coincident with changes in government policy, the closer integration of the European Community economies and growing social pressures, especially in the urban areas, accentuate undercurrents of concern about the longer term future. ..TX.- The immediate prospects are for modest growth. In broad terms, the flow of orders began to revive in the early months of the year; business confidence has risen to the highest levels for three years in expectation that the pressures on profitability will be relieved. ..TX.- But at the same time, the downturn in the European economies has blunted the thrust of recovery which, in any case, was off a low base. Three quarters of companies are working under full capacity, according to the latest calculations of forecasters at the Confederation of British Industry and Business Strategies. ..TX.- Economists, then, are cautious about regional growth. 'At the start of the year I forecast 1.5 per cent for 1993,' says Mr Martin Booth, chief economist at the West Midlands Enterprise Board. 'I think I want to tone that down slightly now, but I can see stronger growth next year unless the recovery is choked off.' By stronger growth, he means more than 2.0 per cent. ..TX.- Mr David Kern, the chief economist at National Westminster Bank, predicts in his mid-1993 forecast a 1.5 per cent growth for this year and 2.3 per cent for 1994. So he is slightly more optimistic than Mr Booth. ..TX.- Any sustained national rise in consumer and investment spending would translate fairly quickly into a flow of orders for the engineering industry of the region and hence into the wider economy. Manufacturing remains the economic staple. ..TX.- This is both a strength and a weakness. Although the West Midlands is traditionally the manufacturing heart of the UK, manufacturing as a source of employment has declined, is declining and is likely to continue to decline. The growth of employment in the services sector, until checked by the latest recession, was slower in the West Midlands than elsewhere in the UK. ..TX.- Considering the region as a source of wealth, however, the future may be brighter than the employment prospects suggest. ..TX.- The UK government has recently switched its rhetoric to stress the importance of manufacturing - after a decade of verbal indifference. Government tax policy has latterly followed lines approved by, for example, the regional Engineering Employers Federation. ..TX.- Whether there exists the ability to take advantage of this new place in the political and economic sun is the wider question. ..TX.- It bears on the suggestion of economic atrophy. Geographically the region has no particular advantage: it may be at the centre of the UK, but it is on the periphery of that arc of European vigour stretching from northern Italy, through Germany and France, to London. ..TX.- Yet the pattern of the region's overseas trade is now firmly cast towards continental Europe. It is in the European arena, the more closely integrated EC market, that its competitive future will evolve. This is what worries the West Midlands Regional Forum of Local Authorities (whose collective voice is more sober than the 'boosterism' of its individual members). ..TX.- Noting that, as a traditional industrial region, the West Midlands is expected 'to have above average vulnerability' to competition from within the EC, while remaining highly dependent on exports to other members of the EC, the Forum is anxious about the ability to compete. 'By the year 2000, it has been estimated that 70 per cent of all European jobs will require brain rather than manual skills, yet levels of academic and skill attainment are relatively low in the West Midlands. Of particular concern is that several of the older manufacturing areas appear to lack access to the higher level skills required for the modernisation of the region's industries,' the Forum says. ..TX.- In fact, skills shortages never wholly disappeared - even during the recession - and there have been indications in recent surveys that skills shortages have begun to return as the economy revives. Corporate training budgets were frequently pruned during the recession. The training and enterprise councils which now stimulate and oversee much of the industrial training are too recent to have made a lasting impact. ..TX.- There is also a social element to the question. In general, the areas which need the jobs most, because of their high unemployment, are the areas where employment opportunities have diminished. ..TX.- The wards with highest unemployment are those of the inner cities. But the Birmingham City Council economic development department has drawn attention to the way in which job opportunities declined in the inner city, while increasing in the outer. ..TX.- Between 1984 and 1991 total employment in the Birmingham outer city grew 4.2 per cent, but declined in the inner city by 7.4 per cent, largely because of the scale of change in the motor vehicle industry. ..TX.- Planning policy and official funding is directed towards redressing that balance throughout the Birmingham-Black Country conurbation. The effort is to renew tired and derelict inner city areas so that more employment opportunities will emerge and more people will be trained to take advantage of them. ..TX.- Hence the existence of two urban development corporations, in the Black Country and east Birmingham, and four City Challenge areas in Birmingham, Sandwell, Walsall and Wolverhampton. ..TX.- Hence the appeals to government to retain assisted area status, able to receive regional and industrial development subsidies. Hence, by contrast, the fevered publicity, asserting how marvellous is the region and the cities in it. ..TX.- Yet the pressures for development on the green belt, the steady flow of tenants into business parks on the edge of the conurbation and the movement of companies to greenfield sites, in areas such as Telford, testify to a drift of corporate activity away from the inner city areas of the region, rather than towards it. ..TX.- Working through this mix of overlapping problems - inherent skills shortages and a lack of jobs where jobs are needed most - will be of the first importance to the development of the region into the next century. ..TX.- But if their solution is at least partially dependent on the level of economic activity, there are encouraging factors. ..TX.- The competitive position of industry changed between the recessions of the 1980s and the 1990s. Generally it is now more productive, more export-oriented - at least among the large and medium-sized groups. ..TX.- There has been a widening of the economic base in two senses: an influx of overseas investment has stimulated the regional economy, not only through its demands for local goods and services, but also through its spread of diverse management techniques; and at the same time there has been growth in the services sector. ..TX.- This throws up two caveats: if overseas industry has been attracted mostly because of low domestic costs, then it can disappear as quickly as it came, while the expansion of the services sector is largely an expansion of the low wage economy. ..TX.- The third encouraging factor is the developing links between the universities - Aston, Birmingham, Coventry, Warwick, Wolverhampton and the rest - and industrial groups. Co-operation of this kind will stimulate the movement of companies towards higher technology and new products, bringing into play different disciplines and harnessing wider ranges of skills. Here the future of the region rests. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P9611 Administration of General Economic Programs. P8331 Job Training and Related Services. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9311, P9611, P8331. ..DS.- The Financial Times ..XP.- London Page 31 ***************************************************************** ..AN.-00DGNB5AF1FT ..HL.- 930714FT 930714 Commodities and Agriculture: Jordan cultivates phosphates exports - The industry's moves into wider markets (867) ..BL.- By JAMES WHITTINGTON ..TX.- DESPITE a depression in the world market for phosphates and potash, Jordan is proving to be a remarkably resilient exporter. ..TX.- Jordan Phosphate Mines Company, which is majority-owned by the state, last year captured 15.3 per cent of world phosphate exports, making it the number two exporter of phosphate rock, behind Morocco and overtaking the US. Potash sales in 1992 were up to 3.24 per cent of total world exports. Furthermore, Jordan's mining sector is rapidly changing to meet the demands of the market and it seems set to become a big producer of complex fertilisers and chemicals by the end of the century. ..TX.- JPMC's phosphate exports fell from 6.4m tonnes in 1989 to 4.2m tonnes in 1991 - in line with a 37.7 per cent drop in world exports of phosphate rock in 1989-92 and the collapse of the company's traditional eastern European markets. The company's exports picked up slightly to 4.3m tonnes last year, and results from the first half of this year suggest that a similar figure is likely for 1993. ..TX.- The lower exports - in addition to falling international prices and severe government taxes recently implemented under Jordan's economic restructuring programme - have slashed the JPMC's net profits almost seven-fold over the past four years. Last year the company registered a net profit of only 16.1m Jordanian dinars (Dollars 22.8m) compared with JD33.1m in 1991 and JD109m in 1989. ..TX.- However, JPMC's general manager, Mr Thabet Taher, brushes aside any talk of doom and gloom. With a gradual shift of trade towards the rapidly expanding Asian markets, and two major joint ventures for the production of phosphate-based fertilisers and phosphoric acid already signed with Indian and Japanese companies, he is optimistic about the future. ..TX.- Contracts with India have partly replaced the loss of eastern European markets. Despite distortions in India's demand for fertiliser, caused by the government's recent abolition of price controls, Jordan shipped 1.3m tonnes of phosphate to India last year - making it JPMC's biggest client. In 1991, a Dollars 150m joint venture was signed with India's Southern Petrochemicals Corporation to produce an annual 200,000 tonnes of phosphoric acid for the Indian market. A new processing plant with 60 per cent Indian and 40 per cent Jordanian equity is due to begin operations in 1995 and, according to Mr Taher, Indian demand may be increased to 400,000 tonnes. ..TX.- A similar deal was signed last year with a Mitsubishi-led consortium of four Japanese companies that will take a 60 per cent share in a Dollars 360m compound fertiliser plant. JPMC and Arab Potash Company (APC), Jordan's other main exporter, will each have a 20 per cent holding. Under the agreement, a new plant, due to open in 1995, will produce 300,000 tonnes of compound fertiliser for Japan, which is about 10 per cent of the country's entire consumption. ..TX.- JPMC is negotiating with trading partners in Pakistan to establish another joint venture that will produce material for the Pakistani market. ..TX.- Meanwhile, APC is also following strategies of product diversification and expansion as a means of securing its future. The company, which has a phosphate plant on the Dead Sea, is 58 per cent owned by the Jordan government and 42 per cent by foreign Arab investors. It has maintained annual exports of potash of between 1.3 and 1.4m tonnes over the past five years. ..TX.- Unlike JPMC, APC exports have been relatively unaffected by the political upheavals of eastern Europe and the former Soviet Union as most of its trade is with Asian countries. Last year it exported a total of 1.35m tonnes of phosphate, 87 per cent of which went to Asian markets. ..TX.- But APC has seen its profits fall. Despite a 12 per cent drop in exports between 1991 and 1992, net profits fell from JD38m to JD28m, mainly because of an increase in government levies. ..TX.- APC's plans include a two-phase expansion programme, already under way at its Dead Sea site, which will increase potash production capacity to 1.8m tonnes by 1994 and 2.2m tonnes by the year 2000. George Wimpey International is the contractor. In addition, a Dollars 600m Dead Sea chemicals complex is due to begin operations in 1995. It will produce bromine derivatives, magnesium oxide and potassium-based fertilisers. ..TX.- APC's managing director, Mr Ali Yousef Ensour, explains that loans of Dollars 31m from the World Bank and the Jeddah-based Islamic Bank for Development have so far been agreed upon. Additional funding is expected to be raised by APC and foreign investors. Two US companies, Ethyl Corporation and Great Lakes Chemicals, are assisting with the technical side of the plans. ..TX.- With the abundance of raw materials and the unique saline composition of the Dead Sea, Mr Ensour says he is confident the complex will put Jordan on the map as a highly competitive chemical producer in addition to its phosphate and potash exports. ..CO.- Companies: Jordan Phosphate Mines. ..CN.- Countries: JO Jordan, Middle East. ..IN.- Industry: P6231 Security and Commodity Exchanges. P1475 Phosphate Rock. P1474 Potash, Soda, and Borate Minerals. ..TP.- Types: MKTS Foreign trade. CMMT Comment & Analysis. ..IX.- P6231, P1475, P1474. ..DS.- The Financial Times ..XP.- London Page 30 ***************************************************************** ..AN.-00DGNB5AF0FT ..HL.- 930714FT 930714 Commodities and Agriculture: Speculators spark Dollars 77 fall in copper price (411) ..BL.- By KENNETH GOODING, Mining Correspondent ..TX.- COPPER'S PRICE collapsed yesterday as commodity funds pulled out of the market and speculative selling sent the metal down to Dollars 1,861 a tonne in after-hours dealing. ..TX.- Since early May copper has gained about Dollars 300 a tonne and touched Dollars 2,020, a three-month peak, on Friday. Then in the first two trading days this week it lost half about half those gains, dropping by Dollars 46 a tonne on Monday and another Dollars 77 yesterday. ..TX.- The collapse, like the rise, was caused by technical factors but it was so spectacular that it undermined sentiment in other metals markets. Aluminium and nickel prices were particularly badly affected. ..TX.- Mr Wiktor Bielski, analyst at Bain & Company, part of the Deutsche Bank group, pointed out that copper's collapse originated late on Friday on the New York Commodity Exchange when there was a huge volume of selling. ..TX.- The market was surprised by a rise in the London Metal Exchange's copper stocks on Friday, when a reduction was expected. There was another rise reported yesterday, taking the total up by 11,000 tonnes to a fresh 15-year peak of 458,000 tonnes. ..TX.- Nevertheless, Mr Bielski argued that, while copper's prospects were poor for the next few months and the price might fall back below 80 cents a pound (Dollars 1763 a tonne), present bearish sentiment was probably overdone. For example, total copper stocks represented only 6 1/2 -7 weeks' consumption whereas in the previous recession they reached the 14-weeks level. ..TX.- Other analysts have been revising copper price forecasts they made in January and now predict much lower levels. Smith New Court, which predicted then that copper would average 110 cents a pound in 1993, now suggests 90 cents is more likely. Warburg is also predicting a 90-cents average, down from a January forecast of 105 cents, and Ord Minnett has reduced its forecast from 102 cents to 90 cents. Billiton-Enthoven Metals predicts a 90-cents average for 1993 but that was its January forecast. ..TX.- ------------------------------------------ LME WAREHOUSE STOCKS (As at Monday's close) tonnes ------------------------------------------ Aluminium +14,625 to 1,918,350 Copper +3,500 to 458,000 Lead +875 to 262,250 Nickel +2,586 to 93,390 Zinc +1,025 to 702,750 Tin +25 to 20,440 ------------------------------------------ ..CN.- Countries: US United States of America. ..IN.- Industry: P1021 Copper Ores. P6231 Security and Commodity Exchanges. ..TP.- Types: COSTS Commodity prices. CMMT Comment & Analysis. ..IX.- P1021, P6231. ..DS.- The Financial Times ..XP.- London Page 30 ***************************************************************** ..AN.-00DGNB5AFZFT ..HL.- 930714FT 930714 Commodities and Agriculture: Bangladesh jute estimate cut (387) ..BL.- By KUNAL BOSE ..DL.- CALCUTTA ..TX.- BANGLADESH'S 1993-94 jute crop is expected to fall short of an earlier estimate of 4.5m bales (180kg each), which was itself 500,000 bales below 1992-93 output. ..TX.- The smaller crop is mainly the result of the diversion of land from jute to rice, which gives a better return to the farmers. According to Bangladesh trade officials, more than 10 per cent of the 525,000 hectares under jute last year has been diverted to rice. ..TX.- However, the use of certified Indian seeds on a large scale and adequate retting (softening) facilities will ensure that a high percentage of quality fibre is produced. ..TX.- At least 75 per cent of the crop will be tossa jute, a variety that is increasingly favoured by jute mills both inside and outside the country. The balance will be white jute. ..TX.- The average annual requirement of raw jute in Bangladesh is 4.8m bales, including 2.9m bales for consumption by mills, 1.5m bales for export and 400,000 bales for village use. The shortfall will be taken care of by this season's comfortable opening stocks at the start of this month of more than 1m bales. ..TX.- The 1994-95 jute season will, however, open with low stocks. Trade officials think a fairly large volume of jute from Bangladesh will find its way into India through unauthorised channels because prices of the commodity are 25-40 per cent higher in India, depending on grade. ..TX.- As in the past, the export-orientated jute mills in India will import some high quality raw jute from Bangladesh, and India is expected to harvest a lower crop of 6.5m bales in the current season. ..TX.- The low prices of jute in Bangladesh have been attributed to the government's decision to end price support. The new season crop has only just started coming on to the market in small lots but prices are already depressed. ..TX.- The principal importers of jute from Bangladesh are Pakistan, Russia and some European and African countries. Thailand, itself a producer of the fibre, also buys from Bangladesh. Jute and jute goods are Bangladesh's main foreign exchange earners. ..CN.- Countries: BD Bangladesh, Asia. ..IN.- Industry: P0139 Field Crops Ex Cash Grains, NEC. P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Production. CMMT Comment & Analysis. ..IX.- P0139, P6231. ..DS.- The Financial Times ..XP.- London Page 30 ***************************************************************** ..AN.-00DGNB5AFYFT ..HL.- 930714FT 930714 Commodities and Agriculture: Fears of frost in Brazil push coffee up to Dollars 1,000 (478) ..BL.- By DEBORAH HARGREAVES and REUTER ..DL.- YAOUNDE ..TX.- COFFEE PRICES surged ahead in London yesterday as buyers rushed to the market in fear that Brazil's crop would be affected by frosts this week. London's September futures contract rose by Dollars 48 to touch a peak of Dollars 1,016 a tonne. But it later dropped to close at Dollars 1,000 as the New York market became very volatile. ..TX.- One private weather forecaster has estimated that there is a 50 per cent chance of frost in Brazil's Parana coffee-growing areas late today or early tommorrow. Other forecasters are more sceptical and put the chances of frost at 20 per cent or 30 per cent. ..TX.- Nevertheless, coffee traders remember the devastating frosts of 1975 that almost wiped out the Brazilian coffee crop and led to a boom in prices. For that reason any hint of frost is enough to push prices higher. ..TX.- Since 1975 Brazil has concentrated its plantings further north in regions less susceptible to frost. In the south, Parana now accounts for only 10 per cent of the country's crop; it was once the main coffee-growing state. Brazil's share of the world coffee crop has also declined so the impact of a frost on world prices could be less dramatic than in the past. ..TX.- Coffee prices have been depressed by high stocks in consuming countries such as the US and Europe. Last week the price was boosted by meetings between producers over a retention scheme and the threat of a frost in Brazil last weekend. ..TX.- If the frosts fail to materialise, prices could drop swiftly, one analyst suggested. ..TX.- Exporters in Cameroon estimate that the country's 1992-93 robusta coffee production will be just over half last season's level at about 45,000 tonnes, Reuter reports from Yaounde. ..TX.- The Douala-based Conseil Interprofessionel du Cafe et du Cacao said 1991-92 production was 85,409 tonnes. That figure was less than the ministry of industry and commerce's estimate of 97,835 tonnes, but local industry officials said the ministry figure was subject to manipulation by exporters. ..TX.- The CICC's executive secretary, Enouga Ntsimi, said all the 1991-92 crop had now been sold and forecast 1993-94 output at about 70,000 tonnes. ..TX.- Cameroon cut the producer price for robusta coffee by a third at the start of this season after the government had to subsidise 1991-92 production with 8.2bn CFA francs (Pounds 19m) in payments. ..TX.- Mr Ntsimi said most of the fall was normal, reflecting cyclical variation of yields from the coffee trees. But he estimated that 20 per cent was a result of farmers cutting down their trees. ..CN.- Countries: BR Brazil, South America. CM Cameroon, Africa. ..IN.- Industry: P0179 Fruits and Tree Nuts, NEC. P6231 Security and Commodity Exchanges. ..TP.- Types: COSTS Commodity prices. CMMT Comment & Analysis. ..IX.- P0179, P6231. ..DS.- The Financial Times ..XP.- London Page 30 ***************************************************************** ..AN.-00DGNB5AFXFT ..HL.- 930714FT 930714 World Commodities Prices: Market Report (249) ..BL.- By REUTER ..TX.- The collapse in the copper market (see story above) undermined sentiment in the other London Metal Exchange contracts to varying degrees. The next biggest loser was ALUMINIUM, which added Dollars 31.25 to Monday's Dollars 27 fall to close at Dollars 1,186.25 a tonne in the three months position. Traders attributed the fall to nervous liquidation, which gained momentum after support at Dollars 1,200 was broken. ZINC reversed the recent uptrend with three months metal closing Dollars 9.75 down at Dollars 965.50 a tonne and NICKEL's continuing decline was exacerbated by news of a fresh increase in LME warehouse stocks. The GOLD market began with a test of support at Dollars 390 a troy ounce following an overnight wave of selling by Japanese trade houses. But the subsequent recovery to Dollars 393.75 an ounce, down 30 cents on the day, at the London bullion market close showed that there was 'good physical demand on the dips', said one dealer. 'Investors are happy to take profits at about three to four dollars above the market, while shorts are covering at around Dollars 390 and there are plenty of stops (stop-loss orders) just below that,' he added. ..TX.- Compiled from Reuters ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. P1031 Lead and Zinc Ores. P1099 Metal Ores, NEC. P1061 Ferroalloy Ores, Ex Vanadium. P1041 Gold Ores. ..TP.- Types: COSTS Commodity prices. ..IX.- P6231, P1031, P1099, P1061, P1041. ..DS.- The Financial Times ..XP.- London Page 30 ***************************************************************** ..AN.-00DGNB5AFWFT ..HL.- 930714FT 930714 Commodities and Agriculture: French farmers expected to break seed limit (208) ..BL.- By REUTER ..DL.- PARIS ..TX.- FRENCH FARMERS are likely to have exceeded their grain, oilseed and proteinseed area limit and be forced to set aside an even larger portion of their land next season, Reuter reports from Paris. ..TX.- 'We're probably heading towards an excess, although it's difficult to know for sure,' an agriculture ministry official said. ..TX.- Definitive figures are expected in early August when farmers' applications for European Community direct aid payments are registered. According to ministry projections, France is likely to have exceeded by 322,000-483,000 hectares its 1989-91 reference area of 13.522m hectares, which was set as a limit under the EC's new farm system. ..TX.- EC members decided last May to shift the focus of their Common Agricultural Policy from price support to direct aid to farmers in an effort to cut their huge surpluses of food. ..TX.- The grain, oilseed and protein-seed excess is likely to be made even worse next season as more farmers choose to join the scheme. ..TX.- Only 539,000 farmers sent their applications for direct aid instead of the 745,000 expected, an official said. ..CN.- Countries: FR France, EC. ..IN.- Industry: P0119 Cash Grains, NEC. ..TP.- Types: NEWS General News. ..IX.- P0119. ..DS.- The Financial Times ..XP.- London Page 30 ***************************************************************** ..AN.-00DGNB5AFVFT ..HL.- 930714FT 930714 World Commodities Prices: Jute and Cotton (110) ..TX.- JUTE ..TX.- C and F Dundee; BTC USDollars 315, BWC USDollars 325, BTD USDollars 295, BWD USDollars 300. C and F Antwerp; BTC USDollars 305, BWC USDollars 305, BTD USDollars 280, BWD USDollars 280. ..TX.- COTTON ..TX.- LIVERPOOL- No spot or shipment sales were recorded for the week ended 9 July, against 262 tonnes in the previous week. Activity was severly restrained and business was on narrow lines. Cost of raw cotton deterred users from increasing their purchases. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P0139 Field Crops Ex Cash Grains, NEC. P0131 Cotton. ..TP.- Types: COSTS Commodity prices. ..IX.- P0139, P0131. ..DS.- The Financial Times ..XP.- London Page 30 ***************************************************************** ..AN.-00DGNB5AFUFT ..HL.- 930714FT 930714 Commodities and Agriculture: Indices offer confusing inflation clues (432) ..BL.- By LAURIE MORSE ..TX.- BOND TRADERS who use commodity prices to predict inflation-rate changes have had to pick their indicators carefully this year. Industrial commodity prices have for the most part fallen, while futures prices for consumer goods such as cereals, gold and softs have tended to rise. ..TX.- At the same time, US government indices that measure price movements have exhibited a curious tendency to follow seasonal variations - a trend belies the Bureau of Labour Statistics' practice of adjusting prices for seasonal factors. ..TX.- If, as forecast, the BLS reports today that consumer prices were flat in June, it will bring the consumer price index (CPI) back to a year-over-year rate close to 3 per cent - little changed from last year. ..TX.- That is good news for businesses and the US Federal Reserve Board, which aim for price stability. However, it is a puzzle to fixed-income traders who shorted bonds when inflation took an alarming swing upwards in the first quarter. ..TX.- Mr John Lipsky, chief economist for Salomon Brothers, says CPI data have risen in the first four months of every year since 1989, without consistently following through for the rest of the year. ..TX.- The June CPI, if it comes in on forecast, will smooth the first quarter's seasonal changes. 'For now, outlook for energy prices is good, demand is not too strong, and the dollar is helpings us out overseas. That gives a pretty steady outlook for inflation,' Mr Lipsky said. ..TX.- The calm inflation forecast seems to be borne out by commodity prices. While the Commodity Research Bureau's closely watched index of futures prices reached 20-month highs last week, it did so on the strength of soyabean and precious metals prices. ..TX.- Those commodities carry very little weight in either the CPI or the producer price index. A better indicator of price inflation is the CRB's index of spot industrial commodities, heavily weighted towards scrap metals and materials like rubber and tin. ..TX.- That index, in contrast to the futures index, is near its lowest levels of the year. A third, the Goldman Sachs commodity index, is in a similar position. ..TX.- The two indices are moving in parallel because industrial metals and energy prices have been locked together this year. Economists say it will take an upward turn in the broader indexes to predict a shift in inflation expectations. ..CN.- Countries: US United States of America. ..IN.- Industry: P6231 Security and Commodity Exchanges. P6289 Security and Commodity Services, NEC. ..TP.- Types: COSTS Commodity prices. TECH Services & Services use. ..IX.- P6231, P6289. ..DS.- The Financial Times ..XP.- London Page 30 ***************************************************************** ..AN.-00DGNB5AFTFT ..HL.- 930714FT 930714 Jobs: Mythical mice . . . and middle managers - Ambitious move to lay down national standards for a type of activity that may not exist (1212) ..BL.- By MICHAEL DIXON ..TX.- READERS who are middle managers, and the rest of us on their behalf, should perhaps be grateful. For during this past half decade much analytic brainpower has been exerted on a question which, having an awful lot of work on their hands, they themselves are mostly too busy to think about. ..TX.- The question is what precisely is it that middle managers do for their pay? And the brainpower has been brought to bear by a body named the Management Charter Initiative which has the backing of 1,614 employing outfits, and the blessing of - albeit no longer automatic funding from - the British government. The employers, mostly large, consist of 850 businesses, 293 public-sector organisations and 471 others such as the Royal National Institute for the Blind. ..TX.- It would be wrong, of course, to suppose that the MCI body is the only one which has lately been pondering the aforesaid question. Many others have done likewise since the recession began, especially in the business sector. Alas their thinking has less often resulted in a definition of what middle managers do than in a decision that, whatever it may be, a lot of it is unnecessary. Hence wholesale firings trendily euphemised as 'de-layering'. ..TX.- The charter body, however, has remained above such logic-chopping. Not only has it pursued its inquiries into the various activities and other elements making up middle-management work, but it has published its conclusions in a tastefully designed and systematically organised book* of 134 pages. ..TX.- Given the wealth of research showing that reading is not something managers do unless obliged to, even the book's modest length seems unlikely to make it a best seller among people doing the work the authors analyse. So it's probably as well that, to judge by the tenor of the book, it is mainly intended not so much for middle managers as for their 'assessors', who are not necessarily the same kind of animal. ..TX.- For one thing, whereas mid-rank executives are bidding fair to become an endangered species, assessment is a growth industry. Indeed the MCI itself is allied to Britain's National Vocational Qualifications scheme set up to award certificates to people deemed to merit same, in parallel to the certificates awarded by the academic educational network. ..TX.- For another thing, although the job of assessors is to judge suitability for work in middle management, they apparently do not need to have worked as middle managers themselves. Hence their judgment can be entirely uncontaminated by narrow experience of what they are judging. Moreover, thanks to the charter body, they no longer have to rely on rules of thumb such as whether the person under assessment is related to the company chairman. They can be guided by the book's analysis. ..TX.- The idea underpinning it was evidently originated by American psychologist David McClelland in the 1970s. Its nub is that although any given job may be done in different ways by different people, those who are good at it display certain patterns of skilled behaviour that are essentially the same in all cases. Such patterns are known as 'competences'. ..TX.- They are exemplified by the three which Professor McClelland identified in a searching study of how successful diplomats in United States embassies overseas differed from people doing the same job badly. ..TX.- One thing the successful had in greater degree was political nous: 'the ability to figure out quickly who influences whom and what each person's political intrests are. Another was 'the ability to hear what people from a foreign culture are really meaning, and to predict how they will react.' The third he picked out was 'a strong belief in the underlying dignity and worth of others different from oneself, and the ability to maintain this positive outlook under stress.' ..TX.- As a measure of ability to do the diplomatic job well, tests of those three competences proved better than either standard aptitude and intelligence tests or paper qualifications. Even so, the tests were by no means a perfect measure. The professor made no pretence that just looking at the competences was sufficient to judge people's overall suitability for the work. That necessitated considering their performance in the job as a whole. ..TX.- The British charter body professes to agree. The evidence used in assessment, the book declares, must '. . . describe the activities required by the occupational role as a whole rather than a fragmented and over-detailed list of tasks.' ..TX.- It then serenely proceeds to list 36 'elements of competence', 258 'performance criteria', and 351 'range indicators' - some of which admittedly overlap from element to element - together with what the MCI evidently regards as a less than complete inventory of 439 sorts of evidence to be evaluated. ..TX.- While that tally might seem fulsome compared with David McClelland's three competences, there's a point to be remembered. He focused on a specific type of job done in a specific setting. The MCI is spreading its web across middle management in general, regardless of economic sector let alone kind of organisation. ..TX.- Whether such a universal activity really exists, however, is another question. True, a well defined entity called 'middle' management can be found on notional organisation charts: it's the chunk of the pyramid just below 'senior' management. But does any such entity exist in the actual workplace as distinct from purely on paper? ..TX.- While the MCI evidently thinks so, numerous authorities on management would disagree. One who'd be apt to do so, for example, is Harvard Business School's Professor John Kotter. A second is Bath University's Professor of Management Iain Mangham, who waxes eloquent on the daftness of the myth that the abilities of real-life managers are somehow assembled from a kit of standard competences, as one might construct Mickey Mouses out of Lego blocks. ..TX.- Besides, the charter body's performance criteria are not entirely self-consistent. Take for example those on leading meetings. One is that the people invited to attend should be 'appropriate to the context and the purpose of the meeting' Another - to which the assessor is presumably required to give equal weight - is that 'unhelpful arguments and digressions' should be effectively discouraged. ..TX.- Since people who indulge in such digressions can hardly be appropriate to the meeting, surely any leader needing to take the discouraging action must be marked down for having invited them in the first place. On the other hand, if they aren't invited, the leader must lose the ordained mark for deterring digressions because none will arise. ..TX.- Such details aside, however, the MCI is certainly right in claiming that it has taken a positive step towards establishing standards of management work. The only trouble is that even positive steps can be dangerous when taken on shaky ground. ..TX.- So before proceeding any farther in its grand bureaucratic endeavour, the charter body should perhaps remember James Thurber's maxim: 'One can just as well fall flat on one's face as lean over too far backwards.' ..TX.- *Middle Management Standards, MCI, London WC1B 5BZ. Pounds 40. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8741 Management Services. ..TP.- Types: PEOP People. TECH Safety & Standards. ..IX.- P8741. ..DS.- The Financial Times ..XP.- London Page 27 ***************************************************************** ..AN.-00DGNB5AFSFT ..HL.- 930714FT 930714 Government Bonds: Gilts shrug off 1.8% rise in manufacturing output (895) ..BL.- By PETER JOHN and PATRICK HARVERSON ..DL.- LONDON, NEW YORK ..TX.- THE LATEST batch of UK economic data may have suggested that a recovery was in full swing but the gilt market failed to react accordingly, and was only slightly lower on the day. ..TX.- Ultra long-dated gilt yields were at their lowest for more than 20 years when trading began yesterday morning. ..TX.- News that manufacturing output had risen by 1.8 per cent in May against market expectations of only 0.3 per cent should have provided a perfect opportunity to take profits. That argument could have been strengthened by the weakness of government bond markets in mainland Europe. ..TX.- There was a knee-jerk reaction and September gilt futures tumbled 5/8 to 108 after the data was released. ..TX.- However, the Central Statistics Office said the data had been distorted by the late May bank holiday. This dampened the enthusiasm and gilt prices rose again. ..TX.- Although the futures contract closed at 107 29/32 , most dealers said the slide was testing buying interest and reflecting the weakness in Europe rather than a fundamental shift in economic opinion. ..TX.- Gilts has been rising steadily since May and the lack of volatility has meant buyers have found few opportunities to get into the market. Therefore, there was still strong demand. Mr Andy Tweed, gilts specialist with BZW, said: 'Each time the market came back we saw buyers.' ..TX.- Mr Ian Shepherdson, UK economist with Midland Global Markets, said: 'The market had been expecting a moderate increase in output and it got a staggering increase. The trend is undeniably upwards but the market does not believe the underlying trend to be as strong as these figures suggest.' ..TX.- The price of 15-year gilts eased only 1/32 to 109 3/8 and dealers said there was switching into index-linked gilts, which have been left behind. ..TX.- GERMAN government bonds slipped, although the markets were looking for a cut of around 5 basis points in the repo today ..TX.- Bund futures for September fell 0.22 to 96.08 on low volume as recent heavy foreign buying faded away. ..TX.- Economists are hanging fire over a reduction in the key floor rates at the Bundesbank council meeting tomorrow until they see what happens at the repo. Some argue that if the funds injected at the repo top DM72bn and the cut is more than five basis points that would be a clear signal for a cut in lending rates on July 29 and possibly as soon as tomorrow CONTINUING pressure on the French franc failed to check the French bond market which tested a new high before ending the day around 0.20 up on the previous close at 119.92. ..TX.- Mr Kit Juckes, economist with SG Warburg Securities, said: 'If there is a problem in France it's a currency problem and not a bond problem. Real yields are very high, a protracted rise in interest rates is not on the cards and the Balladur auction has shown that there is an excess of spare savings.' ..TX.- JAPANESE government bonds held on to their gains in London as investors bought on renewed hopes of a rate cut. ..TX.- Dealers said that there had been investment buying during Tokyo trading by domestic life insurance firms and pension funds, taking the yield on the JGB No 145 from 4.28 per cent to 4.26 per cent. ..TX.- AMONG the high yielders, Spanish bonds were barely moved after the Bank of Spain left key money rates unchanged and June CPI figures came in as expected. ..TX.- Italian government bonds were firmer ahead of the Bundesbank repo today with BTP September futures rising by 27 basis points to 104.41. ..TX.- US TREASURY prices were mixed across the board in the wake of June inflation numbers that were in line with, but no better than, expectations. ..TX.- In late trading the benchmark 30-year government bond was up 3/32 at 106 19/32 , yielding 6.611 per cent. At the short end, the two-year note was slightly weaker, down 3/32 at 100 3/16 , to yield 4.007 per cent. ..TX.- The keenly-awaited June producer prices report confirmed that inflation does not pose a threat to fixed-income markets. The Labor Department announced that its producer prices index fell 0.3 per cent in June, and its core measure of prices - excluding the volatile food and energy components - declined 0.1 per cent. ..TX.- The data were consistent with Wall Street forecasts, although some analysts had hoped for a bigger decline in core producer prices. This accounted for the early selling, said dealers. While prices at the short end remained lower, the long end staged a modest rally in the wake of declining commodities and gold prices. ..TX.- Ultimately, however, the good inflation news was already priced into bonds, so there was no need for investors to rush into Treasuries. It was not long before attention turned to the next set of data, today's release of the June consumer prices index, which analysts expect to mimic the performance of the PPI. ..TX.- Technical problems with the information service meant that closing benchmark government bond prices were unreliable yesterday. Consequently the table has not been published ..CN.- Countries: GB United Kingdom, EC. DE Germany, EC. FR France, EC. JP Japan, Asia. ES Spain, EC. US United States of America. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: MKTS Market data. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGNB5AFRFT ..HL.- 930714FT 930714 International Capital Markets: Japanese bonds stay cool ahead of election (518) ..BL.- By EMIKO TERAZONO ..DL.- TOKYO ..TX.- As the countdown to Sunday's landmark election gets under way, the Japanese bond market is looking remarkably sanguine, with long-term yields in the lower half of this year's trading range. ..TX.- Last minute campaigning might be all about political reform, with most of the new reformist groups pledging themselves to programmes for economic recovery, but bond market participants have mostly focused on recent economic data. ..TX.- The data have pointed unequivocally to a delayed recovery, and bond yields have fallen steadily on renewed hopes of a cut in the official discount rate by the Bank of Japan. ..TX.- The yield on the No 145 benchmark 10-year bond yesterday closed at 4.255 per cent, down from a May peak closer to 4.8 per cent. ..TX.- Industrial production for May fell by 2.4 per cent compared with April. Meanwhile, the growth of housing starts decelerated to 0.3 per cent year-on-year, after averaging 5.5 per cent in the first quarter of this year. ..TX.- May's total employment fell by 0.2 per cent from the previous month, while consumer demand also slumped, with growth of chain store sales falling by 2.5 per cent year-on-year. ..TX.- Many private economists have revised their economic growth forecasts downward for the fiscal year. This has led to buying of long-term bonds. Institutional investors, which have been buyers of short-term bonds due to forecasts of a near-term economic recovery, are now investing in the No 145 bond. ..TX.- If - as widely predicted - the ruling Liberal Democratic Party does not regain its majority in Sunday's general election, a coalition government would result. The core party in any coalition would be likely to be conservative. ..TX.- However, whatever the combination, an immediate stimulus for Japan's economy through public spending looks unlikely. ..TX.- Mr Marshall Gittler, bond market analyst at Merrill Lynch, reckons that a coalition government would take its time in dealing with the sluggish economy. ..TX.- He predicts that the Bank of Japan will be forced to cut interest rates, pushing down the yield on the No 145 benchmark to 4 per cent during the third quarter. ..TX.- However, politicians in the new structure may try to arouse popular support through income tax cuts. ..TX.- Ms Tomoko Fujii, an economist at Salomon Brothers, says such fiscal favours will create higher fiscal deficits. Together with refinancing by corporations of equity-linked bonds issued in the 1980s, this could put pressure on bond yields in the medium term, she says. ..TX.- Ms Fujii expects the BoJ to remain reluctant to cut rates due to fears of reflation. This will make it difficult for the long bond yield to fall below 4.2 per cent, she says. In the long run, however, the impact of any political shake-up could be positive for the bond market. ..TX.- Electoral reform will correct the over-representation in the rural areas, shifting more power to the urban electorate. This could liberalise areas such as agriculture and distribution, leading to lower inflation. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGNB5AFQFT ..HL.- 930714FT 930714 International Bonds: Dutch bank launches tightly priced Eurosterling deal (485) ..BL.- By SARA WEBB ..TX.- BORROWERS tapped the international bond market using a wide assortment of currencies and structures - including straight bonds, floating rate notes and equity-linked issues - yesterday. ..TX.- In the Eurosterling sector Bank Nederlandse Gemeenten, the Dutch bank which funds local authorities, launched a Pounds 200m, 10-year bond which some banks criticised for being too aggressively priced, especially since the borrower does not have an official credit rating. ..TX.- BNG's bonds were priced to yield 20 basis points over the gilt, giving a yield of 7.83 per cent. Some dealers said the yield pick-up was too small to appeal to UK investors. ..TX.- However, Paribas Capital Markets, the bookrunner for the deal, argued that BNG was regarded as 'in line with triple-A borrowers,' given that it was owned 50 per cent by the state and 50 per cent by the municipalities. ..TX.- The deal was swapped into guilders, allowing the borrower to achieve its funding target of 25 - 30 basis points over the yield on the 10-year Dutch state loan - or around 6.75 per cent. ..TX.- Paribas Capital Markets said demand came mainly from international investors who saw little downside risk with the currency and who like the yield pick-up over the core European government bonds. ..TX.- Elsewhere, the Republic of Austria launched a Dollars 350m, four-year floating-rate note, with a coupon of three-month Libor capped at 6.25 per cent. ..TX.- CSFB, the lead manager, said the deal attracted interest from money market funds, which liked the higher, up-front coupon. 'A lot of people think we are in a low interest rate environment and that if rates rise, they won't be going up that much,' said an official. ..TX.- One rival house criticised the deal, saying that it was rare to see such a low cap. Some of the much older issues (with a similar maturity date) trading in the market have caps of as much as 12 per cent. ..TX.- Bayerische Vereinsbank, one of Germany's two large Bavaria-based banks, yesterday launched a collared floating rate note in the Canadian dollar sector of the international bond market. ..TX.- The CDollars 150m, 10-year deal has a coupon set at the rate on three-month bankers acceptances less 30 basis points, with a floor of 6.25 per cent and a maximum of 10 per cent. Three-month bankers acceptances are currently about 4 3/8 per cent. Kidder Peabody International, the lead manager, reported strong retail investor interest. ..TX.- In the equity-linked sector, Morgan Stanley brought a L565bn convertible bond issue for Softe, a financial subsidiary of Stet, the Italian public sector telecommunications group. ..TX.- The bonds can be exchanged for shares in Sip, the main telephone utility (Stet is the holding company for Sip). ..CN.- Countries: GB United Kingdom, EC. AT Austria, West Europe. CA Canada. IT Italy, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: MKTS Market data. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGNB5AFPFT ..HL.- 930714FT 930714 International Company News: Banamex poised to offer Dollars 320m of MTNs (184) ..BL.- By DAMIAN FRASER ..DL.- MEXICO CITY ..TX.- BANCO Nacional de Mexico, (Banamex), Mexico's largest bank, is poised to offer 1bn pesos (Dollars 320m) of medium-term notes in the international capital markets. It will be the first peso-denominated Euronote offering by a Mexican company since Mexico's return to international debt markets in 1989. ..TX.- Banamex's existing peso debt is rated A grade by Standard & Poor's. The issue will enable Banamex to fund peso loans at a lower rate than that available in Mexico. The notes can be issued with maturities from 30 days to 10 years. The offering is expected to be followed by other Mexican companies keen to sell peso-denominated debt to foreign investors. ..TX.- The Mexican government has tapped foreign interest in high-yielding peso treasury bonds, but Mexican companies have up to now brought in foreign funds mainly by offering dollar-denominated debt. ..CO.- Companies: Banco Nacional de Mexico. ..CN.- Countries: MX Mexico. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: FIN Share issues. CMMT Comment & Analysis. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AFOFT ..HL.- 930714FT 930714 International Company News: GM to restrict price increases (370) ..BL.- By MARTIN DICKSON ..DL.- NEW YORK ..TX.- GENERAL Motors yesterday unveiled plans to hold back US vehicle price increases in the 1994 model year to win back market share. ..TX.- The company, in the throes of a restructuring to return loss-making North American operations to profit, said in the 1994 model year, starting in October, it would expand the 'value pricing' marketing idea it initiated on some models in 1993. ..TX.- This involved dropping the price of certain models of vehicles, equipped with popular levels of optional equipment. The idea is to lift sales and run GM's factories closer to capacity, to raise profits. ..TX.- Mr Michael Losh, a GM vice-president, said a value pricing strategy had been a factor behind the resurgence of GM's North American sales this year. ..TX.- The company's share of the US passenger car market fell sharply late last calendar year, to less than 31 per cent, when it cut back sharply on unprofitable sales to fleet buyers. ..TX.- However, it has recovered this year and in June totalled 37.1 per cent, compared with 36.7 per cent a year earlier. However, in the first half of 1993 its car market share was down a point on 1992, at 35.3 per cent. ..TX.- The recovery has been due partly to value pricing and because Japanese competitors, hurt by a strong yen, have been increasing their prices faster than American rivals. ..TX.- Mr Losh said that in the 1994 model year, GM's prices would rise by 1.5 per cent, even though they were fitted with additional equipment. ..TX.- Truck prices would rise by 2.2 per cent and the average price for GM vehicles would go up about 1.8 per cent - about half the rate of inflation. ..TX.- However, the proposed price changes do not include the impact of rebates to consumers given by US car companies to increase sales. Mr Losh said he expected 1994 rebates to be below those of 1993, but the company would alter policy in response to competitors. ..CO.- Companies: General Motors Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P3711 Motor Vehicles and Car Bodies. ..TP.- Types: COSTS Product costs & Product prices. CMMT Comment & Analysis. ..IX.- P3711. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AFNFT ..HL.- 930714FT 930714 International Company News: Cox resigns as president of CSFB's US arm (343) ..BL.- By PATRICK HARVERSON ..DL.- NEW YORK ..TX.- CS First Boston, the New York-based investment bank, said last night that Mr Archibald Cox, the president and chief executive of its US operations, had resigned. ..TX.- The firm said Mr Cox was leaving for personal reasons, and that his resignation had been accepted by the board 'with extreme reluctance'. ..TX.- The news stunned Wall Street, and industry insiders speculated that Mr Cox's departure was linked to a recent restructuring or to a long-running internal row at First Boston over employee bonuses, which led to a series of defections by high-level bankers and traders. ..TX.- Officials at CSFB and First Boston would not comment, but in a statement Mr Cox, 53, said: 'I am resigning to seek other personal interests. I feel strongly that during my tenure at First Boston I have made a meaningful contribution to the organisation.' ..TX.- First Boston said Mr Cox would stay on at the firm until September 1. No successor has been named, and Mr John Hennessy, chief executive of the CSFB group, will assume Mr Cox's responsibilities. ..TX.- Mr Cox's departure is the latest upheaval at CSFB, which has recently reported erratic profits and been dogged by internal rivalries. In March, Mr Jans-Jorg Rudloff, chairman of the group's European operations, was appointed to the board of CSFB's majority shareholder, the Zurich-based financial group CS Holdings, and replaced in London by Mr David Mulford, a former US Treasury official. ..TX.- At roughly the same time, Mr Robert Diamond, head of CS First Boston Pacific in Tokyo, was brought in to run the US bond sales and trading division after the division's previous head had resigned for personal reasons. ..TX.- Last month, CSFB said it was consolidating its three units into one group, and reorganising the business along product, rather than geographic, lines. ..TX.- The restructuring was seen by some analysts as an implicit acceptance by CSFB that its ambition to forge a fully-integrated global investment banking group had failed. ..PE.- People: p3. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AFMFT ..HL.- 930714FT 930714 International Company News: Reebok to buy back more stock (100) ..BL.- By MARTIN DICKSON ..TX.- REEBOK International, the footwear company whose shares dropped last month after it warned that second-quarter figures would be below forecasts, is to repurchase up to Dollars 200m of its stock, writes Martin Dickson. ..TX.- This augments an existing Dollars 200m buy-back plan under which 5.6m shares have been purchased for about Dollars 183m. Its stock closed at Dollars 27 5/8, down 1/8. ..CO.- Companies: Reebok International. ..CN.- Countries: US United States of America. ..IN.- Industry: P3149 Footwear, Ex Rubber, NEC. ..TP.- Types: COMP Shareholding. ..IX.- P3149. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AFLFT ..HL.- 930714FT 930714 International Company News: Thomson-CSF to acquire part of Siemens arm (135) ..BL.- By JOHN RIDDING ..DL.- PARIS ..TX.- THOMSON-CSF, the French electronics group, is to buy part of the electronic tubes business of Siemens, the German engineering and electronics company. ..TX.- The acquisition is part of Thomson's strategy of making European joint ventures to offset reduced defence expenditure and would consolidate its position in microwave tubes for telecommunications, the company said. ..TX.- Thomson will buy Siemens' travelling wave tube and coaxial tube businesses. ..TX.- Travelling wave tubes are used in telecommunications for radio links and earth stations while coaxial tubes are used in radar and television transmission. ..CO.- Companies: Thomson CSF. ..CN.- Countries: FR France, EC. DE Germany, EC. ..IN.- Industry: P3671 Electron Tubes. P3679 Electronic Components, NEC. ..TP.- Types: COMP Mergers & acquisitions. COMP Disposals. ..IX.- P3671, P3679. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AFKFT ..HL.- 930714FT 930714 International Company News: Nokia joins Mitsui in mobile phone venture (224) ..BL.- By MICHIYO NAKAMOTO ..DL.- TOKYO ..TX.- NOKIA, the Finnish telecommunications and electronics group, and Mitsui & Co, the Japanese trading house, have formed a joint venture to market mobile phones in Japan. ..TX.- The joint venture, to be established in August, will provide Nokia, the world's second largest mobile phones maker after Motorola of the US, with a foothold in the Japanese market. ..TX.- The Japanese industry is heavily regulated, with mobile phone companies restricted to leasing equipment. ..TX.- However, from next April companies will be able to sell mobile phones on the market. ..TX.- The industry expects increasing competition from next year when the two companies will be allowed to offer digital mobile phone services. ..TX.- Nokia's joint venture in Japan, Nokia Mobile Phone Japan, will also start marketing handsets for digital mobile telecommunications systems from early next year. ..TX.- Nokia will provide two-thirds of the capital of Y300m (Dollars 2.74m) for the joint venture while Mitsui will provide the remaining Y100m. ..TX.- Unit sales in the initial year are projected at 40,000 to 50,000 units with revenues targeted at Y5bn. ..CO.- Companies: Nokia Corp. Mitsui and Co. ..CN.- Countries: FI Finland, West Europe. JP Japan, Asia. ..IN.- Industry: P3661 Telephone and Telegraph Apparatus. P6719 Holding Companies, NEC. ..TP.- Types: COMP Strategic links & Joint venture. ..IX.- P3661, P6719. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AFJFT ..HL.- 930714FT 930714 International Company News: P&G extends price cuts for detergents (237) ..BL.- By MARTIN DICKSON ..TX.- PROCTER & Gamble, the US consumer products group facing competition from low-priced rivals, yesterday announced price cuts of between 3 per cent and 15 per cent on its liquid laundry detergents in the American market. ..TX.- The cuts, which will be effective on August 2, follow a 9 per cent price reduction on two of these products late last year and cuts earlier this year on powdered detergents. ..TX.- The company said the price cuts would be funded from savings from improved manufacturing techniques and other non-value added costs. The price cuts were not expected to affect earnings. ..TX.- P&G has been moving away from a marketing strategy based on special promotions to one based on a policy of consistent, but lower prices. ..TX.- The normally secretive company is holding a rare series of meetings with analysts and the Press tomorrow where it is expected to outline its strategy and cost-cutting plans in greater detail. ..TX.- P&G shares closed last night down Dollars 1 3/8 at Dollars 51 5/8 . ..TX.- In a separate move, the company named Mr Erik Nelson, a 53-year-old vice-president of financial operations as chief financial officer, filling a position vacant since 1991. ..CO.- Companies: Procter and Gamble. ..CN.- Countries: US United States of America. ..IN.- Industry: P2841 Soap and Other Detergents. ..TP.- Types: COSTS Product costs & Product prices. PEOP Appointments. ..IX.- P2841. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AFIFT ..HL.- 930714FT 930714 International Company News: Int Paper hit by slow US growth (306) ..BL.- By KAREN ZAGOR ..DL.- NEW YORK ..TX.- INTERNATIONAL Paper, the US forest products group, yesterday reported a 29.9 per cent drop in underlying second-quarter earnings, reflecting slow domestic growth and weak overseas economies. The company warned that weakness in European and export markets would probably continue in the second half. ..TX.- Net income for the three months to June 30 was Dollars 77m, or 62 cents a share, on sales of Dollars 3.5bn compared with earnings of Dollars 112m, or 92 cents, on sales of Dollars 3.4bn a year earlier. ..TX.- Although earnings per share were higher than most analysts had expected, the company's shares slipped Dollars 5/8 to Dollars 63 1/8 . ..TX.- Interest costs were considerably higher in the 1993 period, and in the 1992 quarter International Paper had benefited from tax-related interest income and higher capitalised interest attributable to two important European projects. ..TX.- Stripping out income taxes, extraordinary items and the cumulative effect of accounting changes, International Paper earned Dollars 122m in the quarter against Dollars 174m a year earlier. ..TX.- For the first six months, net income was Dollars 141m, or Dollars 1.14, on sales of Dollars 6.9bn, against profits of Dollars 164m, or Dollars 1.36, on sales of Dollars 6.7bn in the same period of 1992. ..TX.- Packaging operations saw sales decline to Dollars 890m from Dollars 925m, but the company's other leading business segments posted improved sales. ..TX.- Mr John Georges, chairman and chief executive, said demand for printing papers had risen a few percentage points from last year. Increases in reprographic and coated groundwood papers had been made for the third quarter. ..CO.- Companies: International Paper Co Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P2621 Paper Mills. P2672 Paper Coated and Laminated, NEC. ..TP.- Types: FIN Interim results. ..IX.- P2621, P2672. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AFHFT ..HL.- 930714FT 930714 International Company News: Brierley sells gas utility holding (351) ..BL.- By TERRY HALL ..DL.- WELLINGTON ..TX.- BRIERLEY Investments has sold its remaining 50.3 per cent shareholding in Enerco, a New Zealand gas utility, for NZDollars 58.6m (USDollars 32.2m). ..TX.- Brierley sold a 30 per cent stake for NZDollars 35.2m to a number of institutions and is selling the remaining 20.3 per cent to Natural Gas Corporation, the New Zealand utility, for NZDollars 23.4m. ..TX.- The shares are changing hands for NZDollars 2.09, compared with a current market price of NZDollars 2.25. ..TX.- Enerco was publicly floated last year when Brierley sold a 30.4 per cent shareholding at NZDollars 1.35 a share. A further placement of 19.2 per cent was made this March. ..TX.- Mr Paul Collins, Brierley chief executive, said the sale of Enerco shares was in accordance with forecasts made in the Enerco flotation prospectus. ..TX.- Telecom Corporation, New Zealand's biggest company, yesterday had its credit rating downgraded to AA1 by Moody's Investment Services, the US credit rating agency. ..TX.- Moody's said the downgrading was due to Telecom's announcement earlier this year that it intended lowering its cost of capital by reducing the number of shares on issue and moving to a higher debt gearing ratio. ..TX.- Mr Jeff White, Telecom chief financial officer, said the company's new debt ratio of around 40 per cent would still be conservative. ..TX.- Telecom is 60 per cent owned by Bell Atlantic and Ameritech of the US. ..TX.- New Zealand's Bancorp Holdings has bought Australian investment bank International Pacific Securities, which specialises in takeover and corporate advisory operations. ..TX.- The new acquisition's operations dovetail with those of Bancorp's in the area of treasury and financial market advisory services, Bancorp said. ..TX.- Bancorp is 47 per cent-owned by Public Bank Berhad, the Malaysian investment bank. ..CO.- Companies: Brierley Investments. Enerco. Telecom Corp. Bancorp Holdings. International Pacific Securities. ..CN.- Countries: NZ New Zealand. AU Australia. ..IN.- Industry: P6719 Holding Companies, NEC. P4923 Gas Transmission and Distribution. P4813 Telephone Communications, Ex Radio. P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: COMP Shareholding. COMP Disposals. CMMT Comment & Analysis. COMP Mergers & acquisitions. ..IX.- P6719, P4923, P4813, P6081. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AFGFT ..HL.- 930714FT 930714 International Company News: Nokia and Mitsui in mobile phones joint venture (333) ..BL.- By MICHIYO NAKAMOTO ..DL.- TOKYO ..TX.- NOKIA, the Finnish telecommunications and electronics group, and Mitsui & Co, the Japanese trading house, have formed a joint venture to market mobile phones in Japan. ..TX.- The joint venture, to be established in August, will provide Nokia, the world's second largest mobile phones maker after Motorola of the US, with a foothold in the Japanese market which is expected to grow strongly over the next few years. ..TX.- The Japanese industry is heavily regulated, with mobile phone companies, such as NTT's mobile phones subsidiary and IDO Cellular, restricted to leasing equipment. However, from next April companies will be able to sell mobile phones on the market. ..TX.- The industry expects increasing competition from next year when the two companies will be allowed to offer digital mobile phone services. ..TX.- Nokia's joint venture in Japan, Nokia Mobile Phone Japan, will also start marketing handsets for digital mobile telecommunications systems from next spring. ..TX.- Nokia, which is headed by chief executive Mr Jorma Ollila, will provide two-thirds of the capital of Y300m (Dollars 2.74m) for the joint venture while Mitsui will provide the remaining Y100m. ..TX.- Unit sales in the initial year are projected at 40,000 to 50,000 units with revenues targeted at Y5bn. Nokia expects initially to market its mobile phones on an original equipment manufacturer basis to telecommunications companies but plans eventually to sell products under its own brand name. ..TX.- Nokia has been studying the Japanese market for the past year or so, having established a mobile phones division in Japan last year. ..TX.- The Japanese mobile phones market has been held in check by heavy regulation and high prices which have kept penetration at a low 1.5 per cent of the population. ..CO.- Companies: Nokia Corp. Mitsui and Co. ..CN.- Countries: FI Finland, West Europe. JP Japan, Asia. ..IN.- Industry: P3661 Telephone and Telegraph Apparatus. P6719 Holding Companies, NEC. ..TP.- Types: COMP Strategic links & Joint venture. ..IX.- P3661, P6719. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AFFFT ..HL.- 930714FT 930714 International Company News: Banamex to offer MTNs in international market (193) ..BL.- By DAMIAN FRASER ..DL.- MEXICO CITY ..TX.- BANCO Nacional de Mexico, (Banamex), Mexico's largest bank, is set to offer 1bn pesos (Dollars 320m) of medium-term notes in the international capital market, writes Damian Fraser in Mexico City. ..TX.- It will be the first peso-denominated Euronote offering by a Mexican company since the country's return to international debt markets in 1989. ..TX.- Banamex's existing peso debt is rated A grade by Standard & Poor's. The issue will enable Banamex to fund peso loans at a lower rate than that available in Mexico. The notes can be issued with maturities from 30 days to 10 years. ..TX.- The offering is expected to be followed by other Mexican companies keen to sell peso-denominated, rather than dollar, debt to foreign investors. While the Mexican government has tapped foreign interest in high-yielding peso treasury bonds, Mexican companies have up to now brought in foreign funds mainly by offering dollar-denominated debt. ..CO.- Companies: Banco Nacional de Mexico. ..CN.- Countries: MX Mexico. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: FIN Share issues. CMMT Comment & Analysis. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AFEFT ..HL.- 930714FT 930714 International Company News: News Corp buys 50% of Mushroom Records (228) ..BL.- By BRUCE JACQUES ..DL.- SYDNEY ..TX.- NEWS Corporation, Mr Rupert Murdoch's Australian media group, is expanding its recorded music business with the purchase of a 50 per cent stake in Mushroom Records, Australia's largest independent recording company. ..TX.- Announcing the purchase yesterday, Mr Ken Cowley, chief executive of News in Australia, said the company's wholly-owned Festival Records subsidiary had acted as Mushroom's main distributor for 20 years and would continue to do so. ..TX.- 'This new investment is in keeping with our commitment to provide first class multi-media entertainment and information services,' he said. Mushroom has annual sales of around ADollars 50m (USDollars 34m) ..TX.- Mr Michael Gudinski, chairman of Mushroom, said the deal would allow the company to expand overseas, especially in the US and Britain, with its stable of recording stars which include Kylie Minogue and Jason Donovan. ..TX.- Mr Gudinski said the deal would provide valuable links with News subsidiaries, including Fox Broadcasting, and would bolster Festival Records' position in a competitive Australian market where top recording companies have bought out most of the independents. ..TX.- Mushroom was founded 21 years ago. Mr Gudinski will retain day-to-day control of the operation. ..CO.- Companies: News Corp. Mushroom Records. ..CN.- Countries: AU Australia. ..IN.- Industry: P2711 Newspapers. P3652 Prerecorded Records and Tapes. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P2711, P3652. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AFDFT ..HL.- 930714FT 930714 International Company News: EIE to restructure 'on its own' (272) ..BL.- By REUTER ..DL.- TOKYO ..TX.- EIE International, a Japanese property developer weighed down with debts of Y700bn (Dollars 4.3bn), plans to restructure without help from its main bank, Long-Term Credit Bank of Japan, Reuter reports from Tokyo. ..TX.- On Monday, five leading Japanese banks said that they would halt lending to EIE. The break with the banks came after a dispute with LTCB which has Y190bn in loans outstanding to the company. ..TX.- 'We plan to restructure on our own,' an official said. EIE would continue its important Sanctuary Cove and Bond University projects on the Gold Coast of Queensland, Australia, he said. ..TX.- LTCB decided to stop support for EIE after a disagreement over the company's restructuring plan. ..TX.- The bank proposed a sharp cutback in EIE's assets including an option of bankruptcy, but Mr Harunori Takahashi, EIE president, opposed the proposal, banking industry sources said. ..TX.- Japanese press reports quoted Mr Takahashi as saying he planned to form a new restructuring programme as soon as possible. He was reported to be confident of EIE's restructuring since it 'needs little new money to continue its business'. ..TX.- An LTCB spokesman said on Monday that even if the bank sets aside provisions against bad loans to EIE International, it will try to minimise the impact on earnings for 1993-1994 by selling its shareholdings. ..TX.- He denied media reports that LTCB will set aside Y80bn to Y100bn in 1993-1994 in provisions against bad loans to EIE. ..CO.- Companies: EIE International. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P6552 Subdividers and Developers, Ex Cemeteries. ..TP.- Types: COMP Company News. ..IX.- P6552. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AFCFT ..HL.- 930714FT 930714 International Company News: Comalco lifts smelter stake by 20% (399) ..BL.- By BRUCE JACQUES ..DL.- SYDNEY ..TX.- COMALCO, the Australian aluminium producer, is to buy a further 20 per cent stake in the Boyne Island smelter in Queensland for about ADollars 200m (USDollars 136m) from Metall Aktiengesellschaft, the Austrian metals group. ..TX.- The purchase would lift Comalco's interest in the smelter to 50 per cent and comes as the company is close to a decision on adding a new potline which would lift annual aluminium capacity by about 85 per cent. ..TX.- Construction of the new potline, being considered despite the glut in world aluminium supplies, would add about 200,000 tonnes to the smelter's annual capacity of 230,000 tonnes of primary metal. ..TX.- Mr Nick Stump, Comalco chief executive, said the proportion of ownership in the new potline was still under discussion with remaining shareholders - a consortium of five Japanese companies. ..TX.- Deliberations also included arrangements for electric power for the smelter from the Gladstone power station, controlled by the Queensland government, and a decision was expected by the end of 1993. ..TX.- One option being considered by the company is outright purchase of the Gladstone power station. Comalco is also involved in talks on power supplies to the two other smelters it controls, at Bell Bay in Tasmania and at Tiwai Point in New Zealand. ..TX.- 'This (purchase) decision is consistent with Comalco's previously announced strategy to concentrate its future investment in the upstream (bauxite to metal) sector of the aluminium industry,' Mr Stump said. 'The additional supply will allow Comalco to service its increasing customer base in export markets.' ..TX.- Mr Stump said AMAG, which is controlled by the Austrian government, had expressed a wish to end its interest in the smelter early this year as part of a plan to focus more closely on the company's European fabricating operations. ..TX.- The smelter, which began production in 1982, operates under a consortium tolling arrangement with participants taking metal in line with their equity shares. AMAG has been a partner since 1989. ..TX.- The acquisition includes AMAG's shares in the smelter, working capital and other funding obligations attached to the interest. The purchase price is subject to minor adjustments and to approval from the Foreign Investment Review Board. ..CO.- Companies: Comalco. Metall Aktiengesellschaft. ..CN.- Countries: AU Australia. AT Austria, West Europe. ..IN.- Industry: P3341 Secondary Nonferrous Metals. ..TP.- Types: COMP Shareholding. CMMT Comment & Analysis. ..IX.- P3341. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AFBFT ..HL.- 930714FT 930714 International Company News: German steel groups hold tin plate talks (174) ..BL.- By ARIANE GENILLARD ..DL.- BONN ..TX.- THYSSEN STAHL and Krupp-Hoesch Stahl, Germany's two largest steel makers, yesterday confirmed that they were holding talks about co-operation in their tin plate divisions but denied any intention to merge their operations. ..TX.- This follows a report in a Ruhr valley newspaper that the companies might consider merging their tin plate productions to gain economies of scale and reduce costs. ..TX.- Spokesmen from both companies said that talks regarding production, research and development were taking place but described them as routine. ..TX.- Hoesch Stahl, which merged with Krupp Stahl at the beginning of the year, produces annually 300,000 tonnes of tin plate products in its Westfalenhutte plant in Dortmund. ..TX.- Thyssen Stahl's Rasselstein subsidiary in Neuwied, near Koblenz, produces 700,000 tonnes of tin plate products a year. ..CO.- Companies: Thyssen Stahl. Krupp-Hoesch. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P3312 Blast Furnaces and Steel Mills. P3339 Primary Nonferrous Metals, NEC. ..TP.- Types: COMP Strategic links & Joint venture. ..IX.- P3312, P3339. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AFAFT ..HL.- 930714FT 930714 International Company News: Poles entice foreign bond investors (252) ..BL.- By CHRISTOPHER BOBINSKI ..DL.- WARSAW ..TX.- A NEW general licence permitting automatic repatriation of interest earnings by foreigners which comes into force in Poland on July 15 aims to generate demand abroad for three-year treasury bonds as well as treasury bills. ..TX.- The three-year bonds as well as the 26, 39 and 52-week treasury bills available to foreign investors since the middle of last year have met with minimal success since repatriation of earnings has required special central bank permits for each tranche. ..TX.- The government has sought to place 7,000bn zlotys (Dollars 407m) worth of three-year treasury bonds since last August but so far only 2,500bn zlotys worth have been taken up by domestic investors. ..TX.- In the first quarter of this year the annual yield on the three-year treasury bonds was 43 per cent while the country's current 'crawling peg' mechanism is devaluing the zloty at a rate of 25 per cent a year. Year-on-year inflation is running at 36 per cent. ..TX.- Poland's first cement sector privatisation has taken place with the sale of the Odra works in Opole to Miebach Projektgesellschaft of Germany for DM6m (Dollars 3.38m). Miebach plans to invest a further DM31m to modernise the Polish plant. ..CO.- Companies: Miebach Projekgesellschaft. ..CN.- Countries: PL Poland, East Europe. DE Germany, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P9611 Administration of General Economic Programs. P3241 Cement, Hydraulic. ..TP.- Types: TECH Patents & Licences. COMP Mergers & acquisitions. ..IX.- P9311, P9611, P3241. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AE9FT ..HL.- 930714FT 930714 International Company News: Riyad Bank rises 25% at halfway (103) ..BL.- By AP-DJ ..DL.- MANAMA ..TX.- SAUDI Arabia's Riyad Bank reports a 25 per cent increase in net profit to SR426.14m (Dollars 113.64m) for the first half of 1993, compared with the same period a year earlier, AP-DJ reports from Manama. ..TX.- According to an unaudited financial statement, the bank's operating income increased 7 per cent to SR736.93m. Loan loss provisions were 41 per cent higher at SR56.72m. ..CO.- Companies: Riyad Bank. ..CN.- Countries: SA Saudi Arabia, Middle East. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: FIN Interim results. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 25 ***************************************************************** ..AN.-00DGNB5AE8FT ..HL.- 930714FT 930714 International Company News: IBM launches Risc server (141) ..BL.- By LOUISE KEHOE ..DL.- SAN FRANCISCO ..TX.- IBM is moving to capitalise more broadly upon its Risc (reduced instruction set computing) technology for high performance microprocessors with the introduction yesterday of a powerful Risc desktop server computer for use in networks of workstations, writes Louise Kehoe in San Francisco. ..TX.- The company also unveiled several new data storage products from its Adstar business unit, that provide faster access to data and reduce storage costs for workstation users. ..TX.- IBM announced price reductions of up to 34 per cent on a range of Risc System/6000 workstations and peripherals. The new server is priced in the US at Dollars 13,200. ..CO.- Companies: International Business Machines Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P3571 Electronic Computers. ..TP.- Types: TECH Products & Product use. ..IX.- P3571. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGNB5AE7FT ..HL.- 930714FT 930714 International Company News: GE ahead at Dollars 1.3bn for quarter - Strong performances from financial services and power systems (409) ..BL.- By MARTIN DICKSON ..DL.- NEW YORK ..TX.- GENERAL Electric, the diversified US manufacturing and services group, yesterday reported a 10 per cent increase in net earnings for the second quarter. ..TX.- The group benefited from strong operating performances at its financial services and power systems businesses. ..TX.- The company reported earnings of Dollars 1.33bn, or Dollars 1.56 a share, compared with Dollars 1.21bn, or Dollars 1.42, in the same period of last year. ..TX.- Revenues rose by 4 per cent to Dollars 14.8bn. ..TX.- The figures were slightly ahead of the Wall Street consensus and GE shares closed Dollars 5/8 higher at Dollars 98 on the New York Stock Exchange yesterday. ..TX.- The quarter's results were distorted by the company's disposal of its aerospace business in April to Martin Marietta, also of the US. ..TX.- It recorded a Dollars 678m, or 79 cents a share, after-tax gain on the sale which Mr Jack Welch, the chairman, said had been used to fund restructuring operations to enhance operations. ..TX.- The one-time restructuring charge of 79 cents a share was classified as a reduction of continuing operations and the gain on the sale was classified as an increase in discontinued operations. ..TX.- This meant that net earnings from continuing operations totalled Dollars 656m, or 77 cents a share, down 42 per cent, in spite of the 10 per cent gain at the net level. ..TX.- Mr Welch said that the operating margin for the quarter was a record 14.2 per cent, compared with 12.8 per cent a year ago. ..TX.- Earnings at GE Capital Services, the financial services group, were 19 per cent ahead of 1992, with 16 of its 23 subsidiaries having record first-half earnings, including Kidder Peabody, its once-troubled securities house. ..TX.- Power systems recorded 'much higher' on-going operating profit on higher revenues, due to a strong performance by the power generation business. ..TX.- Aircraft engines had flat operating profits on a considerable drop in revenues. ..TX.- However, the company said that lower shipments of engines and spare parts were somewhat mitigated by revenues associated with the consolidation of a recently-acquired engine maintenance and management services business in Wales. ..CO.- Companies: General Electric. GE Capital Services. ..CN.- Countries: US United States of America. ..IN.- Industry: P3511 Turbines and Turbine Generator Sets. P3612 Transformers, Ex Electronic. P6719 Holding Companies, NEC. ..TP.- Types: FIN Interim results. CMMT Comment & Analysis. ..IX.- P3511, P3612, P6719. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGNB5AE6FT ..HL.- 930714FT 930714 International Company News: PaineWebber advances 30% (331) ..BL.- By PATRICK HARVERSON ..TX.- PAINEWEBBER, the US securities house, yesterday reported that second-quarter profits climbed to Dollars 59.3m, up 30 per cent on the Dollars 45.8m earned in the same period a year ago. ..TX.- Revenues in the three months totalled Dollars 686.5m, compared with Dollars 592.1m in the second quarter of 1992. ..TX.- The strong quarter took PaineWebber's half-yearly profits to a record Dollars 130.2m. In the first six months of 1992 it earned Dollars 120.1m. ..TX.- PaineWebber said revenues from its four main areas of business - brokerage commissions, principal transactions, investment banking and asset management - all rose during the quarter. ..TX.- The biggest contribution, apart from interest income, came from commission revenues, which rose 23 per cent to Dollars 239.9m as investor demand for securities products remained strong. ..TX.- Earnings from principal transactions - the firm's trading for its clients and its own account - climbed 8 per cent to Dollars 182.7m, while investment banking revenues edged 5 per cent higher to Dollars 95.8m. ..TX.- Asset management revenues, meanwhile, rose 19 per cent, to 77.4m as client assets under PaineWebber's control climbed from Dollars 107.4bn a year ago to Dollars 127.8bn. Net interest income rose 19 per cent to Dollars 328.1m. ..TX.- Non-interest expenses were Dollars 589.2m, up sharply from a year earlier because of a big rise in performance-related employee compensation. ..TX.- The results had little impact on PaineWebber's shares, which eased Dollars 1/8 to Dollars 29 at the close in New York. In spite of the decline, the stock remained close to its 52-week high. ..TX.- Bear Stearns, the Wall Street securities house, yesterday announced the appointment of Mr James Cayne, the firm's president, as chief executive. Mr Alan Greenberg, chairman, said the move was a recognition of Mr Cayne's contributions to the company. ..CO.- Companies: PaineWebber Group Inc. Bear Stearns Companies Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P6211 Security Brokers and Dealers. ..TP.- Types: FIN Interim results. PEOP Appointments. ..IX.- P6211. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGNB5AE5FT ..HL.- 930714FT 930714 International Company News: Merrill Lynch posts 53% rise to Dollars 345m at halfway (447) ..BL.- By PATRICK HARVERSON ..DL.- NEW YORK ..TX.- THE BIG Wall Street securities house Merrill Lynch yesterday announced a 53 per cent jump in second-quarter profits to a record Dollars 345m, on total revenues of Dollars 3.97bn. ..TX.- The strong second quarter took the firm's six-month earnings total to Dollars 687m, well ahead of the Dollars 443.7m reported in the first half of 1992. ..TX.- Over the past two years Wall Street has enjoyed an unprecedented boom in stockbroking and investment banking business because of low US interest rates and heavy demand from investors for stocks and bonds. ..TX.- The firm is the largest retail broker in the US, and in the second quarter its commission revenues (including commissions from the sale of mutual funds) totalled Dollars 666m, up from Dollars 568.8m in the same period a year ago. ..TX.- Merrill also leads Wall Street in stock and bond underwriting with an 18.4 per cent share of the domestic market, and earnings from investment banking climbed 4 per cent in the quarter to Dollars 414m, due primarily to higher revenues from corporate debt underwritings. ..TX.- As one the country's largest asset managers, with Dollars 148bn of client assets under fee-based management and more than Dollars 500bn in total client assets in the firm's custody, Merrill earned Dollars 240m in asset management and custodial fees, up 11 per cent from a year earlier. ..TX.- Its largest source of income, however, remained principal transactions - the trading the firm does for its clients and its own account - which brought in Dollars 734m in the quarter, up 33 per cent on 1992 thanks to strong revenues from the trading of corporate equities, swaps and derivatives, corporate bonds and currencies. ..TX.- The final component of earnings, net interest and dividend income, rose 20 per cent to Dollars 279m, due partly to higher levels of interest-earning assets and favourable interest rate spreads. ..TX.- On the cost side, Merrill's non-interest expenses climbed 13 per cent to Dollars 1.97bn following an 18 per cent jump to Dollars 1.28bn in compensation and benefits payments, which are tied to the firm's profitability. ..TX.- Although the news of strong second-quarter earnings provided an initial lift to Merrill's stock, when the share price reached a new 52-week high of Dollars 86 1/8 mid-morning, investors began to sell and take profits, so by the close the stock was quoted at Dollars 84 5/8, down Dollars 1. ..CO.- Companies: Merrill Lynch and Co Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P6211 Security Brokers and Dealers. P6221 Commodity Contracts Brokers, Dealers. ..TP.- Types: FIN Interim results. CMMT Comment & Analysis. ..IX.- P6211, P6221. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGNB5AE4FT ..HL.- 930714FT 930714 International Company News: US foods group expects better second half (153) ..BL.- By REUTER ..DL.- NEW YORK ..TX.- CPC International, the US foods group, expects earnings to improve in the second half and to outpace the Dollars 1.34 per share earned in the first six months of 1993, Reuter reports from New York. ..TX.- Mr Fred Meendsen, CPC vice-president, declined after a meeting with analysts to make a specific forecast on full-year earnings. He added, however, that the company was 'not significantly uncomfortable' with Wall Street estimates of earnings between Dollars 2.95 and Dollars 3 for all of 1993. ..TX.- CPC posted second quarter net income of Dollars 116.9m, or 76 cents a share, compared with Dollars 111.3m, or 72 cents a share, a year earlier. ..CO.- Companies: CPC International. ..CN.- Countries: US United States of America. ..IN.- Industry: P2046 Wet Corn Milling. P2034 Dehydrated Fruits, Vegetables, Soups. ..TP.- Types: COMP Company News. ..IX.- P2046, P2034. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGNB5AE3FT ..HL.- 930714FT 930714 International Company News: Hilton hit by lack of 'high rollers' (323) ..BL.- By RICHARD WATERS ..DL.- NEW YORK ..TX.- A SHORTAGE of 'high rollers' - gamblers willing to bet the largest stakes - at the Las Vegas Hilton contributed to a second-quarter decline in net income for Hilton, the hotels and gaming group, to Dollars 26.8m, or Dollars 0.56 a share, from Dollars 32.4m, or Dollars 0.68 a share, in the same period in 1992. ..TX.- A strong rise in operating income from gaming had helped Hilton to shrug off flat operating revenues from its hotels division in 1992 and the first quarter of 1993. ..TX.- In the three months to June 30, however, operating income from gaming fell slightly, to Dollars 37.4m from Dollars 37.5m. ..TX.- The company blamed the result on a lack of gamblers placing large stakes at the tables in the Las Vegas Hilton, although it said the Flamingo Hilton in Las Vegas and its two hotel-casinos in Reno, Nevada, had done well. ..TX.- The hotels division recorded unchanged operating income, at Dollars 29.7m. Continuing weakness in New York and Hawaii, and industry-wide pressure on rates, had accounted for the result, Hilton said. The hotel occupancy rate rose by one point, to 70 per cent, compared with the same quarter in 1992, but average room rates fell in a number of areas. ..TX.- Turnover rose 17 per cent to Dollars 345.2m from Dollars 294.8m. Net income was struck after financing charges to Dollars 17.7m, up from Dollars 13.2m due to the Dollars 300m of extra borrowing taken on last year to finance further casino developments. ..TX.- Hilton said that it had accelerated its development of casinos in New Orleans and Kansas City, both of which were expected to open in the first quarter of 1994. ..CO.- Companies: Hilton Hotels Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P7011 Hotels and Motels. P7999 Amusement and Recreation, NEC. ..TP.- Types: FIN Interim results. ..IX.- P7011, P7999. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGNB5AE2FT ..HL.- 930714FT 930714 International Company News: Hearing postponed as TWA names head (265) ..BL.- By KAREN ZAGOR ..DL.- NEW YORK ..TX.- TRANS World Airline, the bankrupt US carrier, yesterday named Mr William Howard as chairman when the company emerges from Chapter 11 bankruptcy protection later this summer. ..TX.- As a result of the appointment, tomorrow's US bankruptcy court hearing to confirm TWA's reorganisation plans has been postponed to August 11. ..TX.- TWA has been operating under Chapter 11 since January 1992. ..TX.- The company said yesterday that more than 90 per cent of each of its unsecured creditor classes had voted in favour of reorganisation. ..TX.- TWA's unions and creditors have been pressing for an experienced outsider to help lead the company. Attempts to woo Mr Lee Iacocca, former head of Chrysler, failed late last year. ..TX.- Mr Howard, 71, is credited with the success of Piedmont Airlines which he headed in the 1980s. ..TX.- He is popular with labour groups - which is important since TWA's unions will own 45 per cent of the re-organised common stock and have four seats on the board. ..TX.- Mr Howard left Piedmont in 1987, when it was acquired by USAir. ..TX.- Mr Howard faces a daunting task. Competition remains fierce, and TWA has lost some of its most valuable routes, such as New York-Heathrow which was sold by Mr Carl Icahn, TWA's former owner, in 1991. ..TX.- Mr Glenn Zander and Mr Robin Wilson, TWA's two chief executives, will remain with the company as vice-chairmen. ..CO.- Companies: Trans World Airline Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P4512 Air Transportation, Scheduled. ..TP.- Types: PEOP Appointments. ..IX.- P4512. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGNB5AE1FT ..HL.- 930714FT 930714 International Company News: AT&T's new battle call in US phone war (369) ..BL.- By MARTIN DICKSON ..TX.- AN INTENSE marketing battle between American Telephone & Telegraph and MCI Communications for US long-distance telephone customers took a novel turn yesterday when AT&T trumpeted it had invented a method of 'dramatically improving' the sound quality of calls over its network. ..TX.- It said the new system made long-distance calls sound clearer, closer and more natural by boosting the base end of a call's sound spectrum. But the claim was immediately dismissed as a 'marketing gimmick' by an MCI spokesman, who added: 'It's not of any concern to us.' ..TX.- The new sound - called TrueVoice - is the latest of many attempts by America's largest long distance operators - AT&T, MCI and Sprint - to add brand value to what is essentially a commodity service. ..TX.- As if to underline that point, some of AT&T's self-promotion yesterday sounded remarkably similar to an advertisement for toothpaste or pet food. ..TX.- Mr Merrill Tutton, president of the group's consumer communications services, said research studies of AT&T, Sprint and MCI customers had shown that 'eight out of 10 people surveyed preferred the sound quality of AT&T TrueVoice to current long-distance sound quality'. ..TX.- He claimed that TrueVoice 'does for the telecommunications industry what the digital compact disc did for the recording business'. ..TX.- However, some journalists who were among the first to hear the new system felt if it did represent any improvement in sound quality, then this was incremental rather than a fundamental breakthrough. ..TX.- AT&T, the largest US long distance company, certainly needs to bolster its market position, for MCI, the second largest carrier, has been taking share from it through marketing initiatives. ..TX.- MCI has about 18 per cent of the long distance market, against 60 per cent for AT&T and 9 per cent for Sprint. ..TX.- AT&T said it would begin introducing TrueVoice in some parts of the US in September and would complete deployment across the nation by the end of 1994. ..CO.- Companies: American Telephone and Telegraph. MCI Communications Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P4813 Telephone Communications, Ex Radio. ..TP.- Types: TECH Services & Services use. CMMT Comment & Analysis. ..IX.- P4813. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGNB5AE0FT ..HL.- 930714FT 930714 International Company News: James Capel analysts quit (160) ..BL.- By DAMIAN FRASER ..DL.- MEXICO CITY ..TX.- THE HEAD of research and at least one other analyst from the Latin American department of James Capel have resigned to join Bear Stearns, in an effort by the US brokerage to boost its coverage of emerging markets, writes Damian Fraser in Mexico City. ..TX.- James Capel confirmed that Mr Geoffrey Dennis, head of research, and another analyst had quit, and that other defections were possible. But Mr Mark Donegan, head of emerging markets for James Capel, said: 'If there were other resignations they would be very junior.' Bear Stearns confirmed the hirings but declined further comment. However, it is known to have made coverage of emerging markets a priority. ..CO.- Companies: James Capel and Co. Bear Stearns Companies Inc. ..CN.- Countries: GB United Kingdom, EC. US United States of America. ..IN.- Industry: P6211 Security Brokers and Dealers. ..TP.- Types: PEOP People. PEOP Appointments. ..IX.- P6211. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGNB5AEZFT ..HL.- 930714FT 930714 International Company News: Revenues at Ciga fall by 4.9% (343) ..BL.- By HAIG SIMONIAN ..DL.- MILAN ..TX.- CIGA, the troubled luxury hotels chain which is controlled by the Aga Khan, suffered a 4.9 per cent fall in revenues in the first half as the recession bit into occupancy rates. ..TX.- Turnover fell to L206.8bn (Dollars 88m) from L217.6bn, with the steepest fall in Spain where room occupancy sank to just 38 per cent. ..TX.- By contrast, sales and occupancy in the big Italian market improved slightly. ..TX.- Ciga's latest figures come as a Milan judge decides today whether to approve a court order in late May freezing the Aga Khan's stake in Ciga, which is held through his quoted Fimpar holding company. The court decision, postponed from early June, follows a legal action by the German subsidiary of the IMI financial services group, which led a Dollars 100m loan to Fimpar. ..TX.- As a result of the freeze, trading in Ciga and Fimpar shares has been suspended for the past seven weeks. Ciga's shareholders' meeting yesterday elected two court-appointed representatives to its board, which has been slimmed down to seven from 12 members. The two members will represent the interests of the IMI-led bank consortium pending resolution of the dispute. ..TX.- Ciga gave no precise earnings forecast for this year in view of the difficult trading conditions. However, it said that it expected operating earnings to be in line with the L23.9bn made before interest in 1992. ..TX.- Having reduced costs to ensure break-even at occupancy levels of about 50 per cent, the group maintained it was well placed to benefit from any recovery. ..TX.- Net group debts reached L1,101bn, including unpaid interest, at the end of last month, against L972bn at the end of December 1992. ..TX.- Financial charges amounted to L196.3bn in 1992, with interest costs accounting for about L125bn and an additional burden of L71bn arising from the effect of the lira devaluation on Ciga's foreign currency borrowing. ..CO.- Companies: Ciga. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P7011 Hotels and Motels. ..TP.- Types: FIN Interim results. ..IX.- P7011. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGNB5AEYFT ..HL.- 930714FT 930714 International Company News: Ex-Glaxo chief joins small US drugs group (157) ..BL.- By PAUL ABRAHAMS ..TX.- MR ERNEST Mario, the former chief executive and vice-chairman of Glaxo, who left in March after a boardroom bust-up at Europe's largest pharmaceuticals company, has resurfaced in the pharmaceuticals industry. ..TX.- Alza Corporation, a small specialist drug delivery system company based in Palo Alto, California, announced yesterday Mr Mario would become co-chairman and chief executive from the beginning of August. ..TX.- The Californian company recorded sales last year of Dollars 250m and profits of Dollars 72.2m while Glaxo generated pre-tax profits Pounds 1.42bn on turnover of Pounds 4.09bn in 1992. ..TX.- Alza generates its income through royalty payments from pharmaceuticals groups using its technologies. ..TX.- Mr Mario replaces Mr Martin Gerstel who announced this year he planned to resign to pursue non-corporate interests. ..CO.- Companies: Alza Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P2834 Pharmaceutical Preparations. ..TP.- Types: PEOP Appointments. ..IX.- P2834. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGNB5AEXFT ..HL.- 930714FT 930714 International Company News: Puma slips to DM12.6m loss, omits dividend (148) ..BL.- By ARIANE GENILLARD ..DL.- BONN ..TX.- PUMA, the troubled German-based sports goods manufacturer, suffered a DM12.6m (Dollars 7.2m) loss in 1992, writes Ariane Genillard in Bonn. ..TX.- The company recorded a small profit in 1991 after five consecutive years of losses. It confirmed that there would be no 1992 dividend. ..TX.- Group sales for 1992 fell from DM577.1m to DM512.9m. ..TX.- Including licensed sales, worldwide sales for the Puma label were DM1.17bn last year, down from DM1.29bn in 1991. ..TX.- Mr Jochen Zeitz, the group's chief executive, said that the company had suffered from the decline in the price of sportswear and high marketing costs. ..CO.- Companies: Puma. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P2329 Men's and Boys' Clothing, NEC. P2339 Women's and Misses' Outerwear, NEC. P3149 Footwear, Ex Rubber, NEC. ..TP.- Types: FIN Annual report. ..IX.- P2329, P2339, P3149. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGNB5AEWFT ..HL.- 930714FT 930714 International Company News: Motorola turns in record result (275) ..BL.- By LOUISE KEHOE ..DL.- SAN FRANCISCO ..TX.- MOTOROLA, the US electronics and semiconductor manufacturer, reported record second-quarter earnings, matching Wall Street expectations. ..TX.- Net income rose 57 per cent to Dollars 224m, or 81 cents a share, from Dollars 143m, or 53 cents, fully diluted. Revenues were Dollars 3.9bn, up 25 per cent from the Dollars 3.1bn of the same period last year. Net profit margins on sales were 5.7 per cent, against 4.6 per cent a year ago. ..TX.- Semiconductor sales advanced 28 per cent to Dollars 1.39bn, with orders up 30 per cent at an all-time high, the company said. ..TX.- The general systems group, which includes telecommunications equipment, had sales of Dollars 1.18bn, up 40 per cent from the second quarter of 1992. ..TX.- In the communications segment, including land mobile products and the paging and wireless data group, sales rose 23 per cent to Dollars 1.13bn. ..TX.- Demand for Motorola's semiconductors, communications products and electronic equipment continued to increase throughout most of the world, even in regions such as Europe, where economic conditions remain sluggish, said Mr George Fisher, chairman and chief executive. ..TX.- For the half-year, sales reached Dollars 7.56bn, up from Dollars 6.2bn in the first half of 1992. Earnings were Dollars 428m, or Dollars 1.58 a share, against Dollars 268m, or Dollars 1.01, before the cumulative effect of a 1992 accounting change related to insurance benefits. Fully-diluted earnings per share were Dollars 1.53, up from 99 cents a year earlier. ..CO.- Companies: Motoroal Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P3674 Semiconductors and Related Devices. ..TP.- Types: FIN Interim results. ..IX.- P3674. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGNB5AEVFT ..HL.- 930714FT 930714 International Company News: Cambior buys Peru property (128) ..BL.- By ROBERT GIBBENS ..DL.- MONTREAL ..TX.- CAMBIOR, a fast-growing Canadian gold producer now diversifying into base metals, has bought 60 per cent of the Cristo Rey copper-gold property in Peru from Vancouver's Southwestern Gold, writes Robert Gibbens in Montreal. ..TX.- The group paid USDollars 5m and will spend a further Dollars 2m to explore a nearby property. It also paid Dollars 3m for an option to buy a further 10 per cent of Cristo Rey. Cambior also acquired 25 per cent of Valdez Gold in Alaska, bringing its total interest to 100 per cent. ..CO.- Companies: Cambior Inc. Southwestern Gold. Valdez Gold. ..CN.- Countries: CA Canada. ..IN.- Industry: P1041 Gold Ores. ..TP.- Types: COMP Mergers & acquisitions. RES Facilities. ..IX.- P1041. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGNB5AEUFT ..HL.- 930714FT 930714 International Company News: Medco confirms merger talks with drugs groups (527) ..BL.- By RICHARD WATERS and PAUL ABRAHAMS ..DL.- NEW YORK, LONDON ..TX.- A REALIGNMENT of drug distribution in the US, giving pharmaceutical companies greater control over sales to their biggest buyers, could be under way following news of merger talks involving one of the country's largest distributors. ..TX.- Medco Containment Services, a fast-growing mail-order supplier, said it was in talks with several pharmaceutical companies which could lead to strategic relationships, partnerships, joint ventures or business combination. ..TX.- Mr Martin Wygod, chairman and chief executive, said the statement was prompted by a report yesterday that Medco had been in talks about a Dollars 4.5bn merger with Merck, the largest US drugs company. Merck's recently-appointed president, Mr Richard Markham, resigned unexpectedly on Friday. ..TX.- Medco supplies pharmaceuticals to the employees of many of the largest US companies, including General Motors and General Electric, under their company health plans. ..TX.- The company is the largest mail order company for pharmaceuticals in the US and last year controlled more than half of the US mail order market, worth about Dollars 3.8bn a year. Its closest competitor, Baxter Prescriptions, a division of Baxter International, has about 10 per cent of the market. ..TX.- Medco represents 1,550 companies and public agencies, covering 33m employees and by buying in bulk it claims to achieve discounts from pharmaceutical companies of between 20 per cent and 40 per cent. Mr Wygod estimated that it would account for drug purchases worth Dollars 7bn-Dollars 8bn this year, or 12 per cent of drug sales in the US. ..TX.- He refused to comment on whether Medco had been in talks with Merck, or whether a tie-up with one pharmaceutical company was the most likely outcome. ..TX.- 'We're trying to make the right types of relationships with manufacturers to help cut back healthcare bills,' he said. ..TX.- However, consultants questioned the strategy of pharmaceuticals companies buying their customers. 'This makes little sense. If Merck acquired Medco, they would be buying only 2 per cent of the non-hospital market at a huge cost,' said Mr Eran Broshy, head of the Boston Consulting Group's healthcare practice. ..TX.- The growth of bulk buying by Medco and other institutional purchasers of pharmaceuticals has contributed to pressure on drug companies' profits, and put control of distribution into the hands of a group of intermediaries who have grown up between the drug companies and the users of their products. ..TX.- A tie-up with a distributor such as Medco would give a company greater control over sales of its drugs. However, Medco's relationships with its customers could suffer if it became a sales channel for the products of one company. ..TX.- Medco, based in Montvale, New Jersey, had achieved compound sales growth of more than 35 per cent a year in the past eight years, said Mr Wygod. In early trading, its shares rose Dollars 2 1/8 to Dollars 31 1/4 but slipped to Dollars 30 1/8 by the close. ..CO.- Companies: Medco Containment Services. Merck and Co. ..CN.- Countries: US United States of America. ..IN.- Industry: P5122 Drugs, Proprietaries, and Sundries. P2834 Pharmaceutical Preparations. ..TP.- Types: COMP Mergers & acquisitions. CMMT Comment & Analysis. ..IX.- P5122, P2834. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGNB5AETFT ..HL.- 930714FT 930714 International Company News: Deckel Maho sees benefits in three years (351) ..BL.- By CHRISTOPHER PARKES ..DL.- FRANKFURT ..TX.- THE first fruits of the merger of German machine tool makers Friedrich Deckel and Maho are expected in three years when the slimmed-down company should return to profit. ..TX.- According to Mr Bodo Viets, Maho chairman, a loss of DM100m (Dollars 62.5m) is expected in the first year, and the first two years' results will be burdened by restructuring costs totalling DM240m. These will include charges for closures, removals and the cost of reducing the workforce. ..TX.- However, cost savings worth DM120m a year will have a beneficial effect from 1995 onwards, according to a merger report published yesterday. The new company, to be called Deckel Maho, expects turnover in the year to June 30 1994 of between DM400m and DM500m with the workforce cut to about 1,500 people. ..TX.- The figures suggest heavy capacity cuts, which have not yet been decided. Last year's combined sales came to DM750m with a workforce of more than 3,000 people down from almost 6,000 in 1989-90. ..TX.- The merger of two of Germany's best-known and most troubled machine tool makers was engineered by banks, led by Deutsche Bank, which have a controlling stake in Maho. Mr Rolf Breuer, a senior Deutsche Bank director, was recently appointed chairman of the Maho supervisory board. The new company will be majority-owned by Walter Eder, an engineering group which controls Deckel. ..TX.- Prime aim of the deal is to construct a group with the necessary critical mass and a strong home base from which it can hope to fight off the Japanese, Germany's main international competitors. Deckel and Maho have between them up to 40 per cent of the German market in boring and milling machines. ..TX.- The deal indirectly involves Gildemeister, a leading operator in the sector, which last January founded a joint distribution company with Deckel. ..CO.- Companies: Friedrich Deckel. Maho. Deckel Maho. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P3541 Machine Tools, Metal Cutting Types. P3542 Machine Tools, Metal Forming Types. ..TP.- Types: COMP Mergers & acquisitions. CMMT Comment & Analysis. ..IX.- P3541, P3542. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGNB5AESFT ..HL.- 930714FT 930714 International Company News: GMF offers Fnac stake options (436) ..BL.- By JOHN RIDDING ..DL.- PARIS ..TX.- THE future of Fnac became clearer yesterday when GMF, the French insurance company said Credit Lyonnais, the French bank, and Compagnie Generale des Eaux, the water and energy group, would be granted an option to buy a controlling stake in the French retailer. ..TX.- Credit Lyonnais and Compagnie Generale des Eaux have the option, until October 11, to acquire 54.78 per cent of the shares in Fnac at FFr2,928 per share. ..TX.- This values Fnac at FFr2.4bn (Dollars 444m). ..TX.- Fnac's shares, which have climbed sharply from a level of about FFr2,200 two weeks ago, were suspended yesterday at FFr3,208. ..TX.- Analysts in Paris said that the deal was a financial transaction to provide capital for GMF, a mutual insurance company, and to maintain French ownership of Fnac. They said that the October deadline gave GMF the opportunity to find alternative sources of capital and maintain control of the group. ..TX.- GMF has been seeking fresh capital as a result of losses in a property venture in the Dutch Antilles and in its travel insurance business. ..TX.- Pressure on GMF to sell part or all of its 80 per cent stake in Fnac has prompted interest from several European retailing groups, including Berthelsmann of Germany and Printemps of France. ..TX.- 'Fnac is a attractive asset,' said Mr Anthony West, retail analyst at Enskilda Research in Paris. ..TX.- 'It has had a chequered history in terms of ownership, but has a strong position in urban retailing and is a dominant force in the French records and books market.' ..TX.- Fnac reported sales of about FFr6.96bn in the first three-quarters of its financial year, an increase of 7.9 per cent over the corresponding period last year. ..TX.- Net profits for the year to the end of August are expected to increase by about 11 per cent to FFr92m. ..TX.- Credit Lyonnais has acquired the option to buy the majority of the 54.8 per cent of the shares through Altus, a financial subsidiary. Compagnie Generale des Eaux is taking the option to buy the shares through Immobiliere Phoenix, a property subsidiary. ..TX.- French takeover law states that if the two companies take up their options to buy the controlling stake in Fnac, they must extend the offer to minority shareholders in the company. ..CO.- Companies: Fnac. Credit Lyonnais. Compagnie General des Eaux. Garantie Mutuelles des Fonctionnaires et Employes d'Etat des Services Publiques. ..CN.- Countries: FR France, EC. ..IN.- Industry: P5311 Department Stores. P6351 Surety Insurance. P6081 Foreign Banking and Branches and Agencies. P4941 Water Supply. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P5311, P6351, P6081, P4941. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGNB5AERFT ..HL.- 930714FT 930714 International Company News: Roche buoyed by continued sales growth (235) ..BL.- By PAUL ABRAHAMS ..TX.- ROCHE, the Swiss healthcare and chemicals group, yesterday reported sales for the first six months up 8 per cent to SFr7.15bn (Dollars 5.1bn) from SFr6.62bn. In local currencies the increase was 10 per cent. The company does not publish half-year profit figures. ..TX.- The company said it expected sales to continue to improve during the second half of the year and that barring unforeseen circumstances, particularly in foreign exchange rates, the group should post a significant increase on last year's net income of SFr1.9bn. ..TX.- Much of the first-half growth was generated by the pharmaceuticals division which reported sales up 12 per cent to SFr1.59bn from SFr1.56bn. Excluding exchange rates, the increase was 14 per cent. ..TX.- The company said the German healthcare reforms introduced in January - which have led to a 13 per cent fall in the market for the first four months - had little impact. Turnover in Italy during the first half improved in spite of the fall in the market following reforms introduced in April. Roche said it expected sales in both Italy and Germany to increase this year. ..TX.- The vitamins and fine chemicals unit lifted sales 2 per cent to SFr1.59bn from SFr1.56bn. ..TX.- Lex, Page 18 ..CO.- Companies: Roche Holding. ..CN.- Countries: CH Switzerland, West Europe. ..IN.- Industry: P2834 Pharmaceutical Preparations. ..TP.- Types: MKTS Sales. ..IX.- P2834. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGNB5AEQFT ..HL.- 930714FT 930714 International Company News: Dutch bank finds a second home - ABN Amro's dollars 500m acquisition of Cragin Federal, a Chicago-based savings bank, will make it Illinois' second-largest retail bank. Roland van de Krol reports from Amsterdam on ABN's 14-year-pold strategy (934) ..BL.- By ROLAND VAN DE KROL ..DL.- AMSTERDAM ..TX.- A similarity between the Netherlands and the US Midwest is the flatness of the terrain. Another, less visible link, is the prominent role played by ABN Amro, the Netherlands' largest bank, in the state of Illinois and its capital, Chicago. ..TX.- Last week, the bank announced that it would be putting the finishing touches to a 14-year-old strategy of carving out a second home market in this important region of the Midwest. ..TX.- ABN Amro's planned Dollars 500m acquisition of Cragin Federal, a savings bank with roots in Chicago's wealthy north-western suburbs, marks its biggest foreign acquisition in value terms. ..TX.- The move lifts its local offices by 27 to 90 and raises its savings and deposits in Illinois to Dollars 2bn, making ABN Amro the state's second-largest retail bank after home-grown First Chicago. ..TX.- The acquisition, due to take place early next year, is the latest in a Dollars 1.6bn series of purchases in Illinois since 1979. Earlier acquisitions have included LaSalle National, Lane Financial, Exchange Bancorp and Talman Home Federal. ..TX.- Besides this local operation, the Dutch group maintains 10 ABN Amro offices in the US and Canada from which it serves top corporate customers. It owns European American Bank on New York's Long Island. ..TX.- Mr Jan Kalff, the board member responsible for ABN Amro's push into Illinois for the past nine years, says he has no designs on further acquisitions in Illinois. 'We'll leave it at this for the time being,' he says. 'We are not looking any further in the Chicago area.' ..TX.- He acknowledges that ABN Amro has said this before, most recently after the Talman acquisition in 1992. The fact that the Dutch bank has returned once again to the familiar territory of Chicago testifies to the region's economic resilience, the fragmentation of its banking market and the prospect of achieving savings on operating costs at Cragin. ..TX.- ABN Amro plans to farm out Cragin's administrative operations to a service centre run by its LaSalle group of banks near Chicago's O'Hare airport. ..TX.- This, plus a cut in staff at headquarters, should help ABN Amro realise the 30 per cent reduction in costs that is regarded as a rule of thumb in US banking acquisitions. 'If that happens at Cragin, and we'll have to wait and see, that would mean savings of Dollars 12m to Dollars 15m,' Mr Kalff says. ..TX.- Another lure for ABN Amro was the strength of the economy in and around Chicago. The region has escaped the deep recession that has scarred the north-east and California, exhibiting steady growth rather than a boom-and-bust cycle. ..TX.- ABN Amro's decision in 1979 to focus on Chicago was due in part to the fiercer competition among foreign banks in New York and California, and also in part to admiration for the Midwest's economy. Looking back on the LaSalle acquisition, Mr Kalff notes, 'In retrospect, it was a fortunate move, not only because the bank itself was attractive but the entire region is very attractive.' ..TX.- Financing for Cragin is easy to arrange as ABN Amro will be paying one-third to one-half of the Dollars 500m acquisition price in dollar-denominated preferred stock issued by LaSalle, just as it did for Lane, Exchange and Talman. Dividends on these instruments are low as they are linked to US interest rates, and the dollar funding means that the parent bank does not run any currency risk. ..TX.- A final reason to return to Chicago was the sense that regional banks such as Banc One and National Bank of Detroit will be stepping up their involvement in Illinois, whose splintered banking market numbers more than 1,000 banks. ..TX.- Most of the rest are small, but Cragin represented the second-largest independent savings bank after the leader, St Paul. 'I wanted to be ahead of the others,' Mr Kalff says. ..TX.- ABN Amro's concerted expansion since the late 1970s has left it with a significant critical mass in the local market, creating important economies of scale. This is a situation which the bank would find difficult, if not impossible, to replicate in EAB's home market on Long Island, which is dominated by five or six of New York's biggest banks. ..TX.- Similarly, Europe poses very different challenges. ABN Amro, which has a network of offices in each of the European Community states, is searching for local acquisitions in France, Belgium and Germany, but the power of domestic banks and the prices commanded by acquisition targets are barriers to success. ..TX.- One solution may be to take a regional approach in a country such as Germany. 'It could well be that you buy something in North Rhine-Westphalia or in the north around Hamburg or in the south, where we'd at least be able to create a strong local base without necessarily covering all of Germany from the very start,' Mr Kalff says. ..TX.- Still, any acquisition in a European state is bound to take longer to pay off financially than the most recent one in the state of Illinois. 'In Europe and elsewhere in the world, it is extremely difficult to buy something which immediately contributes to results in the first year,' he says. ..CO.- Companies: ABN Amro Holdings. Cragin Federal Savings. ..CN.- Countries: NL Netherlands, EC. US United States of America. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: CMMT Comment & Analysis. COMP Mergers & acquisitions. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGNB5AEPFT ..HL.- 930714FT 930714 UK Company News: Putting all the potatoes into one frying basket - Bensons Crisps' plan to centralise its production (871) ..BL.- By CATHERINE MILTON ..TX.- MR SIDNEY Benson was not the kind of man to let the second world war deprive the people of Wigan of their crisps. ..TX.- When Smiths, virtually the only UK volume crisp maker in the 1940s, slashed production because of a wartime shortage of vegetable oil, the fish and chip shop proprietor used lard to make his own, and Bensons crisps were born. ..TX.- Today Bensons Crisps is the fourth-largest quoted savoury snack maker in a UK market, worth about Pounds 1.4bn. The company, however, has recently launched an ambitious investment programme to try to secure its future. ..TX.- It is moving the bulk of its production from three factories and a warehouse in Kirkham, Lancashire, to a purpose built plant nearby to increase output and raise efficiency to match that of its much larger competitors. ..TX.- Bensons believes it will be one of the most efficient snack producers in the country when production begins at the end of this year. ..TX.- The investment will total about Pounds 9.7m, funded by a Pounds 5.3m rights issue topped up by lease finance. ..TX.- The plant will help Bensons, which ceased to be a family-owned business in the late 1970s, to overcome its main problem - lack of size. ..TX.- It claims a 5 per cent market share compared with the top three crisp makers, which are all multinationals. ..TX.- Pepsico and United Biscuits are vying for market leadership, and both claim more than 40 per cent. Dalgety comes a clear third with 13 per cent. ..TX.- Without the efficiency gains from volume production available to its larger rivals, the company's capacity to remain competitive is questionable. With operations split between two factories and a warehouse site in Kirkham and one factory in Newport, Gwent, the question marks over its future had multiplied. ..TX.- Then also, in the late-1980s, the market began changing rapidly and Bensons did not. Consumers moved away from the company's tradi-tional sales ground of independent retailers selling single packets of crisps and began choosing instead lower margin multipacks sold through supermarkets. The big multiples now account for almost 50 per cent of retail sales. ..TX.- In 1992 pre-tax profit margins were 1.5 per cent, against 6.9 per cent in 1989. Pre-tax profits dropped to Pounds 500,000 from Pounds 1m in 1991 while turnover advanced more than a quarter to Pounds 33.2m. ..TX.- Over the past five years Bensons has seen a number of independent operators absorbed by larger competitors. Mr Malcolm Jones, managing director, considered but then abandoned the idea of selling up. ..TX.- He says: 'We knew we would have to do something, and we really had two options: sell up, or invest in a greenfield site. We chose to invest. It is the option that is four times harder, but we think it could be more than four times as rewarding for shareholders and employees.' ..TX.- Bensons has spent more than Pounds 5m in the past six years on re-equipping, and will transfer much of that machinery to the new plant. ..TX.- The total investment, however, is less than three quarters the sum that the Snack Factory, a privately-owned company 40 miles away, has spent on a greenfield plant in Skelmersdale, which it claims is Europe's most efficient snack producer. ..TX.- Bensons' new 9.8 acre site will allow for improved materials flow and greater capacity. It will replace, for example, an existing 700kg per hour fryer with one that can handle 2,000kg per hour. The fryer will feed automated packaging systems which can respond flexibly to the order flow. ..TX.- Bensons hopes the greater efficiency will allow it to make cost savings of between 10 and 13 per cent, or roughly Pounds 1m a year. The new facility should mean a changed sales mix. ..TX.- It now sells 40 per cent of its turnover to supermarkets, another 10 per cent of sales are made through van rounds, with the remaining 50 per cent to wholesale cash and carry businesses. ..TX.- It is negotiating with the big multiples and says it has had encouraging signals about increasing supplies. ..TX.- When the new plant is in operation Bensons expects 60 per cent of its turnover will go to supermarkets, with 40 per cent sold through the independent sector. ..TX.- It is a bold strategy, which although based on sound assumptions about how technology can improve efficiency, depends crucially on factors which Bensons, like everyone else in the market, cannot control. ..TX.- It will remain vulnerable, though, to aggressive pricing by a small number of large competitors and the significant price pressures exerted by the leading multiples. ..TX.- Bensons argues, however, that its increased competitiveness will mitigate the effect of external pressures. ..TX.- Mr John Hase, savoury snack specialist with PA Consulting Group, said: 'It is a very competitive business and the big players are very serious, particularly Pepsico and United Biscuits, about dominating the market. ..TX.- With competition like that it will not be an easy job to carve out and maintain an adequate and profitable market share.' ..CO.- Companies: Bensons Crisps. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2096 Potato Chips and Similar Snacks. ..TP.- Types: CMMT Comment & Analysis. MKTS Market shares. MKTS Production. ..IX.- P2096. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGNB5AEOFT ..HL.- 930714FT 930714 UK Company News: Triplex looks to power for growth (349) ..BL.- By PAUL CHEESERIGHT, Midlands Correspondent ..TX.- TRIPLEX LLOYD, the industrial engineering group, announced pre-tax profits of Pounds 7.08m for the year to last March, a fractional improvement on last time's Pounds 7.07m. ..TX.- Earnings per share were 9.8p, down from 10.9p as the diluting effects of February's 1-for-4 rights issue came into play. As promised then, the final dividend is 4.5p, maintaining the total at 7p. ..TX.- While engineering turnover declined from Pounds 55.4m to Pounds 47.6m and operating profits fell sharply from Pounds 2.1m to Pounds 763,000, the power division's turnover rose from Pounds 57.3m to Pounds 69.1m and produced operating profits ahead from Pounds 4.41m to Pounds 5.56m. ..TX.- As operating profits of the automotive division were scarcely changed at Pounds 3.73m, on turnover of Pounds 46.8m (Pounds 42.8m) it meant that the power division, where investment has been concentrated, was the single most important factor in holding up profits. ..TX.- 'We see immediate growth opportunities for our power division both organically and by acquisition,' said Mr Colin Cooke, chairman. ..TX.- COMMENT ..TX.- Triplex Lloyd's immediate future is mixed: bright for the power division, not too bad for automotive, although that depends on winning market share, and dull for general engineering and building products. In fact, with so much investment going into power and a large proportion of profits coming from it, the building products business looks more and more uncomfortable in the group. The shares are not a buy for immediate gain, because profits growth from current heavy investment will not show through strongly until 1995-96. Given the mixed prospects, pre-tax profits for this year may not top Pounds 8.5m and earnings could slip back to about 9p. That would put the shares on a prospective p/e of more than 19, high enough for any but the most patient. ..CO.- Companies: Triplex Lloyd. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3493 Steel Springs, Ex Wire. P3316 Cold Finishing of Steel Shapes. P3321 Gray and Ductile Iron Foundries. ..TP.- Types: FIN Annual report. CMMT Comment & Analysis. ..IX.- P3493, P3316, P3321. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGNB5AENFT ..HL.- 930714FT 930714 UK Company News: Birse deficit hits Pounds 18.5m as recession bites (501) ..BL.- By ANDREW TAYLOR, Construction Correspondent ..TX.- BIRSE GROUP, the building and civil engineering company in which Bilfinger & Berger, the German contractor, has a 15 per cent stake, incurred a Pounds 18.5m pre-tax loss during the 12 months to end-April. ..TX.- The deficit compared with a Pounds 12.3m loss the previous year. Turnover fell by 7.9 per cent from Pounds 356.1m to Pounds 328.4m. Losses per share widened from 15.3p to 22.3p. ..TX.- The loss was struck after provisions of Pounds 3.48m against the group's commercial property operations. That was only slightly lower than the Pounds 3.67m provisions made against commercial property in 1991-92. ..TX.- Mr Peter Birse, chairman, said the company had suffered from a severe recession in all its markets. ..TX.- The company has net debt of Pounds 27m, more than twice shareholders' funds of Pounds 12.5m. It recently renegotiated its loan agreements, rescheduling its short term borrowings 'on a committed three year basis to May 1996.' ..TX.- Mr Birse said the agreement with the banks had given the group a firm foundation from which to reduce its borrowings through an orderly sale of its commercial property interests valued at Pounds 35m. ..TX.- Its contracting operations last year incurred a loss of about Pounds 9m compared with a deficit of Pounds 5m the previous year. Commercial property ran up a loss of Pounds 4m after provisions (Pounds 3.1m); plant hire profit fell from Pounds 1.5m to Pounds 1m while house building made a similar loss to the previous year of Pounds 1.5m. ..TX.- Mr Birse said that the construction division had suffered from low margins on contracts and delays in receiving payments on long term projects. He expected this position to improve in the current year. ..TX.- House sales by the company had risen by 25 per cent last year but the division had suffered from weaker house prices. ..TX.- COMMENT ..TX.- The preparedness of banks, led by Midland, to support Birse is good news for its British and German shareholders. The company's survival looks assured provided there are no nasty surprises to upset its recuperation. Birse, however, is unlikely to make a quick return to robust health. Contracting is likely to remain a difficult market while housebuilding - expected to lead the construction recovery - is only a very small part of the company's business. The group also appears under-capitalised for a turnover of more than Pounds 300m. Property sales still have to be concluded to reduce debt. Interest charges, however, should be lower this time next year. The group has left itself sufficient leeway, over the timing of when it takes construction profits, to enable it to return to the black this year. Profits, however, should be not much more than Pounds 1m to Pounds 2m and there are better recovery stocks elsewhere. ..CO.- Companies: Birse Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8711 Engineering Services. P1542 Nonresidential Construction, NEC. ..TP.- Types: FIN Annual report. CMMT Comment & Analysis. ..IX.- P8711, P1542. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGNB5AEMFT ..HL.- 930714FT 930714 UK Company News: Electron House up 58% to Pounds 2.25m (190) ..TX.- Steady growth in all market areas enabled Electron House, the electronic components distributor, to record a 58 per cent increase in profits to Pounds 2.25m pre-tax for the year to end-May. ..TX.- The figure was bolstered by a drop in interest charges to Pounds 1.18m (Pounds 2.47m) reflecting lower borrowings following the disposal of the computer wholesaling business in August 1992. ..TX.- The disposal had the effect of reducing year-end gearing on a pro forma basis from 33 per cent to 23 per cent. ..TX.- Group turnover declined from Pounds 125.4m to Pounds 89m. However, sales from continuing operations showed an improvement of Pounds 15.9m at Pounds 78.4m. ..TX.- Earnings improved to 4.92p (2.62p) per share and a proposed final dividend of 1.55p makes a 2.6p (2.35p) total. ..TX.- Mr Robert Leigh, chairman, said early indications were encouraging with strong sales and order intake in the first weeks of the current year. ..CO.- Companies: Electron House. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5045 Computers, Peripherals and Software. P5065 Electronic Parts and Equipment. ..TP.- Types: FIN Annual report. ..IX.- P5045, P5065. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGNB5AELFT ..HL.- 930714FT 930714 UK Company News: Snack Factory takes ruthless line with deviants (407) ..BL.- By CATHERINE MILTON ..TX.- ONLY 40 miles from Bensons Crisps lies one of its main competitors, which is already exploiting state-of-the art production techniques. The Snack Factory, part of the privately-held Anan Hayle Saeed Group, claims to be the most efficient snack producer in Europe, writes Catherine Milton. ..TX.- 'The management team had all worked in crisps and snacks before, and we strongly believed we could do things more efficiently, given facilities designed with modern technology rather than bolting new machines on to old,' said Mr Geoff Marsden, Snack Factory's managing director. ..TX.- Based in Skelmersdale, Lancashire, the factory flanks the M58 motorway. It cost Pounds 21m and started operating in 1990. It is generating pre-tax profits of about Pounds 2m on annual turnover of Pounds 28m, all from sales to supermarkets. ..TX.- In 11 minutes it can turn muddy potatoes into crisps with computers enforcing tight specifications at every step. ..TX.- Not every crisp makes it through the computer checks and tests. The raw materials themselves may be rejected if tests show that more than 2.5 per cent of a load is mud rather than vegetable. ..TX.- Once in the factory the potatoes are automatically washed in recycled water, cut, and passed through a 'Sizer Halver' to standardise crisp dimensions. Starch is recovered from effluent and sold on to other users. ..TX.- The larger of two cookers can handle 2,500kg of potatoes an hour, responding to temperature and load requirements which change between customer preference and season. ..TX.- A US-made computer-controlled high speed video optical sorter scrutinises every crisp, 'recognises' deviants and then 'orders' them blown off the production line. ..TX.- Moisture and oil content are continually monitored by scanners to prevent soggy-crisp syndrome. Even flavour is checked automatically by a machine which gives instant salt readings to indicate flavour levels. ..TX.- The crisps are conveyed around the factory on a specially gentle vibrating auto-feed system to prevent fractures. ..TX.- Surviving crisps are fed into Japanese-made Ishida weighing machines, which drop the proper weight of crisps into tubes of plastic packaging. These are then sealed and severed to form the packets of crisps. ..TX.- Mr Marsden said: 'Starting from scratch you have the opportunity to develop your own culture because you are not bringing working practices from other organisations.' ..CO.- Companies: Snack Factory. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2096 Potato Chips and Similar Snacks. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P2096. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGNB5AEKFT ..HL.- 930714FT 930714 UK Company News: Maiden profit at ML Labs (260) ..BL.- By JOAN GRAY ..TX.- ML LABORATORIES, the USM-quoted research and development company which has the dialysis drug Icodextrin as its main product, turned in pre-tax profits of Pounds 65,000 for the six months to March 31. ..TX.- The outcome, the company's first profit since its shares were placed at 70p on the Third Market in 1987, compared with a deficit of Pounds 447,000. ..TX.- Turnover was up at Pounds 467,000 (Pounds 312,000) and earnings per share came out at 0.1p against losses of 1.8p. ..TX.- At the year-end the company had Pounds 14.8m on deposit. ..TX.- Following the announcement that it had won a marketing licence for Icodextrin in January, the shares - which moved to the USM in December 1990 - jumped to their present level of about Pounds 11, giving a market capitalisation of more than Pounds 300m. ..TX.- Icodextrin is a drug which can be used in chemical dialysis so that kidney patients do not have to rely on hospital visits to use kidney machines but can change bags of fluid in their own abdomen themselves, at home or at work. ..TX.- The estimated market for Icodextrin - which makes it possible for patients to go for longer in between fluid changes and has fewer side effects than other drugs - is, according to Mr Stuart Sim, finance director, 'conservatively estimated at Pounds 487m a year.' ..CO.- Companies: ML Laboratories. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8731 Commercial Physical Research. P2834 Pharmaceutical Preparations. ..TP.- Types: FIN Interim results. ..IX.- P8731, P2834. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGNB5AEJFT ..HL.- 930714FT 930714 UK Company News: Jacques Vert back in black (349) ..BL.- By PETER PEARSE ..TX.- JACQUES VERT turned losses of Pounds 4.65m into pre-tax profits of Pounds 1.03m in the year to April 24, as the women's fashion wear group reverted to its core activities. ..TX.- Mr Malcolm Heald, finance director, said that margins had 'crept up on continuing operations', but that the turnround was due to elimination of loss-makers. ..TX.- The board took the decision to restructure at the end of the last financial year: since then Alain Cannelle has been closed, the 51 per cent stake in L'Anglaise sold and JV's part of the Ben de Lisi joint venture sold to Mr de Lisi. ..TX.- Mr Heald said that the group was now able to trade profitably even if the economic climate did not improve, but it might have to look for more cuts if there was a third dip to the recession. ..TX.- Cash flow and retained profit allowed borrowings to be reduced to Pounds 3.11m (Pounds 6.11m) at the period-end. Gearing fell from 79 to 37 per cent. Turnover emerged at Pounds 39.3m (Pounds 40.9m restated) and operating profits were Pounds 1.7m (losses Pounds 1.32m). Interest payable was down at Pounds 499,000 (Pounds 866,000). ..TX.- Some 85 per cent of the group's output goes to wholesale with the balance being sold through JV's own retail outlets. At the end of April, it had 23 stand-alone stores, three down on last time, and having added 41 over the year, there were 46 concessions within other stores. ..TX.- Mr Heald said that as a result of the mark-down policy, JV was now 'very clean' on stock - it was down at Pounds 4.6m (Pounds 5m), the lowest since April 1989. ..TX.- Earnings were 8.8p per share, against losses of 40.66p last time. A final dividend of 2p is proposed for a total of 3p, against the 2p interim last time when the final was passed. ..CO.- Companies: Jacques Vert. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5621 Women's Clothing Stores. P2339 Women's and Misses' Outerwear, NEC. ..TP.- Types: FIN Annual report. ..IX.- P5621, P2339. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGNB5AEIFT ..HL.- 930714FT 930714 UK Company News: Cray Electronics pushes up profits to Pounds 29m - Objectives achieved as acquisition of Dowty IT business gives the group international status (542) ..BL.- By PAUL TAYLOR ..TX.- CRAY Electronics Holdings, the Berkshire-based data communications and software systems group which acquired the Dowty information technology division from TI for Pounds 50m in August last year, yesterday reported sharply higher profits for the year ended April 30 1993. ..TX.- Swollen by the Dowty acquisition, profits on disposals and foreign exchange as well as margin improvements and organic growth, pre-tax profits jumped from Pounds 2.35m to Pounds 29m. ..TX.- Earnings per share were 13.8p (1.9p) and the recommended final dividend is increased to 1p (0.5p) making a total of 1.5p (0.5p). ..TX.- As expected the results will trigger the final tranche of a three-part share-option based incentive bonus package, worth in total about Pounds 27m. ..TX.- The package will be shared by former chairman Sir Peter Michael, his successor Mr Roger Holland, Mr Jeff Harrison, finance director, and Mr Jon Richards, managing director, each of whom invested Pounds 750,000 in the stock at 50p a share when they took over in 1989. ..TX.- Mr Holland, who succeeded Sir Peter last month, said: 'Our objectives of improving profit margins, increasing exports and consolidation in the growth sectors of information technology have been achieved.' ..TX.- Turnover increased to Pounds 200.8m (Pounds 84.8m) including a 40 per cent increase in turnover from continuing operations to Pounds 90.4m (Pounds 64.6m) and Pounds 97m attributable to Dowty. ..TX.- Continuing operations generated Pounds 11m (Pounds 3.22m) of operating profits in addition to the Pounds 7.2m of profits attributable to the acquisition and Pounds 322,000 (Pounds 2.14m) from discontinued operations. ..TX.- After paying Pounds 871,000 (Pounds 2.61m) in interest charges the company reported 'normal trading profits' of Pounds 17.6m, slightly higher than most forecasts. An additional Pounds 3.43m in realised foreign exchange profits made total profits on ordinary activities of Pounds 21m (Pounds 2.74m). ..TX.- Pre-tax profits were further boosted by exceptional profits on disposals which with a Pounds 12.6m gain on the sale of Malvern Instruments partly offset by a Pounds 4.55m loss on other items. ..TX.- At the divisional level, Cray Communications, which now incorporates most of the Dowty business, emerged as the largest and most profitable division within the company with profits of Pounds 12.7m on turnover of Pounds 127m representing almost 70 per cent of the total. The Dowty data communications companies accounted for Pounds 7.2m of the profits and Pounds 97m of the divisional turnover. ..TX.- COMMENT ..TX.- The acquisition of the Dowty IT business has transformed Cray Electronics into an international force in the fast growing market for data communications equipment. The business has been quickly integrated but there is still room to push up margins in the combined communications division. The balance sheet is solid with Pounds 12m in net cash at the year end and pre-tax profits should reach Pounds 25.5m this year producing earnings of 8.7p per share. The shares slipped 6 1/2 p yesterday to close at 156p and therefore trade on a lofty prospective p/e of 17.9. ..CO.- Companies: Cray Electronics Holdings. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7372 Prepackaged Software. P3672 Printed Circuit Boards. ..TP.- Types: FIN Annual report. CMMT Comment & Analysis. ..IX.- P7372, P3672. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGNB5AEHFT ..HL.- 930714FT 930714 UK Company News: Pressure builds on Spring Ram chief (267) ..BL.- By ANDREW BOLGER ..TX.- PRESSURE IS mounting on Mr Bill Rooney, chairman and chief executive of Spring Ram, the bathrooms and kitchens group which has seen its share price plunge after three profits warnings within eight months. ..TX.- Institutions led by the Prudential Corporation, Spring Ram's biggest shareholder, are now believed to have the support of 35 per cent of the shareholders for their demand that Mr Rooney resign from the company which he co-founded. ..TX.- Mr Rooney will be under intense pressure to stand down at a board meeting of Spring Ram today. He has said he would be prepared to give up the role of chairman or chief executive, but not both positions. ..TX.- Company sources have suggested that other executive directors would not be prepared to work with an imposed chairman. ..TX.- However, institutional investors believe that they would fall in line with the wishes of shareholders, in spite of their loyalty to Mr Rooney. ..TX.- A key role is likely to be played at today's meeting by Mr Roy Barber, Spring Ram's only non-executive director. A specialist in reviving financially troubled companies, Mr Barber was appointed in April following the first bout of pressure from the Prudential. ..TX.- Mr Rooney and his family trusts own 16 per cent of the group's shares. Other large stakeholders are Baillie Gifford with 6.8 per cent and Schroders with 3.5 per cent. ..CO.- Companies: Spring Ram Corp. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3432 Plumbing Fixture Fittings and Trim. P3261 Vitreous Plumbing Fixtures. ..TP.- Types: PEOP People. ..IX.- P3432, P3261. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGNB5AEGFT ..HL.- 930714FT 930714 UK Company News: Farepak (106) ..TX.- Farepak, the USM-quoted mail order distributor and food processor, intends to seek an introduction to the main market. ..TX.- To comply with the Stock Exchange's principal outstanding requirement for listing - that a minimum of 25 per cent of the company's shares be in public hands - family interests of Mr Bob Johnson, chairman, will place 2.05m shares with institutional investors via Hoare Govett Securities. ..TX.- The shares rose 10p to 300p yesterday. ..CO.- Companies: Farepak. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5961 Catalog and Mail-Order Houses. P2011 Meat Packing Plants. ..TP.- Types: FIN Share issues. ..IX.- P5961, P2011. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGNB5AEFFT ..HL.- 930714FT 930714 UK Company News: Faber and Faber (82) ..TX.- Profits of Faber and Faber, the independent publisher, rose from Pounds 267,000 to Pounds 930,000 pre-tax for the year to end-March. ..TX.- The growth was achieved despite first half trading conditions which many in the book trade saw as the worst in living memory. The second half showed a marked improvement. ..CO.- Companies: Faber and Faber. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2731 Book Publishing. ..TP.- Types: FIN Annual report. ..IX.- P2731. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGNB5AEEFT ..HL.- 930714FT 930714 International Company News: Heiton (105) ..TX.- Heiton Holdings, the Dublin-based steel stockholder, builders' merchant and retailing group, reported a 21 per cent increase in pre-tax profits, from IPounds 1.48m to IPounds 1.75m (Pounds 1.65m), in the year to April 30. ..TX.- The outcome was achieved on turnover up from IPounds 59.6m to IPounds 61.7m and included 16 months trading for Hollington Company (Atlantic Homecare). ..TX.- A final dividend of 1.35p is proposed, maintaining the total at 2p. ..CO.- Companies: Heiton Holdings. ..CN.- Countries: IE Ireland, EC. ..IN.- Industry: P5051 Metals Service Centers and Offices. P5039 Construction Materials, NEC. ..TP.- Types: FIN Annual report. ..IX.- P5051, P5039. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGNB5AEDFT ..HL.- 930714FT 930714 UK Company News: Colorvision advances to Pounds 1.78m (151) ..TX.- COLORVISION, the retailer of televisions, video recorders and camcorders, lifted pre-tax profits to Pounds 1.78m for the year ended March 31. ..TX.- That compared with Pounds 84,000 for the previous 12 months which was struck after an exceptional charge of Pounds 808,000. ..TX.- Turnover rose from Pounds 59.3m to Pounds 64.6m. ..TX.- Having changed the year-end date the accounts showed turnover of Pounds 88.5m and profits of Pounds 2.03m for the 18 month period ended March 31 1992. ..TX.- In line with the forecast made in January, directors are recommending a final distribution of 3.1p (2.5p) to make a 5.6p total. ..TX.- The total was unchanged compared with the previous 12 months but was against 8.1p for the 18 month period. ..CO.- Companies: Colorvision. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5731 Radio, Television, and Electronic Stores. ..TP.- Types: FIN Annual report. ..IX.- P5731. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGNB5AECFT ..HL.- 930714FT 930714 UK Company News: Disappointing start for Court Cavendish (119) ..BL.- By CATHERINE MILTON ..TX.- Shares in Court Cavendish, the UK nursing home operator, ended the first day of trading at 207p compared with an issue price of 225p. ..TX.- The company's flotation is the first in a recent spate of nursing home listings to disappoint the market. The offer was more than twice oversubscribed and applications were scaled down. ..TX.- One analyst said last week's announcement of a Pounds 33.3m placing and open offer by rival operator CrestaCare had weakened demand for the stock. ..CO.- Companies: Court Cavendish Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8059 Nursing and Personal Care, NEC. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P8059. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGNB5AEBFT ..HL.- 930714FT 930714 UK Company News: Takeover Panel chief expresses fears over European Directive (318) ..BL.- By MAGGIE URRY ..TX.- SIR DAVID CALCUTT, chairman of the Takeover Panel, fears that the European Takeover Directive could mean the UK losing the advantages of a flexible and speedy response during takeovers and lead to tactical litigation during bids. ..TX.- Sir David used his chairman's statement in the Panel's annual report to attack the directive, which requires a statutory body to regulate takeovers and mergers. The directive has been under discussion since 1987. ..TX.- The Panel is a non-statutory body. It claims to 'avoid over-rigid rules' and 'the risk of takeovers becoming delayed by litigation of a tactical nature, which may frustrate the ability of shareholders to decide the outcome of an offer'. ..TX.- If the directive came into effect, said Sir David, 'the tried and tested attributes of the Panel - the facility of advance consultation, flexibility of approach, speed of response and a decision on which practitioners can rely - may be lost or rendered less potent'. ..TX.- The annual report showed a sharp drop in the Panel's income, from Pounds 6.38m to Pounds 4.73m, largely because of a fall in contract note levy income from Pounds 4.1m to Pounds 3.29m and a drop in document fees from Pounds 2.26m to Pounds 1.4m. ..TX.- Even so income exceeded expenditure, which fell by Pounds 60,000 to Pounds 4m, and with interest receivable of Pounds 85,000 (Pounds 63,000) the Panel's surplus after tax was Pounds 748,000, down from Pounds 2.32m. At the year end the Panel had cash of Pounds 1.68m (Pounds 889,000). ..TX.- Mrs Frances Heaton, the director general, said the Panel 'has decided not to make any changes to the basis or level of its charges'. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. P9651 Regulation of Miscellaneous Commercial Sectors. ..TP.- Types: COMP Mergers & acquisitions. FIN Annual report. ..IX.- P6231, P9651. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGNB5AEAFT ..HL.- 930714FT 930714 UK Company News: Low demand pushes Wyko into the red (233) ..BL.- By PAUL CHEESERIGHT, Midlands Correspondent ..TX.- WYKO, the distributor and manufacturer of bearings and power transmission components, ended what it called 'the most unrewarding and difficult year in the group's history' with a pre-tax loss of Pounds 20,000. ..TX.- That compared with profits of Pounds 1.38m for the previous year to April 30. Losses per share were 0.5p, against earnings of 2.37p; a final dividend of 0.5p brings the total to 1p (2.8p). ..TX.- Wyko's downturn in fortunes has come late in the business cycle. It is now in the middle of a retrenchment programme of a type which has become familiar in Midlands industry. Last year the payroll was cut from 1,060 to 962; there will be a further fall this year. ..TX.- Both the distribution and manufacturing divisions contended with low demand, severe pressure on margins and an erratic pattern of trade which made - and still makes - business planning difficult. ..TX.- Turnover was slightly higher at Pounds 57.4m, against Pounds 55.5m, reflecting a full contribution from EW Bearings, the distribution business, but disguising the disappearance of Pounds 5.13m of business on the disposal of Wyko Power Plant Gears in April 1992. ..CO.- Companies: Wyko Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3562 Ball and Roller Bearings. P3568 Power Transmission Equipment, NEC. ..TP.- Types: FIN Annual report. ..IX.- P3562, P3568. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGNB5AD9FT ..HL.- 930714FT 930714 UK Company News: Increased investment helps Savills to Pounds 1.4m (245) ..BL.- By CATHERINE MILTON ..TX.- AN INCREASE of one third in property investment by institutions and cost-cutting helped Savills, the surveyor and estate agent, return pre-tax profits of Pounds 1.44m for the 12 months to April 30, against losses of Pounds 2.86m last time. ..TX.- A final dividend of 1p is proposed; directors omitted the interim having made no payment in the year to April 1992. ..TX.- Earnings per share were 2.2p compared with losses of 6.5p. ..TX.- Group turnover rose to Pounds 25.3m (Pounds 23.7m). Mr George Inge, chairman, said: 'Generally, the mood is improved on a year ago although economic uncertainty continues to dampen market confidence.' ..TX.- The commercial consultancy division, which includes investing for institutions, improved turnover to Pounds 10.7m (Pounds 9.68m) reporting operating profits of Pounds 819,000 (Pounds 1.25m losses). ..TX.- Mr Inge said: 'Our investment activity was up by about a third. Consultancy work on behalf of banks and other lending institutions continued to prosper during the year.' ..TX.- Turnover from the agricultural and residential business was virtually flat at Pounds 14.5m (Pounds 14m) with operating profits of Pounds 458,000 against losses of Pounds 1.66m. ..TX.- Net interest received was Pounds 162,000 (Pounds 48,000). The group finished the year with Pounds 5m (Pounds 1.95m) cash and no borrowings. ..CO.- Companies: Savills. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6531 Real Estate Agents and Managers. P8713 Surveying Services. ..TP.- Types: FIN Annual report. ..IX.- P6531, P8713. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGNB5AD8FT ..HL.- 930714FT 930714 International Company News: Bank of Ireland sells stake in Greencore (261) ..BL.- By ROLAND RUDD ..TX.- THE BANK of Ireland, one of the Republic's two leading clearing banks, has sold its stake in Greencore only months after the Irish government had difficulty in placing its holding. ..TX.- Greencore's stockbrokers, Natwest Securities and NCB stockbrokers, sold the bank's 9.6m shares in the sugar, milling and malting group at 300p apiece, making it a IPounds 2.4m (Pounds 2.25m) profit. ..TX.- The bank acquired the shares in May when Davy Stockbrokers had difficulty in placing the government's 30.4 per cent stake in Greencore. ..TX.- It rescued the sale of the government's holding by stepping in and buying the 11.6 per cent holding at 275p a share. Davy is a subsidiary of the bank. ..TX.- Mr Kevin O'Sullivan, Greencore's finance director, said: 'This shows there is no problem with the company or in placing its shares. Any problems in the past must have been with the government or its brokers.' ..TX.- The Irish Stock Exchange responded by launching an investigation into the placing of the government's holding which has been completed but has yet to be published. ..TX.- The bank was originally forced to sell the shares because another of its subsidiaries, the Investment Bank of Ireland, held 15 per cent of Greencore - the maximum allowed under the company's articles of association. ..CO.- Companies: Bank of Ireland. Greencore. ..CN.- Countries: IE Ireland, EC. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. P2061 Raw Cane Sugar. P2062 Cane Sugar Refining. ..TP.- Types: COMP Shareholding. COMP Disposals. ..IX.- P6081, P2061, P2062. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGNB5AD7FT ..HL.- 930714FT 930714 UK Company News: Great Portland to review management agent fees (172) ..BL.- By ANDREW BOLGER ..TX.- GREAT PORTLAND Estates, the UK's sixth largest property group, is to review a long-standing arrangement by which it pays management fees to a company fully owned by Mr Richard Peskin, the group's chairman and chief executive, writes Andrew Bolger. ..TX.- In the year to March, the property company paid fees of Pounds 2.9m to the management agent, Basil & Howard Samuel, which acts solely for Great Portland. ..TX.- Mr Peskin told shareholders at the annual meeting that fees paid were significantly lower than those provided for by their contract and more than Pounds 6m had been saved for shareholders since 1986. ..TX.- In the light of the Cadbury Report the board had decided to review the existing arrangements at its next meeting. ..CO.- Companies: Great Portland Estates. Basil and Howard Samuel. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6552 Subdividers and Developers, Ex Cemeteries. P6531 Real Estate Agents and Managers. ..TP.- Types: FIN Annual report. ..IX.- P6552, P6531. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGNB5AD6FT ..HL.- 930714FT 930714 BA goes on offensive in Virgin row (416) ..BL.- By DANIEL GREEN ..TX.- SIR COLIN MARSHALL, chairman of British Airways, yesterday denied prior knowledge of the 'dirty tricks' his airline played on Virgin Atlantic Airways, which led to an apology and a Pounds 610,000 payment to Virgin in January. ..TX.- He attacked Virgin's continued pursuit of legal action in courts in London and with the European Community in Brussels and renewed his call for arbitration in the long-running dispute between the two carriers. ..TX.- Sir Colin's account of the Virgin affair was the central plank in his first speech to BA's annual meeting as chairman. 'I did not direct, authorise or implement any improper activities or conduct against Virgin or its chairman. I did not know about them at the time they occurred,' he told the 1,000-plus shareholders. ..TX.- He conceded: 'There had been a few unconnected incidents of conduct by a few British Airways' employees so as to give Virgin cause for concern. Some employees did obtain some information which related mainly to the number of passengers travelling on Virgin flights.' ..TX.- Sir Colin said: 'We do not believe that what was done caused significant damage to Virgin or brought significant benefit to BA.' He argued that Virgin's continued claims consisted only of vague accusations. ..TX.- The new chairman admitted that the Virgin affair and a strike last month by some employees had hurt morale, but that this was now being rebuilt. ..TX.- Sir Colin's intense and strident delivery contrasted with the laconic and sometimes brusque style of his predecessor Lord King at previous meetings. ..TX.- Lord King refrained from commenting on the Virgin affair which had hastened his retirement and sat silently in the front row of yesterday's meeting. He received praise from the platform for his contribution to the company then rose to acknowledge loud shareholder applause. ..TX.- Sir Colin's defence of BA came shortly after Mr Brian Basham, its former public relations consultant, arrived for the meeting saying that Sir Colin should resign. ..TX.- 'He must take responsibility for the actions of his staff,' said Mr Basham, who was sacked as a freelance consultant by BA when the Virgin row broke. ..TX.- Virgin last night rejected Sir Colin Marshall's arbitration proposal. 'We agreed to an arbitration on another dispute in 1990. It is yet to go through four years later,' said the airline. ..TX.- Lex, Page 18 ..CO.- Companies: British Airways. Virgin Atlantic Airways. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4512 Air Transportation, Scheduled. ..TP.- Types: FIN Annual report. ..IX.- P4512. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGNB5AD5FT ..HL.- 930714FT 930714 Banks wake up to the big deal in small sums: Rivalry in cross-border payments (919) ..BL.- By JOHN GAPPER ..TX.- In the market for European cross-border payments - as with so many matters involving banks - it never rains but it pours. After years of hardly reacting to moans over the long delays and high charges that accompany such payments, banks are now falling over each other to improve things. ..TX.- The disclosure this week that Visa International is to set up a transfer system using its data network to allow small payments within six days is one element of a competitive ferment. At least two consortia of European banks and several telecommunications groups are working on projects. ..TX.- Given the development of the European single market - and European Commission pressure for greater transparency, lower charges and more reliable service - banks might be expected to compete strongly for such business. There are two reasons why they have not until now. ..TX.- One is that the market is still small. Most of the 200m small cross-border payments each year are made by individuals. Only 10 per cent of UK companies made payments abroad in 1991, and one in 13 received them. ..TX.- Second, banks already have a cross-border payments mechanism. The Swift network, founded in Brussels in 1977, is a closed and secure service used by 3,000 financial institutions in 90 countries. It allows cash and securities transfers in standard formats. ..TX.- But the status quo seems increasingly unattractive for a variety of reasons: ..TX.- Small businesses in Europe are keen to make quick and cheap cash transfers as they trade more across borders. The Swift system was designed for large transfers and does not impose strict conditions in terms of pricing or speed of transfer. This can mean variation and delays. ..TX.- Transfers made through Swift rely on a chain of bank links. The cash is transferred from the originating company's bank through the Swift network to its correspondent bank in the country involved. That bank then registers the payment with the bank of the company receiving it. ..TX.- Small payments can be delayed and cost a lot. An EC study last year found that transfers averaged six days and took up to 30, costing an average of 14 per cent of the sum transferred. ..TX.- Swift was established as the banks' data network. But other networks run by companies such as IBM, General Electric and British Telecom offer access to financial services companies. This means prices are falling for transfers over popular routes in Europe. ..TX.- European banks are increasingly seeking ways to co-operate across borders without buying expensive branch networks from other banks. The offer of cross-border services through the networks of other banks is one means of attracting domestic fee-based business from companies with trade links. ..TX.- The Ibos system, run by Royal Bank of Scotland, Banco Santander, Credit Commercial de France and Banco de Comercio e Industria in Portugal, has been aimed primarily at individuals, but will be relaunched this autumn with new services for small companies. ..TX.- Rather than using a correspondent banking network, Ibos is confined to the member banks in each country. Those banks can make transfers, through British Telecom's Timenet data network, among their accounts across borders and can be cleared within seven seconds. ..TX.- Royal Bank charges Pounds 6 for a Pounds 3,000 transfer through Ibos, compared with Pounds 15 through Swift. Mr Norman McCluskie, Royal Bank's managing director of operations, says the Ibos banks 'see ourselves in a very dramatic position' because of the potential for attracting new business. ..TX.- The bank believes Ibos will help persuading corporate customers to open accounts. The Ibos system requires access to accounts at the banks that participate. This means that as long as Ibos sticks to allowing one bank per country to take part, it may gain a competitive advantage. ..TX.- However, this also limits the potential business for Ibos. At the moment, Royal Bank and Banco Santander only account for 0.7 per cent of cross-border payments between Britain and Spain. The system carried 5,000 transactions last month, but can carry 40,000 per day. ..TX.- The issue of whether to continue limiting access to Ibos is pressing because other banks are considering establishing their own closed networks. National Westminster Bank, Commerzbank in Germany and Societe Generale in France have said they are working on a possible initiative. ..TX.- The participating banks in Ibos are meeting in Madrid this Friday to consider opening the network to others. They are also mulling over approaches from US banks to participate in the network, possibly on the basis of a single bank operating the service in each state. ..TX.- Swift is also thinking of ways to respond. The network has cut prices on the most-used transfer routes and is considering bulk transfer of small amounts. ..TX.- Mr Eric Chilton, Swift's chairman, thinks it would be wrong to allow other carriers to dominate the retail market while Swift concentrated on high value transfers. He says easier transfer of small sums will attract treasury operations of large companies. ..TX.- 'If we make transfer easier, then a lot of people who hold assets in different countries now might be keen to avoid it and run Treasury operations from the centre,' he says. The implication is that the emergence of competition for small cross-border payments has only just started. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6021 National Commercial Banks. P6081 Foreign Banking and Branches and Agencies. P6029 Commercial Banks, NEC. ..TP.- Types: TECH Services & Services use. CMMT Comment & Analysis. ..IX.- P6021, P6081, P6029. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGNB5AD4FT ..HL.- 930714FT 930714 Companies in this issue (178) ..TX.- ----------------------------------------------- UK ----------------------------------------------- Bass 44 Bensons Crisps 22 Birse 22 British Aerospace 44, 19 British Airways 19 Colorvision 20 Court Cavendish 44, 20 Cray Electronics 20 Eleco 13 Electron House 22 Faber & Faber 20 Farepak 20 Great Portland Ests 20 Greencore 20 Heiton 20 Jacques Vert 20 Legal & General 44 Logica 13 ML Laboratories 22 ..TX.- Savills 20 Snack Factory 22 Spring Ram 20 Triplex Lloyd 22 Unilever 44 Virgin Atlantic 19 Wyko 20 ----------------------------------------------- Overseas ----------------------------------------------- ABN Amro 23 Banamex 25 Baxter International 23 CPC Int 24 CSFB 25 Ciga 24 Comalco 25 Credit Lyonnais 23 Deckel 23 Fnac 23 General Electric 24 ..TX.- Generale des Eaux 23 Glaxo 24 Hilton 24 IBM 24 IRI 19 Int Paper 25 Maho 23 Medco 23 Merck 23 Merrill Lynch 24 Mitsui 25 News Corp 25 Nokia 25 PaineWebber 24 Procter & Gamble 25 Reebok 25 Roche 23 TWA 24 Taiwan Aerospace 19 Thomson-CSF 25 ----------------------------------------------- ..CN.- Countries: XA World. ..IN.- Industry: P99 Nonclassifiable Establishments. ..TP.- Types: COMP Company News. ..IX.- P99. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGNB5AD3FT ..HL.- 930714FT 930714 Takeovers sink to a 25-year low (378) ..BL.- By MAGGIE URRY ..TX.- MERGER activity last year fell to its lowest level in the Takeover Panel's 25-year history. ..TX.- The panel's annual report, published yesterday, said that in the year to March 31 there were 88 takeover or merger proposals, down from 142 the previous year. ..TX.- The highest number in one year was 436 in 1971-72. The annual average is 225. The fall in the number of takeovers had enabled staff cuts to be made, said Mrs Frances Heaton, the panel's director-general. ..TX.- The panel regulates takeovers of publicly owned companies through the application of the Takeover Code. It is also consulted on cases which do not lead to published offers. The number of such cases rose from 116 in 1991-92 to 141 in 1992-93, suggesting that companies were more likely to back away from proposed deals. ..TX.- Several financial restructurings of troubled companies have been carried out, leading to the panel adjudicating on a larger number of 'whitewashes' - where shareholders taking more than 30 per cent of a company's equity and acting in concert are exempted from making a full bid for the company. ..TX.- These have arisen mainly where groups of banks have agreed to convert a company's debt into equity, and as a result have more than 30 per cent of the company's shares. Mrs Heaton said the panel had tried to treat these conversions 'as pragmatically as possible'. ..TX.- She also referred to the panel's statement last August on 'off the record' comments made during takeover bids by a company or its advisers. This came after TI Group's successful bid for Dowty Group in June. The Panel censured two Dowty advisers, one for giving a profit forecast to analysts which could not be substantiated under the Code. Mrs Heaton said: 'This subject remains of great concern to the panel.' ..TX.- She added that if speculation arose in the stock market or the press during a bid, the panel might require the appropriate company to make a statement either substantiating, or disassociating itself from, the speculation to prevent a false market developing. ..TX.- Lex, Page 18; Details, Page 20 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9651 Regulation of Miscellaneous Commercial Sectors. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P9651. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGNB5AD2FT ..HL.- 930714FT 930714 Italian telecoms merger planned (355) ..BL.- By HAIG SIMONIAN ..DL.- MILAN ..TX.- IRI, Italy's biggest state holding company, yesterday revealed plans to rationalise the telecommunications sector, starting with the merger of Sip and Italcable by the end of this year. ..TX.- Sip is Italy's main telecoms utility, while Italcable handles intercontinental traffic. Both companies are quoted. ..TX.- The union will be the first step towards grouping Italy's public sector telecoms activities, split between seven main companies, into a single concern. The new organisation, expected to be called Telecom Italia, should be operational by 1995-96. ..TX.- IRI's new management, facing a cash crisis, has identified telecoms, controlled by the Stet holding company, as an obvious privatisation candidate. ..TX.- Stet is issuing a L565bn Eurolira bond, convertible into Sip savings shares, in a further step towards privatisation. The deal could cut Stet's stake in Sip savings shares from 32 to 18 per cent. ..TX.- The government has set IRI a June 30 deadline to prepare rationalisation plans. IRI intends to start by merging the main providers of services, while keeping manufacturing and mobile telecoms apart. ..TX.- Telecom Italia will absorb Telespazio and Sirm, Stet's satellite and maritime communications subsidiaries. Telecom Italia will also comprise Iritel, formerly known as ASST, the unit responsible for domestic trunk communications and short-distance international calls. ..TX.- The future of Stet's equipment manufacturing (Italtel) and network service (Sirti) businesses is less clear. Stet has been looking for foreign investors in Italtel, in which AT&T has a 20 per cent stake. ..TX.- The highly profitable mobile telecoms business, run by Sip, will be hived off into a separate company, in which Telecom Italia will retain a minority stake. Italy's government hopes to float about 20 per cent of the IMI financial services group and 30-35 per cent of the Ina state insurance company this year. ..CO.- Companies: Istituto per la Ricostruzione Industriale. Societe Italiana per l'Esercizio della Satellite Information Services. Italcable. Istituto Mobiliare Italiano. Istituto Nazionale delle Assicurazioni. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P6719 Holding Companies, NEC. P4813 Telephone Communications, Ex Radio. P9611 Administration of General Economic Programs. ..TP.- Types: COMP Mergers & acquisitions. FIN Share issues. ..IX.- P6719, P4813, P9611. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGNB5AD1FT ..HL.- 930714FT 930714 Go-ahead for BAe's Taiwan deal (386) ..BL.- By DENNIS ENGBARTH and DANIEL GREEN ..DL.- TAIPEI, LONDON ..TX.- TAIWAN'S economics ministry and local banks yesterday gave a conditional go-ahead to provide Dollars 460m (Pounds 309m) in low-interest loans for joint venture between British Aerospace and Taiwan Aerospace Corporation (TAC). ..TX.- The proposal to transfer production of BAe's regional jet (RJ) airliners to the Pounds 250m joint venture is fundamental to the restructuring and recovery of BAe's loss-making civil aircraft business. ..TX.- BAe said the main condition made by Taiwan's government - a commitment to the joint development of new aircraft models - was already the subject of talks between the two parties. ..TX.- The loans are needed to finance the production and leasing of the RJ aircraft, to be assembled in Britain and Taiwan. ..TX.- Mr Yang Shih-chien, deputy minister of economic affairs, said the bank group now 'has a grip on the risk factors'. It is 'willing in principle to co-ordinate with government policy' which is strongly in favour of the venture. ..TX.- Mr Yang said the banks agreed in principle to offer TAC a minimum package of Dollars 460m, including Dollars 400m to help finance the launch of the leasing operation for the RJ jet and Dollars 60m in working capital. ..TX.- But the banks want BAe to provide firm commitments on several issues before granting final approval. ..TX.- The 'focal point' was a commitment by BAe to develop jointly with TAC an advanced regional passenger jet (or RJ-X). The ministry and the banking group had agreed that 'development of the RJ-X is an indispensable part of the entire plan', Mr Yang said. ..TX.- He also wanted to know more about possible launch aid from the UK and further details of the arrangements for leasing the aircraft. ..TX.- The bank consortium, led by the state-owned Chiaotung Bank, has questioned the sales and leasing potential of the RJ and the feasibility of the venture's plans to lease the aircraft. ..TX.- TAC, 29 per cent owned by the Taiwan government, and BAe agreed in January to form the 50:50 joint venture to produce a new family of passenger aircraft to cash in on the fast-growing but competitive Asian markets. ..CO.- Companies: British Aerospace. Taiwan Aerospace. ..CN.- Countries: GB United Kingdom, EC. TW Taiwan, Asia. ..IN.- Industry: P3721 Aircraft. ..TP.- Types: COMP Strategic links & Joint venture. ..IX.- P3721. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGNB5AD0FT ..HL.- 930714FT 930714 Water clean-up will add Pounds 54 to bills, warns regulator (508) ..BL.- By DAVID LASCELLES, Resources Editor ..TX.- MR IAN BYATT, the water regulator, yesterday warned the government that it risked large increases in household water bills unless it delayed the timetable for cleaning up the UK's water supply. ..TX.- If all obligations to improve quality were met, the typical household water bill in England and Wales could rise Pounds 54 a year in the five years from 1995, and a further Pounds 23 in the five years after that, Mr Byatt warned. This would amount to an annual rise of 5 per cent in real terms. ..TX.- In a report to ministers, 'Paying for quality: the political perspective', he said Britain's water quality obligations were confronting the industry with enormous costs which would have to be passed on to the consumer. ..TX.- 'I do not believe that customers would want to see their water bills rising at this rate,' he said. 'Domestic customers have already suffered a squeeze in their incomes. Business customers competing in difficult markets may be hard-hit by large increases in water bills and the cost of treating trade effluent.' ..TX.- Mr Byatt singled out European Community regulations for placing 'an unmanageable burden' on customers. The cost of implementing the urban waste water directive had soared from an estimate of Pounds 2bn to Pounds 10bn, he said, and the government should consider going to Brussels to negotiate a five-year extension. He believed the UK was not alone in its concerns about EC standards. ..TX.- Other regulations which could be reviewed include those on drinking water, sewage disposal, run-off of fertilisers, dumping of sludge at sea and the clean-up of bathing beaches. Mr Byatt said it was 'not a matter of going back to the Dark Ages, but of how far and how fast we proceed'. ..TX.- The report was welcomed by consumer groups such as the Ofwat National Customer Council and industry but attacked by environmentalists for seeking to postpone the clean-up. ..TX.- Mr Chris Smith, Labour's environment spokesman, called it misdirected: 'Where pollution cannot be prevented, it should be the polluter, not the water consumer, who pays to remove it.' ..TX.- Mr Tim Yeo, minister at the environment department, said the government would gauge public reaction and try to respond by early autumn. He said the report 'shows there is an inextricable link between higher standards and prices'. ..TX.- The report forms part of a campaign by Mr Byatt to hold down costs in the water industry, and to deal with public concern about water bills. It is addressed to Mr John Gummer, the environment secretary, and Mr John Redwood, the Welsh secretary. ..TX.- The report updates a preliminary paper issued last year by Mr Byatt in which he laid out the cost of cleaning up Britain's water, which has suffered from decades of underinvestment. ..TX.- Water debate floods into government's domain, Page 7 ..TX.- Editorial Comment, Page 17 ..TX.- See Lex ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4941 Water Supply. P4952 Sewerage Systems. ..TP.- Types: TECH Safety & Standards. ..IX.- P4941, P4952. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGNB5ADZFT ..HL.- 930714FT 930714 Private charges by NHS consultants 'a monopoly' (344) ..BL.- By ALAN PIKE, Social Affairs Correspondent ..TX.- THE WAY some National Health Service consultants charge for private practice forms a complex monopoly under the Fair Trading Act, according to the Monopolies and Mergers Commission. ..TX.- The commission says that last year 9,500 NHS consultants set fees at or close to British Medical Association guidelines or the scales of Bupa and PPP, two leading private medical insurers. ..TX.- This finding is given in a letter to doctors setting out the provisional results of an investigation into private medical services. ..TX.- The commission says it thinks the action of consultants in 'following what are in effect tariffs' restricts competition, but emphasises that it has not reached final conclusions 'nor made any judgment as to whether the effects of the conduct are good or bad'. ..TX.- NHS consultants working part-time provide the bulk of medical manpower for private hospitals. The commission began investigating the way they set their fees last September. ..TX.- In its letter, the commission says it has identified a number of respects in which the behaviour of the BMA, Bupa, PPP or consultants might be considered to be against the public interest. ..TX.- These included questions as to whether publication of guidance had led to higher fees and whether it had reduced or eliminated regional variations in charges. The commission sets out possible remedies that might apply if it decides the action is against the public interest. ..TX.- These include prohibiting consultants from following published guidance and banning insurers from reimbursing claims according to tariffs of procedures. The remedies also raise the possibility of opening up private medical services to a wider range of doctors. ..TX.- BMA officials argue that provision of information on fees is a public benefit, and say the commission's inquiry has shown that consultants' fees rose more slowly than most other hospital charges between 1986 and last year. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8062 General Medical and Surgical Hospitals. P6321 Accident and Health Insurance. ..TP.- Types: COSTS Service costs & Service prices. ..IX.- P8062, P6321. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGNB5ADYFT ..HL.- 930714FT 930714 Major backs ending of Sunday trading curbs (437) ..BL.- By NEIL BUCKLEY and RALPH ATKINS ..TX.- MR JOHN MAJOR yesterday backed the ending of restrictions on Sunday trading, amid warnings that the government's planned legislation on shop opening hours could be wrecked unless it provided extra protection for shopworkers. ..TX.- The Downing Street statement that the prime minister would vote for total deregulation came as the Home Office unveiled four options for reforming the widely-flouted Sunday trading laws in England and Wales. ..TX.- MPs will have a free vote in the new session of parliament in the autumn on which option will form the basis of legislation. ..TX.- The four options are: ..TX.- Total deregulation, allowing all shops to open at any time. ..TX.- Partial deregulation, based on proposals from the Shopping Hours Reform Council, allowing smaller shops to open at any time, but larger shops to open only six hours. ..TX.- Limited opening, based on proposals from the Keep Sunday Special Campaign. Most shops would shut but small shops and certain categories of large shop, including DIY and garden centres, could open. ..TX.- Limited opening, based on proposals from Retailers for Shops Act Reform, similar to those of the KSSC but allowing all shops to open on the four Sundays before Christmas. ..TX.- Mr Michael Howard, home secretary, who also favours deregulation, said he was confident parliament would back one of the options. ..TX.- The government annoyed Labour MPs and campaign groups whose proposals formed the basis of the bill by failing to extend protection against being forced to work on Sundays to future as well as existing shopworkers. Mrs Joan Ruddock, Labour's home affairs spokeswoman, said the threat was 'hanging over the government' that MPs might ultimately vote the bill down, even if one of the options received a majority. ..TX.- Mr Michael Schluter, director of KSSC, said the government had broken its promise to give a 'full and fair representation' of each campaign group's proposals by excluding KSSC's demand for full employee protection and double pay for Sunday working. He said his group could not support any reform of the law without worker protection. ..TX.- Baroness Jay, chairman of SHRC, said she hoped the government's stance on employee protection would not 'jeopardise the reform process'. ..TX.- Bill sparks job fears, Page 13 ..TX.- Editorial Comment, Page 17 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P52 Building Materials and Garden Supplies. P53 General Merchandise Stores. P54 Food Stores. P55 Automotive Dealers and Service Stations. P56 Apparel and Accessory Stores. P57 Furniture and Homefurnishings Stores. P58 Eating and Drinking Places. P59 Miscellaneous Retail. ..TP.- Types: NEWS General News. ..IX.- P52, P53, P54, P55, P56, P57, P58, P59. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGNB5ADXFT ..HL.- 930714FT 930714 High-fliers push aside corporate old guard (331) ..BL.- By LUCY KELLAWAY ..TX.- THE TRADITIONAL British boss, famed for being poorly educated, elderly and insular, is being pushed aside by a younger generation of better-qualified managers. ..TX.- A survey of British company boards by Korn/Ferry, the firm of international headhunters, says a 'transformation' is taking place in the education of British managers. ..TX.- The survey, taken from The Times 1,000 companies, shows almost 80 per cent of top executives at companies with a turnover of over Pounds 250m are under 55, and 40 per cent are under 50. ..TX.- Fewer younger managers had been promoted from within, compared with older ones, and almost half had been in their jobs for less than five years. ..TX.- Of younger directors, 27 per cent could speak at least one language in addition to English, compared with only 15 per cent of directors between 50 and 55. Two-thirds of those under 50 had degrees, compared with less than half the older group. Of the top executives of companies with turnover above Pounds 1bn, 13 per cent have a master of business administration qualification, more than twice as many as last year. ..TX.- Mr George Bain, president of London Business School, said: 'People have always said that the British manager lacks quality as he doesn't have the same training as his competitors and is insular. These figures begin to suggest that that is changing.' ..TX.- Mr Michael Brandon, the report's author, said pressure exerted by the recession had helped to promote younger managers, and explosive growth in MBAs and management consultancies had made management more attractive to young people. ..TX.- He argued the change was part of a general move towards a better-educated society and resulted from the expansion in university education since the 1960s. ..TX.- Korn/Ferry Boards of Directors Study UK, Pounds 99. Tel: 071 930-4334. ..TX.- Top roles split, Page 7 Where women excel, Page 14 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8741 Management Services. ..TP.- Types: PEOP People. ..IX.- P8741. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGNB5ADWFT ..HL.- 930714FT 930714 The Lex Column: Takeover Panel (130) ..TX.- Two clouds darken the Takeover Panel's horizon. The panel worries that the proposed EC takeover directive will result in a statutory body superseding its informal role. Such a change would indeed be a shame if it lessened the flexibility of the UK's takeover regime. But the directive's shape is unclear. Besides, it will take some time to wend its way through Brussels' corridors. A more immediate concern is simply the dearth of takeovers, at a 25-year low in 1992. The panel is already shedding staff. It may yet end up having to cut its fees. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9651 Regulation of Miscellaneous Commercial Sectors. ..TP.- Types: COMP Mergers & acquisitions. CMMT Comment & Analysis. ..IX.- P9651. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGNB5ADVFT ..HL.- 930714FT 930714 The Lex Column: British Airways (216) ..TX.- Sir Colin Marshall must have breathed a large sigh of relief yesterday as he successfully anticipated and defused criticisms of BA's management at its annual meeting. Small shareholders were more inclined to discuss the merits of Cornwall, the imperfections of Concorde and the beastliness of transporting furry animals by air than unravelling the mysteries of the Virgin affair. Large institutions have never been much interested in the matter. BA therefore looks as though it has survived the storm. The appointment of more non-executive directors, including the no-nonsense chief executive of Inchcape, Mr Charles Mackay, helps reassure. ..TX.- But there are still unanswered questions. Publicly, Virgin says it is determined to pursue its legal case. That may result in BA directors appearing in court, throwing up more bad publicity. Moreover, Virgin has opened another front by complaining that BA has breached EC anti-trust rules. Shareholders may dismiss these issues as rather tiresome but they are unlikely to go away. The Pounds 22m general provision BA continues to carry against litigation suggests it regards such tussles as a permanent feature of the airline business. ..CO.- Companies: British Airways. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4512 Air Transportation, Scheduled. ..TP.- Types: CMMT Comment & Analysis. FIN Annual report. ..IX.- P4512. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGNB5ADUFT ..HL.- 930714FT 930714 The Lex Column: UK economy (237) ..TX.- Since the government's own statisticians were at pains to stress that May's industrial production figures were distorted by public holidays, not even the enthusiasts for recovery can take them at face value. Still, the trend in manufacturing output confirms the strength of recovery. Even the slowing in pace recently is overshadowed by the overall improvement, and economic growth may approach 2 per cent in 1993. It seems the inflationary impact of devaluation has been effectively muted because the UK economy is running so far behind its potential and deflationary forces are still strong worldwide. ..TX.- What stops the champagne corks popping is anxiety over the current account deficit. If the increase in investment is helping increase exports, the UK may be in for some genuine non-inflationary growth. If it stokes domestic demand, the recovery will not have too far to run. Either way, there is a case for some tax increases in the autumn budget to control the rate of expansion. A simultaneous interest rate cut might also blunt sterling's appreciation on the foreign exchanges. One other nagging worry is the way in which economic statistics seem to be running ahead of companies' expectations. But perhaps the September reporting season will provide more cheer. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: CMMT Comment & Analysis. ECON Industrial production. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGNB5ADTFT ..HL.- 930714FT 930714 The Lex Column: Roche (241) ..TX.- Roche is a rare example of a pharmaceuticals company which has successfully reinvented itself. Having lived through dark days during the decline of Valium, the tranquilliser on which its fortunes rested until the early 1980s, Roche's prodigious investment in research and development is now bearing fruit. The 14 per cent sales increase in pharmaceuticals during the first half stands in contrast to modest expectations elsewhere in the sector. Holding drug sales steady in Germany despite the havoc caused by healthcare reforms is especially impressive. ..TX.- Like other drugs companies, Roche may still be vulnerable to nasty shocks. A successful patent challenge to its diagnostics technology, or disappointment for Genentech's new products, would cloud the earnings outlook. With strong positions in biotechnology, over-the-counter medicines and prescription pharmaceuticals, Roche has spread its risks second time around. ..TX.- Strange, then, that it should remain shy about the fine details of its financial performance. Investors will have to wait until the year end for an indication of first half profits. Still, as long as the company is turning in annual earnings growth of around 20 per cent, even the most principled investor will be inclined to forgive. If the stratospheric growth rate starts to falter, Roche may have to be more forthcoming to retain support. ..CO.- Companies: Roche Holding. ..CN.- Countries: CH Switzerland, West Europe. ..IN.- Industry: P2834 Pharmaceutical Preparations. ..TP.- Types: MKTS Sales. CMMT Comment & Analysis. ..IX.- P2834. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGNB5ADSFT ..HL.- 930714FT 930714 The Lex Column: Mr Byatt's water torture (296) ..TX.- Yesterday's missive from Ofwat on the cost of water quality sheds little light on the direction of next year's regulatory review. True, the 7 per cent real return on capital for water companies assumed in Ofwat's sums would be encouraging if carried through to the review. But Mr Ian Byatt, the regulator, may not be as generous in practice. By recommending that the government postpones the implementation of some water standards, he is trying to pass the problem of rapidly rising water charges back to the politicians. As he also believes that standards are too tight, the assumption in his report of a generous rate of return - and hence larger price rises - suits his purpose well. ..TX.- Whether Mr Byatt can squeeze a decision from government on standards, and thus capital expenditure for water companies, before the review is also open to doubt. Without a political decision, Ofwat might feel obliged to assume tough standards and high capital expenditure in setting price limits for the second half of the decade. That could result in a cautious settlement, broadly favourable for shareholders. The more likely outcome, though, is that price limits will be altered as spending obligations become clear. A stable framework of medium-term regulation looks a distant prospect. ..TX.- Even if the government comes down in favour of less onerous standards and lower capital expenditure, there is no guarantee water companies will be less geared or less likely to make rights issues. That turns on the return on capital which Mr Byatt finally settles on in his review. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4941 Water Supply. P4952 Sewerage Systems. ..TP.- Types: TECH Safety & Standards. CMMT Comment & Analysis. ..IX.- P4941, P4952. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGNB5ADRFT ..HL.- 930714FT 930714 Observer: Out to grass (38) ..TX.- How do you turn an old rake into a lawnmower? ..TX.- Marry him. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P99 Nonclassifiable Establishments. ..TP.- Types: NEWS General News. ..IX.- P99. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGNB5ADQFT ..HL.- 930714FT 930714 Observer: Rothschild's reserve (172) ..TX.- As usual, the annual report of merchant bank NM Rothschild raises about as many questions as it answers. One teaser is why the remuneration of the bank's chairman, Sir Evelyn de Rothschild, should fall from Pounds 852,000 to Pounds 542,000, when disclosed profits rose to a record Pounds 14.5m, well over double the previous year's Pounds 6m? ..TX.- The answer, according to a nervous Rothschild retainer, is that around half of that was not profit in the commonly accepted sense. Rothschild's Guernsey offshoot sold its stake in an investment trust and the gross proceeds - not just the capital gain - were included. Also, for some obscure reason, Sir Evelyn had received an exceptionally large bonus the previous year. ..TX.- Meanwhile, the report explains how the bank complies with the Cadbury recommendations 'to the extent that these are appropriate to a private company'. But of course. ..CO.- Companies: NM Rothschild. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6029 Commercial Banks, NEC. ..TP.- Types: PEOP People. ..IX.- P6029. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGNB5ADPFT ..HL.- 930714FT 930714 Observer: Grilling (104) ..TX.- How times change. Spotted in the Savoy Grill after yesterday's British Airways annual meeting were Sir Tim Bell, Lady Thatcher's favourite spin doctor and BA's new image-maker, BA's ex-chairman Lord King, and Brian Basham, who used to be Lord King's favourite public relations man but is now dishing the dirt on his old client. ..TX.- A couple of years ago they could have been sharing the same table. Yesterday they hardly seemed to be on speaking terms. ..CO.- Companies: British Airways. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4512 Air Transportation, Scheduled. ..TP.- Types: COMP Company News. ..IX.- P4512. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGNB5ADOFT ..HL.- 930714FT 930714 Observer: Changing horse (308) ..TX.- The race to take over the presidency of the European Bank for Reconstruction and Development is turning out to be more complicated than first thought. ..TX.- Leaving aside Observer's suggestion yesterday that the wife of Jacques de Larosiere, governor of the Bank of France, may prefer her jet-setting husband to stay closer to home, it is gradually dawning upon other EC governments that de Larosiere's candidacy may in fact be an elaborate bluff. ..TX.- EC officials in Brussels say France's real aim is to secure the top job at the European Monetary Institute, the precursor of the independent European Central Bank, which under the Maastricht treaty will oversee a single European currency. ..TX.- Thus the de Larosiere candidacy serves a dual purpose: to preserve France's original claim to the EBRD seat which, if denied, would give Paris far greater leverage in determining the EMI appointment. France desperately wants the top job at the EMI because it would signal that the German stranglehold on European monetary policy exerted by the Bundesbank was at last being broken. It would also be a consolation prize in the light of the expected location of the putative European Central Bank in Germany, either in Bonn or Frankfurt. ..TX.- It is all gossip at the moment but it perhaps explains the behaviour at Monday's Ecofin meeting where only the Germans showed much enthusiasm for the candidacy of de Larosiere. The Belgians and Italians, who had been expected to support him, were surprisingly mute. ..TX.- Meanwhile, Lord Lawson is emerging as a wild card candidate for the EBRD post. Britain's ex-chancellor of the exchequer is widely believed to covet the job - but regards it as infra dig to apply. Know the feeling. ..CN.- Countries: LU Luxembourg, EC. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: PEOP People. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGNB5ADNFT ..HL.- 930714FT 930714 Observer: Brave face (118) ..TX.- Tough luck for Manchester that Olympic supremo Juan Antonio Samaranch should arrive in town the morning after the coldest July night since 1946. Even worse that it soon started raining. However, Manchester has learnt how to turn bad news into good in its long campaign to win the games in 2000. It didn't take long for a local worthy to note that since the International Olympic Committee is really interested in seeing new world records, yesterday's weather was ideal for any athlete, other than a sprinter, contemplating a record-breaking run. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7941 Sports Clubs, Managers, and Promoters. ..TP.- Types: NEWS General News. ..IX.- P7941. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGNB5ADMFT ..HL.- 930714FT 930714 Observer: Rival exhaustion (100) ..TX.- First the good news for owners of Trabant cars who live in Budapest. In a bid to get rid of the fume-belching relics of the communist era, the city announced yesterday that it would give free public transport passes for two years to motorists who hand over their two-stroke cars for demolition. ..TX.- The bad news is that Wartburg owners get three years' free travel if they promise to ditch their old bangers. ..CN.- Countries: HU Hungary, East Europe. ..IN.- Industry: P3711 Motor Vehicles and Car Bodies. ..TP.- Types: NEWS General News. ..IX.- P3711. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGNB5ADLFT ..HL.- 930714FT 930714 Observer: Food for thought (199) ..TX.- Wise old birds attending agms have all sorts of tips on what to look for apart from a copy of the chairman's speech. Did the great man smile, was his finance director wearing a colourful tie, or, heaven forbid, a beard? Little things count when checking a company's health. ..TX.- However, one of Observer's favourite ploys is to check out the grub. Take Aegis, the media-buying company. At its agm in May 1990 it served up champagne and canapes, before serving up bumper pre-tax profits for the following year. Its 1991 agm saw a diminished but none the less inviting spread of fancy biscuits, followed by mildly disappointing profits. But by 1992 only the plainer Rich Tea were on offer and sure enough it was a horrible year for Aegis - boardroom mayhem, collapsing share price, and a pre-tax loss of Pounds 1.9m. ..TX.- What then are we to make of yesterday's agm, with its ginger and marzipan-coated Battenberg cakes? Probably no more than that the company is going through a sticky patch. ..CO.- Companies: Aegis. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7311 Advertising Agencies. ..TP.- Types: COMP Company News. ..IX.- P7311. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGNB5ADKFT ..HL.- 930714FT 930714 Leading Article: The value of clean water (512) ..TX.- PURER DRINKING water, cleaner rivers and less polluted beaches have clear attractions. But what is the price of delivering them? ..TX.- Too high, according to Mr Ian Byatt, director-general of Ofwat, the economic regulator of Britain's water industry. Meeting European Community environmental commitments agreed by the government since the industry was privatised in 1989 will lead to an extra Pounds 1.5bn a year in capital investment over the next five years, on top of the Pounds 3.5bn currently being spent. Additional commitments under discussion could increase the cost by a further Pounds 1bn a year. ..TX.- For the average customer, the full programme would mean an extra Pounds 54 a year on bills between 1995 and the end of the century. Customers would not be prepared to put up with such increases, thinks Mr Byatt. The government should therefore renegotiate EC directives on sewage treatment and drinking water quality. ..TX.- Mr Byatt's argument has been challenged by the National Rivers Authority, the industry's environmental regulator. It says Britain's water charges are low by comparison with the rest of Europe, bills would not need to rise by as much as Ofwat suggests because of the scope for efficiency improvements and customers would be willing to pay for better standards. ..TX.- It is difficult to know for certain how much customers would be prepared to pay for higher quality in an industry where they have no opportunity to shop around. But the bulk of the evidence suggests that too much attention has been paid to standards and not enough to costs. Customer surveys show that in most parts of the country there is limited willingness to pay much more for additional improvements. Moreover, a raft of complaints to Ofwat and politicians about the cost of current bills suggests there would be stiff resistance to higher charges. ..TX.- Nor is there much evidence that better standards would improve public health. Mr Byatt argues that the new sewage measures would mean that a town with a population of 10,000 produced the pollution equivalent to 27 pigs, while the drinking water provisions would result in pollution equivalent to one aspirin in an Olympic-size swimming pool. ..TX.- Pointing out that these are EC standards to which Britain is already commited, as the NRA does, is not a sufficient counter-argument. The huge sums involved mean this is a sufficiently important issue for EC governments to re-think the regulations. Moreover, given the current stress on subsidiarity, this surely is an example of regulation which should be dealt with at the national level. ..TX.- Mr Byatt yesterday asked the government to make its mind up whether it wants higher standards or higher prices. This puts ministers in a tight corner. If standards are relaxed, they will be lambasted by the green lobby; if they are maintained, customers may complain. Ofwat has made an impressive case. It demands a political response. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4941 Water Supply. P4952 Sewerage Systems. ..TP.- Types: TECH Safety & Standards. CMMT Comment & Analysis. ..IX.- P4941, P4952. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGNB5ADJFT ..HL.- 930714FT 930714 Leading Article: Sunday trading (519) ..TX.- THE PRIME MINISTER and the home secretary yesterday strongly backed complete deregulation of Sunday trading in England and Wales. Their backing came as the government published details of the four options it will place before parliament for replacing the current discredited restrictions. This strategy could, however, leave the law in chaos or impose equally anomalous restrictions on Sunday trading. ..TX.- The idea of letting MPs choose between a range of options on an issue which has divided the Conservative party in the past is attractive to a government with a small majority. However, there is a danger that presenting several options could result in the adoption of none if the most popular of the four cannot command a parliamentary majority. That would leave the law in its current unsatisfactory state, widely broken by large retailers and not enforced by local authorities which see the popularity of Sunday shopping. ..TX.- Barely more acceptable would be a victory for partial deregulation. Two of the three options allowing limited Sunday trading include a list of goods which could legitimately be sold. Such a list would inevitably replicate the anomalies which have thrown the present law into disrepute by permitting the sale of pornography on the sabbath but not the sale of bibles. Why, after all, should it be permissible to buy fertiliser at a garden centre on a Sunday, but not groceries at a supermarket? ..TX.- All three partial deregulation options involve restrictions on the opening of larger shops. This would limit choice to the smaller, less efficient retailers whose prices are often higher. One worthwhile consequence of deregulating Sunday trading would be the opportunity to make more efficient use of capital. To exclude the larger stores from unrestricted Sunday opening would therefore impede this desirable outcome. ..TX.- Complete deregulation has been an unqualified success in Scotland. And reprehensible though law-breaking is, the de facto deregulation of Sunday trading south of the border has been hugely popular with customers. The government must thus strain every sinew to ensure that this option eventually commands a majority. ..TX.- One way to achieve this would be to strengthen the legal protection for shopworkers who do not wish to work on Sundays. Seven-day working is common in other industries, and it would be invidious to give shopworkers special rights for work on Sundays. But there may be scope for concessions - perhaps time-limited - which could win support from opposition MPs without losing the benefits of deregulation. ..TX.- Alternatively, local authorities could be allowed to hold referenda on Sunday trading. Parts of the country with strong sabbatarian traditions could retain restrictions, while more secular areas broke free from them. A measure of local democracy could yet be the way to break the parliamentary log-jam. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P52 Building Materials and Garden Supplies. P53 General Merchandise Stores. P54 Food Stores. P55 Automotive Dealers and Service Stations. P56 Apparel and Accessory Stores. P57 Furniture and Homefurnishings Stores. P58 Eating and Drinking Places. P59 Miscellaneous Retail. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P52, P53, P54, P55, P56, P57, P58, P59. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGNB5ADIFT ..HL.- 930714FT 930714 Personal View: Why World Bank needs an ombudsman (727) ..BL.- By DANIEL D BRADLOW ..TX.- The need for an effective World Bank has never been greater, and confidence in its operating procedures has never been lower. The international community expects the World Bank to help Russia and the other former eastern bloc countries create functioning market economies; help South Africa transform its apartheid economy; and continue helping borrower countries alleviate poverty, and improve the efficiency and sustainability of their economies and the efficacy of their governance. ..TX.- Recent developments suggest that the bank cannot meet these demands unless it undergoes structural reform. An internal study found that the bank is plagued by a 'pervasive preoccupation with new lending' that can distort loan appraisals. Both staff and borrowers view loan appraisal as a promotional exercise aimed at the directors who must approve all loans. ..TX.- Loan administration is also deficient. The study found borrower compliance with the financial covenants in loan agreements to be 'startlingly low'. The bank's failure to enforce these covenants suggests both parties view them as 'suggestions', not binding commitments. ..TX.- The bank's experience with the gigantic Sardar Sarovar dam project in India provides a graphic illustration of the consequences of these problems. The bank-appointed independent review panel found that the bank's failure to follow its own operating rules contributed to the problems associated with the dam's human and environmental impact. The bank's management is aware of these problems, and the board has just begun reviewing proposals for improving the supervision of the bank's operations. ..TX.- One proposal the directors should be encouraged to adopt is to appoint an ombudsman. Such an ombudsman should have a mandate to: ..TX.- Investigate all 'qualifying' complaints about the bank's implementation of its own operating rules and procedures. A qualifying complaint is one made about ongoing bank operations by any person directly affected by bank activities. The complaint must be accompanied by some supporting evidence. ..TX.- Respond to the complainant and, if appropriate, make non-binding recommendations to the board within a reasonable period after receiving the complaint. ..TX.- Publish a publicly available annual report discussing the complaints received, the investigations conducted, and the final dispositions of the complaints. ..TX.- The ombudsman, who would be appointed by and report directly to the executive directors, would be independent of the bank staff; should not be drawn from the bank staff; and would be granted a fixed-term, non-renewable appointment and control of his/her own budget. The ombudsman would have the authority to initiate investigations, compel bank staff to produce documents, submit to investigations and participate in public hearings. ..TX.- An ombudsman's function is to monitor the administration of public institutions and prevent administrative injustice. A World Bank ombudsman would: ..TX.- provide the board with independent and timely appraisal of claimed deficiencies in ongoing bank operations; ..TX.- provide directors with independent information on the staff's compliance with the bank's operating rules and procedures. The board can use this information both to design appropriate rules and procedures and to identify the 'best practice' for their implementation; ..TX.- create an impartial, independent and competent authority that assures both bank and public that all complaints about bank operations will receive a fair hearing and helps educate the public about the bank's operating rules and procedures; ..TX.- de-politicise disputes concerning bank operations by providing a complaints procedure that is based on rules that assure fair access for all qualifying complainants; and that ensures that fact-finding and decision-making is carried out by a disinterested body. Decisions must also be based on the merits of the complaint rather than on the complainant's ability to exert political pressure on the bank; ..TX.- protect the bank's executive directors and staff from having to deal with complaints lacking merit; ..TX.- provide the board and, through its annual reports, the international community with empirical information, that is presently unavailable, on the developmental and human impact of bank operations. ..TX.- In short, an independent World Bank ombudsman whose findings are public would significantly enhance public confidence in the bank's ability to perform its responsibilities and the credibility of the advice it gives to its member countries. It would also set a precedent for other international organisations entrusted with the management of public resources. ..TX.- The author is associate professor of law at the American University, Washington DC ..CN.- Countries: US United States of America. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGNB5ADHFT ..HL.- 930714FT 930714 A shine on its financial face: Domestic and foreign pressures are forcing reform on Germany's capital markets (1360) ..BL.- By DAVID WALLER ..TX.- German bankers are normally a self-confident breed. Lately, however, they have started to worry, loudly and publicly, about the need to speed up necessary reforms in the country's financial markets. The mood is all the more sombre because it comes in the middle of a deep recession. ..TX.- Summing up the anxieties, Mr Rolf Breuer, chairman of the German Stock Exchange and a board director at Deutsche Bank, said recently: 'The German capital market still has an international credibility problem.' ..TX.- Mr Gerhard Eberstadt, board director in charge of securities at Dresdner Bank, adds: 'If Finanzplatz Deutschland - Germany as a financial centre - wants to improve its international acceptance, it must observe international standards.' ..TX.- The mood of soul-searching has been touched off by several developments. First, companies need to find capital abroad as the government soaks up the bulk of domestic savings to finance the costs of reunification. This is exemplified by the recent decision of Daimler-Benz, Germany's largest industrial group, to become the first German company to seek a full listing on the New York Stock Exchange. ..TX.- 'Germany is much less of a financial island than it was 10 years ago, much more dependent on foreigners,' said Mr Herbert Jacobi, chief executive of Trinkaus & Burkhardt, a Dusseldorf bank principally owned by Midland Bank of the UK. ..TX.- Second, banks recognise the need for changes in the regulatory environment to face up to foreign competition. Unless Germany can match the regulatory infrastructure of the US and the UK, Frankfurt will find itself at a disadvantage in the global competition for capital. German financial institutions will also lose business to other centres - and the manufacturing companies which are their prime clients could suffer as a result. ..TX.- Mr Joseph Lufkin, managing director of Global Proxy Services, a company which advises US institutional investors, said: 'Anglo-American money has a whole set of different strings attached to it. Recognising this, the German financial and industrial establishment is taking deliberate steps to improve its international image.' ..TX.- Third, the scandal over share transactions by Mr Franz Steinkuhler, the former head of the IG Metall trade union, focused international attention on German delays in drawing up laws to combat insider dealing. On Monday, after sustained criticism of apparent foot-dragging in outlawing insider trading, the finance ministry finally published a draft law to criminalise the practice and to introduce other long-awaited reforms. ..TX.- Mr Wolfram Freudenburg, head of the Stuttgart branch of Deutsche Bank, said of the Steinkuhler affair: 'In the interests of both the company (Daimler-Benz) and Germany as a financial centre we simply cannot put up with this sort of thing.' ..TX.- Of the three factors acting as a catalyst for reform, the need to attract outside capital to meet the costs of reunification is most significant. After years of registering large current account surpluses, united Germany is now registering a moderate deficit. Whereas Germany in 1990 exported DM66bn of long-term capital, last year it imported a net DM47bn of long-term funds from abroad. ..TX.- With Germany's public sector borrowing requirement likely to stay high for several years, the implications for corporate and financial Germany are clear. 'Whenever they look for capital, German companies will face strong competition from the state,' said Mr Thomas Mayer, senior economist at the Frankfurt office of investment bank Goldman Sachs. 'This will drive up the cost of borrowing money and force companies to look abroad for capital.' ..TX.- One important development is that companies are stepping up their marketing efforts to attract foreign investors. They are more willing to provide the kind of 'investor relations' services common in the US and the UK - such as 'roadshows', where senior managers visit investors and promote the benefits of owning their shares. ..TX.- Ms Corinna Arnold, senior analyst at Investor Responsibility Research Centre, a US organisation which advises American institutions on corporate governance issues, said: 'There is a greater understanding of what US investors and analysts are trying to do. German companies are helpful in providing information now.' ..TX.- The importance of the international investment community is underlined by foreigners' large stakes in big companies: nearly 40 per cent at Siemens, the electronics group, more than 40 per cent at Deutsche Bank, nearly a third at Veba, the energy-based conglomerate, just under 40 per cent at Commerzbank, and over 20 per cent at BASF, the chemicals company. ..TX.- While companies are improving investor relations in general, Germany's biggest company is taking a more radical step. In seeking a full New York listing, Daimler-Benz is submitting to American-style regulation for the first time. ..TX.- For decades German companies have refused to comply with the listing requirements set by the Securities and Exchange Commission - the regulatory body for the US securities industry. The reason was their reluctance to disclose financial information in line with US rules. ..TX.- As part of its attempt to meet US investors' requirements for openness in business dealings, and to show that it was ready to play by international rules, Daimler announced in early April it would wind up Mercedes Holding (MAH), a holding company which owns a 25 per cent stake in Daimler, because it served no purpose other than to block takeover bids. Daimler intends to convert MAH shares into ordinary Daimler shares for two reasons: first, the shareholding structure means MAH would interfere with plans for a DM2bn-DM3bn Daimler rights issue next year; and second, because of the perception that US investors would find the anti-takeover device an affront to their notions of fair play. ..TX.- MAH was propelled into the limelight when Mr Steinkuhler of IG Metall, a former member of the Daimler-Benz supervisory board, bought nearly DM1m worth of shares in the company, most of them just before it was revealed that MAH would be dissolved. The announcement led to a substantial rise in MAH's share price, leading to the suspicion that Mr Steinkuhler had made his investment on the basis of insider information. ..TX.- Mr Steinkuhler denied this, but resigned anyway, in the face of criticism from Germany's financial es-tablishment as well as international investors. Mr Tom Homes, head of research at Schroder Munchmeyer Hengst, a bank majority-owned by Lloyds Bank of the UK, said: 'The suspicion alone that he was insider dealing degrades the quality of Germany's financial markets.' ..TX.- While the Steinkuhler affair heightened awareness that the rules needed to be changed, his dealings also served 'to revive foreigners' perceptions that the German market is an insiders' market', said Mr David Hale, chief economist at Chicago-based Kemper Financial Services Group. ..TX.- Deutsche Bank and other large German institutions are striving to allay this perception by bringing their internal compliance regimes up to international standards. The emphasis has been on stopping practices such as 'front-running' - whereby traders would buy shares on their account before buying shares for clients. This would be classified as a form of insider dealing in the UK or the US. ..TX.- Foreign investors nevertheless remain concerned about an 'insider culture' within German capitalism: foreigners will always be at an 'information disadvantage' compared with German banks and insurance companies. Domestic institutions still own the bulk of shares in quoted German companies and have access to detailed information about companies' performance via their seats on German supervisory boards. One consequence of Daimler-Benz's New York listing is that foreign investors will receive more details about the group's financial performance. ..TX.- Change will be slow. But the inevitability of Germany's increasing capital needs over the next decade will mean further change is ineluctable. 'If you want equity capital,' said Mr Barthold von Ribbentrop, former head of securities sales and trading at Deutsche Bank, 'the biggest suppliers are English and American pension funds. If you want this equity, you have to adjust to their way of thinking. You have to swallow your pride and present yourself differently.' ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P6231 Security and Commodity Exchanges. P9651 Regulation of Miscellaneous Commercial Sectors. P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: CMMT Comment & Analysis. TECH Safety & Standards. ..IX.- P9311, P6231, P9651, P6081. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGNB5ADGFT ..HL.- 930714FT 930714 Leading Article: Saving Somalia (490) ..TX.- AT THE heart of Somalia's deepening crisis is the fact that the United Nations, and in particular the US, have not faced up to the implications of their military intervention. The humanitarian imperative that prompted it remains compelling, for Somalia manifestly cannot save itself. To withdraw now would be to compound a tragedy: it would mean abandoning a country in terminal distress while undermining the credibility of UN interventions elsewhere. But for the UN to continue in its present role, neither peacekeeper nor peacemaker, also invites disaster. ..TX.- The sequence of events that led to the murder of four journalists by the Mogadishu mobs shows how serious the crisis has become. It began when UN forces attacked what was said to be a command centre of General Mohamed Farah Aideed, the fugitive warlord whose militia have killed 35 UN soldiers over the past month. The UN said the raid had been successful, and that 16 people had died. Aideed's Somali National Alliance claimed that 74 died, and that victims included elders of Aideed's clan. In the fury that followed, mobs turned on reporters once praised for bringing Somalia's plight to the attention of the world. ..TX.- Similarly, the warmth with which US marines were greeted last December has turned to a resentment so deep that many aid agencies which welcomed the UN as a protector now see association with the troops as positively dangerous. Key military partners, notably Italy, are questioning the merits of the exercise. ..TX.- One tragedy begets another. The UN force is in danger of getting caught up in the very chain of retaliation and revenge that fuels the bitter clan rivalry which has destroyed Somalia. Military intervention that sought primarily to provide security for food convoys appears to have become an end in itself; but the UN operation was never going to be enough in a country shattered by civil war. ..TX.- Intervention should have included at the outset a comprehensive programme to disarm rival factions, using all the necessary force and offering the combatants the eventual choice of integration into a national army, or training in civilian skills. There should have been a long-term programme of economic reconstruction and constitutional negotiations drawing on the widest range of Somali leaders. ..TX.- A new initiative by the UN is now desperately needed. This should involve, at the very least, greater clarity on the part of the Security Council as to its objectives in Somalia. It may entail taking full responsibility for Somalia as a UN trusteeship. This would be a costly and unprecedented undertaking. But it is the only way of providing a legal basis and political framework for an effective UN role. The alternative - abnegating responsibility - would be a dishonourable course. But even that would be better than the shambles that prevails today. ..CN.- Countries: SO Somalia, Africa. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGNB5ADFFT ..HL.- 930714FT 930714 No bite without teeth: Europe needs its own troops and the will to commit them (980) ..BL.- By EDWARD MORTIMER ..TX.- Last week I gave you the worm's eye view of Europe, from the Balkans. Now look at the continent (or subcontinent) from the other end of the telescope: the privileged centre, looking out. This week I was invited to a cosy little get-together in Paris, organised by the Konrad Adenauer Stiftung, one of those well-endowed 'foundations' associated with German political parties (in this case Chancellor Helmut Kohl's own CDU.) ..TX.- Only six countries were represented: the Big Three of the European Community (Germany, France, the UK) and the Hopeful Three of central Europe (Czech Republic, Hungary, Poland) - the latter being countries which have made a convincing transition to democracy, are well on the way to becoming market economies, and are directly contiguous either to the existing EC or (in the case of Hungary) to the EC as it should be after Austria joins in about 1995. ..TX.- We were there to talk about 'integrating the states of central and eastern Europe into western structures'. But the structures discussed were mainly those concerned with security, rather than the EC as such. The keynote speaker was Karl Lamers, the CDU/Christian Social Union spokesman on such matters, who proposed that the 'Visegrad countries' (the Hopeful Three plus Slovakia) should be admitted to the Western European Union, as a step on the way to full membership of both the EC and Nato. ..TX.- Everyone appreciated Mr Lamers's good intentions, but this specific proposal did not arouse much enthusiasm. WEU is prized by some for its strength and seriousness on paper, but despised by others for its weakness and frivolity on the ground. ..TX.- At present it has only 10 full members, all of whom also belong to both the EC and the Atlantic alliance, and are bound by treaty to come to each other's assistance if attacked - a stronger commitment than that which binds Nato members, whose treaty leaves each member to decide for itself how to respond if one of the others is attacked. At Maastricht, WEU was formally designated as both the 'European pillar' of the alliance and the 'defence component' of the future European Union. ..TX.- All of which makes it quite a serious affair: not so much a step on the way to either body as an inner sanctum where both overlap. But when it comes to military hardware and organisation, WEU is at best a pale shadow of Nato. Its main area of practical activity in the last year or so has been the enforcement of sanctions on Yugoslavia, and it has done little to make the operations more effective. If anything, it has got in Nato's way, by duplicating the chains of command through which forces belonging to the same group of countries are controlled. ..TX.- Both Nato and WEU have sought to involve central and east European countries in their activities, realising that if they did not contribute to the integration of those countries with the west they would appear completely irrelevant to Europe's post-cold war security problems. But neither has yet been able to satisfy the main demands of those countries, which are for full integration and security guarantees. ..TX.- Nato has set up NACC (pronounced Nack-Cee), the North Atlantic Co-operation Council, which has done some useful work but is devalued in the eyes of central Europeans by the fact that it includes a lot of remote ex-Soviet republics, in whose security Nato clearly has at most a marginal interest. (Some are already up to their necks in warfare.) WEU has avoided that mistake, confining its attentions to countries it sees as eventual candidates for EC membership: the Visegrad four plus Bulgaria, Romania and the three Baltic states. But short of full membership, with the explicit security guarantee that that would bring, it has little of practical value to offer. ..TX.- Central Europeans have looked carefully at western security structures. They have no doubt that for the foreseeable future Nato is the one worth dealing with, and if possible belonging to. 'Consequently,' said a Czech speaker in Paris this week, 'we do not agree with some west European countries which try to seek in WEU an alternative to the Atlantic alliance.' ..TX.- That dig was aimed not at Mr Lamers, who genuinely sees WEU as binding the EC and Nato closer together, but at the French - who, even while claiming to want a continued US presence in Europe, constantly warn that it is not to be counted on, and stress WEU's link to the EC while playing down its link to Nato. ..TX.- Yet within the west that argument has cooled down a lot in the last year. France, of course, remains outside Nato's integrated military command. But the Germans did succeed in brokering an agreement on the circumstances in which the Franco-German 'Eurocorps' would be available for Nato service, and neither in London nor in Washington is it any longer seen as a dire threat to the alliance. ..TX.- At the same time the US's firm refusal, despite European pleas, to put troops on the ground in Bosnia to back the Vance-Owen plan has given some substance to the French argument. Clearly there are contingencies where Europe will need a capacity to do something military, but where the US, without being strongly opposed, will not feel its own interests sufficiently engaged to be willing to commit troops. ..TX.- Enter, presumably, WEU. But brandishing those three magic letters will not help unless Europe itself has the troops needed and is willing to commit them. And that will not be the case unless Germany can overcome its political and constitutional inhibitions about deploying troops in a peace-enforcement role. ..TX.- Mr Lamers, the ball is in your court. ..CN.- Countries: XJ West Europe. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGNB5ADEFT ..HL.- 930714FT 930714 Letter: An adequate retirement income for all (370) ..BL.- From Mr FRANK FIELD MP ..TX.- Sir, Your editorial ('Private pensions', July 13) suggests one solution to the cost of funding state pensions is to let them 'gradually wither on the vine'. That is what is happening. By the middle of the next century, the value of the state retirement pension will have shrunk to a mere 8 per cent of average earnings. ..TX.- It is this dark fact, combined with a current Pounds 35bn bill for providing inadequate pensions, which was the starting point for the Fabian pamphlet entitled Private Pensions for All, which Matthew Owen and I wrote and submitted as evidence to Labour's Social Justice Commission. ..TX.- Our proposals do not envisage - as you have reported - the scrapping of the state pension. The aim is to gain a mix of public and private pensions so that everyone gains two pensions and thereby an adequate retirement income. Our assumption here is that there is a limit to what individuals want to pay in tax. The proposals therefore combine tax, compulsory contributions from employers and employees, while leaving open the opportunity for people to make additional voluntary contributions. ..TX.- The reform package envisages: ..TX.- A substantial increase in today's pension financed by the scrapping of the tax concession on lump sum payments. ..TX.- The compulsory inclusion of all workers, including part-timers, in company or private pension schemes. ..TX.- The focus of taxpayers' money to finance the contributions of the unemployed, disabled and carers who are prevented from working. ..TX.- While everyone will continue to receive their state pension a clawback will operate on those with substantial private pensions. ..TX.- Each and every one of us will have a right to own our own pension fund assets. ..TX.- We hope the Social Justice Commission will poll voters on what they think of this plan. While any new idea is open to misinterpretation, Labour's aim must be to have an agenda to which the government is forced to react, and which voters will enthusiastically endorse at the next election. ..TX.- Frank Field, ..TX.- House of Commons, ..TX.- London SW1A 0AA ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6371 Pension, Health, and Welfare Funds. ..TP.- Types: NEWS General News. ..IX.- P6371. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGNB5ADDFT ..HL.- 930714FT 930714 Letter: Private royal palaces on parade (170) ..BL.- From E F GROVE ..TX.- Sir, The article on royalty by John Lloyd ('Superstar route for royalty', July 10) is in need of correction. ..TX.- He states that all of the palaces 'including the so-called private possessions like Balmoral and Sandringham' should be opened up to the public. ..TX.- He obviously has not visited these two residences or he would have discovered that both are accessible to the public. At Sandringham he could not only see the house but also the extensive country park, the stunning gardens and grounds and the museums (including a motor museum). ..TX.- At both places he could have enjoyed a cup of tea and a meal. He could have bought granny a souvenir and at Sandringham the children could have tried the adventure playground. ..TX.- What more does he want? ..TX.- E F Grove, ..TX.- Chapel Cottage, ..TX.- West Newton, ..TX.- Kings Lynn, ..TX.- Norfolk, PE31 6AU ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9111 Executive Offices. ..TP.- Types: NEWS General News. ..IX.- P9111. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGNB5ADCFT ..HL.- 930714FT 930714 Good try, but could do better: Can Tecs shift their strategy from skills training to economic regeneration? (1398) ..BL.- By LISA WOOD ..TX.- The chief executive of the Training and Enterprise Council looked pensive as she listened to a succession of government ministers last week spelling out what they expected Tecs to deliver. ..TX.- It was a long list: what part, for example, could Tecs play in improving educational standards? How should they transform the skills of the workforce, or help companies to improve their competitiveness? ..TX.- 'We have only existed for three years and we are getting better all the time,' said Mrs Olivia Grant, chief executive of Tyneside Tec. 'It is not that we are not eager and willing to do more - but it is a hell of a task they are asking of us.' ..TX.- The event was the third annual conference, in Birmingham, of the 82 Tecs in England and Wales. It was attended by more than a thousand Tec directors and a drove of ministers. Mr John Major, the prime minister, then in Tokyo, sent a video message. ..TX.- Tecs were set up in 1991 as the government's main response to mounting anxiety about the UK's industrial competitiveness and the inadequate skills of its workforce. They represent the government's most radical experiment in public-private partnership. Funding for the Tecs, whose boards are dominated by senior business executives, will be Pounds 2.3bn this year. ..TX.- Their brief at inception was to run government programmes for the unemployed more efficiently (any efficiency savings can be used to re-invest in local projects), and to become involved in their local economies. They would assess and address local skills needs and set priorities for economic development with other agencies such as local authorities. The idea was to help bolster the wider economy by tackling skills and enterprise issues at local level. ..TX.- That was the mission. Government league tables, to be released next week, will show that a growing number of Tecs are having a small, but significant impact on what have long been seen as deep structural problems in the British education and training systems. The tables will show that Tecs - albeit with widely differing performances - are getting better at placing young people in training schemes, where they are gaining better qualifications than in the past; they are equipping more unemployed adults with vocational qualifications; and they are encouraging more companies to train workers to match their business requirements. ..TX.- But there have been frustrations for the Tecs. The government, their main customer, concerned at rising unemployment, has forced them to concentrate most of their efforts on improving the two main training programmes for young people and the adult unemployed. This meant they were unable to tackle effectively the broader part of the brief - promoting enterprise. ..TX.- But last week at the Tec conference the government reaffirmed its original mandate to Tecs - much to their delight. Mr David Hunt, the new employment secretary, made it explicit that he wanted them to live up to all of their name. ..TX.- 'I want the enterprise objectives of Tecs to come to the fore,' said Mr Hunt, who has told his civil servants that the employment department is an economic - as distinct from a social welfare - department. ..TX.- The Tecs should do this by building on what they had already achieved in local enterprise projects and skills training. ..TX.- For the past 18 months or so there has been a mounting campaign among the 1,000-odd Tecs directors about their enterprise role - that part of the brief that persuaded business leaders such as Sir Alistair Morton, chairman of Eurotunnel, to join Tec boards. ..TX.- Their argument is simple: it is no good concentrating on training unemployed people for jobs when there are so few jobs to go round. Thus the balance of the Tecs' work should logically shift from training to enterprise: this would embrace initiatives from promoting inward investment to setting up soft loans for companies. ..TX.- The Tecs are aware this part of task will be tough. ..TX.- 'Enterprise is a difficult word,' said Mr Edward Roberts, chairman of G10, the group of Tec chairmen which represents common Tec concerns to the government. ..TX.- 'It means lots of different things, from supporting businesses small and large, to the whole of economic regeneration. Tecs must also be part of and party to setting local economic strategies.' ..TX.- Mr Michael Hanson, chief executive of South Thames Tec, said: 'If you took everything that was said at the conference by both the government and Tecs you would think we were the salvation of the nation.' ..TX.- The government must help, said Mr Hanson, by first putting its own house in order. Government departments had to have clear and co-ordinated objectives and relationships with Tecs. Further, Tecs want greater clarity about the way they fit in with other government schemes, such as the new Urban Regeneration Agency, set up to try to improve the use of derelict land. ..TX.- Mr Hanson said: 'We are important but we can only be one of a number of contributors to a larger effort. There are no magic buttons. But the government must play an active part. It could for example help us persuade our prospective partners that being involved with us is worthwhile.' ..TX.- There is further support for the importance of the government's co-ordinating role in a study by Mr Bob Bennett, senior lecturer in geography at the London School of Economics, to be published this autumn. ..TX.- Mr Bennett points to the Tecs' new 'one-stop shops' as one of their most successful business advice projects. The brainchild of Mr Michael Heseltine, the secretary of state for trade and industry, these pull together under one roof a wide spectrum of business aid agencies, including Tecs, chambers of commerce and local enterprise agencies. ..TX.- However, Mr Bennett says the Tecs' record of promoting enterprise and economic development is patchy. A big problem, according to Mr Bennett - a strong advocate of Tecs merging with chambers of commerce - is the government's current weighting of Tec budgets towards train-ing. ..TX.- Tecs made clear to Mr Hunt last week they wanted the balance of funding to be reviewed, and they presented him with a list of demands to promote enterprise, including tax relief for companies pursuing best training practice, and more flexibility in their own budgets to plug skills gaps and encourage local employment. ..TX.- Funding is critical to their progress, but Tecs are showing they are able to work as effective local catalysts. They have the remit to bring organisations together, and to identify areas where they can best make a contribution. Examples of Tecs working along these lines include: ..TX.- Lincolnshire Tec, which is working in partnership with its county and district councils on inward investment. They have jointly set up a free-phone service for inquiries from potential investors. The Tec can also offer investors training tailored to their needs. Northumberland Tec identified a need for low-cost loans to local business. It helped set up new venture capital arrangements with local banks. ..TX.- Leeds Tec identified a need for more cost-effective training among local printing companies. The Tec brought together a group of companies and contributed to the cost of training equipment to be used jointly. Such collaboration is rare among competing companies. Mr Hunt believes that is 'just the sort of catalysts Tecs can be'. ..TX.- But does it add up to a strategy? ..TX.- Mr Richard Guy, chief executive of South and East Cheshire Tec, said: 'Each Tec has a different local plan but generally they are around the broad themes of helping individual businesses to start up and grow, improve their skills base and promote inward investment along with other partners. ..TX.- 'That is set down as a local strategy. But, if you added them all together, that adds up to an industrial strategy.' ..TX.- But Tecs need the government's help to turn that into a national strategy, engaging all its departments in a common cause. ..TX.- As Britain emerges from recession, the urgency and scale of the task still facing the Tecs and government is underlined by a recent study by the International Institute of Management Development of the extent to which education and training in 22 developed countries was meeting the needs of a competitive economy: the UK ranked 20th. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8331 Job Training and Related Services. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P8331. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGNB5ADBFT ..HL.- 930714FT 930714 Letter: Oxleas Wood victory is not an isolated case (179) ..BL.- From Mr JOHN STEWART ..TX.- Sir, Tim King gave a good account of the campaign that saved Oxleas Wood ('If you protest in the woods today', July 10), but he was wrong to conclude that it 'looks like an isolated cause'. It is only the latest in a number of road schemes to be dropped since 1990: the London Road Assessment Studies; the Exeter northern by-pass; the Hereford by-pass; the Woodstock by-pass. Contrast this with the 1980s when the Department of Transport rarely suffered a setback. ..TX.- Moreover, there is a growing transport and environmental movement which is calling for a switch of road-building resources to investment in other modes of transport. The Oxleas Wood victory will have given it added momentum, placing other roads schemes long cherished by the transport department in real danger. ..TX.- John Stewart, ..TX.- chairman, Alarm UK (Alliance Against Road-building), ..TX.- 13 Stockwell Road, London SW9 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9512 Land, Mineral, Wildlife Conservation. ..TP.- Types: NEWS General News. ..IX.- P9512. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGNB5ADAFT ..HL.- 930714FT 930714 Letter: Costly move over border (205) ..BL.- From Mr CHARLES HARVEY ..TX.- Sir, There is a touch of Monty Python in the fact that in this day of instant electronic money transfer and an alleged 'common market' that Visa International can make your headlines with 'Visa plans small payments cross-border service' (July 12) for small companies and individuals. Is not the cheap, simple transfer of funds around Europe a pre-requisite of a Single European Market? Why have not our Brussels bureaucrats made this, rather than standards for false eyelashes, the priority? ..TX.- I have just tried to pay into Barclays a cheque for Pounds 13.33 drawn on a French bank. I was told there would be an initial handling charge of Pounds 4, then a Pounds 2 charge for the interest (usury?) while the cheque was being handled, and a further Pounds 6 for a 'correspondence' charge: a total of Pounds 12. Net receipts Pounds 1.33. The sooner we have a common currency the better for all of us, except the banks. ..TX.- Charles Harvey, ..TX.- 58 Keyford, ..TX.- Frome, Somerset BA11 1JT ..CN.- Countries: QR European Economic Community (EC). ..IN.- Industry: P6141 Personal Credit Institutions. P6021 National Commercial Banks. ..TP.- Types: NEWS General News. ..IX.- P6141, P6021. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGNB5AC9FT ..HL.- 930714FT 930714 Letter: Full picture on Gatt (247) ..BL.- From Mr DONALD S JACKSON ..TX.- Sir, Your article on winners and losers in the Uruguay Round of the General Agreement on Tariffs and Trade ('World Trade News: Those who stand to win and lose in thewrangling', July 9) sets out most lucidly the principal issues, and those suppliers of goods and services who stand to benefit. Any exposition of the issues at stake in the current negotiations should surely include an analysis of winners and losers among the purchasers of those goods and services - that is consumers around the world. Given that in virtually all cases consumers stand to benefit from progress in the Gatt talks it was most surprising to see the only mention of consumers under the heading of Losers (third world consumers unable to afford expensive pharmaceuticals). ..TX.- It is the focus on protected producers who stand to lose, and the lack of emphasis on benefits to consumers, that has enabled politicians to drag their heels on Gatt talks for the last seven years. While it is not incumbent upon your journal to lobby actively for or against the Uruguay Round, it is at the least incumbent upon you to show a fuller picture than offered by your otherwise most informative article. ..TX.- Donald S Jackson, ..TX.- assistant director, ..TX.- Matheson Investment ..TX.- Management, ..TX.- Jardine House, ..TX.- 6 Crutched Friars, ..TX.- London EC3N 9HT ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGNB5AC8FT ..HL.- 930714FT 930714 Letter: Objectivity in radio jamming (151) ..BL.- From Y KOVACH ..TX.- Sir, Your editorial on Bosnia ('Strong words, weak action', July 9) ends on a James Bond type of note by referring to a mystery ship 'that was broadcasting objective news to all the ex-Yugoslav republics from offshore in the Adriatic'. ..TX.- It ceased operations 'because of a Serbian complaint to the International Broadcasting Union'. ..TX.- You urge the nations that are enforcing sanctions in the Adriatic to render all necessary assistance to enable the ship to resume operations. ..TX.- I can only conclude that the Serbo-Croat programmes of the BBC World Service and of the Voice of America, which, incidentally, are not subject to jamming, are deemed by you to fall short of object-ivity. ..TX.- Y Kovach, ..TX.- 38 Lebanon Park, ..TX.- Twickenham, ..TX.- Middx TW1 3DG ..CN.- Countries: BA Bosnia-Hercegovina, East Europe. ..IN.- Industry: P4833 Television Broadcasting Stations. ..TP.- Types: NEWS General News. ..IX.- P4833. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGNB5AC7FT ..HL.- 930714FT 930714 Arts: Rain stops play in Avignon - Anthony Curtis finds Moliere's Don Juan getting more than he bargained for (908) ..BL.- By ANTHONY CURTIS ..TX.- The Don Juan of Moliere has a career that is identical with that of Mozart's Don Giovanni, not surprisingly since they both stem from the same original written by a Spanish monk. In both play and opera the Don has a faithful servitor who accompanies him on his travels, takes much of the rap for his misdeeds, and at one point swaps identities with him. But, as emerges from the new production of Moliere's comedy at Avignon that opened this year's Festival, there is a world of difference between the mood of the two works. ..TX.- Through the interrogation of his master, amusingly combined with deference and flattery, Moliere's Sganarelle forces him to define and redefine his position in relation to the traditional Christian tenets he has repudiated. The result is a mixture of black comedy and socratic dialogue that rips apart the basic assumptions of family life. No wonder the Church saw that the play should remain unstaged for many years and then allowed it to reach the stage only in a sanitised version by Thomas Corneille. This was in spite of the climax, as in Mozart, when the statue of the Commander whom Don Juan has killed in a duel, comes to dinner - the subtitle is Le Festin de Pierre (The Stone Feast) - and consigns him to hell. ..TX.- At the first night in Avignon when the stone Commander nodded his head in acceptance from his plinth there were magnificent claps of thunder and flashes of lightning. Full marks, we thought, to Jacques Lassale, the administrator of the Comedie Francaise who has directed this production. But no, the storm was for real. Then the unthinkable happened, the heavens opened and the rain poured down. There is no shelter either for actors or audience in the Courtyard of the Papal Palace and so at around midnight the play was abandoned with two acts still to go. I cannot remember rain stopping play here ever before and I have been covering this Festival for at least 10 years. ..TX.- Even so three acts out of five were enough to take the measure of Lassale's production. The setting could not be more simple or more effective. A cluster of conifers to the left of the stage and a small stream in front serve as the decor. Towering above them is the great medieval facade of the palace alternatively shrouded in darkness or bathed in soft yellow light. It is a formidable arena for a conflict between good and evil, expressed through the discrepancy between appearance and reality, underlined by Lassale in a series of costume changes. The Don enters in the traditional black doublet and hose of a Spanish nobleman and we observe him being stripped of this habit by the tubby cynical Sganarelle of Roland Bertin, an experienced actor who has played many roles here in previous festivals. The hero is then shaved and re-attired on stage in a colourful costume suitable for a masquerade. This Don Juan has to contend not only with the ghost of the Commander but with several historical ones, the ghosts of those great actors who have played the role in living memory - Jouvet, Vilar, Strehler among them. ..TX.- Avignon's new Don Juan, the Polish actor Andrzej Seweryn has been working in France since 1980. He joined the Comedie Francaise this year and he gives an exciting interpretation of the exacting role. He has grace, agility, gentleness; his striking lantern-jawed face provides a fine impassive mask to match the enormity of his utterances and behaviour. He treats the tirades as if they were nocturnes by Chopin, delivering them with delicate, subtle articulation. The same lightness of touch is evident in his bodily contact with the other characters, notably when he encounters his discarded wife Elvira. This role of the one-time nun is played by Jeanne Balibar, a young actress still a pupil of the Conservatoire: a great opportunity which she seized passionately. Clearly we are going to hear a lot more of her in the future. ..TX.- The later scene with the two peasant girls (Catherine Sauval and Cecile Brune) to both of whom Don Juan has promised marriage was played with a similar balletic mobility. As Don Juan removed their bonnets and let down their hair, it seemed only right and proper that they should have rejected their longstanding rustic boyfriends in order to marry him. Seweryn elegantly deflects their questions, refusing to commit himself to either by name. In the end the two women are left embracing each other, the Don having once more escaped. ..TX.- Lassale is on record as saying that he views the comedy as 'a kind of road movie.' Don Juan uncovers new aspects of himself with each encounter. They are marked by the director's skilful use of the elements - water into which one of his assailants is thrown, earth on which he sits, fire by the light of which he unfolds his pragmatic morality to his servant. It will be interesting to see how Lassale copes with these effects when this essentially open-air production transfers to the Salle Richelieu in Paris later this year. At least it will not be rained off there. ..CN.- Countries: FR France, EC. ..IN.- Industry: P7922 Theatrical Producers and Services. ..TP.- Types: NEWS General News. ..IX.- P7922. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGNB5AC6FT ..HL.- 930714FT 930714 Arts: Spoleto - without music - William Weaver is entertained by Mamet, Williams and Dario Fo (1005) ..BL.- By WILLIAM WEAVER ..TX.- The spoken theatre - the 'prose' theatre, as Italians call it, even when the dramas are in verse - has always been a part of Gian Carlo Menotti's Festival of Two Worlds, though its position has been ambiguous. Some years, drama occupied a major role, and new plays by Tennessee Williams or by Italian writers like Giuseppe Patroni Griffi have been presented in Spoleto's houses. In other years, music and, often, ballet have played the major roles, while one or two plays were given, dutifully, almost as filler. ..TX.- This year, Italy's drama critics flocked to Spoleto, where they were offered the continental premiere of David Mamet's Oleanna, as controversial here as elsewhere; and a revival of Williams's Streetcar named Desire, in a superior new translation by Masolino D'Amico and an aggressive, even brutal, but always coherent staging by Elio De Capitani, with a set by Ferdinando Bruni that erased all reference to New Orleans, all local colour (indeed, all colour of any kind). Somehow, this abstraction made some of Williams's poetic tirades, which seemed outdated almost when they were written, become more acceptable, a part of the general madness. This grotesque approach, however, did not rob Mariangela Melato's Blanche of her touching magic. Aleksandar Cvjetkovic pulled off the amazing feat of looking and dressing like Brando, yet still giving a strong, individual, original performance. ..TX.- Critics, in speaking of Dario Fo, tend to call him not an actor but a 'man of the theatre.' To some extent, this description simply means that, in addition to performing, he also writes plays and stages them. But there is more to it than that: Fo is one of those artists who, no matter what he does, remains himself, Dario Fo, even while he is convincing you that he is an industrialist or a pope or a clown. So when it was announced that he would perform two works of the 16th century Paduan dramatist Angelo Beolco, known as 'Ruzante,' the admirers of Fo and the admirers of this elusive, rarely-performed late Renaissance master were understandably excited. ..TX.- In the event, apparently for bureaucratic reasons, the production could not be realised; instead Fo devised a 'meeting' with Ruzante, which was perhaps more useful, if less fun. The evening - Fo standing behind a lectern - began with an almost academic presentation of the figure of Beolco, placing him in the political and social context that are so important to understanding his work. But understanding his work is arduous for a more specific and straightforward reason: he wrote almost entirely in the Paduan dialect of his time, virtually incomprehensible to today's Italians, even if they come from Padua. After his professorial introduction, Fo began to read, practically to perform, first alone, then with the collaboration of his wife and co-star Franca Rame and two other actors, some passages from Ruzante, which Fo had translated not into Italian, but into a modern Paduan-Venetian dialect to some extent of his own invention. For many members of the audience, this was almost equally strenuous to grasp. Even at the lectern, Fo indulged in his familiar posturings and grimacings. Finally, one was certainly convinced of the importance of Ruzante, less convinced perhaps of Fo as the writer's ideal interpreter. It may be that Ruzante's theatre - like that of Plautus, his spiritual ancestor - cannot be reproduced in modern terms. A sad thought, but one that is hard to dismiss. ..TX.- For some years a regular, highly popular feature at Spoleto has been the season of the marionettes of the Carlo Colla and sons, a company that has delighted generations of Milanese children (and adults) for about a century and a half. Menotti, one of those children, on hearing a few years ago that the Collas were losing their home, helped rescue the troupe, along with the incomparable patrimony of original sets, costumes, texts, scores, and - of course - marionettes, and festival audiences have enjoyed a series of revivals, including the grand spectacular ballet Excelsior which, with human actors and dancers, was a triumph at La Scala in the 1880's. This year, in the now-deconsecrated church of Santa Maria della Piaggia, which has been made into a theatre for them, the Collas presented a lesser, but charming piece, Dalla terra alla luna, with a moon-walk (or rather moon-dance, with wedding, that made NASA look cheap). ..TX.- Another recent and fascinating intrusion of the spoken word at the festival is the series of interviews, under the rubric Testimoni del tempo (Witnesses of our time), conducted by the critic and journalist Elena Doni, who has the gift of being understated without fawning and informed without showing off. This year her series of guests included Arthur Schlesinger, who attracted a capacity crowd to the intimate Sala Frau, a perfect setting. There, relaxed and urbane, he answered Doni's questions - as well as those of the audience - with pointed wit, evident concern, and profound knowledge. For some Italians, it was a revelation to see this multi-faceted mind at work; and it was clear why so many leaders, Kennedy at their head, listened to the speaker with attention. ..TX.- Nowadays, every event at Spoleto sells out; and on weekends the town is jammed. And yet, it remains unspoiled. Or rather, it improves, from the festival-goer's point of view; as a new hotel, like the elegant Palazzo Dragoni, or a fine new restaurant like the Apollinare, make a stay in the Umbrian jewel still closer to perfection. Only the audiences are sometimes a trial. Since Spoleto has become 'in,' the visitors eager only to be seen and, if possible, to spot some celebrity, shamelessly talk through performances (one even read his newspaper during a lovely chamber concert), leave before the end. But this is the price Spoleto pays for its success. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P7922 Theatrical Producers and Services. ..TP.- Types: NEWS General News. ..IX.- P7922. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGNB5AC5FT ..HL.- 930714FT 930714 Arts: Today's Television (235) ..BL.- By CHRISTOPHER DUNKLEY ..TX.- We should not, I suppose, allow the dreadful mateyness of the title of BBC1's new series, Doc Martin's Casebook to put us off, though when it becomes clear that the subject of this opening programme is snoring it is hard to avoid the feeling that we are in for yet another example of tabloid television. Dr Hughes is a Cambridge GP who has been dishing out advice on local radio for the past eight years, and Tom Moffatt is the man who has always snored but who used to work shifts. Now he has been retired, and is driving his wife and family crazy (7.30). ..TX.- Golf And All Its Glory is described as both a showcase for golf and a celebration. Great players talk about the game and archives are used to investigate the origins of the sport (7.40 BBC2). ..TX.- There is nothing wrong with good television programmes being repeated; indeed television should have a repertory element. But BBC2's series of The Wednesday Play may serve to highlight the paucity in single drama today. The season begins (9.00) with 'Up The Junction', written by Nell Dunn and directed by Ken Loach. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4832 Radio Broadcasting Stations. P4833 Television Broadcasting Stations. P4841 Cable and Other Pay Television Services. ..TP.- Types: TECH Services & Services use. ..IX.- P4832, P4833, P4841. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGNB5AC4FT ..HL.- 930714FT 930714 Arts: Why success is all a question of pitch - Television (1345) ..BL.- By CHRISTOPHER DUNKLEY ..TX.- While radio is an excellent medium for broadcasting music, television has always had problems: the sound has to be accompanied by something in the way of pictures, and most programme makers clearly feel that they should provide 'added value'. This notion has reached its logical extreme in the pop video where the pictures are often more interesting than the music and, these days, frequently dominate the experience. On Saturday in Pictures At An Exhibition: Concerto For Paintbrush And Orchestra BBC2 came up with a sort of orchestral video. While the orchestra played the Mussorgsky, artist Norman Perryman painted on glass plates which the camera showed us either straight on the television screen or projected onto a tall screen behind the orchestra. ..TX.- Such ideas are not new. Decades ago a documentary about Picasso's technique was made by setting up cameras behind glass screens upon which the artist worked. Moreover the type of image created by Perryman reminded you of the light shows accompanying rock concerts in the 1960s where oil, water, paint and dyes were mixed and squeezed, sometimes between small glass plates, and then projected on giant screens. The effects were particularly pleasing, it is said, for anyone who happened to be enjoying hallucinogenic substances at the time. My own memories, admittedly somewhat hazy, suggest that the effects at a Doors concert at the ICA and at a Time Out concert at - could it have been? - Alexandra Palace were far more dramatic and gorgeous than anything we saw on television on Saturday. ..TX.- In any case the idea of Perryman 'interpreting' the music through paint and working to the rhythms of the orchestra was irritating. It brought to mind a passage from Howard's End: 'What is the good of the arts if they're interchangeable? What is the good of the ear if it tells you the same as the eye? Helen's one aim is to translate tunes into the language of painting and pictures into the language of music. It's very ingenious and she says several pretty things in the process, but what's gained I'd like to know?' What indeed. ..TX.- Much more entertaining was Discovering Beethoven, also screened by BBC2, which consisted of a lecture about the fifth symphony with musical illustrations followed by a performance of the entire work. The success of the venture stemmed almost entirely from the personality of Michael Tilson Thomas who conducted the orchestra and choir (why a choir for the fifth? - well, he showed us how it might have sounded had the composer given us a choral section as in the ninth) and delivered the lecture. This was cleverly pitched so that it neither insulted anyone's intelligence nor demanded such musical expertise as to put people off. It took us from Gregorian chant to Beethoven via Monteverdi with remarkable ease and lucidity. Tilson Thomas has that trick of conveying learning without supercilious didacticism which was such a winning characteristic for Kenneth Clark and Jacob Bronowski. ..TX.- Of course in 1993 many broadcasters view that sort of expertise with deep suspicion. The Reithian notion of aiming programmes slightly above the heads of your expected audience has been turned upside down: now broadcasters are competing to see who can aim lowest. Some years ago Granada, then the most highly regarded commercial television company in the world, launched what was planned as a major series called Man And Music. Four or five splendid documentaries were completed, with extensive foreign footage and lots of expensive archive research. But what has happened to the rest of the series? Today it is not programme quality which gets Granada's name in the newspapers but its predatory activities in the stock market. ..TX.- The magazine Time Out is, of course, the most fashionable and flourishing of London's 'what's on' magazines. Launched in the 1960s, it has stayed at the centre of successive social trends and now toes the sort of politically correct line which avoids publication of sexually stimulating photographs unless they appeal to homosexuals. This month it ran a feature about female comedians which neatly encapsulated the received wisdom on this topic: fewer (or to use their word, less) female than male comedians appear on television and on the London club circuit because of prejudice against women. 'Almost anybody, no matter how liberated, reacts differently to a woman trying to be funny. There's this arms folded 'show us what you can do' type attitude.' ..TX.- Just as it is repeatedly asserted of television in general that 'you have to be twice as good to get on if you're a woman' so 'women have to work much harder to get an audience's trust' and 'it's just not seen as attractive for women to be funny; people see it as ugly and unladylike . . . The industry is discriminating and under-serves a rich seam of female talent . . . it's important to ask why so few females feel able to make it in comedy'. Never at any stage does anybody even whisper the suggestion that perhaps there simply are not very many talented female comedians around, yet all the evidence suggests that this is the only reason for the disparity between the sexes. ..TX.- When you think of the dramatic inequality between men and women in other activities (orchestral composition, philosophy, chess, physics, cartooning) this scarcely seems surprising. And when you remember the global success achieved as much as 40 years ago by a woman who did prove her talent - Lucille Ball - you feel obliged to ask what happened to the prejudice in her case? There is such pressure in broadcasting these days to discriminate in favour of women that, far from needing to be twice as good to get a chance, you only need to be half as good as a comparably inexperienced man. But while broadcasters may desperately kid themselves that the talent is there so that a new one-woman series is justified (Emma Thompson, Tracey Ullman and Josie Lawrence come to mind) they cannot force the public to share their blinkers. The idea that this is misogynistic prejudice on the part of viewers rather than the ability to discriminate would be more convincing if Victoria Wood, French and Saunders, Ruby Wax and Sandi Toksvig had not been so successful. ..TX.- Nor can you accuse these successful women of abandoning their sex and buying acceptance by becoming quasi men (an argument used about leading female comics in the Victorian music hall). Since giving birth Ruby Wax has specialised in detailed and discursive, not to say lurid, sequences about childbirth, and the funniest routine in Victoria Wood: Sold Out on Saturday was her account of buying a pregnancy testing kit and attempting to use it in a public lavatory. ..TX.- To more strait-laced viewers that may sound distasteful, but it is as pure as the driven snow compared to the material used by somebody such as Jo Brand in television's late night alternative comedy slots. Note the way Brand deliberately emphasises her natural unattractiveness in her dress, hairstyle and facial expressions; listen to her man-hating diatribes, wonder to yourself what would happen to a man who delivered a line as nasty as her threat to sit on men's faces at certain times, and it is not hard to see why no one offers her a prime time slot. If you point to the violent contempt for all men expressed in the work of so many of these female comics and suggest that this may have something to do with their unpopularity they narrow their eyes and hiss remarks about 'centuries of mother-in-law jokes' as though joking about a notoriously difficult relationship was justification for spitting out a stream of hatred against half the human race. It is difficult to imagine a nastier prejudice than that of these female comics against all those who happen to be of a different sex. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4833 Television Broadcasting Stations. ..TP.- Types: NEWS General News. ..IX.- P4833. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGNB5AC3FT ..HL.- 930714FT 930714 Business and the Environment: Muddy waters - Plans to clean up the heavily polluted Baltic Sea have stumbled over funding (1066) ..BL.- By JOE KIRWIN ..TX.- The Baltic Sea is one of the most polluted in the world, but the problem of how to clean it up and who should foot the bill has plunged politicians, bankers, and environmentalists into a lengthy controversy. ..TX.- This has festered even though the Baltic coastal nations - including Sweden, Denmark, Russia, Finland, Germany, and Poland - agreed more than a year ago on an Dollars 18m (Pounds 12m) plan to restore the health of the world's largest body of brackish water. The arguments have centred mainly on the lending terms of development banks and the long-term benefits of the plan. ..TX.- The debate came to a head at a recent conference in the Polish port city of Gdansk where more than 100 designated environmental 'hotspots' in the region were pinpointed. In what was billed as a 'resource mobilisation' meeting, it proved to be another ministerial session where leaders from eastern Europe looked for help and western European ministers pleaded poverty. ..TX.- However, Denmark did pledge Dollars 5m this year and an overall increase in Danish foreign development assistance in the next decade. ..TX.- Svend Auken, Danish environment minister, took issue with the European Bank for Development and Reconstruction and the Nordic Investment Bank. His criticism amplified the frustrations eastern European leaders have expressed for several years. ..TX.- Since then, the EBRD has been castigated for spending heavily on itself and being too slow to lend on new projects. ..TX.- 'We all had great expectations as to what the banks could offer, especially the European development banks,' says Auken. 'I must say I am not impressed with the willingness and capability of the international banks. ..TX.- 'Nothing will happen if the loans are only provided on market terms - that is with western guarantees and market-level interest rates and high consultants' fees to the banks. ..TX.- 'The banks will have to provide soft loans for this programme,' Auken adds. 'Only by doing so can they help to increase investments in environmental improvements. A sewerage treatment plant is obviously not going to make the same immediate return as a cement producing plant. So loans need to be adjusted accordingly.' ..TX.- The need to improve water quality in the Baltic Sea has become ever more urgent. With more than 80m people in its catchment area, it is continually flooded with dangerous concentrations of not only the typical sewerage effluents of nitrogen and phosphorous, but also more toxic substances such as PCBs, DDT, chlorine, mercury, lead, cadmium and others. ..TX.- 'The concentrations of organochlorine residues in fish in the Baltic proper are three to 10 times higher than in those from the North Sea,' scientists stated in a report released when the updated Baltic Sea convention was signed two years ago in Sweden. 'More than 100,000 sq km are totally dead.' ..TX.- Another source of pollution comes from chemical weapons dumped after the second world war. The casings for these weapons have rusted at the bottom of the sea and mustard gases and other chemicals are a particular problem in various parts of the Baltic. ..TX.- The deteriorating conditions in the Baltic are aggravated by geography and an unusual marine ecology. The inflow of seawater from the North Sea past the Danish and Swedish coasts is very limited and ice covers much of the Baltic in winter. Thus its ability to clean itself is much more limited compared with the North Sea or the oceans. ..TX.- Concentrated efforts by the Nordic nations such as Sweden, Finland and Denmark have been made to clean up the Baltic. One example is provided by modern Swedish paper and pulp mills which have drastically reduced chlorine emissions. Water quality in many of the Scandinavian coastal cities has improved to the point where fish have returned and swimming is possible for the first time in decades. ..TX.- But local progress has been offset by pollution emissions not only from Russia, Poland, the Baltic nations and the former East Germany, but also by increased agricultural runoff from Denmark, Finland and southern Sweden. ..TX.- The financial problems associated with the clean-up are not the only controversy that has erupted over the action plan. Environmental groups such as the Coalition for a Clean Baltic and Greenpeace have criticised it for its emphasis on end-of-pipe solutions such as sewerage treatment plants. ..TX.- 'There must be much more of an emphasis on clean technology so as to control diffuse sources of pollution like agricultural runoff,' says Jesper Grolin, a Greenpeace representative who has worked closely with Baltic Sea issues. ..TX.- The environmental groups have also criticised the financial problems of implementing the plan. 'Even if governments from Scandinavia and Germany and the others do not pledge the money now, they should at least commit themselves to finding it,' Grolin says. ..TX.- With aid loan money in short supply, several eastern European nations have attempted to help themselves. Poland has started a Bank for Environmental Protection, which has assets of more than Dollars 3bn raised from pollution licence fees charged to industry and other pollution sources. Slovakia, which also drains into the Baltic Sea basin, is expected to set up a similar bank. ..TX.- Poland and Slovakia have moved much further than Russia and the former Soviet satellite nations in establishing local government bodies. ..TX.- 'This is essential if international institutions are going to put forward loan money for a project such as a municipal sewerage treatment plant,' says Piotr Krzyzanowski, a Polish government representative working with the Baltic Sea convention. ..TX.- 'This is true whether it be for a soft loan or on market terms.' ..TX.- George Toregas, an economist with the EBRD, says it will take more than the establishment of local governments to allow loans for environment projects. ..TX.- 'If governments such as that of Denmark and others want us to make loans on soft terms, they have to change regulations established when the bank was set up. ..TX.- 'Governments run the boards of the bank and these were the rules we were given. So it is hardly fair to blame us for not allowing soft loans to eastern European nations.' ..CN.- Countries: SE Sweden, West Europe. DK Denmark, EC. RU Russia, East Europe. FI Finland, West Europe. DE Germany, EC. PL Poland, East Europe. ..IN.- Industry: P9511 Air, Water, and Solid Waste Management. ..TP.- Types: RES Pollution. CMMT Comment & Analysis. ..IX.- P9511. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGNB5AC2FT ..HL.- 930714FT 930714 Management: Bridging the ethical gap - Values may differ widely from behaviour (649) ..BL.- By TIM DICKSON ..TX.- There is often a wide gap between companies' professed values and their actual behaviour, or at least the public's perception of it. ..TX.- That is the main conclusion to be drawn from two separate, but far from contradictory, surveys of senior business executives published this week. ..TX.- The importance of being ethical* - by Ashridge Management Research Group and the UK consultancy Integrity Works - concentrates largely on the views of non-executive directors of Britain's leading companies. ..TX.- All 119 respondents in the report felt business ethics was a significant issue, even if there was little consensus about what the term meant. But while the majority thought it 'very important' for business to be viewed as ethical, less than half felt this to be the case in practice. More than a quarter thought that the public views business as 'quite unethical'. ..TX.- That said, 54 per cent of respondents consider that company standards are better than they were 10 years ago - 22 per cent said they were worse - and 43 per cent disclosed that their firm operates an ethics code. Thirteen per cent have adopted the practice of 'ethics awareness training', while a further 8 per cent carry out an ethics audit. ..TX.- The findings of the Ashridge research reinforce the view that an organisation's conduct is largely dependent on the stance of its chief executive. ..TX.- Many of the conclusions, moreover, find an echo in the other study - Insights into values in business** carried out by the Helsinki-based consultancy Values into Action and based on responses from 70 senior executives 'in Britain, the Nordic countries, Europe and beyond'. ..TX.- Three in five said they conduct their business activities and practices according to a common code of values. But more than three quarters of these believed there was a gap between ethical values and actual behaviour, and one in five said that business necessity overrides such values. ..TX.- Values into Action adds that a study of more than 400 annual reports highlights the need to clarify use of the word 'value'. It makes the distinction between 'business values', which are situational and relative, and 'ethical values', which are universal and absolute. Corporate value codes - which often look more like corporate goals than value statements - should explain how they relate to each other. ..TX.- Values into Action says managers who want to check their companies' 'ethical health' should ask themselves whether the following are true or false: ..TX.- 1. People in the company conduct their business activities and practices according to the same code of values. ..TX.- 2. Because of the current (economic) situation, there is less time to show employees the consideration they deserve as individuals. ..TX.- 3. Survival depends on getting back to basics, cutting costs and reducing overheads. ..TX.- 4. Faced with a choice, business necessity overrides ethical values. ..TX.- 5. Sometimes there is a gap between ethical values and the way in which the company and/or people in it behave. ..TX.- 6. Management trusts employees and employees trust management. ..TX.- 7. Sometimes there is a discrepancy between what executives preach and what they expect their colleagues and employees to practice. ..TX.- 8. People willingly and genuinely want to put the values of the company into practice. ..TX.- 9. We accept and honour our responsibilities towards other 'stakeholders' (those who are taken into account when business decisions are being made, or who are affected by the outcome of business decisions) as well as customers, shareholders and employees. ..TX.- 10. Frank, fearless and critical dialogue both upwards and downwards in the company is actively encouraged and practised. * Price Pounds 40, available from Terrylynn Knott, Ashridge Management College, Berkhamstead. ..TX.- ** Price Pounds 15. Requests for copies should be faxed to (358) 0 388 1981 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8741 Management Services. ..TP.- Types: MGMT Management & Marketing. ..IX.- P8741. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGNB5AC1FT ..HL.- 930714FT 930714 Management: Female progress by the book - Why have women made it to the top of publishing but so few other professions? (1440) ..BL.- By LUCY KELLAWAY ..TX.- Frances Coady is not Oxbridge educated. With her black leather jacket, mini skirt and scarlet lipstick she does not fit the classic picture of a boss. Yet this 34-year-old has just been given one of the best jobs in British publishing: running the literary imprints of Random House - Jonathan Cape, Chatto and Windus, Vintage and Pimlico. ..TX.- At the same time, Kate Parkin, also in her early 30s and just back from maternity leave, has been put in charge of the more mass-market publishing names Century and Arrow. Carmen Callil, 20 years older and the industry's grande dame, has become grander still as publisher-at-large of the Random House group. ..TX.- The glass ceiling is lying in shards at the feet of the Random House women. At the centre stands Gail Rebuck, who became chief executive 18 months ago, and is the most powerful of the lot. ..TX.- 'This shouldn't be a great story, but it is,' says Coady. When she started in publishing in 1982 as a secretary at Faber & Faber there were only two women close to the top: Callil who founded Virago and went on to manage Chatto, and Liz Calder who was the first woman on the board at Jonathan Cape. ..TX.- Now both have moved on to greater things (Calder has set up Bloomsbury) while the list of big female names in British publishing has lengthened. Paula Kahn is managing director of Longman. Philippa Harrison runs Little, Brown. Other women have started their own companies: Victoria Barnsley at Fourth Estate and Sarah Mahaffy at Boxwood. ..TX.- But have women really made it in publishing? And if so is publishing a model for other industries, or is it somehow a special case? ..TX.- In sheer bulk, book publishing is dominated by women. They make up more than 60 per cent of the workforce, but only 40 per cent of the managers and 20 per cent of the directors, according to the Hansard Society Commission. That is still much better than in the economy as a whole, where 25 per cent of junior managers and less than 2 per cent of senior ones are women. ..TX.- Anecdotal evidence suggests that women are increasingly making their presence felt in senior, if not in the most senior, jobs. One London Business School student was surprised to find himself interviewed exclusively by women at each of the four publishing houses to which he had applied for a job. ..TX.- But according to Kahn, nearly all the big decisions are still being taken by men. 'There are a number of very high-profile women managing major editorial departments, but when it comes to women with significant financial and commercial power, there are really only two, Gail Rebuck and myself,' she complains. ..TX.- So two things need explaining: why women do better in publishing than elsewhere, and why their absolute majority at the bottom still translates into a minority at the top. One answer to the first question is that publishing is something women are good at. Calder sees it as an 'enabling, servicing job', with editors playing a 'shepherding and championing' role. ..TX.- Rebuck talks about the feminine traits of creativity, the instinct and flair needed in a publisher, but then thinks better of it. 'That's all rubbish,' she says, deciding that the real reason is the entry policy. Traditionally, a young woman with a degree but no particular training could get a job in publishing as a secretary or assistant. 'No one else would employ them.' ..TX.- The pay for these young hopefuls was pitifully low. When Coady, who has degrees from Sussex and Essex Universities, was taken on in 1982 she was offered less than Pounds 3,000. 'I couldn't believe it. They obviously expected me to have a private income,' she says. ..TX.- She, in common with many others, proved her worth and was rapidly promoted. 'Because many of the women had brains and gumption they got on,' says Rebuck. ..TX.- But why haven't they got on still further and in greater number? One reason may have been a lack of ambition, at least on the part of some of the older women. 'Women of my generation have not wanted to be the ultimate boss, but younger women don't all feel that way,' says Calder. ..TX.- Another problem, says Rebuck, is that women who have made it as editors may fear - wrongly - the financial responsibility that comes with moving up the mangement ladder. 'It's not as hard as it's cracked up to be. I haven't had any formal training with numbers and I don't need one. All you need is a bit of common sense.' ..TX.- Recent changes in the industry may also be in women's favour. Until recently, publishing was a shambolic cottage industry with highly paternalistic ways. According to Kahn, women lost out in this informal environment. 'In a small family firm it is only great if you happen to be the daughter,' she says. ..TX.- The bigger companies have given the industry its first taste of formal equal opportunities policies: a decade ago maternity leave - if any - was decided on an ad hoc basis. Now companies are vying with each other to offer the best maternity deals. Faber & Faber and Longman have recently agreed to pay towards employees' childcare costs. ..TX.- The reorganisation has also started a game of musical chairs in senior positions: men who had seemed likely to remain forever in their jobs have moved, and some have been replaced by women. ..TX.- Just as the balance is shifting towards women at the middle and the top of the industry, the reverse is happening at the bottom. The higher salaries are drawing in more men, who are increasingly prepared to start as secretaries. 'The young men don't come with all that baggage any more. They've got mothers who worked,' says Rebuck. Both Rebuck and Coady have had male secretaries - something that would raise no eyebrows in the US where some 60 per cent of publishing assistants and secretaries are male. ..TX.- The experience of the women who have made it in publishing, and of those who work for them, suggests that the sex of the people at the top does make a difference. Coady says that women's attitude to power is less political: 'I look at power in relation to what I am doing. Power is desirable to me if it means I can put my ideas about writers and books into work.' ..TX.- Rebuck agrees: 'There is that element of Machiavellian charm of men in publishing. They meander around the point, and you walk out of the office and do not realise until later that you have been carved up. Women are more direct.' ..TX.- Women are also said to communicate better. One female employee commented with approval that when Rebuck took over she went round the office talking to everyone. 'You wouldn't find a man doing that.' ..TX.- They work harder, says Coady, who admits to being a 'complete workaholic'. Rebuck, who hurries home every night to see her two children, has had to become an efficient user of time. However, their view from the top is not altogether pleasant. As pioneers, they are constantly subjected to a great deal of attention, not all of it flattering. Carmen Callil is used to reading that she is a nightmare to work for, while Rebuck learnt from the trade press that she got the job by stabbing her predecessor in the back. ..TX.- Such talk, argues Coady, is heard every time a woman gets into a position of power. 'You've always got people trying to explain why you've got the job,' she says. Rebuck complains that 'women in power are often criticised for being tough. But if they are not tough there is a suggestion that they are not up to the job.' ..TX.- She also finds that many men do not know how to deal with her. 'They have run out of stereotypes,' she says. She tells the story of a middle-aged male journalist asking her whether she could sense any sexual tension when she chaired board meetings. She rolls her eyes and laughs. ..TX.- That brave new world is still a fiction in which women are in charge and the men do the typing without either party feeling they are doing anything odd. But if one day it is to become fact, it could well be in books first. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2731 Book Publishing. ..TP.- Types: MGMT Management & Marketing. CMMT Comment & Analysis. ..IX.- P2731. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGNB5AC0FT ..HL.- 930714FT 930714 Business and the Environment: Battle for the heartland of South America - Plans to create a 3,400km waterway (740) ..BL.- By JOHN BARHAM ..TX.- The rivers of South America have been largely untravelled since they were used by conquistadores, explorers and traders to settle the continent's heartland. Now, once again, the peace may be about to be disrupted. ..TX.- Plans are under way to transform the Paraguay and Parana rivers into a 3,400km waterway that would link the often impoverished interior with seaports at the River Plate estuary. The waterway would be quick, easy and cheap to create. ..TX.- The governments of Argentina, Bolivia, Brazil, Paraguay and Uruguay, whose territory the rivers flow through, are seeking international finance to set up the waterway, known as the Hidrovia. It could become one of the region's biggest development projects since the construction of the Itaipu dam in the 1980s. ..TX.- Predictably, the project has met with hostility from environmentalists. Argentine and US scientists said in a recently published study that the Hidrovia could threaten the environment. They also doubted its economic viability. The report, produced by Wetlands for the Americas, a conservation group, and supported by the prestigious Woods Hole Research Institute in the US, warns of water pollution from spills of oil and chemical cargoes. ..TX.- River life, wildlife and the surrounding land would be affected by the increased river traffic and the civil engineering projects required to make the rivers navigable. ..TX.- The main threat, says the report, is to Brazil's vast Pantanal marshland. The 200,000 sq km Pantanal not only supports a rich diversity of wildlife, but acts as a gigantic sponge, regulating water levels in the Paraguay river. Damaging the Pantanal's sponge function 'may result in an overlap of the peak flooding period in both the Parana and Paraguay rivers, which can increase the risk of both catastrophic rises and extreme lows in water level along the middle and lower Parana River'. ..TX.- Changes in the region's hydrology would exacerbate alterations already caused by the large Itaipu dam and add to potential impacts caused by other dams under construction on the Paraguay and Parana Rivers. ..TX.- The Hidrovia could also cause further problems. 'It is very likely that the greatest environmental impacts caused by the Hidrovia will be indirect, given the rapid development process that may follow the starting of the operations in the waterway,' the report says. ..TX.- Better transport would inevitably increase human occupation and bring environmental disruption. This could also lead to an expansion of diseases such as malaria, dengue and yellow fever and the spread of water-borne diseases. ..TX.- The Hidrovia would help bring vast new areas of land under cultivation in the heart of the continent, replacing native vegetation. This could increase soil erosion and the silting of rivers. Increased use of agrochemicals would damage river life. Industrial mining and gold wildcatting, which already threaten the Pantanal, could also increase. ..TX.- The authors attack as superficial a previous economic feasibility study carried out by Brazilian consultants which estimated the Hidrovia's rate of return at 16-23 per cent. This report has been used by governments to support the Hidrovia's viability. But Wetlands for the Americas claims that the benefits are overstated and environmental costs are not taken into consideration. ..TX.- Without attempting a detailed estimate of these costs, the Wetlands report says the economic benefits are probably significantly less than claimed and could even be negative. ..TX.- However, Jesus Gonzalez, the Argentine government official on the Hidrovia's executive committee, recently promised a full-scale environmental impact study, and said the project would be shelved if the potential damage were too high. This is in keeping with greater government sensitivity to the environment throughout the region. Governments are under pressure from industrial countries, lending agencies and to some extent their own populations to protect the environment. The Inter-American Development Bank is financing environmental consultants to carry out impact studies. ..TX.- However, experience in Latin America has shown that government assurances to safeguard the environment must be treated with scepticism. ..TX.- The Wetlands' report is only an opening shot in a battle between environmentalists and a powerful development lobby of farmers, international lending agencies, big business and governments that is likely to become increasingly bitter. ..CN.- Countries: AR Argentina, South America. BO Bolivia, South America. BR Brazil, South America. PY Paraguay, South America. UY Uruguay, South America. ..IN.- Industry: P9511 Air, Water, and Solid Waste Management. P9512 Land, Mineral, Wildlife Conservation. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9511, P9512. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGNB5ACZFT ..HL.- 930714FT 930714 Commodities and Agriculture: Minor Metals Prices (207) ..TX.- Prices from Metal Bulletin (last week's in brackets). ..TX.- ANTIMONY: European free market 99.6 per cent, Dollars per tonne, in warehouse, 1,540-1,590 (1,540-1,580). ..TX.- BISMUTH: European free market, min. 99.99 per cent, Dollars per lb, tonne lots in warehouse, 2.25-2.50 (same). ..TX.- CADMIUM: European free market, min. 99.5 per cent, Dollars per lb, in warehouse, 0.44-0.50. ..TX.- COBALT: MB free market, 99.8 per cent, Dollars per lb, in warehouse, 12.50-13.30 (12.30-13.35); 99.3 per cent, Dollars per lb, in warehouse, 9.80-10.50 (9.50-10.30). ..TX.- MERCURY: European free market, min. 99.99 per cent, Dollars per 76 lb flask, in warehouse, 115-130 (115-135). ..TX.- MOLYBDENUM: European free market, drummed molybdic oxide, Dollars per lb Mo, in warehouse, 2.25-2.30 (same). ..TX.- SELENIUM: European free market, min 99.5 per cent, Dollars per lb, in warehouse, 4.70-5.40. ..TX.- TUNGSTEN ORE: European free market, standard min. 65 per cent, Dollars per tonne unit (10 kg) WO, cif, 27-39 (same). ..TX.- VANADIUM: European free market, min. 98 per cent, Dollars a lb VO, cif, 1.30-1.40 (same). ..TX.- URANIUM: Nuexco exchange value, Dollars per lb, UO, 7.00 (same). ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1099 Metal Ores, NEC. P6231 Security and Commodity Exchanges. P1094 Uranium-Radium-Vanadium Ores. ..TP.- Types: COSTS Commodity prices. ..IX.- P1099, P6231, P1094. ..DS.- The Financial Times ..XP.- London Page 30 ***************************************************************** ..AN.-00DGNB5ACYFT ..HL.- 930714FT 930714 Popular touch urged for BBC (386) ..BL.- By RAYMOND SNODDY ..TX.- THE BBC needs to broadcast more relaxing popular entertainment programmes because large sections of the audience are not being well served. ..TX.- This tentative conclusion has emerged during a review of programme strategy by Ms Liz Forgan, managing director of BBC Radio, and Mr Alan Yentob, controller of BBC1. ..TX.- Ms Forgan said yesterday: 'The BBC is brilliant at serving upmarket and minority audiences.' It was much less good, she added, at serving the C and D social groups. ..TX.- She said that in the past few years the BBC had focused a lot of attention and resources on news and current affairs. It was now time to put greater emphasis on entertainment. ..TX.- The conclusions, which came from detailed audience research, also suggested that the BBC seemed remote and old-fashioned to sections of its audience. ..TX.- But as the BBC was hinting at new programme strategies the ITV network was suggesting it was planning to move up market. ..TX.- Launching a Pounds 173m programme schedule for the autumn, Mr Marcus Plantin, the ITV network director, said the schedule was aimed to attract younger, more upmarket audiences. Mr Mark Tully, the BBC's veteran India correspondent, yesterday delivered his promised attack on the way Mr John Birt, the BBC director-general, is running the corporation. ..TX.- Mr Tully told the Radio Academy Festival in Birmingham that he did not think Mr Birt understood 'what the BBC was, or indeed what it should become'. ..TX.- There was a very real sense of fear among the staff which prevented people speaking their minds, he added. ..TX.- Mr Tully warned that there was a threat to the BBC's talent base from the practice of putting more staff on short-term contracts. ..TX.- No one could do their best work if they were always worrying about their next contract, he said. ..TX.- BBC chiefs yesterday rejected Mr Tully's criticisms. Mr Tony Hall, managing director of news and current affairs, said: 'It is not surprising that staff are unsettled by the changes that are happening. ..TX.- 'But criticism is not being stifled - indeed we are stressing the need for debate about our purpose.' ..CO.- Companies: British Broadcasting Corp. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4833 Television Broadcasting Stations. P4832 Radio Broadcasting Stations. ..TP.- Types: TECH Services & Services use. ..IX.- P4833, P4832. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5ACXFT ..HL.- 930714FT 930714 Parliament and Politics: Social fund pays out over Pounds 400m (76) ..TX.- PAYMENTS from the Social Fund, providing loans or grants to the needy, exceeded Pounds 400m last year, double the amount of its first year of operation, Mr Nicholas Scott, the social security minister, said in a written reply last night. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9441 Administration of Social and Manpower Programs. ..TP.- Types: NEWS General News. ..IX.- P9441. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACWFT ..HL.- 930714FT 930714 Parliament and Politics: Budget likely at end of November (133) ..TX.- MR Stephen Dorrell, financial secretary to the Treasury, confirmed in the Commons last night that the first unified budget was likely to be introduced 'at the end of November'. ..TX.- He also gave a further assurance that the time available for the finance bill to be scrutinised by MPs under the new procedure would be 'marginally increased'. ..TX.- Mr Nick Brown, a Labour treasury spokesman, feared that the timetable envisaged by the government for future years would result in the finance bill not being published until after Christmas with MPs being pressed to complete the committee stage before the Easter recess. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACVFT ..HL.- 930714FT 930714 Parliament and Politics: Portillo warns over PSBR (150) ..TX.- MR MICHAEL Portillo, chief secretary to the Treasury, last night stressed that the elements in Britain's Pounds 50bn public sector borrowing requirement attributable to cyclical factors would not automatically unwind as the recession ended. ..TX.- Before the Finance Bill was given its third Commons reading by a majority of 37 (311-274), Mr Portillo warned that the constraints on public expenditure agreed by the cabinet were more challenging than was realised by some Conservatives. ..TX.- Mr Portillo thanked those Tory MPs who had supported the government in taking the unpopular decision to extend VAT to domestic fuel, and he hoped they would also support the specific measures which would be needed to ensure that the spending totals would not be exceeded. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON National income. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACUFT ..HL.- 930714FT 930714 Parliament and Politics: Clarke trip aims to ease tensions (189) ..BL.- By PETER NORMAN ..TX.- MR KENNETH Clarke, the chancellor, will next week make an official visit to Germany in an attempt to strengthen economic relations between the two countries and smooth over any residual tensions between the Treasury and Bundesbank, Peter Norman writes. ..TX.- In a packed two-day schedule Mr Clarke will dine with industrialists and bankers in Frankfurt on Sunday, lunch with Mr Hans Tietmeyer, the Bundesbank president-designate, on Monday and meet Mr Theo Waigel, the German finance minister, in his home city of Munich later that day. In Munich the chancellor will give a speech that is expected to develop the UK's ideas for improving Europe's international competitiveness through supply side policies. ..TX.- UK officials played down suggestions that the chancellor would be pushing for German interest rate cuts. But while Mr Clarke's trip may lack a specific policy goal, it will mark a notable change of style from that of Mr Norman Lamont, his predecessor. ..CN.- Countries: GB United Kingdom, EC. DE Germany, EC. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACTFT ..HL.- 930714FT 930714 Parliament and Politics: Lib Dems press fuel VAT attack (447) ..BL.- By DAVID OWEN ..TX.- A TORY DEFEAT in the Christchurch by-election could force the government to reverse plans to impose value added tax on domestic fuel, the Liberal Democrats said yesterday. ..TX.- The Lib Dems tried to exploit Monday's backbench rebellion on the issue, which cut the government's Commons majority to eight votes, while Labour sought to turn the heat on Mr John Major in the Commons. ..TX.- Mrs Diana Maddock, the Liberal Democrat candidate in this month's election, said people felt they had been cheated by a party that 'lambasted' its opponents for advocating higher taxes. She was supported by Mr Paddy Ashdown, the Liberal Democrat leader, who said Christchurch voters had a chance to shape the next Budget. ..TX.- Their remarks came as Mr William Powell, the MP for Corby who was among Monday's rebels, predicted that imposing VAT on fuel would cost the Conservatives the by-election. ..TX.- At Westminster Mr John Smith launched a concerted attack on the issue, accusing the government of betraying election promises. ..TX.- The Labour leader urged Mr Major to apologise to voters for pressing ahead with the proposal to levy VAT on fuel in spite of past Conservative promises. He asked: 'Do you deny that you have cynically betrayed an election pledge?' ..TX.- Mr Major countered by saying Labour was 'looking at' VAT on fuel and had once excluded fuel from a list of items on which it thought VAT should not be imposed. ..TX.- Turning his fire on the Liberal Democrats, the prime minister said they had also advocated a tax on energy in a recent policy document. 'Perhaps you will go back to Christchurch and tell them that,' he said. ..TX.- The exchanges triggered a flurry of correspondence. Sir Norman Fowler, the Conservative chairman, wrote to Mr Ashdown and Mr Smith reiterating the comments made by Mr Major, while Mr Chris Smith, Labour's environment spokesman, wrote to the prime minister denying Labour had ever supported VAT on fuel. ..TX.- Challenged on her party's energy policy at the Dorset seaside town where one in three residents is a pensioner and the Conservatives are defending a majority of 23,000, Mrs Maddock said imposing VAT on fuel and introducing a carbon tax were 'quite different things'. She confirmed her party favoured a carbon tax. ..TX.- Mr Robert Hayward, the Tory candidate, said he supported the overall economic package of which broadening the VAT base was a part but stressed that the government had said it would provide help for those on low incomes. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P9199 General Government, NEC. ..TP.- Types: GOVT Taxes. ..IX.- P9311, P9199. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACSFT ..HL.- 930714FT 930714 Parliament and Politics: Government confident of defeating referendum move (285) ..BL.- By ALISON SMITH ..TX.- GOVERNMENT business managers expressed confidence yesterday that the attempt in the House of Lords today to bring about a referendum on Maastricht would be defeated. ..TX.- But evidence of their determination to take no chances came in a briefing note from Tory Central Office, countering arguments put forward by the referendum campaigners on Monday. ..TX.- Tactics for dealing with the more serious challenge to the government's ratification plans posed by the Commons social chapter debate later this month were discussed yesterday by senior ministers. ..TX.- They agreed that in order to leave the greatest possible freedom of manoeuvre, the government should not spell out publicly what it would do if it were defeated. Labour has had an amendment agreed to the motion for debate, saying that the treaty should not be ratified until the UK has committed itself to the social agreement. ..TX.- Yesterday's briefing note to peers particularly targeted Lady Thatcher, who made it clear earlier this week that she intended to vote against the three-line Tory whip and in favour of a referendum. ..TX.- Her speech in 1975 against a referendum was extensively quoted against the line that the campaign for a referendum was neutral and could be supported both by those in favour of Maastricht as well as those against the treaty. ..TX.- The note also rejected the suggestion that the government was trying to force peers to vote for a referendum by threatening to resign. 'Scare tactics may be part of others' strategy, but the government has no need of them,' it said. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACRFT ..HL.- 930714FT 930714 People: Smout moves up at the Bank (186) ..TX.- Clifford Smout, who is just 36, is being promoted to the position of deputy head of the Bank of England's supervision division, in charge of supervisory policy; he replaces Richard Farrant, the new chief executive of the Securities and Futures Authority. A decade younger than the other three deputies, he will report to Michael Foot, who is to take over from Roger Barnes. ..TX.- An economics graduate from Clare College, Cambridge, Smout joined the Bank in 1978, initially in the international division, concentrating on economic forecasting. His next port of call was money markets, and, following the implementation of the Financial Services Act, he became involved in setting up the division supervising wholesale money markets. Between 1987 and 1989 he was private secretary to the then deputy governor Sir George Blunden. He moved on to the foreign exchange side, and then into his most recent job - manager in the supervision division in charge of North American banks. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6011 Federal Reserve Banks. ..TP.- Types: PEOP Appointments. ..IX.- P6011. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACQFT ..HL.- 930714FT 930714 Parliament and Politics: Fierce battle ahead as MPs weigh reform (484) ..BL.- By RALPH ATKINS ..TX.- THE PARLIAMENTARY battle over Sunday trading will be a fraught game of bluff and tactical manoeuvring between the competing lobby groups that may well end up with the rules on opening hours unchanged. ..TX.- With ministers still wincing at memories of the government's ignominious 1986 defeat when it tried to deregulate opening hours completely, the Home Office is putting the onus on MPs to decide how Sunday trading should be reformed. ..TX.- The bill will be formally presented to the Commons in the legislative session beginning in November. The first main debate, or 'second reading' will be on the principle of reforming the 1950 Shops Act. ..TX.- The battle proper will not come until the bill is considered in detail by a committee of the whole Commons. The Speaker will decide the order in which MPs vote on the four options selected by the government - but probably with total deregulation first. Once one option wins a majority, the others will fall. ..TX.- A special feature of yesterday's bill is that if, as seems entirely possible, no option wins a majority, the government would be able to ask the Commons to vote again at a later date without the need for the entire legislation to be re-considered. That could be after a general election. In the meantime, the 1950 Act would continue. ..TX.- The House of Lords will also vote on the same options. If it chooses a different version to the Commons, MPs will have to vote again. ..TX.- The government has separated the issue of employee protection. But Labour and Liberal Democrat MPs, and possibly some Tories, will propose amendments to enhance the rights of future employees who work on Sundays, as well as the rights of existing employees. Conservative MPs will almost certainly be whipped to vote against them. ..TX.- But if employee rights are not improved, opposition MPs could vote against the bill on its third and final reading, even if they back the reform option eventually selected. Together with those unhappy about the option chosen, they may defeat the bill. ..TX.- Mrs Joan Ruddock, who speaks for Labour on home affairs, said: 'That will always be the threat that hangs over the government - that the whole legislation may end up being voted down at the final stage if they don't satisfy us all on protection of future, as well as existing, workers.' ..TX.- Government business managers have yet to decide if Tory MPs will have a free vote on third reading. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P52 Building Materials and Garden Supplies. P53 General Merchandise Stores. P54 Food Stores. P55 Automotive Dealers and Service Stations. P56 Apparel and Accessory Stores. P57 Furniture and Homefurnishings Stores. P58 Eating and Drinking Places. P59 Miscellaneous Retail. ..TP.- Types: NEWS General News. ..IX.- P52, P53, P54, P55, P56, P57, P58, P59. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACPFT ..HL.- 930714FT 930714 Parliament and Politics: Clarke trip aims to smooth tensions (362) ..BL.- By PETER NORMAN, Economics Editor ..TX.- MR KENNETH Clarke, the chancellor, unveils a further facet of his chancellorship next week when he visits Germany to strengthen economic relations between the two countries and smooth over any residual tensions between the Treasury and Bundesbank. ..TX.- After Mr Clarke, the friend of industry, and Ken Clarke, the 'straight from the shoulder' political chancellor who tells voters of possible tax increases and welfare cuts, the public will be presented with a chancellor who beats the drum for Britain 'at the heart of Europe'. ..TX.- In a packed two-day schedule Mr Clarke will dine with industrialists and bankers in Frankfurt on Sunday, lunch with Mr Hans Tietmeyer, the Bundesbank president-designate, on Monday and meet Mr Theo Waigel, the German finance minister, in his home city of Munich later that day. In Munich the chancellor will give a speech that is expected to develop the UK's ideas for improving Europe's international competitiveness through supply side policies. ..TX.- UK officials played down suggestions that the chancellor would be pushing for German interest rate cuts. But while Mr Clarke's trip may lack a specific policy goal, it will mark a notable change of style from that of Mr Norman Lamont, his predecessor. ..TX.- The Euro-sceptic Mr Lamont made no secret of his lack of enthusiasm for meeting European finance ministers. ..TX.- He also mishandled relations with the Bundesbank, nearly provoking a walk-out by Mr Helmut Schlesinger, the German Bundesbank president, at last September's meeting of EC finance ministers and central bank governors in Bath shortly before sterling was forced to leave the European exchange rate mechanism. ..TX.- There is no record of Mr Lamont ever visiting the Bundesbank as chancellor, whereas Mr Clarke will meet Germany's independent central bankers less than two months after moving into 11 Downing Street. ..TX.- Mr Clarke's meeting with Mr Waigel will be his third in a fortnight, after bilateral talks with the German minister in Tokyo last week and Monday's economic and finance ministers' council in Brussels. ..CN.- Countries: GB United Kingdom, EC. DE Germany, EC. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACOFT ..HL.- 930714FT 930714 People: Read plugs into Logica network (416) ..TX.- Logica, the computing services company, is strengthening its senior management by promoting David Mann into the new position of deputy chairman, and bringing in Martin Read (right) as the next managing director and chief executive. ..TX.- Paul Bosonnet, who took over when Logica's founder Philip Hughes stepped down in 1990, says that, unlike Hughes, he is a part-time chairman 'with the accent very much on the part-time'. This means that he has 'had very little involvement with customers'. Hence Mann, who has been at Logica since 1969, will be able to devote more time to customers and industry partners now he is freed of day-to-day management responsibilities. ..TX.- Meanwhile, 43-year-old Read has been headhunted from GEC-Marconi. Appointed managing director of Marconi Command and Control Systems in 1989, he was then made managing director of Marconi Radar and Control Systems on the 1991 merger with Marconi Radar. In the following year he also took on the supervisory managing directorship of the GEC systems engineering company EASAMS, as well as the GEC-Marconi Research Centre. This year he collected similar roles at GEC Computer Services and GEC-Marconi Software Systems, an accumulation of extra responsibilities that Bosonnet calls 'very encouraging'. ..TX.- 'We were looking for somebody who did not replicate everything we already had inside Logica,' says the chairman. 'He is not unfamiliar with software and he has enough educational background to understand our business.' Read has a natural sciences degree from Cambridge and an Oxford DPhil in physics. He is also expected to inject more than a whiff of the culture of his previous employer. 'Coming from GEC he is a little more hard-nosed and commercially-oriented; we inevitably start from our interest in technology,' as Bosonnet puts it. ..TX.- However, despite holding down international management positions for Overseas Containers and International Paint before joing GEC-Marconi in 1985, he has no real operating experience in the US, where Logica continues to experience difficulties. 'If you compile a list of all the attributes you want, you rule yourself and everybody else out,' Bosonnet says philosophically. ..TX.- While Read becomes boss of a publicly listed company, Logica, which employs 3,300 people and has annual sales of Pounds 200m, is considerably smaller than the outfits he has been running. Marconi Radar and Control Systems alone sees a turnover of Pounds 310m and has more than 4,000 employees. ..CO.- Companies: Logica. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7379 Computer Related Services, NEC. ..TP.- Types: PEOP Appointments. ..IX.- P7379. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACNFT ..HL.- 930714FT 930714 People: Non-executive directors (41) ..TX.- David Cohen, a director of Robert Fleming Securities, at ARMOUR TRUST. ..CO.- Companies: Armour Trust. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2064 Candy and Other Confectionery Products. ..TP.- Types: PEOP Appointments. ..IX.- P2064. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACMFT ..HL.- 930714FT 930714 People: Non-executive directors (39) ..TX.- Alastair Deakin, finance director of Hewden Stuart, at CLYDE BLOWERS. ..CO.- Companies: Clyde Blowers. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3559 Special Industry Machinery, NEC. ..TP.- Types: PEOP Appointments. ..IX.- P3559. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACLFT ..HL.- 930714FT 930714 People: Non-executive directors (51) ..TX.- Harry Roche, chairman and chief executive of the Guardian and Manchester Evening News and chairman of the Press Standards Board of Finance, at JOHNSTON PRESS. ..CO.- Companies: Johnston Press. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2711 Newspapers. ..TP.- Types: PEOP Appointments. ..IX.- P2711. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACKFT ..HL.- 930714FT 930714 People: Non-executive directors (59) ..TX.- Neil Chapman, a practising pharmacist, at UNICHEM. Since 1990 he has been chairman of the Unichem Northern Regional Committee and was a non-exec at Unichem from 1986-90. James Buchanan has retired. ..CO.- Companies: Unichem. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5122 Drugs, Proprietaries, and Sundries. ..TP.- Types: PEOP Appointments. ..IX.- P5122. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACJFT ..HL.- 930714FT 930714 People: Non-executive directors (40) ..TX.- Neil Mackay (above), a director of Lazard Brothers, at LAMONT HOLDINGS. ..CO.- Companies: Lamont Holdings. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2211 Broadwoven Fabric Mills, Cotton. ..TP.- Types: PEOP Appointments. ..IX.- P2211. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACIFT ..HL.- 930714FT 930714 People: Non-executive directors (38) ..TX.- Keith Chapman, founder partner of Crouch Chapman, at WINDSOR. ..CO.- Companies: Windsor. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6411 Insurance Agents, Brokers, and Service. ..TP.- Types: PEOP Appointments. ..IX.- P6411. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACHFT ..HL.- 930714FT 930714 People: Non-executive directors (46) ..TX.- Sir Jeremy Black, chairman of Remy & Associates, and John McLaren, a director of Morgan Grenfell, at MACALLAN-GLENLIVET. ..CO.- Companies: Macallan-Glenlivet. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2085 Distilled and Blended Liquors. ..TP.- Types: PEOP Appointments. ..IX.- P2085. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACGFT ..HL.- 930714FT 930714 People: Non-executive directors (64) ..TX.- Stuart Henderson, former chairman and chief executive of Contractors Services Group which he sold to BET, as chairman of INTERNATIONAL MACHINERY COMPANY, the Terex and Samsung distributor which bought Blackwood Hodge from the BM Group. ..CO.- Companies: International Machinery. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5082 Construction and Mining Machinery. ..TP.- Types: PEOP Appointments. ..IX.- P5082. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACFFT ..HL.- 930714FT 930714 People: Non-executive directors (41) ..TX.- John Guinness, chairman of British Nuclear Fuels, at OCEAN GROUP. ..CO.- Companies: Ocean Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4412 Deep Sea Foreign Transportation of Freight. ..TP.- Types: PEOP Appointments. ..IX.- P4412. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACEFT ..HL.- 930714FT 930714 People: Non-executive directors (37) ..TX.- John Elfed Jones, former chairman of Welsh Water, at BMSS. ..CO.- Companies: BMSS. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5039 Construction Materials, NEC. ..TP.- Types: PEOP Appointments. ..IX.- P5039. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACDFT ..HL.- 930714FT 930714 People: Non-executive directors (70) ..TX.- Yves Tuloup as chairman, Jean-Paul Oudet and Charles Bernard at SOCIETE GENERALE STRAUSS TURNBULL SECURITIES; the previous chairman Patrick Duverger, head of Societe Generale's capital markets division who will concentrate more on the corporate side of capital markets. ..CO.- Companies: Societe Generale Strauss Turnbull Securities. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6211 Security Brokers and Dealers. ..TP.- Types: PEOP Appointments. ..IX.- P6211. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACCFT ..HL.- 930714FT 930714 Parliament and Politics: Sunday bill sparks job fears (577) ..BL.- By TIM KING and RALPH ATKINS ..TX.- CONCERN ABOUT protection for shop workers' rights was the common element in reaction yesterday to the government's White Paper and draft bill on Sunday trading. ..TX.- The various lobby groups disagreed sharply about how the law should be reformed but were united in calling for reform to be accompanied by guaranteed employment rights. ..TX.- Home Secretary Mr Michael Howard would only support protecting those employed as shopworkers at the time that any changes to the law came into effect. ..TX.- Mrs Joan Ruddock, Labour's home affairs spokesman, said she would press hard for protection for future, as well as existing, employees who have to work on Sundays. She said the party's MPs supported changing the 1950 Shops Act but added: 'We can say with confidence that complete de-regulation is not something that Labour MPs will vote for.' ..TX.- Mr Paddy Ashdown, Liberal Democrat leader, also backed reform but said he would judge the legislation according to whether it protected employees, preserved to some extent the special nature of Sundays, and gave some flexibility to local authorities in deciding what shops could open and when. ..TX.- The shop workers' union Usdaw said it was totally opposed to plans for deregulating Sunday trading. ..TX.- Mr Garfield Davies, the union's general secretary, said ..TX.- any new law should enshrine voluntary working so that workers who did not want to work on Sundays would not be discriminated against. ..TX.- Usdaw also demanded legal entitlement to double-time pay for Sunday working. ..TX.- Mr Michael Schluter, director of the Keep Sunday Special Campaign, said: 'KSSC will not accept any government bill, however many the options, unless shop workers are adequately protected from being compelled to work on a Sunday and properly remunerated if they choose to do so.' ..TX.- The John Lewis Partnership gave its support to KSSC, saying it represented the best balance for society as a whole. ..TX.- The Retailers for Shops Act Reform, which represents some of the UK's largest retailers including Marks and Spencer, would allow Sunday opening for small convenience and leisure shops of not more than 3,000 sq ft and all garden centres and DIY shops. ..TX.- Mr Geoffrey Maitland Smith, chairman of Sears, another RSAR member, said Sunday trading was not financially attractive except at Christmas. He said that outside big cities it could present problems with stock delivery and staffing. ..TX.- The group closest to the government's preference is the Shopping Hours Reform Council, which would allow shops below 3,000 sq ft unrestricted opening, but larger shops could open for not more than six hours between 10am and 6pm. This option is supported by the big supermarket chains and the retail group Kingfisher. ..TX.- SHRC chairman Baroness Jay said their option was popular, practical and permanent, adding that it would solve the problem of Sunday trading once and for all. But SHRC parts company with the government in wanting statutory employee protection. ..TX.- The Association of District Councils, which represents many local authorities that enforce the current Shops Act, said its main concern was that whatever reform was made should be legally enforceable. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P52 Building Materials and Garden Supplies. P53 General Merchandise Stores. P54 Food Stores. P55 Automotive Dealers and Service Stations. P56 Apparel and Accessory Stores. P57 Furniture and Homefurnishings Stores. P58 Eating and Drinking Places. P59 Miscellaneous Retail. ..TP.- Types: NEWS General News. ..IX.- P52, P53, P54, P55, P56, P57, P58, P59. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACBFT ..HL.- 930714FT 930714 People: Eleco snaps up Callaghan as its chief executive (312) ..TX.- Eleco, the building products, contracting and distribution company, has replaced its former chief executive 41-year-old Michael Webster, who had been in the position for the past six years, with Australian-born Peter Callaghan. ..TX.- Chairman Field Walton explains: 'We had some rather dreadful interim results, which had concerned the whole board.' In February, the company reported a Pounds 2.21m loss for second half 1992. ..TX.- Together with two recently appointed non-executives, Walton says he approached the executive management and explained that he expected to see changes. 'It was the style of management more than anything else. The approach had worked very well for acquiring businesses. But the new acquisitions tended to have been treated as investments. The (recessionary climate) demanded more hands-on management.' ..TX.- Of Callaghan, he says: 'It is amazing he has not been snapped up before now,' adding that he is 'very user-friendly and has a good sense of humour'. His 'hands-on' management abilities, Walton believes, were demonstrated at Camford Engineering, where he was co-opted as deputy chairman by Markheath Securities to turn round the automotive components manufacturer before selling it on to Hoesch. ..TX.- It is understood Callaghan was offered a job by Hoesch both at its German headquarters and in Houston, within its American operation, but that he had declined. For the past 18 months he has been doing corporate advisory work. ..TX.- A production engineer by training, 42-year-old Callaghan also studied business administration in the early 1980s at the New South Wales Institute of Technology - where, coincidentally, Walton had once been offered a teaching post. He then worked for Australian resources company Peko Wallsend before moving to Natcorp Investments where he was operations director. ..CO.- Companies: Eleco Holdings. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3429 Hardware, NEC. P3441 Fabricated Structural Metal. ..TP.- Types: PEOP Appointments. ..IX.- P3429, P3441. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5ACAFT ..HL.- 930714FT 930714 Political Notebook: The price of Maastricht (872) ..BL.- By PHILIP STEPHENS ..TX.- BRITAIN will ratify Maastricht. The only question remaining is whether the treaty has the potential still to destroy Mr John Major's premiership. ..TX.- That - as has most of the tortuous process during which Mr Major has struggled to salvage a single point from what he once claimed as game, set and match - needs some explanation. ..TX.- After a year of ruinous conflict in the Tory party the bill to give legal force to the treaty is within sight of Royal Assent. If Mr Major is fortunate it will be signed and sealed before MPs depart for their Umbrian villas at the end of July. ..TX.- But two minefields remain. ..TX.- The first lies in the House of Lords, where Lady Thatcher is promising today to blemish her parliamentary career by voting against her party for the first time in 34 years. ..TX.- In spite of the pledge of Lord Rees-Mogg and his fellow backwoodsmen to follow their heroine into the division lobbies in support of a referendum, Mr Major is quietly confident she will not derail the treaty. The odds are that a majority will recognise the inherent illogicality of an unelected, un-accountable chamber demanding the people should decide. ..TX.- If for some obscure reason they do not, the prime minister's battered reputation will take another severe knock. Ratification would be further delayed. But eventually the House of Commons, which has already voted overwhelmingly against a referendum, would overturn the peers. ..TX.- The second, more serious, threat lies in the subsequent vote by MPs on the social chapter. Here we hit the legal technicalities. But it is important they are understood because this vote might - and the conditional tense is important - fatally wound Mr Major. ..TX.- During the spring an unholy alliance of opposition parties and Tory Euro-sceptics forced through an amendment related to Britain's opt-out from the treaty's social provisions. ..TX.- The amendment states that final ratification - the physical transfer of the legal instruments to Rome - can take place only after MPs and peers have voted on the wisdom or otherwise of the opt-out. It does not specify that MPs must support the deal negotiated by Mr Major, merely that a vote must take place on a motion tabled by the government after the bill has become law. ..TX.- The trap lies in another amendment being framed by the Labour party. In essence the new amendment, on which MPs will vote alongside the government motion, will say this: even though Maastricht has been enacted, the treaty itself should not be ratified unless the opt-out is scrapped. ..TX.- Labour is drafting the change in close consultation with the Tory sceptics. If the opposition can persuade a dozen or so of the rebels to join them then Mr Major could be defeated. The sceptics, of course, do not want the social chapter. But some of the diehards see in it a last chance to wreck the whole process. After all, Mr Major has declared he could never abandon the opt-out. ..TX.- So in the event of a government defeat Mr John Smith would demand the prime minister embrace the social chapter while the sceptics - including perhaps one or two in the cabinet - would insist he abandon the entire treaty. ..TX.- Of course it is not that simple. Mr Major might simply ignore the vote and complete the ratification process regardless. It would be messy - and probably subject to later judicial challenge - but better than leaving Britain isolated in Europe. ..TX.- Politics though would count for much more than legal sophistry. It is far from clear Mr Major could survive such a blow to his authority. Whatever the advice of the lawyers, however perverse the motivation of some Tory MPs, it might be impossible also to ignore the expressed will of parliament. ..TX.- All these issues were discussed in detail by the prime minister and his most senior colleagues yesterday. They concluded not to disclose their intentions in advance of the social chapter debate. ..TX.- Perhaps they have a masterplan, overlooked so far by their opponents. More likely they believe that uncertainty offers the best chance of unnerving the Tory sceptics. ..TX.- Some in the government disagree. They want Mr Major to give an unequivocal commitment to ratify come what may - a public warning to the rebels that if Britain were to end up with the treaty plus the social chapter they not the government would bear the blame. ..TX.- Perhaps life is not that simple. And the same message presumably can be conveyed to the sceptics as effectively in private as in public. But the reality there is no other option but to ratify Maastricht. A majority in the cabinet - foreign secretary and chancellor among them - could not accept a different outcome. ..TX.- The sceptics eventually may understand this and vote for once with their own party. The strengthening economic recovery might then refloat Mr Major's government. But what price his premiership if he does lose in the Commons on the social chapter and then suffers a crushing defeat in the Christchurch by-election? ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9199 General Government, NEC. P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9199, P9721. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGNB5AB9FT ..HL.- 930714FT 930714 Pounds 60m defence order (52) ..TX.- THE Ministry of Defence has ordered a Pounds 60m electronic system for controlling the targeting of gun batteries from GEC-Marconi, it was announced yesterday. ..CO.- Companies: GEC-Marconi. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3823 Process Control Instruments. ..TP.- Types: MKTS Contracts. ..IX.- P3823. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5AB8FT ..HL.- 930714FT 930714 Tory leader quits (44) ..TX.- MR DAVID Weeks has resigned as leader of Westminster City Council following pressure to step down from fellow Conservative councillors. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9121 Legislative Bodies. ..TP.- Types: PEOP People. ..IX.- P9121. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5AB7FT ..HL.- 930714FT 930714 Mirror holds its own in tabloid war (112) ..TX.- THE DAILY Mirror seems to have held on to and even increased its circulation yesterday in spite of being 7p more expensive than The Sun, its main rival. ..TX.- Industry sources suggested that the Mirror increased sales by about 2 per cent. Daily Mirror sales in June were more than 2.6m a day. ..TX.- Early estimates suggested that The Sun's price cut of 5p to 20p for the summer was having a modest effect so far, with sales up by about 220,000 yesterday. ..CO.- Companies: Mirror Group Newspapers. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2711 Newspapers. ..TP.- Types: MKTS Sales. ..IX.- P2711. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5AB6FT ..HL.- 930714FT 930714 Civil Service numbers attacked (106) ..TX.- MR QUENTIN Davis, a Conservative MP, yesterday attacked the government's record in curbing Civil Service numbers and called on ministers to follow the lead of the private sector and privatised industries in improving productivity. ..TX.- Mr Stephen Dorrell, financial secretary to the Treasury, told a sub-committee hearing of the Commons Treasury and Civil Service committee that efficiency improvements had been offset by policy decisions which had increased activity in the Civil Service. ..TX.- Executive agencies would deliver greater efficiency, he said. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9199 General Government, NEC. ..TP.- Types: NEWS General News. ..IX.- P9199. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5AB5FT ..HL.- 930714FT 930714 Terms for panel agreed at Lloyd's (178) ..TX.- LLOYD'S OF London announced last night that lossmaking Names and their agents had agreed terms of reference for a legal panel which is attempting to negotiate an out-of-court settlement. The panel was set up last month. ..TX.- Names - the individuals whose assets support the market - and lawyers acting for the errors and omissions insurers, which cover agents against negligence awards and would fund a settlement, had been at odds about the status of any conclusions reached by the panel. ..TX.- Lloyd's said that although the panel's legal evaluation would not be binding, it would be able to make a settlement offer. ..TX.- Solicitor Mr Harold Weston, who faced bankruptcy after incurring losses on the Lloyd's market, hanged himself in despair in April, an inquest at Hornsey, north London, heard yesterday. ..TX.- A verdict of suicide was recorded on Mr Weston, 51, of Cricklewood, north Lon-don. ..CO.- Companies: Lloyd's of London. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6411 Insurance Agents, Brokers, and Service. ..TP.- Types: COMP Company News. ..IX.- P6411. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5AB4FT ..HL.- 930714FT 930714 Surveyors warn of 'suicidal' prices (138) ..BL.- By ANDREW TAYLOR ..TX.- INTENSE competition is forcing construction prices down to suicidal levels, the Royal Institution of Chartered Surveyors warned yesterday, Andrew Taylor writes. ..TX.- It said that contractors' tender prices had fallen 3 per cent in the first three months of this year - the lowest level since 1986. But contractors' construction costs were expected to rise 5.5 per cent in the next 24 months. ..TX.- The institution added that spare capacity among contractors meant that tender prices were unlikely to rise until well into next year. Its tender price index had fallen 25 per cent since 1989. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1542 Nonresidential Construction, NEC. P1629 Heavy Construction, NEC. P1522 Residential Construction, NEC. ..TP.- Types: COSTS Service costs & Service prices. ..IX.- P1542, P1629, P1522. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5AB3FT ..HL.- 930714FT 930714 MP implicates building society in 'fraud' (473) ..BL.- By JOHN GAPPER and SCHEHEREZADE DANESHKHU ..TX.- WEST Bromwich Building Society yesterday called for a Tory MP to give evidence to the police after he accused it of being implicated in 'forgery and fraud' over loans made to elderly investors through home income schemes. ..TX.- Mr William Powell, MP for Corby, said in the Commons that 'a great deal of criminal activity has been taking place' in relation to home-income plans taken out by 800 people. The schemes aimed to unlock capital in investors' homes in the late 1980s. ..TX.- Mr Powell said that West Bromwich, which lent about Pounds 24m through such schemes, had tried to avoid responsibility in an 'utterly scandalous, deeply shocking' way, that would 'merit much closer attention, particularly by the police'. ..TX.- Mr Glenn Elliot, the society's chief executive, said that he was 'horrified and appalled' that Mr Powell had used parliamentary privilege to make the accusation. He called for Mr Powell to produce any evidence to the police. ..TX.- Mr Elliot said: 'We have certainly not committed fraud, and if a financial adviser has been involved in fraud or forgery, we have no knowledge of it.' ..TX.- Mr Powell said he had seen documents signed by constituents which were changed after being signed. ..TX.- He said incomes had been falsified on the forms 'in order to justify the pushing out of much larger sums' than they wished to borrow. ..TX.- He said this had resulted in 'misery across the country' and in one case an elderly constituent had committee suicide. The society said that it was 'wrong' for Mr Powell to speculate that it had caused an investor's suicide. ..TX.- Many of West Bromwich's home-income loans were made after investors were sold schemes by the broker Fisher Prew-Smith, which was fined Pounds 20,000 by the insurance brokers' regulator Fimbra for its conduct and went into liquidation in 1991. ..TX.- Investment-linked home-income schemes were devised in the late 1980s. The idea was to take out a mortgage and invest the proceeds in the hope of earning a return large enough to meet the repayments as well as providing extra income. ..TX.- Many advisers backed the plans with single-premium investment bonds. When the value of these fell because of poor stock market performance and interest rates rose, investors ran into financial difficulties. ..TX.- The building society ombudsmen have been hampered in investigating home income plans because these fall outside their jurisdiction, and they require the prior consent of the building society. ..TX.- West Bromwich is one of nine building societies which have refused to co-operate with the ombudsman scheme. Mr Elliot said yesterday that it would co-operate with the complaints procedure if it received certain guarantees. ..CO.- Companies: West Bromwich Building Society. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6162 Mortgage Bankers and Correspondents. ..TP.- Types: TECH Safety & Standards. ..IX.- P6162. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5AB2FT ..HL.- 930714FT 930714 Chemical safety failures found (366) ..BL.- By DIANE SUMMERS, Labour Staff ..TX.- MORE THAN a quarter of employers do not comply with health and safety regulations on hazardous substances nearly four years after the introduction of new rules, research by the Health and Safety Executive yesterday revealed. ..TX.- The executive said it was 'encouraged' that 71 per cent of employers surveyed had implemented the Control of Substances Hazardous to Health Regulations 'satisfactorily or with just minor shortcomings'. ..TX.- However, the MSF general technical union yesterday accused the executive of complacency over the research results. Ms Judith Church, the union's health and safety officer, said: 'We know the ICIs and DuPonts have done a lot of work on Coshh. The problem is in the small organisations where half of the total workforce are employed.' ..TX.- A government review aimed at cutting red tape is under way, with health and safety one of the areas under scrutiny. The executive is probably stressing the positive side of the research results because it wishes to highlight the benefits to businesses of complying with health and safety regulations, while minimising the bureaucratic burdens involved. ..TX.- The regulations, which took effect in October 1989, are described by the executive as 'one of the most significant pieces of health and safety legislation since the Health and Safety at Work Act 1974'. They cover all potentially dangerous substances from typewriter correction fluid to farm pesticides. ..TX.- All employers are supposed to produce an assessment of potential hazards and take appropriate action to protect and monitor the health of their employees. ..TX.- The research shows that 22 per cent of employers 'needed to make more effort to comply with Coshh'. A further 6 per cent 'had made little or no attempt' to meet the requirements of the regulations. ..TX.- The executive added that some companies had gone 'over the top' in complying with the regulations - 11 per cent had carried out assessments that went beyond what was required by law. Those assessments which had been prepared by employers without outside help were rated as highly as those prepared by consultants. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8399 Social Services, NEC. ..TP.- Types: TECH Safety & Standards. ..IX.- P8399. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5AB1FT ..HL.- 930714FT 930714 Unions in Swans sale initiative (354) ..BL.- By CHRIS TIGHE ..TX.- UNION LEADERS at Swan Hunter, the Tyneside shipbuilder in receivership, wrote yesterday to eight companies they believe may be interested in buying the yard, pledging the workforce's commitment to its survival and prosperity. ..TX.- The letter from the Confederation of Shipbuilding and Engineering Unions emphasises its desire to retain shipbuilding on the Tyne and stresses that Swans' workforce has been 'in the vanguard of industrial relations change', embracing flexibility in working practices. ..TX.- The initiative reflects union concern at mounting job losses and continuing uncertainty about the yard's future after two months in receivership. ..TX.- Mr Eddie Darke of the Life for Swans campaign said: 'We've been very patient for two months. We decided we had to be a bit more pro-active.' The unions, he said, also wanted to discourage anybody who did not want to continue shipbuilding at Swans. ..TX.- Receivers Price Waterhouse are unhappy about the timing of the letter amid delicate negotiations with four prospective buyers. PW confirmed yesterday that no bid had yet been received. ..TX.- The recipients of the letter are AMEC, which owns large offshore fabrication facilities on the Tyne; German-based shipbuilder Bremer Vulkan; British Aerospace; GEC, owner of the Clyde warship builder Yarrow; Norwegian-owned Kvaerner, owner of the Govan yard on the Clyde; Rolls Royce; Southampton-based shipbuilder Vosper Thornycroft; and VSEL, the submarine builder based at Barrow-in-Furness, Cumbria. ..TX.- Unions believe the eight have been in touch with PW since Swans went into receivership. ..TX.- Yesterday Rolls Royce and British Aerospace strongly denied any interest in buying Swan Hunter, and Mr Martin Jay, managing director of Vosper Thornycroft, said his company had spare capacity at its Southampton and Portsmouth yards. ..TX.- Mr Diderik Schnitler, executive vice-president of Kvaerner, indicated that his company, one of the world's largest shipbuilders, would be unlikely to bid. ..TX.- Amec, GEC and VSEL all refused to comment. Mr Friedrich Hennemann, chief executive of Bremer Vulkan, said in a BBC television interview his company might be interested. ..CO.- Companies: Swan Hunter Shipbuilders. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3731 Ship Building and Repairing. ..TP.- Types: PEOP Labour. ..IX.- P3731. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5AB0FT ..HL.- 930714FT 930714 Caledonian seeks privatised mines stake (368) ..BL.- By MICHAEL SMITH ..TX.- CALEDONIAN MINING, a Nottinghamshire mining equipment manufacturer, is seeking to become a significant shareholder in a privatised British coal industry, providing the business is sold off as a single entity. ..TX.- The privately owned company, which has an annual turnover of about Pounds 30m, has told the government that it wants to own a significant part of the 51 per cent of British Coal that it hopes the government will sell in the first tranche of privatisation. ..TX.- Although Caledonian is a relatively small company, its bid is significant because it is among the first to express faith in a privately owned British coal industry. The government plans to privatise the industry within two years and hopes to bring a bill before parliament in the autumn. ..TX.- Mr Colin MacLeod, Caledonian chairman, said the company had the backing of its bankers for a bid if the government agreed to its pro-posals. ..TX.- Caledonian's bid is likely to be strongly opposed by unions and some managers who want to bid for British Coal themselves. ..TX.- Caledonian says in a submission to ministers that it would welcome employee participation through share ownership. ..TX.- But it would expect to negotiate no-strike agreements and modern working practices. ..TX.- The company agrees with management and unions that British Coal should not be broken up. ..TX.- 'It is doubtful if a coal industry could survive if it was split into a number of comparatively small units all competing in a market place dominated by two principal customers,' it says. ..TX.- It adds that coal producers would be played off against each other in the need to generate sales, and urges an 'orderly' rundown of electricity generators' coal stocks. ..TX.- Mr MacLeod said yesterday that his company would not be bidding for individual mines sold by British Coal in the approach to full privatisation. ..TX.- In the longer term, however, it would be interested in mines such as Easington in Durham and Wearmouth in Tyne and Wear, which are being closed by British Coal. ..CO.- Companies: Caledonian Mining. British Coal Corp. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1222 Bituminous Coal-Underground. P9611 Administration of General Economic Programs. ..TP.- Types: COMP Shareholding. ..IX.- P1222, P9611. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5ABZFT ..HL.- 930714FT 930714 Standards institute defends quality management benchmark (267) ..BL.- By CHARLES BATCHELOR ..TX.- THE BRITISH Standards Institute yesterday attacked critics of BS5750, its controversial quality management standard, and defended its role as a writer of British standards. ..TX.- Mr Vivian Thomas, BSI chairman, said BS5750 was 'a national asset which BSI designed and exported round the world and which has been adopted by more than 20,000 companies in the UK'. ..TX.- Companies which register for BS5750 are required to formalise internal management systems so that a consistent quality is maintained. It has nothing to do with the quality of the product or service and has been criticised by small businesses in particular as being costly and bureaucratic. ..TX.- Mr Thomas said yesterday, at the first of a series of presentations intended to explain the role of BSI, that the BS5750 standard allowed companies to reduce waste, increase productivity and obtain a competitive advantage. ..TX.- 'I want to clear the air because there are a lot of misconceptions about BSI and its terms of reference,' said Mr Thomas. BSI, government subsidies for standards writing and the quality of British standards are being reviewed by the Department of Trade and Industry. ..TX.- As part of its response to criticism of BS5750 BSI issued a policy statement which it said was intended to correct misconceptions about the standard. Organisations certifying compliance with BS5750 must ensure that companies do not misuse their certificates to suggest their products or services have been assessed, it said. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9651 Regulation of Miscellaneous Commercial Sectors. ..TP.- Types: TECH Safety & Standards. ..IX.- P9651. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5ABYFT ..HL.- 930714FT 930714 Private funds sought for rail project (402) ..BL.- By RICHARD TOMKINS, Transport Correspondent ..TX.- THE government announced yesterday that another in a long line of badly needed transport projects was to be funded and carried out by the private sector. ..TX.- It has appointed Hambros Bank, the merchant bank, to develop a plan involving the private sector in the Pounds 300m resignalling of the London Euston to Glasgow line, one of the busiest InterCity routes. ..TX.- The move comes amid growing criticism of the government's progress in its attempts to involve private-sector finance in public-sector infrastructure projects. ..TX.- Some private companies and critics in government spending departments say the private- sector initiative has become an excuse for delaying projects such as the Pounds 2.5bn Channel tunnel rail link and the Pounds 2bn CrossRail scheme for London's east-west rail link. ..TX.- Mr Roger Freeman, transport minister, yesterday sought to counter scepticism by emphasising the London-Glasgow line modernisation marked a new approach by the government in its attempts to involve private sector funding. ..TX.- He said the government had previously invited the private sector to put forward proposals which had then been considered on their merits. But now, he said, the government was taking the initiative. ..TX.- Hambros has been given until September to develop the funding proposal. Provided the package was acceptable to the private sector and the Treasury it will form the basis for tendering between private-sector contractors for the signalling project. ..TX.- Last month Eurorail, a consortium involving GEC, Trafalgar House and Balfour Beatty, said it wanted to become involved in rail projects such as the upgrading of the London-Glasgow line. ..TX.- Whichever company wins the contract will recover investment by charging Railtrack, the public-sector body that will own the tracks after privatisation, a toll for each train using the resignalled line. Mr Freeman said private-sector finance would enable the resignalling to be carried out much more quickly than if the state undertook it, with the cost spread over the lifetime of the investment. ..TX.- If the formula proves successful, he added, it could be extended to many other rail projects. If Hambros does not come up with a package acceptable to the private sector and government, Railtrack would have to find the funds for investment. ..CO.- Companies: Hambros. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4011 Railroads, Line-Haul Operating. P4111 Local and Suburban Transit. P3669 Communications Equipment, NEC. ..TP.- Types: RES Facilities. MKTS Contracts. ..IX.- P4011, P4111, P3669. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5ABXFT ..HL.- 930714FT 930714 25% of house sales 'fail before contract exchange' (235) ..BL.- By ANDREW TAYLOR, Construction Correspondent ..TX.- MORE THAN a quarter of house sales collapse before contracts are exchanged, a study by the Lord Chancellor's Department has found. ..TX.- The main reasons are problems raised by surveys, mortgage valuations or changes in personal circumstances. ..TX.- The report says the average cost of buying or selling a house in England and Wales represented about 2 per cent of the purchase price, making it the cheapest in Europe. ..TX.- It takes just more than six weeks for an average transaction to progress from initial agreement to exchange of contracts. To complete a purchase takes two months on average. ..TX.- Delays in exchanging contracts are mostly due to waiting for mortgage finance or by last-minute attempts to renegotiate the purchase price. ..TX.- The study was commissioned under the Citizen's Charter programme to help 'speed up and simplify the process of buying a house'. ..TX.- The government is investigating two proposals - time limits for local authority searches, and a national land information system 'so that all the information currently requiring searches at the Land Registry and in local authority registers could be obtained from a single computerised source'. ..TX.- Report on House-Buying. Lord Chancellor's Department, Southside, 105 Victoria Street, London SW1E 6QT. Pounds 2.50. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6531 Real Estate Agents and Managers. ..TP.- Types: NEWS General News. ..IX.- P6531. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5ABWFT ..HL.- 930714FT 930714 BR pensions 'at risk', say trustees (426) ..BL.- By NORMA COHEN, Investments Correspondent ..TX.- THE government's proposals for the privatisation of British Rail put BR pensioners at risk because there is no safeguard against a shortfall in investment income, according to the scheme's trustees and managers. ..TX.- The board of trustees, which includes representatives of BR management and staff, will send a letter to pension scheme members later this week urging them to contact their MPs to express their concerns. ..TX.- 'The trustee company and the management committee consider that the government's choice is still not as secure as the current BR pension scheme. It still leaves pensioners unprotected against any future investment shortfall,' the letter says. ..TX.- 'It places their pensions at risk in the future because, if enacted, it removes the present, strong protections against any investment shortfall.' ..TX.- The trustees want a government 'solvency' guarantee to insure against a sustained period of poor investment returns at a time when the scheme has few contributing members. ..TX.- They expressed their concerns in a meeting with Mr John MacGregor, transport secretary, on June 24. Mr MacGregor indicated that he 'wished to find a solution acceptable to all sides'. He has asked his advisers to explore options with BR's actuarial adviser and a further meeting is expected. ..TX.- The letter follows the government's decision in May to back down from its earlier, more controversial, proposal to seize a portion of the scheme's Pounds 8.5bn assets in exchange for a promise to pay scheme members' pensions and increase them annually in line with inflation. ..TX.- Following a public outcry over the proposal Mr MacGregor announced that the government would instead use the assets to create a scheme in which all current employees may participate as long as they remain in the rail industry. A portion of those assets are to be set aside to pay the benefits of present and deferred pensioners. ..TX.- While the trustees feel the current proposals are much better than the earlier ones, they leave open the possibility that pensioners' benefits may have to be cut if investment income is not as high as expected. ..TX.- The pensions clause in the railways bill is set to be debated again in the House of Lords on July 19 and 21 and will return to the Commons for its final reading towards the end of September. ..CO.- Companies: British Rail. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4011 Railroads, Line-Haul Operating. P4111 Local and Suburban Transit. P6371 Pension, Health, and Welfare Funds. ..TP.- Types: COMP Company News. PEOP Labour. ..IX.- P4011, P4111, P6371. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5ABVFT ..HL.- 930714FT 930714 Number of court cases declines (87) ..TX.- THE number of people referred by police to the Crown Prosecution Service in England and Wales has fallen and fewer cases are coming to court in spite of record levels of crime, the CPS annual report said yesterday. ..TX.- The report said that in 1992-93 police referred 1.5m cases to the CPS - 83,000 fewer than in 1990-91 and 41,000 fewer than 1991-92. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9211 Courts. ..TP.- Types: STATS Statistics. ..IX.- P9211. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5ABUFT ..HL.- 930714FT 930714 Birmingham told to retender contract (130) ..TX.- BIRMINGHAM City Council, England's largest metropolitan authority, has been ordered by the government to retender its Pounds 250m housing maintenance contract because of uncompetitive practices. ..TX.- Mr Tony Baldry, the environment minister, said Birmingham had awarded work worth Pounds 250m over five years on 12 large contracts to its own direct labour organisation because it had offered a significant discount on its submitted prices provided it was given all the work. He said this was anti-competitive. ..TX.- The local authority said the bid from its direct labour force was the cheapest of nine bids by Pounds 1.35m. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6531 Real Estate Agents and Managers. P7349 Building Maintenance Services, NEC. ..TP.- Types: MKTS Contracts. ..IX.- P6531, P7349. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5ABTFT ..HL.- 930714FT 930714 Ministers 'prompted' British Coal move (277) ..BL.- By JOHN MASON, Law Courts Correspondent ..TX.- THE GOVERNMENT prompted British Coal to consider using its pension-fund surplus rather than public funds to help pay enhanced pensions to staff made redundant, counsel for the corporation admitted in the High Court yesterday. ..TX.- The admission was made on the first day of the court hearing to determine the legality of the corporation's proposed use of its half share of the fund's Pounds 1bn surplus. ..TX.- Mr Edward Nugee QC denied that the government had sought to influence British Coal to use the surplus rather than grants provided by the Department of Trade and Industry. It had made the initial suggestion of using the surplus, he said. However, the corporation had relied since then on its own legal advice, he added. ..TX.- The legal challenge has been mounted by the pension-fund trustees who argue that British Coal would be in breach of the fund's rules. ..TX.- They argue that British Coal should not be released from its obligations to fund the pensions of redundant workers. The surplus should be used instead to allow the corporation to take a further pension fund contributions holiday. ..TX.- The dispute arose earlier this year when the corporation withheld Pounds 104m - part of Pounds 400m owed to the fund for providing the early and enhanced pensions - with the intention of paying it instead from its share of the surplus. ..TX.- The hearing is expected to last until Friday. ..CO.- Companies: British Coal Corp. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1222 Bituminous Coal-Underground. P6371 Pension, Health, and Welfare Funds. P9211 Courts. ..TP.- Types: COMP Company News. ..IX.- P1222, P6371, P9211. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGNB5ABSFT ..HL.- 930714FT 930714 Companies act to split top roles, report shows (502) ..BL.- By LUCY KELLAWAY ..TX.- BRITISH companies are bowing to pressure from shareholders and their peers to split the roles of chairman and chief executive. ..TX.- According to a survey of companies published yesterday by Korn/Ferry, the headhunting firm, only 15 per cent still combine the two roles, compared with 25 per cent a year ago. The division of the two functions was one of the most important recommendations in the recent Cadbury report on corporate governance, which said that so much power should not be vested in a single individual. ..TX.- Mr Howard Davies, director-general of the Confederation of British Industry, said yesterday: 'The Cadbury report has reached parts that other recommendations on corporate governances haven't reached.' He said the scale of the shift was remarkable for a single year. ..TX.- The report, which takes a detailed look at the structure, pay and concerns of British boards, is likely to add to public concern that some directors are paying themselves too much. It shows that the largest pay rises last year went to those who were already most handsomely rewarded. ..TX.- The upper quartile - those earning more than Pounds 360,000 in companies with turnovers of more than Pounds 1bn and more than Pounds 250,000 in companies with turnovers of more than Pounds 250m - on average received pay increases last year of 16 per cent. The bottom quartile received no increase. ..TX.- The range in pay settlements for directors overall was unusually wide, with one in six taking a pay cut. On average the increases were between 4 per cent and 8 per cent. ..TX.- Mr Davies singled out as disappointing figures showing that 5 per cent of larger companies and 24 per cent of smaller ones did not have an audit committee, as recommended in the Cadbury report. ..TX.- He described as 'depressing' the finding that the position of women had not improved since the survey a year ago. There were only 11 women directors out of nearly 1,000 directors. Only two were executive directors and both of those were from smaller companies. ..TX.- 'At the top level there is still a network into which women do not fit,' said Mr Davies. 'Companies say we do not want token women, we only want board level, but that argument is self-defeating.' ..TX.- The composition of boards is also changing. Nearly 80 per cent of larger listed companies have between six and 11 directors on the board, with the balance becoming more evenly divided between executive and non-executive directors. ..TX.- Mr Michael Brandon, author of the report, said: 'All of these factors suggest that boards have become more businesslike. There are sure signs that the City has gone off the cult of the superstar whose decisions go through largely unchallenged.' ..TX.- Boards of Directors Study UK. Korn/Ferry International, 071-930 4334. Pounds 99. ..TX.- Management, Page 14 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8741 Management Services. P6231 Security and Commodity Exchanges. ..TP.- Types: PEOP People. CMMT Comment & Analysis. ..IX.- P8741, P6231. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGNB5ABRFT ..HL.- 930714FT 930714 Grant cut 'could damage tourism' (435) ..BL.- By MICHAEL SKAPINKER, Leisure Industries Correspondent ..TX.- PLANNED reductions in government funding of the English Tourist Board could cause substantial damage to the industry, a study by management consultants Coopers & Lybrand claims. ..TX.- The report, commissioned by the board with the agreement of Mr Peter Brooke, national heritage secretary, says the proposed funding cuts will damage accommodation rating schemes and end national marketing campaigns. ..TX.- They will also prevent the board from setting up an inspection scheme for activity holiday centres. ..TX.- The report recommends that the board establish such an inspection scheme, but warns that it will need additional funds to do so. ..TX.- The government has said it proposes to cut the board's grant from Pounds 13.9m a year to Pounds 9m by 1995-6. The board was established by a 1969 act to encourage British people to take holidays in England and to promote the improvement of tourist facilities. ..TX.- Without the board, the report says, there would be a deterioration in facilities, a fall in the number of people taking holidays in England and a widening of the balance of payments deficit. ..TX.- According to the board the English domestic tourism market has been stagnant since 1972. In the same period the number of UK residents taking holidays abroad has increased 58.5 per cent. ..TX.- The report says government support for tourism is necessary because the industry is too diverse and fragmented to establish a single representative organisation. It estimates that there are more than 220,000 UK tourist businesses, represented by more than 30 trade organisations. ..TX.- The report says: 'Many elements of the tourism product, such as natural scenery and sites, beaches and museums, are common goods for which no price is charged and which are managed and maintained by the public sector.' Use of these facilities by tourists raises other issues which should be of concern to the government, such as congestion and damage to the environment. ..TX.- It adds that there is no need for extensive government intervention or for large-scale funding. Coopers & Lybrand recommends that the government grant to the board should remain at about the current level. ..TX.- The Scottish tourist industry earned Pounds 1.75bn last year, the same in real terms as 1991, the Scottish Tourist Board said yesterday. Tourism from overseas brought in Pounds 530m last year, up from Pounds 489m in 1991. Spending by Scottish holidaymakers and visitors from the rest of the UK was static. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9611 Administration of General Economic Programs. P7999 Amusement and Recreation, NEC. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9611, P7999. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGNB5ABQFT ..HL.- 930714FT 930714 North sees domestic sales increase as exports decline (315) ..BL.- By CHRIS TIGHE ..TX.- THE NORTH of England's economy is continuing to pull out of recession, a survey published yesterday shows. It reported increasing levels of domestic sales and orders, profitability and investment. ..TX.- In spite of this the Business Survey North, which covers the second quarter this year, records a dip in export markets. Export orders fell by a third and the export sales balance - the number of companies reporting improvement rather than decline - was slightly down. ..TX.- The Northern Development Company produces the quarterly report with the Tyne and Wear and Teesside chambers of commerce. The research, based on responses from 795 companies in north-east England and Cumbria, shows a tripling in the positive balance on domestic sales. ..TX.- The balance was the highest for more than three years, with 47.1 per cent of companies reporting domestic sales up from the previous three months, compared with 22.4 per cent reporting a fall. The first-quarter figures were 39.5 per cent and 31.4 per cent respectively. ..TX.- Domestic orders also rose sharply, recording the best performance since the survey started in 1990. The positive balance for service companies doubled and half the manufacturers reported higher orders, giving a positive balance of 27. ..TX.- Company profits, very depressed since the middle of last year, showed their highest positive balance for nearly three years, although expectations of higher profits in the next 12 months barely rose. Prospects for turnover growth in the coming year were the brightest for three years, with a positive balance of 47. Manufacturers were more optimistic than service companies. ..TX.- Business Survey North. Northern Development Company, Great North House, Sandyford Road, Newcastle Upon Tyne NE1 8ND. By subscription. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P9611 Administration of General Economic Programs. ..TP.- Types: ECON Economic Indicators. ..IX.- P9311, P9611. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGNB5ABPFT ..HL.- 930714FT 930714 Councils may try new governing structures (412) ..BL.- By JOHN AUTHERS ..TX.- LOCAL AUTHORITIES in England are to be allowed to experiment with different models of government and to grant councillors greater allowances to do it, Mr John Gummer, the environment secretary, announced yesterday. ..TX.- The proposals come from a joint working party involving representatives of all the local authority associations, the government and aca - demics. ..TX.- Councils have been deliberately left without a fixed model and instead have been invited to experiment with different structures. The proposals include: ..TX.- Replacing the existing committee structure with a more 'executive' mode of government. ..TX.- Creating deliberative committees drawn only from the ruling party, or ruling coalition. ..TX.- Further decentralisation of decision-taking. ..TX.- New rights of review and scrutiny of decisions for councillors. ..TX.- Enhanced roles for councillors outside the executive. ..TX.- The proposals are intended to allow 'backbench' councillors a scrutiny role similar to that of parliamentary select committees. Proposals for directly elected mayors, mooted by Mr Michael Heseltine when he launched the review as environment secretary in 1991, have been removed from the agenda. ..TX.- The allowances system will be amended so that central government lays down only a basic minimum. Mr Gummer said that this would attract more people to seek election and allow broader accountability. ..TX.- The leaders of all the local gov-ernment associations - the Labour-controlled Association of County Councils and the Association of Metropolitan Authorities, and the Conservative-controlled Association of District Councils - welcomed the proposals. ..TX.- They were addressed by Mr Gummer at a conference on the plans at Westminster, and in a joint statement said: 'The report offers a loose framework within which new approaches can be tried out, and is a welcome alternative to government enforcement of change. ..TX.- 'The recognition that allowances to members need to be improved, with more discretion for authorities, is long overdue.' ..TX.- But Mr Gummer received a hostile reception at the conference when answering councillors' questions. ..TX.- Responding to questions about the removal of schools from local education authority control, he said: 'I'm fed up with local authorities who talk about 'our schools'. I think it should be local people making decisions. ..TX.- 'If I'm going to fight for subsidiarity for local government it won't be helped by people who say they want to get their hands back on things which can run themselves.' ..TX.- Community Leadership and Representation: Unlocking the Potential. HMSO. Pounds 7.60. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9121 Legislative Bodies. ..TP.- Types: NEWS General News. ..IX.- P9121. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGNB5ABOFT ..HL.- 930714FT 930714 Output rises across industry (245) ..BL.- By EMMA TUCKER, Economics Staff ..DL.- THE sharp 1.8 per cent rise in manufacturing output in May ..TX.- and a 2.1 per cent increase in the last three months - was widely spread across industry. ..TX.- Output fell only in the food, drink and tobacco industry, but this was mainly because of abnormally high sugar output in February, which distorted the three-month on three-month comparison. ..TX.- Growth was particularly strong in the engineering industries, which account for more than 40 per cent of manufacturing output. ..TX.- Car and car parts production increased by 7.9 per cent in the latest three months compared with the previous quarter, while strong computer output fuelled a 2.5 per cent rise in electrical and instrument engineering. ..TX.- The milder winter was behind a strong rise in building materials output. This prompted a 6.1 per cent increase in output of minerals and mineral products in the three months to May compared with the previous three months. ..TX.- A 1.9 per cent rise in output of the chemicals and man-made fibres sector stemmed from a strong performance by the pharmaceuticals industry. ..TX.- Output of total production industries - manufacturing plus energy output - rose only 0.4 per cent in the latest three months because of a fall in energy and water pro-duction. ..TX.- Output of coal and coke fell 9 per cent. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Industrial production. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGNB5ABNFT ..HL.- 930714FT 930714 N Sea tax changes set for gas review (265) ..BL.- By RALPH ATKINS ..TX.- THE IMPACT on gas pipelines of changes in the North Sea tax regime announced in the March Budget is to be reviewed by the government, Mr Stephen Dorrell, financial secretary to the Treasury, said last night. ..TX.- Hinting at another possible concession over the Treasury's controversial amendments to the petroleum revenue tax regime, Mr Dorrell said that he had 'agreed to look again' at a particular anomaly raised by Tory MPs. ..TX.- However Mr Dorrell described the area that would be reviewed as 'narrow' and said the government would not bend on the main parts of the changes which were announced in March. ..TX.- Speaking during the final Commons stage of the Finance Bill, which introduces changes announced in the Budget, Mr Dorrell said North Sea exploration would be undermined if the government was believed to be about to re-open the debate about PRT. ..TX.- The problem over pipelines had been raised by Mr Alan Duncan, Conservative MP for Rutland and Melton. ..TX.- He expressed concern that existing pipelines built with excess capacity, with a view to that capacity being used at a later date, would be unfairly disadvantaged compared with new pipelines. ..TX.- The existing pipeline could be subject to PRT but not the competing new pipelines. ..TX.- Last month the government bowed to pressure from Conservative MPs and extended the short-term help for companies worst hit by the PRT changes. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. P4922 Natural Gas Transmission. ..TP.- Types: GOVT Taxes. ..IX.- P1311, P4922. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGNB5ABMFT ..HL.- 930714FT 930714 Water debate flows into government's domain: Dispute is raging over who should foot the bill for rising costs in meeting European directives on quality (803) ..BL.- By DAVID LASCELLES ..TX.- MR IAN Byatt, the water regulator, has thrust the issue of rising water bills firmly into the government's lap. In essence his discussion paper published yesterday says the cost of cleaning up Britain's water has become unacceptable, and it is up to the government to reduce it by renegotiating or relaxing water quality standards. ..TX.- He has deliberately stirred up what is likely to be a fierce debate about how much Britons are prepared to pay for pure water and clean rivers and beaches. ..TX.- The price row has been brewing ever since the UK embarked on its clean-up programme in the 1980s and privatised the water industry in England and Wales. ..TX.- A year ago Mr Byatt produced his first paper on the subject, The Cost of Quality in which he laid out various scenarios for the water clean-up. A typical household paying Pounds 185 a year for water in 1994-95 could be paying Pounds 245 to Pounds 345 a year by 2004-05 depending on how fast the clean-up was done, he said. ..TX.- His paper infuriated water quality regulators, particularly the National Rivers Authority which accused him of exaggerating the problem and providing misleading analyses of the issues. Environmentalists also attacked him for trying to undermine quality standards and ignoring consumers demands for high-class water and sewage systems. There were even suggestions that Mr Byatt, who sets controls for water prices, was trying to duck his responsibilities. ..TX.- The timing of this paper, Paying For Quality, is particularly sensitive because he has to decide on the next set of five-yearly controls by next summer. The pricing formula makes a special allowance for water companies to pass on the cost of service and he is therefore in a position to sanction large price increases. ..TX.- The water industry, usually on the receiving end of complaints about rising water costs, this time supports what it sees as Mr Byatt's efforts to strike a balance between benefits and costs. Ms Janet Langdon, the director of the Water Services Association, said: 'The industry wants stability.' ..TX.- Mr Byatt makes two points in reinforcing his case for a softer approach. One is that considerable improvements are already being made, so it is a question of slowing the rate of improvement rather than reducing standards. Water companies are already spending Pounds 3.5bn a year, but full implementation of the regulations, particularly the European Community's Urban Waste Water Directive, would increase that to Pounds 5bn. ..TX.- The second is that customers have not been given the chance to say whether they are prepared to bear the soaring costs. ..TX.- When Britain signed up for the waste water directive the cost of implementation was put at Pounds 2bn. It is now thought to be Pounds 10bn. ..TX.- 'I don't believe that increases of that kind are what people want or what they are prepared to pay for,' he says. ..TX.- Mr Byatt received support for that view yesterday from Mr Jim Gardner, chairman of the Ofwat National Consumer Council. 'It's too much too quickly,' he said. But Friends of the Earth, the environmental pressure group, has accused him of again trying to postpone improvements. ..TX.- One factor in this debate is whether customers should bear all the costs of improvements. Through price controls Mr Byatt can limit the costs passed on, in which case water company profits would suffer and shareholders would bear some of the cost. ..TX.- But Mr Byatt also has a statutory duty to ensure water companies can finance capital investments - if he squeezes prices too tight the companies could exercise their right to complain to the Monopolies and Mergers Commission. ..TX.- The government will be watching the debate closely. Ministers are sensitive to the furore about water bills, but the shape of public opinion is far from clear cut. All 10 regional water companies in England and Wales have conducted a survey of their customers to enable Mr Byatt to assess whether they are prepared to pay more for quality. Three of them, Anglian, Wessex and Southern, have received the answer yes. ..TX.- But even if a consensus emerges for holding down costs the government will have to weigh the wider implications of seeking to renegotiate the EC directives. Mr Byatt, who is urging them to do just that, says the UK is not the only country with these concerns. 'I sense an increasing interest in costs in other parts of Europe,' he says. ..TX.- Mr Tim Yeo, the environment minister, said yesterday he wanted to see 'whether other countries are coming to the same conclusion.' ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4941 Water Supply. P4952 Sewerage Systems. ..TP.- Types: TECH Safety & Standards. ..IX.- P4941, P4952. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGNB5ABLFT ..HL.- 930714FT 930714 Revenue ruling on bank is reversed (415) ..BL.- By RICHARD LAPPER ..TX.- COMMERZBANK, one of Germany's largest banks, has won a long-running legal dispute with the UK's tax authorities. ..TX.- The European Court of Justice ruled yesterday that efforts by the Inland Revenue to hold back about Pounds 5m in compensation for interest built up on incorrectly assessed tax were contrary to the Treaty of Rome. ..TX.- Mr Stephen Kon, partner of SJ Berwin, the UK solicitors which represented Commerzbank, said the case had 'important implications' for tax legislation in the UK and other EC countries. ..TX.- Commerzbank successfully contested a UK tax assessment in 1990. But the Inland Revenue refused a repayment of interest that would have been earned on the wrongly assessed payments on the grounds that the bank operated through a branch office and was not resident in the UK. ..TX.- The High Court referred the case to the European Court of Justice after the bank challenged the decision. ..TX.- Mr Kon said that the judgment 'creates considerable scope for dealing with discriminatory provisions of this nature both in the UK and other EC domestic law, and a good deal of litigation may well follow'. ..TX.- He pointed to other UK tax reliefs in UK law which are not available to non-residents, including relief on low earnings for corporation tax for small companies and relief on interest deducted on payments to non-resident lenders. Mr Kon said similar anomalies arose in 'legislation in other EC countries, all of which will now be subject to challenge'. ..TX.- The Inland Revenue said that it would write to companies which it believed would be affected by the decision and make the necessary repayments. ..TX.- It added: 'We will give some publicity to the case so that everybody is aware of the change.' ..TX.- The European Court ruling followed a preliminary ruling by the advocate-general in March. It says: 'Articles 52 and 58 of the Treaty of Rome prevent the legislation of a member state from granting repayment supplement on overpaid tax to companies which are resident for tax purposes in that state, whilst refusing the supplement to companies resident for tax purposes in another member state. ..TX.- 'The fact that the latter would not have been exempt from tax if they had been resident in that state is of no relevance.' ..CO.- Companies: Commerzbank. ..CN.- Countries: DE Germany, EC. GB United Kingdom, EC. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: GOVT Legal issues. ..IX.- P6081, P9311. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGNB5ABKFT ..HL.- 930714FT 930714 Surge in early teacher retirements (239) ..BL.- By JOHN AUTHERS ..TX.- THE NUMBER of teachers in England and Wales retiring early through ill health each year has almost tripled since 1979, Teachers' Pension Agency figures released today by the National Association of Head Teachers show. ..TX.- The association blamed government reforms and increasing workloads. Mr David Hart, general secretary, said: 'Teachers are leaving early because they are suffering from stress-related illnesses, or because they are being made redundant.' ..TX.- The pace of reform and the strain on school budgets was taking far too heavy a toll of 'experienced staff that schools could ill-afford to lose', he said. ..TX.- The pension agency, was said the number of early retirements through ill health had risen from 1,617 to 4,775 since the educational year of 1979-80, although the population's health had improved. ..TX.- The numbers made redundant before 60 rose from 2,295 to 10,293. The association said budget problems led to the employment of younger, 'cheaper' teachers at the expense of older, more experienced staff. ..TX.- Mrs Ann Taylor, shadow education secretary, said the statistics provided 'an alarming confirmation of what we all know from personal experience'. ..TX.- She added: 'Some of our most conscientious teachers are leaving education and the confrontational government's failure to listen to the concerns of parents, governors and teachers only makes matters worse.' ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8211 Elementary and Secondary Schools. ..TP.- Types: PEOP Labour. ..IX.- P8211. ..DS.- The Financial Times ..XP.- London Page 7 ***************************************************************** ..AN.-00DGNB5ABJFT ..HL.- 930714FT 930714 World Trade News: US-Mexico push for border funds (257) ..BL.- By NANCY DUNNE ..DL.- WASHINGTON ..TX.- THE US and Mexico will seek to raise Dollars 15bn-Dollars 20bn from the private sector for investment in roads, housing, energy generation, construction and environmental projects along their 2,000-mile border, Mr Ron Brown, the US commerce secretary, said yesterday, Nancy Dunne reports from Washington. ..TX.- Five members of each country's cabinet are to sell the border's economic future, at a conference at San Antonio, Texas, tomorrow and Friday. ..TX.- The idea is 'to do deals' at a meeting of public officials, investment bankers and engineering and construction companies, and this came from Mr Brown. ..TX.- He then quickly won the enthusiastic backing of his Mexican counterpart, Mr Luis Donaldo Colosio Murrieta. ..TX.- 'Too many people have looked on these infrastructure efforts as a drain on tax revenue,' said Mr Brown. 'We're trying to demonstrate that it is the private sector we are looking to, that these are projects which make sense and ought to be able to generate financing.' ..TX.- Mr Brown, a successful former chairman of the Democratic party in the US, is now pushing the old Republican party notion of 'a public-private partnership'. ..TX.- This a particularly attractive to the two countries' cash-strapped governments, looking for ways to create jobs, and to a private sector with much to gain from the investments. ..CN.- Countries: US United States of America. MX Mexico. ..IN.- Industry: P1611 Highway and Street Construction. P1629 Heavy Construction, NEC. P1542 Nonresidential Construction, NEC. ..TP.- Types: NEWS General News. ..IX.- P1611, P1629, P1542. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGNB5ABHFT ..HL.- 930714FT 930714 World Trade News: Eastward with success in glass - Trade across Europe / Ronald van de Krol visits a Philips factory venture in Poland (912) ..BL.- By RONALD VAN DE KROL ..TX.- THE easiest way to measure the transformation of Poland's biggest lighting company is to look for broken glass - or a lack of it - at its production site. ..TX.- Before Philips of the Netherlands took a majority stake in Polam-Pila, in 1991, the company had to produce 170 glass tubes to end up with 100 fluorescent lights. ..TX.- This was because so many glass tubes broke, cracked or ended up faulty. The tell-tale signs of inefficiency were the shards of glass littering the factory floor. ..TX.- Now - after investments in a new glass furnace, intensive training of staff and the advent of stringent quality control - Philips Lighting Poland, the new Polam-Pila, needs to produce just 112 tubes for every 100 effective fluorescent lights. This ratio compares well with the 108:100 achieved by Philips factories in such places as the Dutch town of Roosendal. ..TX.- Showing off his new, computer-driven quality-control system, Mr Stanislaw Kozlowski, the 42-year-old general manager, says: 'Before, we had four grades of quality that we checked for. Now we accept only one type of quality - the best.' ..TX.- The sharp improvement, achieved by a 3.5-fold increase in annual investment to Fl 21.8m (Pounds 7.6m) means that the company, at Pila in north-western Poland, is now allowed to export some of its products to the Philips sales organisation in the Netherlands. ..TX.- This effectively puts a small portion of its production on a par with that of the 11 other lighting plants maintained by Philips in western Europe. ..TX.- Still, the Polish company has a long way to go, despite turning in a small profit for 1992 after running up a loss in 1991. ..TX.- The contrast between the new and the old is vividly highlighted by Building 61A - a showcase of new Philips-built equipment - and Building 48, described by one manager as an 'industrial archaeological museum.' ..TX.- Indeed, inside the hall, pride of place is reserved for two machines dating from the 1920s. These were confiscated from the old Philips factory in Warsaw, after nationalisation in 1948, and are no longer in service. The rest of the machines in the hall are virtually carbon copies of this original, outdated, machinery. ..TX.- For Philips, Polam-Pila is an important step in its plans for eastern Europe, giving it a strong foothold in the region's biggest market and access to a company with a proven record in exports. ..TX.- In 1992, exports accounted for nearly 60 per cent of sales of Dollars 55m (Pounds 37m). Most of these were to store chains in North America and Britain, which sold the lamps under their own labels. ..TX.- Russian exports, hit by turmoil in the former Soviet Union, have started to recover, now that sales are denominated in dollars and linked in a complex counter-trade arrangement to Polish imports of Russian oil. ..TX.- The Polish investment is important because it marks a departure from the normal Philips practice. Instead of stationing a team of expatriate managers in Poland, the Dutch company chose at the outset to work with local management under Mr Kozlowski, whose 80-hour week is testimony to the challenge of switching from a command economy to a free market. ..TX.- In many ways, the success of Polam-Pila under Philips is an extension of its impressive achievements under the constraints of communism. The company used to be bound to follow ministerial edicts from Warsaw, but it was allowed to start exporting to the west in the 1970s and to expose itself to the rigours of self-financing in the 1980s. ..TX.- 'In spite of adverse conditions, they had developed according to their own philosophy, they were motivated and they were serious,' according to Mr Einar Kloster, president of the Philips lighting division. ..TX.- Mr Rene van Reeth, a divisional director and key adviser to the Polish team, says: 'This use of local management is something we may want to try elsewhere.' Philips, which has light bulb factories from Nigeria to Indonesia, is keen to expand. ..TX.- Its eyes are firmly set on China. ..TX.- Its efforts in Poland are frequently contrasted with the acquisition of Hungary's Tungsram lighting group by General Electric of the US. ..TX.- The US company has made intensive use of expatriates and of Hungarian-American managers, and job losses have been heavy. ..TX.- A direct comparison, however, is difficult because Tungsram is four times larger than Polam-Pila, and has six production sites instead of one. ..TX.- Even so, only 500 out of 3,500 jobs have been lost in Pila, underlining the fact that the Polish factory had never known the over-staffing common under the former, communist system. ..TX.- The labour force in Poland has had to adjust to new circumstances. Early expectations of western wages were dashed by a temporary freezing of salaries, causing some short-term labour unrest which has since abated. ..TX.- Also, the Polish management put a halt to the old practice of paying people according to the number of light bulbs produced, regardless of quality. ..TX.- 'Over a year, we gradually abandoned paying people on the quantity of their output,' Mr Kozlowski says. 'Payment is now on the basis of a monthly salary, with the possibility of a small bonus to keep quality discipline.' ..CO.- Companies: Philips Lighting Poland. ..CN.- Countries: PL Poland, East Europe. ..IN.- Industry: P3645 Residential Lighting Fixtures. P3646 Commercial Lighting Fixtures. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P3645, P3646. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGNB5ABGFT ..HL.- 930714FT 930714 World Trade News: Cash sought for Danube bridges (251) ..BL.- By REUTER ..DL.- SOFIA ..TX.- BULGARIA is looking for foreign investors and partners to build its share of two new bridges across the River Danube, officials said yesterday, Reuter reports from Sofia. ..TX.- Bulgaria and Romania plan to build the bridges across their Danube frontier to ease a heavily congested route that links central Europe, several former Soviet republics and the Middle East. ..TX.- 'We are inviting foreign bids for the construction of the bridges,' said Mr Matey Donchev, technical director of Bulgaria's Danube bridges directorate. Neither country had the money to construct the bridges and would have to rely on investment from abroad. ..TX.- Officials have estimated the cost of each bridge at Dollars 120m (Pounds 81m). They would be built over the next four years and customs posts will be combined to save time. ..TX.- Mr Donchev said Mitsubishi from Japan had shown interest in the project, as had other companies from South Africa, Turkey and Austria. ..TX.- Only one bridge links Bulgaria and Romania at present and it is severely congested because of diverted traffic from the former Yugoslavia, wracked by civil war. ..TX.- It is planned that one road and rail bridge will link the Bulgarian river port of Vidin with the Romanian town of Calafat, and the other will connect Oryahovo on the Bulgarian side with and the Romanian town of Beket. ..CN.- Countries: BG Bulgaria, East Europe. ..IN.- Industry: P1622 Bridge, Tunnel and Elevated Highway. ..TP.- Types: RES Facilities. ..IX.- P1622. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGNB5ABFFT ..HL.- 930714FT 930714 World Trade News: UK interest in trans-Andean pipeline (263) ..BL.- By DAVID PILLING ..DL.- SANTIAGO ..TX.- FIVE British companies, among them British Gas, Rolls-Royce and British Steel, are discussing possible participation in the trans-Andean gas pipeline with a Chilean consortium. ..TX.- The project, expected to cost Dollars 1.2bn-Dollars 2bn, will carry gas from southern Argentina to Chile's capital, Santiago, a distance of 1,200km. ..TX.- UK company executives visited Chile recently as part of a delegation led by Mr Michael Portillo, Britain's chief secretary to the Treasury. They discussed participating in transmission and distribution work with Chilectra and ENAP, which hold the gas supply contract. ..TX.- The project has a target completion date of late 1996. ..TX.- Mr Portillo said the broader aim of his trip was to raise Chile's profile among UK businesses. Although Britain had historically been a big investor in the country, it had been slow to exploit recent opportunities outside the mining sector. ..TX.- Chile's economy, though relatively small, is one of the fastest growing in Latin America. Its exports are equally divided between Europe, Asia and the Americas. ..TX.- Mr Portillo, who said ministers had assured him of the country's commitment to free trade, is keen to speed up two bilateral trade deals: a double taxation accord and an investment promotion and protection agreement. After talks with Chile's foreign minister, Mr Enrique Silva, he expressed confidence that the taxation accord would be signed 'before the end of the year'. ..CN.- Countries: GB United Kingdom, EC. CL Chile, South America. AR Argentina, South America. ..IN.- Industry: P4922 Natural Gas Transmission. ..TP.- Types: RES Facilities. ..IX.- P4922. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGNB5ABEFT ..HL.- 930714FT 930714 World Trade News: GEC-Alsthom backed in Indonesia power bid (284) ..BL.- By WILLIAM KEELING ..DL.- JAKARTA ..TX.- GEC-ALSTHOM, the Anglo-French supplier of electricity generation equipment, has gained support in the Indonesian parliament, in the bitter fight to win contracts for two 300MW power stations. ..TX.- Mr Erie Soekardja, deputy chairman of the Indonesian parliamentary energy commission, has called on the government to explain why a rival bid has been favoured, even though it is significantly higher than that tendered by GEC-Alsthom. ..TX.- PLN, the country's state-owned electricity company, recommended last May that the German operation of ABB, the Swiss-Swedish group, and Mitsubishi of Japan should build the gas-powered stations, at Muara Tawar in West Java and Pasuruan in East Java. ..TX.- Some Dollars 23bn of investment in new capacity for the power network is planned in the period 1994 to 1999, and, according to one industry official, the companies 'are playing rough and ready business politics' to win a share of it. ..TX.- Antara, the state-owned news agency, says GEC-Alsthom has written to Indonesian President Suharto, setting out its bid of Dollars 500 per kilowatt, valuing the stations at Dollars 150m each, and a commitment to complete them by September of next year. ..TX.- The bid by ABB and Mitsubishi, it claims, represented Dollars 623 per kilowatt, valuing the plants at Dollars 187m each, and offered completion by March, 1995. ..TX.- PLN says that its recommendation was based on the proven track record of ABB and Mitsubishi in Indonesia. ..TX.- Industry officials also suggest that technical variations in the proposals could account for the cost difference. ..CO.- Companies: GEC-Alsthom. ABB Asea Brown Boveri. Mitsubishi Corp. ..CN.- Countries: ID Indonesia, Asia. ..IN.- Industry: P1629 Heavy Construction, NEC. ..TP.- Types: MKTS Contracts. ..IX.- P1629. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGNB5ABDFT ..HL.- 930714FT 930714 World Trade News: Import prices 'often higher' than US steel - ITC staff report will bear on dumping decisions (660) ..BL.- By NANCY DUNNE ..DL.- WASHINGTON ..TX.- THE PRICE of steel imported into the US is often higher than the steel sold by the American mills which are accusing their foreign competitors of widespread dumping, according to a report produced by the staff of the International Trade Commission. ..TX.- The ITC's staff report forms part of the record for the agency's six commissioners when they weigh their decisions on 72 flat-rolled dumping and subsidy steel cases now moving towards conclusion. Injury findings in the controversial cases are due on July 27. ..TX.- 'Imports generally cost twice as much as domestic steel,' said a senior ITC staff member, who asked not to be identified. Often the foreign products are of higher quality, or capable of special use, and price is not a factor. ..TX.- In fact, high-quality imports often cost so much more that a lawyer defending South Korea before the ITC introduced commissioners to a 'dummy theory' - arguing that US steel customers had to be 'dummies' if they are buying from abroad a product they can get domestically and paying more. ..TX.- The prices charged for steel imports could be the key to the 72 cases against foreign companies, which are accused of depressing US prices. About Dollars 3.2bn (Pounds 2.2bn) in preliminary tariffs have been levied against them, but the duties would be lifted if the ITC fails to find that imports are the cause of the US industry's troubles. ..TX.- A survey conducted by the non-partisan ITC staff found that price is rarely an issue when US manufacturers purchase foreign steel products. More often, the steel is purchased for reasons of quality, reliable supply or superior technical support - the reasons they buy from Americans. ..TX.- According to the survey, users also buy from domestic sources because of shorter lead times between orders and delivery, because of 'Buy American' policies, and of scope for placing smaller minimum orders. ..TX.- Several purchasers said they would not buy any foreign steel if comparable domestic products were available at lower prices; others said they bought imports because a comparable product was not available from domestic mills. ..TX.- The staff also found that foreign companies as a whole had increased market penetration for hot-rolled steel. The share steadily increased from 13.2 per cent in 1990 to 15.3 per cent in 1992. However, the increases were captured by Canada, South Korea and the Netherlands, while other countries' shares were constant or declined. ..TX.- Lawyers representing foreign producers were pleased with the staff report, but say the ITC commissioners are unpredictable and sometimes biased towards the domestic industry. ..TX.- The senior ITC staffer confirmed that impression. 'A minority of commissioners vote on the merits of the individual cases,' he said. 'We look at the decisions. . . and they're from Mars.' ..TX.- Mr Jim Bovard, an expert on the 'unfair trade' laws, said the commission could look at the higher prices and rule the defendants guilty of 'quality dumping' - meaning that the price difference is less than the quality difference, and the foreign steelmaker should charge more even if prices are higher. ..TX.- 'The decisions are often written by the commissioners' staffers,' he said. 'They are political animals.' ..TX.- Meanwhile, US steel users have organised to lobby against the industry's effort. They say the higher prices resulting from the tariffs will make their products uncompetitive on export markets. ..TX.- The Coalition of American Businesses for Stable Steel Supplies said the high tariffs hurts small business which is expected to generate most of the country's new job. ..TX.- 'Supply instability and higher prices will reduce the competitiveness of literally thousands of American companies that employ perhaps up to 8m American workers,' the group said. ..CN.- Countries: US United States of America. ..IN.- Industry: P3312 Blast Furnaces and Steel Mills. P3325 Steel Foundries, NEC. ..TP.- Types: COSTS Product costs & Product prices. CMMT Comment & Analysis. ..IX.- P3312, P3325. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGNB5ABCFT ..HL.- 930714FT 930714 Japanese Elections: Takeshita forced on to the stump - But former prime minister is still the local hero (942) ..BL.- By EMIKO TERAZONO ..TX.- 'LOOK, THERE he goes]' squeal women supporters as Mr Noboru Takeshita, former Japanese prime minister, climbs into his black chauffeur-driven Toyota surrounded by his 10 special police guards. ..TX.- While Mr Takeshita has faced heavy public criticism for his alleged links to gangsters and a more recent corruption scandal involving a gold leaf screen, back in Shimane prefecture, his local constituency in western Japan, he is still a hero. ..TX.- 'I know he'll get in,' says Mr Yutaka Adachi, who proudly says he is the same age as Mr Takeshita - 69. ..TX.- Shimane is a typical rural constituency. The sparsely populated region is represented by five MPs in the lower house, the same as a crowded urban district. For as long as people can remember, four out of the five seats have been held by the ruling Liberal Democratic party, and the benefits are brazenly apparent. The prefecture has the highest annual public works spending per capita. ..TX.- However, the political upheaval triggered by the no-confidence vote which brought down the government of Mr Kiichi Miyazawa has also reached this traditionally conservative region. Mr Atsushi Nishikori, a 42-year-old candidate, is running for the New Harbinger Party, a splinter group from the LDP. ..TX.- Mr Takeshita, running as an independent because of LDP worries that his tarnished image would hurt the party, is facing one of the toughest election campaigns in his 35-year political career. He has been forced to run an unusually thorough campaign, holding meetings with his electorate for the first time in 24 years. ..TX.- He is aware of the opinion polls, where about 70 per cent of Japanese wanted Mr Takeshita's resignation, and is copying the exhaustive campaign tactics of his political mentor Mr Kakuei Tanaka, after he was indicted over a financial scandal in the 1970s. ..TX.- For the past week, Mr Takeshita has been driving through more than 20 towns and villages a day, speaking to groups of 30 to 60 supporters. ..TX.- Mr Takeshita looks relaxed, speaking in his hometown Shimane dialect, but he also feels the need to justify his past actions and blame the scandals on the media. He defends himself against claims that he had used gangster links to silence an extreme right-wing group which had mounted a 'praise to death' campaign against him in 1987 before his elevation to the premiership. ..TX.- 'I couldn't sue the Kominto (the right-wing group) because they were praising me,' he says in front of an audience of 30 in a hall in Hakuta, a village in the mountains. ..TX.- He also tells supporters that the scandal surrounding the sale of a gold leaf screen, the sale proceeds of which were allegedly given to politicians, including a secretary to Mr Takeshita, was 'made up by the media.' ..TX.- After apologising for the 'great sorrow caused among his friends back home,' he clenches his fist, claiming he has a mission to find the truth behind the scandal. ..TX.- Supporters listen intently to Mr Takeshita's recollections of the six summit meetings of the Group of Seven leading industrial nations he attended as finance minister or prime minister. ..TX.- 'I have many friends abroad,' he says, stressing his role as an elder statesman. Mr Takeshita expresses his concern for the environment, implying that he had proposed the earth summit in Rio last year. ..TX.- He does not fail to add his support to political reform. 'It's the sign of the times and I'd like to contribute what I can through my experience as a politician,' he says. ..TX.- After the 20-minute speech, Mr Takeshita leaves the modern village hall in the middle of the rice paddies. ..TX.- 'It's the media's fault that the LDP is having such a hard time,' says supporter Mr Adachi. ..TX.- With the help of Mr Shin Kanemaru, the disgraced former kingmaker of the LDP, Mr Takeshita led the largest faction within the party, but was forced to resign as prime minister in 1989 due to his involvement in the Recruit stock-for-favours scandal. ..TX.- However, even after Recruit, thanks to the vast supporter network and corporate votes from local construction companies, he managed to win the most votes in the prefecture. ..TX.- Elsewhere in the region, Mr Yoshio Sakurauchi, the 81-year-old former speaker of the lower house, who has represented Shimane for more than 40 years, calls through the loudspeakers for support. Although his age limits his campaigning to waving through the rice paddies from his van, and brief speeches in front of small local train stations, supporters rush out of their houses to cheer him on. ..TX.- Such deep-rooted support for the LDP has prevented NHP's Mr Nishikori from overtly criticising Mr Takeshita, although to many Japanese he is a symbol of political corruption. ..TX.- Mr Toshio Harada, head of Mr Nishikori's support group, says that some Shimane voters have come to realise that the prefecture is now the centre of the nation's attention. ..TX.- While national criticism of the old ways of Japanese politicking has heightened during the last few days of the election campaign, most Shimane voters expect Mr Takeshita to be elected. 'He still has very strong links with construction groups, who will give him the organised vote,' says Mr Kiyomi Osawa, a middle-aged office worker. ..TX.- However that is not the only reason he is likely to be re-elected. 'I don't care what the media says, Mr Takeshita is good for Shimane,' says a farmer, gazing at a newly road stretching towards the mountains. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P8651 Political Organizations. P9199 General Government, NEC. ..TP.- Types: GOVT Government News. PEOP People. ..IX.- P8651, P9199. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGNB5ABBFT ..HL.- 930714FT 930714 India posts 30% jump in exports (111) ..BL.- By SHIRAZ SIDHVA ..DL.- NEW DELHI ..TX.- India's exports recorded a 30 per cent growth to reach Dollars 3.46bn (Pounds 2.34bn) in April and May, the first two months of the current fiscal year, against Dollars 2.67bn in the corresponding period of last year, writes Shiraz Sidhva in New Delhi. ..TX.- Official statistics yesterday showed imports fell 4.05 per cent to Dollars 3.47bn compared with Dollars 3.61bn. The country's trade deficit has fallen to Dollars 6.59m against Dollars 944.7m last year. ..CN.- Countries: IN India, Asia. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: STATS Statistics. ECON Balance of trade. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGNB5ABAFT ..HL.- 930714FT 930714 Dollars 1.2bn aid pledge to Tanzania (145) ..BL.- By REUTER ..DL.- PARIS ..TX.- Western donors yesterday pledged to give Tanzania up to Dollars 1.2bn in aid but criticised the country for not overhauling its economy fast enough, Reuter reports from Paris. ..TX.- After a two-day meeting, donors warned Tanzania that it would have to do better because it was competing for aid with many other countries. ..TX.- 'Delegates . . . expressed widespread concern that the pace of economic reform was inadequate to put Tanzania on a sustainable growth path rapid enough to reduce poverty substantially in the medium term,' their statement said. ..TX.- The Dollars 1.2bn pledged for Tanzania's fiscal 1993-94 year to end June 1994 includes Dollars 840m of project assistance and Dollars 360m balance-of-payments support. ..CN.- Countries: TZ Tanzania, Africa. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGNB5AA9FT ..HL.- 930714FT 930714 SDP rejects fresh polls in Nigeria (136) ..BL.- By PAUL ADAMS ..DL.- LAGOS ..TX.- Nigeria's Social Democratic party, the apparent victor in an aborted presidential election last month, has refused to take part in a new poll sought by the military government, writes Paul Adams in Lagos. ..TX.- President Ibrahim Babangida withdrew late on Monday his offer to let the SDP and the rival National Republican Convention form an interim government of unelected civilians and replace his eight-year regime on August 27. ..TX.- Yesterday the government said an interim government would have invited instability. The president used similar reasons to explain annulment of the June election, in which Mr Moshood Abiola, the SDP candidate, was ahead when counting was halted. ..CN.- Countries: NG Nigeria, Africa. ..IN.- Industry: P9199 General Government, NEC. ..TP.- Types: GOVT Government News. ..IX.- P9199. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGNB5AA8FT ..HL.- 930714FT 930714 Iraq braced for more US strikes (159) ..BL.- By Our Middle East Staff ..TX.- IRAQ yesterday began to prepare the public for possible US military attacks, following its refusal to let United Nations weapons inspectors seal off two missile sites west of Baghdad pending installation of remote-control cameras, writes our Middle East Staff. ..TX.- Mr Rolf Ekeus, head of the UN weapons inspection team, flew to Bahrain yesterday on his way to Baghdad in what is likely to be the final attempt to persuade Iraq to abide by UN Security Council resolutions. ..TX.- The Baghdad newspaper al-Qadissiya warned that the US would not hesitate to strike against Iraq again and said the confrontation over the missile test sites was a a pretext for attack. Another newspaper, al-Jumhuriya, earlier accused Mr Ekeus of masterminding a conspiracy to broaden the scope of UN resolutions. ..CN.- Countries: IQ Iraq, Middle East. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGNB5AA7FT ..HL.- 930714FT 930714 IMF chiefs to review Vietnam arrears (238) ..BL.- By GEORGE GRAHAM ..DL.- WASHINGTON ..TX.- DIRECTORS of the International Monetary Fund will review Vietnam's arrears today in a move that will start the process of bringing the country back into the international financial community. ..TX.- The meeting will be the IMF's first discussion of Vietnam since President Bill Clinton announced that the US would no longer oppose efforts to pay off the country's arrears. ..TX.- The US representative on the IMF board is expected today to give a formal signal on Vietnam to his colleagues, who say they have so far read of Mr Clinton's intentions only in the press. ..TX.- This could trigger the formation of a support group headed by France and possibly Japan to provide bridging finance that would enable Vietnam to clear its arrears with the IMF, which total around 100m special drawing rights, the Fund's internal accounting unit. ..TX.- Agreement on an economic policy programme could follow quickly once the country has paid off its arrears. This would allow Vietnam to draw up to SDR120m (Pounds 112.15m) from the IMF under a standby financing agreement. ..TX.- Once money has started to flow into Vietnam from the IMF and the development banks, the US government will find it difficult to resist pressures from US businesses to lift its trade embargo. ..CN.- Countries: VN Vietnam, Asia. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGNB5AA6FT ..HL.- 930714FT 930714 Former BCCI officers charged in Abu Dhabi (424) ..BL.- By RICHARD DONKIN ..TX.- THIRTEEN former officers of the Bank of Credit and Commerce International have been charged in Abu Dhabi two years after the bank was closed following a multi-billion-pound fraud. ..TX.- The charges, announced yesterday, mean that Mr Swaleh Naqvi, the bank's former chief executive officer, could face a 36-year jail sentence if convicted on all counts. ..TX.- Mr Naqvi was among several senior officers in Abu Dhabi engaged on restructuring the bank at the time of its worldwide closure, initiated by the Bank of England, in July 1991. They have been held in police custody in the emirate for nearly two years. ..TX.- Charges have also been made against Mr Agha Hasan Abedi, the bank's founder, and Mr Zafar Iqbal, another former chief executive of the bank. However, Mr Abedi, now living in Pakistan, may never be brought to trial as there is no extradition treaty between the two countries. ..TX.- The charges include forgery, use of a forged instrument, breach of trust, irregular allocation of dividends, false entries in company documents and false entries in accounts. Most of the charges carry a maximum sentence of three years or a fine, but terms can run consecutively. ..TX.- The charges are the culmination of an investigation in Abu Dhabi that has been running almost two years. 'A case of this size and complexity is unprecedented in the emirates and the prosecutors wanted to prepare the ground in as much detail as possible before they went ahead,' said an Abu Dhabi official. ..TX.- A preliminary hearing has been set for October 9 when the court will decide whether the accused bankers should continue to be detained in the police club, as at present, or should be remanded elsewhere. It will also decide whether a trial should be held in public. ..TX.- The prosecution has been launched against 10 of the 13 officers who have been in detention. The three men who were released, Mr Saleem Siddiki, Mr Nadeem Habibullah and Mr Askari Khan, are on conditional bail and cannot leave the country as investigations are continuing. ..TX.- It was not clear last night whether Abu Dhabi would be approaching the UK about Mr Ziauddin Akbar, the former head of treasury at BCCI, who was among those charged. He is currently remanded in Britain on charges laid by the Serious Fraud Office. ..CO.- Companies: Bank of Credit and Commerce International. ..CN.- Countries: AE United Arab Emirates, Middle East. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: PEOP People. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGNB5AA5FT ..HL.- 930714FT 930714 Cambodia guerrillas in peace gesture (251) ..BL.- By REUTER ..DL.- PHNOM PENH ..TX.- KHMER ROUGE guerrillas are willing to join Cambodia's new national army to try to bring peace to the country, according to Mr Khieu Samphan, the faction's president, Reuter reports from Phnom Penh. ..TX.- He also told reporters that Prince Norodom Sihanouk, the head of state, had offered the Khmer Rouge ministerial posts in the new government. 'We have proposed to establish a quadripartite army so as to avoid clashes and confrontation on the military field,' he said after talks with the United Nations military commander and the deputy peacekeeping chief. 'We see it as the only way to solve and avoid clashes and confrontation.' ..TX.- A diplomat warned, however, that the Khmer Rouge may be putting a rosier glow on its new-found friendship with the government than was warranted. 'It sounds as though only one concession has come out,' he said. ..TX.- But he noted with concern that the Maoist group's willingness to join a united army did not mean it would give up the 15 per cent of Cambodia that it now controls, or even allow free access to the areas. ..TX.- Mr Khieu Samphan returned to Phnom Penh yesterday after an absence of three months and met Prince Norodom Ranariddh, joint leader of the interim power-sharing government. ..TX.- Mr Khieu Samphan said the Khmer Rouge sought a role as advisers rather than cabinet posts. ..CN.- Countries: KH Kampuchea, Asia. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGNB5AA4FT ..HL.- 930714FT 930714 Cambodia guerrillas in peace gesture to rivals (471) ..BL.- By REUTER ..DL.- PHNOM PENH ..TX.- KHMER ROUGE guerrillas are willing to join Cambodia's new national army to try to bring peace to the country, according to Mr Khieu Samphan, the faction's president, Reuter reports from Phnom Penh. ..TX.- He also told reporters that Prince Norodom Sihanouk, the head of state, had offered the Khmer Rouge ministerial posts in the new government. ..TX.- 'We have proposed to establish a quadripartite army so as to avoid clashes and confrontation on the military field,' he said after talks with the United Nations military commander and the deputy peacekeeping chief. ..TX.- 'We see it as the only way to solve and avoid clashes and confrontation.' ..TX.- A diplomat warned, however, that the Khmer Rouge may be putting a rosier glow on its new-found friendship with the government than was warranted. ..TX.- 'It sounds as though only one concession has come out,' he said. ..TX.- But he noted with concern that the Maoist group's willingness to join a united army did not mean it would give up the 15 per cent of Cambodia that it now controls, or even allow free access to the areas. ..TX.- The hardline Khmer Rouge fields 10,000 to 15,000 guerrilla fighters. ..TX.- About 100 of them last Wednesday attacked government troops and overran the 12th century temple they were guarding near the country's northern border with Thailand. ..TX.- Mr Khieu Samphan returned to Phnom Penh yesterday after an absence of three months and went straight into a meeting with Prince Norodom Ranariddh, joint leader of the interim power-sharing government. ..TX.- The prince told him that Cambodia's head of state 'has in mind to give us some ministerial posts,' Mr Khieu Samphan said. ..TX.- 'If that is the case, we will accept with pleasure in the spirit of national reconciliation.' ..TX.- He added, however, that the Khmer Rouge sought a role as advisers rather than cabinet posts. ..TX.- The US has said it would have difficulty supporting a government that included the Khmer Rouge. ..TX.- The 3 1/2 -year Khmer Rouge rule claimed 1m lives until Vietnam invaded in December 1978 to oust the group and install a sympathetic government, led until UN-organised elections in May by the then prime minister Hun Sen. ..TX.- The Khmer Rouge and two non-communist guerrilla allies waged a civil war against that government until a UN-sponsored peace pact in October 1991 that led to the elections. ..TX.- The Khmer Rouge later abandoned the peace agreement. It boycotted the polls narrowly won by Ranariddh's royalist party, their civil war ally. ..TX.- The diplomat noted that the guerrilla leader had not met Hun Sen, once his most bitter foe and now a co-president in the interim government that will rule until elected representatives can write a new constitution. ..CN.- Countries: KH Kampuchea, Asia. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGNB5AA3FT ..HL.- 930714FT 930714 Iraqi regime prepares for further US strikes (185) ..BL.- By Our Middle East Staff ..TX.- IRAQ yesterday began to prepare the public for possible US military attacks, following its refusal to let United Nations weapons inspectors seal off two missile sites west of Baghdad pending installation of remote-control cameras. ..TX.- Mr Rolf Ekeus, head of the UN weapons inspection team, flew to Bahrain yesterday on his way to Baghdad in what is likely to be the final attempt to persuade Iraq to abide by UN Security Council resolutions. ..TX.- The Baghdad newspaper al-Qadissiya warned that the US would not hestitate to strike against Iraq again and said the confrontation over the missile test sites was a a pretext for attack. Another newspaper, al-Jumhuriya, earlier accused Mr Ekeus of masterminding a conspiracy to broaden the scope of UN resolutions. ..TX.- Iraq says that under ceasefire accords it can retain missiles with a range of less than 90 miles and denies it intends to use test facilities for developing longer-range weapons. ..CN.- Countries: IQ Iraq, Middle East. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGNB5AA2FT ..HL.- 930714FT 930714 SDP rejects fresh polls in Nigeria (173) ..BL.- By PAUL ADAMS ..DL.- LAGOS ..TX.- NIGERIA'S Social Democratic party, the apparent victor in an aborted presidential election last month, has refused to take part in a new poll sought by the military government. ..TX.- On Monday night President Ibrahim Babangida withdrew his offer to let the SDP and the rival National Republican convention form an interim government of unelected civilians and replace his eight-year regime on August 27, the scheduled date for completing the transition to democracy. The NRC has always said it would prefer another election. ..TX.- Yesterday the government said an interim government would have invited instability. The president used similar reasons to explain anulment of the June election, in which Mr Moshood Abiola, the SDP candidate, was ahead when counting was halted. ..TX.- A group of leading Nigerians including two ex-heads of state condemned the government's action and demanded that 'the Babangida administration be terminated forthwith'. ..CN.- Countries: NG Nigeria, Africa. ..IN.- Industry: P9199 General Government, NEC. ..TP.- Types: GOVT Government News. ..IX.- P9199. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGNB5AA1FT ..HL.- 930714FT 930714 IMF directors to review Vietnam debts (320) ..BL.- By GEORGE GRAHAM ..DL.- WASHINGTON ..TX.- DIRECTORS of the International Monetary Fund will review Vietnam's arrears today in a move that will start the process of bringing the country back into the international financial community. ..TX.- The meeting will be the IMF's first discussion of Vietnam since President Bill Clinton announced that the US would no longer oppose efforts to pay off the country's arrears and bring it back into good standing with the international financial institutions. ..TX.- The US representative on the IMF board is expected today to give a formal signal on Vietnam to his colleagues, who say they have so far read of Mr Clinton's intentions only in the press. ..TX.- This could trigger the formation of a support group headed by France and possibly Japan to provide bridging finance that would enable Vietnam to clear its arrears with the IMF, which total around 100m special drawing rights, the Fund's internal accounting unit. ..TX.- IMF officials have already established close links with Vietnam and agreement on an economic policy programme could follow quickly once the country has paid off its arrears. This in turn would allow Vietnam to draw up to SDR120m (Pounds 112.15m) from the IMF under a standby financing agreement. ..TX.- Once money has started to flow into Vietnam from the IMF and the multilateral development banks, the US government will find it difficult to resist pressures from US businesses to lift its trade embargo. ..TX.- Although most members of Congress supported the Clinton administration's move to drop US opposition to the clearing of Vietnam's IMF arrears, Mr Robert Smith, a Republican senator from New Hampshire, returned from Hanoi last weekend still convinced by reports that US prisoners of war had been sighted after 1973, when Vietnam said it handed over all prisoners. ..CN.- Countries: VN Vietnam, Asia. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGNB5AA0FT ..HL.- 930714FT 930714 Boutros Ghali warns on unpaid bills (276) ..BL.- By MICHAEL LITTLEJOHNS, UN Correspondent ..DL.- NEW YORK ..TX.- THE United Nations faces a financial crisis of unprecedented dimensions because member states have not paid peacekeeping bills, notably in the former Yugoslav republics and Somalia, Mr Boutros Boutros Ghali, secretary general, said yesterday, writes Michael Littlejohns, UN Correspondent, in New York. ..TX.- With arrears on regular budget and peacekeeping accounts already exceeding Dollars 2.3bn, he warned of the high probability that the UN soon would be unable to meet its day-to-day obligations. ..TX.- Evidently alluding to the US and Russia, Mr Boutros Ghali said two-thirds of the amount was owed by permanent members of the Security Council, the UN's primary peacekeeping authority. By May 31, only 10 member states had paid peacekeeping assessments in full and only eight had paid their regular dues. He noted that in only one year in the last 10 had regular budget collections exceeded assessments and only once had the total outstanding balance been lower at the end of the year than at its beginning. ..TX.- As the UN placed more and more troops in the field, peacekeeping assessments since last September, totalling Dollars 1.7bn (Pounds 1.1bn), exceeded the entire 1993 regular budget. Calling the outlook 'bleak', Mr Boutros Ghali said he had already had to meet shortfalls from a newly established peacekeeping reserve fund, although that was not its purpose. Countries that provided troops were having to wait for reimbursement. Officials said this was one reason why the UN was experiencing serious difficulties in assembling peacekeepers. ..CN.- Countries: US United States of America. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGNB5AAZFT ..HL.- 930714FT 930714 India posts 30% jump in exports (202) ..BL.- By SHIRAZ SIDHVA ..DL.- NEW DELHI ..TX.- INDIA'S exports recorded a 30 per cent growth to reach Dollars 3.46bn (Pounds 2.34bn) in April and May, the first two months of the current fiscal year, against Dollars 2.67bn in the corresponding period of last year, writes Shiraz Sidhva in New Delhi. ..TX.- Official statistics yesterday showed imports fell 4.05 per cent to Dollars 3.47bn compared with Dollars 3.61bn. The country's trade deficit has fallen to Dollars 6.59m against Dollars 944.7m last year. ..TX.- Mr Kamaluddin Ahmed, minister of state for commerce, said the year had 'begun on a positive note,' adding that the export target of 20 per cent growth in 1993-94 would be feasible. ..TX.- The parliamentary committee investigating the Rs50bn (Pounds 1.06bn) Bombay financial scandal yesterday summoned records of phone calls, visitors' registers, and other documents from the office and residence of Mr P V Narasimha Rao, prime minister, after an allegation by Mr Harshad Mehta, the Bombay stockbroker, the main accused in the scandal, that he had paid Rs10m to Mr Rao. ..CN.- Countries: IN India, Asia. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: STATS Statistics. ECON Balance of trade. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGNB5AAYFT ..HL.- 930714FT 930714 Quake overshadows Japanese poll: Miyazawa views damage and pledges aid (384) ..BL.- By MICHIYO NAKAMOTO ..TX.- MR KIICHI Miyazawa, the Japanese prime minister, yesterday flew in to Hakodate on the northern island of Hokkaido to survey nearby damage caused by a strong earthquake and subsequent tidal waves which together claimed 61 lives. ..TX.- Mr Miyazawa, who arrived after campaigning in Nagoya in central Japan for Sunday's general election, had earlier reassured the country that the government would act immediately to assist those affected. Interrupting saturation media coverage of the national election campaign were pictures of smouldering towns and television footage of houses adrift in the ocean. ..TX.- The earthquake off the shore of northern Japan, which registered 7.8 on the Richter scale, was the largest to hit the country since an earthquake of similar magnitude off the Sea of Japan 10 years ago. ..TX.- Tidal waves reaching up to five metres hit Hokkaido as well as the coasts of 10 prefectures in northern Japan, causing extensive damage to local fishing villages and towns. Tidal waves also reached Russia's far east coast, leaving a handful of people missing, damaging fishing vessels and an oil pipeline. ..TX.- In addition to the 61 people reported dead in Japan, 169 were missing, 550 houses collapsed and 385 houses were under water. ..TX.- After shocks continued in the region yesterday and the meteorological agency warned that the danger remained of an after-shock of a magnitude of 6 hitting the region within a month. ..TX.- On Okushiri island, close to the earthquake's epicentre, houses continued to burn last night. More than 300 houses caught fire in the Aonae area of Okushiri alone and a cliff buried a nearby hotel within seconds of collapsing. ..TX.- Residents of Okushiri were moved to a local school and 100 Self Defence Force military personnel were flown in to distribute fresh water and food and help in the rescue. ..TX.- The damage done to towns in Hokkaido is bound to raise fears in Tokyo of a severe earthquake hitting the area in the near future. The Kanto plains, where Tokyo is located, were devastated by a quake in 1923 and studies suggest that another could occur in the not too distant future. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: RES Natural resources. ..IX.- P9229. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGNB5AAXFT ..HL.- 930714FT 930714 Rising death toll stokes Somali hatred against UN: The crusade against General Aideed has damaged the peacekeepers' claim of impartiality (1044) ..BL.- By LESLIE CRAWFORD ..DL.- THE killing of four journalists in Mogadishu on Monday ..TX.- shot, stoned and clubbed to death by a mob seeking revenge for its own dead - has laid bare how tragically the United Nations humanitarian mission in Somalia is unravelling. ..TX.- Since the UN launched its night-time bombing raids over the capital in retaliation for the slaying of 24 Pakistani soldiers last month, gunmen loyal to General Mohamed Farah Aideed have turned south Mogadishu into an urban guerrilla war theatre. ..TX.- The rising death toll - 35 UN troops, more than 100 Somalis - and the UN's decision to single out Gen Aideed as the chief villain in a land of feuding warlords, has stoked Somali hatred against what is now perceived by many as a foreign occupation force. ..TX.- On Monday, after American Cobra helicopters bombarded a compound in the heart of the city, the hatred spilled over to encompass all foreigners. ..TX.- The journalists who were mobbed and killed at the bombed compound were well known to the residents of south Mogadishu. These Somalis used to entreat foreign reporters to come to see the destruction wrought by UN forces. Mr Dan Eldon, a 22-year-old British-American Reuters photographer, was so well known in the area after working there for a year that he had been nicknamed the 'Mayor of Mogadishu'. That he should have been stoned to death indicates how radically the mood has changed. ..TX.- The UN's crusade against Gen Aideed has made the general into a local hero, when only a few months ago his authority was waning. It has also damaged the UN's claim to be an impartial policeman and further undermined its credibility among Somalis. ..TX.- Accounts of the recent attack diverge significantly. Gen Aideed's National Somali Alliance claims a meeting of clan elders was taking place when the compound came under attack. It says 74 people were killed and more than 200 wounded. ..TX.- But Mr Barry Walkley, the UN spokesman in Mogadishu, insisted yesterday that the compound was a command centre and rallying point for Aideed militia. 'We are convinced there was no loss of innocent lives during Monday's assault,' he said. 'UN troops counted 13 militia (members) dead and 15 wounded, maybe more. There is no way 70 people could have been killed. ..TX.- The question of UN-inflicted civilian casualties is straining relations among the 20-odd national contingents that comprise the 20,800-member UN peacekeeping force ..TX.- Suspicion, mistrust and national rivalries are undermining the UN's military command structure, formally under the authority of Turkish Gen Cevik Bir but led in practice by Gen Thomas Montgomery, commander of the US forces in Somalia. ..TX.- The 2,600-strong Italian contingent is now allegedly taking its orders from Rome and has refused to follow instructions from the UN command. Leading Italian newspapers were united yesterday in their condemnation of the US-led assault, after Mr Fabio Fabbri, defence minister, openly called for the suspension of all UN combat operations in Mogadishu. ..TX.- Rome fears the UN is sinking deeper into a military quagmire in Somalia and is reluctant to become involved in a prolonged, senseless conflict. Mr Fabbri's remarks earned him a sharp rebuke from Mr Boutros Boutros Ghali, the UN secretary general, who said it was unacceptable for any troop contingent to take action outside UN command. ..TX.- UN officials distrust what they see as Italy's separate agenda in its former colony. They suspect the Italian contingent may have struck a deal with Gen Aideed's Habir Gedir clan following the deaths of three Italian soldiers earlier this month. ..TX.- They believe the Italians may have created a safe haven for Gen Aideed's gunmen and perhaps even for the fugitive warlord himself. ..TX.- Aid agencies too are increasingly critical of the UN's military operation for losing sight of its political and humanitarian objectives. ..TX.- 'We are primarily concerned with the unnecessary loss of innocent lives,' said Mr Howard Bell of Care International, who was in Mogadishu during Monday's assault. 'Our relations with the military have deteriorated in the past month. It has become difficult to plan relief work as we cannot always rely on military escorts.' ..TX.- Care has withdrawn all but three foreign aid workers from Mogadishu due to the precarious security conditions in the capital. It says it has not been able to supply its 35 feeding centres there on a regular basis since the UN launched its military strikes in June. Before then, Care was feeding 175,000 displaced Somalis in the capital every day. ..TX.- The UN, however, insists that any idea of reconciling rival clans and promoting a political dialogue cannot be achieved until Gen Aideed's militias have been disarmed. 'We need more troops,' said Mr Walkley. 'This country is awash with weapons and we are not naive about the enormity of the task. Security has become our paramount concern.' ..TX.- But Mr Walkley admits that the UN is operating virtually under siege in the capital. It has retreated into a heavily fortified compound on the outskirts of town. UN staff are not allowed outside the compound and are transported to the airport and other sights by helicopter. ..TX.- Outside the capital, he says, progress is being made in bringing clan elders together for talks. Kismayo, the southern port, is reported to have been peaceful since two rival warlords were banished, and truces have been negotiated in other areas. ..TX.- But other Somalia watchers doubt whether the UN has the ability to fulfil its aims. 'The UN is being naive if it thinks it can transform a desert region of nomadic tribes into a model democracy,' said Dr Murray Watson, a scientist who lived in Somalia for 14 years. 'I cannot think of a worse test case for the UN's new role as global policeman. They simply don't have enough experts to know what they are doing.' ..TX.- He said: 'Somalis have a tradition in which blood crimes are repaid with blood. For the past month they have been counting the death toll inflicted by the UN. Foreigners will be killed in Somalia, whether they wear a Blue Helmet, a nurse's uniform or a camera.' ..CN.- Countries: SO Somalia, Africa. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGNB5AAWFT ..HL.- 930714FT 930714 Subpoena for Bush in BNL affair (384) ..BL.- By ALAN FRIEDMAN ..DL.- NEW YORK ..TX.- FORMER President George Bush has received a subpoena to testify and provide documents in the long-running case involving more than Dollars 5bn of Iraqi loans, made by the Atlanta branch of Italy's Banca Nazionale del Lavoro (BNL). ..TX.- Mr Bush has consistently denied any wrongdoing by the government in the BNL affair. It is not known yet whether he plans to contest the subpoena. ..TX.- The subpoena, filed by the lawyers of Mr Christopher Drogoul, former BNL Atlanta manager, calls for the ex-president to appear in September at Mr Drogoul's trial in Atlanta. It seeks from Mr Bush 37 documents, including records of conversations with both Mr Giulio Andreotti, former prime minister of Italy, and Mr Boyden Gray, Mr Bush's White House counsel. ..TX.- Mr Drogoul, who is accused of masterminding a multi-billion dollar loan effort that funded Iraq's nuclear and conventional weapons programme, has changed his plea from guilty to innocent. ..TX.- Last autumn, as the BNL controversy came to a boil in the closing stages of the US presidential election campaign, a federal judge in Atlanta said he suspected a US government cover-up and stated that CIA documents proved that the Bush administration knew about and interfered with the BNL case. ..TX.- Mr Robert Simels, Mr Drogoul's defence lawyer, said yesterday the Bush subpoena was designed to prove that his client was merely a tool in a broader effort by the US, Italian and British governments to help Iraq's President Saddam Hussein during his eight-year war against Iran. ..TX.- 'The aim is to compel the former president to appear, and to produce documents that relate to his knowledge of US foreign policy towards Iraq in the 1980s, coupled with his efforts to assist Iraqi purchases backed by loan guarantees from the US government,' Mr Simels said. 'We also want to show Mr Bush's communications with Prime Minister Andreotti and the Italian government on this matter.' ..TX.- Mr Simels said a subpoena had also been issued to Kissinger Associates, the consultancy headed by Mr Henry Kissinger, former US secretary of state. He is seeking to quash the subpoena. ..CO.- Companies: Banca Nazionale del Lavoro. ..CN.- Countries: US United States of America. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: PEOP People. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGNB5AAVFT ..HL.- 930714FT 930714 Wholesale prices come down in US (241) ..BL.- By MICHAEL PROWSE ..DL.- WASHINGTON ..TX.- US WHOLESALE prices fell last month, indicating that inflationary pressures are moderating, the Labour Department reported yesterday. ..TX.- The producer price index for finished goods fell 0.3 per cent in June, the biggest monthly drop in two years. The annual rate of wholesale price inflation fell to 1.4 per cent against 2 per cent in May. ..TX.- The decline in inflationary pressures was led by a 0.9 per cent drop in food prices in June compared with May, and a 0.5 per cent fall in energy prices. However, excluding the volatile food and energy components, the core producer price index fell 0.1 per cent. In May, core producer prices rose a modest 0.2 per cent. ..TX.- If consumer price figures due today are equally encouraging, the Federal Reserve is likely to become more relaxed about the inflation outlook. In May, after a series of unexpectedly large price increases, it shifted to a bias towards raising short-term interest rates. An early rise in rates is not now expected. ..TX.- Analysts said severe flooding in the Midwest was already pushing up some agricultural prices, but the sluggishness of the economic recovery was expected to prevent them feeding through into a broader increase in inflation. ..CN.- Countries: US United States of America. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P9611 Administration of General Economic Programs. ..TP.- Types: ECON Economic Indicators. ..IX.- P9311, P9611. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGNB5AAUFT ..HL.- 930714FT 930714 Menem election push opposed (260) ..BL.- By JOHN BARHAM ..DL.- BUENOS AIRES ..TX.- THE Catholic Church and the conservative press, two pillars of Argentina's establishment, yesterday attacked President Carlos Menem's campaign to seek a second term when his present mandate ends in 1995. ..TX.- His re-election effort has become the main political issue in Argentina because it would require a constitutional amendment. A presidential incumbent may not serve the next term. ..TX.- Unlike Mr Menem's free market economic reforms, his re-election drive has aroused strong opposition from business and led to renewed attacks by the Church. ..TX.- Yesterday, the influential conservative newspaper La Nacion condemned Mr Menem's plan for a plebiscite to accelerate the amendment. ..TX.- Plebiscites are not binding on congress, but the opposition fears the government would use a likely majority to intimidate congress into backing an amendment. ..TX.- The Church's magazine, Criterio, asked in an editorial if Mr Menem's re-election effort were due 'only to the attraction of power' or to 'the necessity to perpetuate a group in power so that acts of corruption are not investigated'. ..TX.- The Church is divided over Mr Menem's economic strategy, with conservatives backing his policies and liberals demanding greater social justice. However, both wings appear to have united in opposition to his re-election. ..TX.- The attacks on Mr Menem follow the formal proposal last Thursday by Peronist (government party) senators to amend the constitution. They suggested broadening civil rights and strengthening the judiciary, as well as lifting the re-election ban. ..CN.- Countries: AR Argentina, South America. ..IN.- Industry: P9111 Executive Offices. ..TP.- Types: PEOP People. ..IX.- P9111. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGNB5AATFT ..HL.- 930714FT 930714 World Bank lending soars: Loans reach record Dollars 23.7bn (357) ..BL.- By GEORGE GRAHAM ..DL.- WASHINGTON ..TX.- THE WORLD BANK increased its lending by Dollars 2bn to a record Dollars 23.7bn over the past 12 months, with a sharp rise in new loans to recent members in eastern Europe and the former Soviet Union. ..TX.- But political turmoil and a shift in the bank's lending strategy, away from adjustment lending and towards individual projects, led to a fall in lending to Africa. ..TX.- New commitments there dropped to Dollars 2.8bn in the 1993 accounting year which ended on June 30, compared with Dollars 4bn in the previous 12 months. ..TX.- Commitments to Europe and central Asia rose to Dollars 3.8bn, compared with Dollars 2.1bn in the previous year, largely because of Dollars 1.63bn in loans to eight countries of the former Soviet Union which have just joined the bank. ..TX.- Overall, new commitments from the International Bank for Reconstruction and Development, the core of the World Bank group, climbed to Dollars 16.9bn for 122 projects, compared with Dollars 15.2bn for 112 projects in fiscal 1992. ..TX.- The International Development Association, the bank's unit which provides low interest loans to the very poorest countries, committed Dollars 6.8bn to 123 projects in fiscal 1993, compared with Dollars 6.5bn for 110 projects in the previous year. ..TX.- The bank said preliminary figures for disbursements, or money actually handed over to borrowers, showed an increase to Dollars 18bn compared with Dollars 16.5bn in fiscal 1992. ..TX.- While IDA commitments have been climbing steadily since 1988, IBRD lending has been more stagnant, fluctuating between Dollars 15bn and Dollars 16.4bn for several years. ..TX.- Earlier this week, the bank unveiled a set of changes in management practices designed to address criticism of over-emphasis on new lending, and to improve the quality of its projects. ..TX.- Reviews of its portfolios in countries such as India and Brazil has led to Dollars 2.3bn of projects being cancelled outright, although most of the savings are redirected towards other needs in the same countries. ..CN.- Countries: US United States of America. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGNB5AASFT ..HL.- 930714FT 930714 Rescue plan for Everglades agreed (317) ..BL.- By LISA BRANSTEN ..DL.- WASHINGTON ..TX.- FLORIDA sugar-growers and state and federal officials yesterday agreed in principle on a plan to clean up the endangered Everglades, ending a five-year legal wrangle. ..TX.- The plan, announced by Mr Bruce Babbitt, interior secretary, is the latest in a series of compromise deals worked out by the Clinton administration to settle disputes between business and environmental interests. ..TX.- Under the agreement the sugar-growers have promised to spend up to Dollars 322m over 20 years to reduce pollution from fertilisers and increase the flow of water to the Everglades, one of the world's most famous swamp areas and home to a huge variety of plant and animal species. ..TX.- The federal government will seek to contribute about Dollars 161m through flood control projects and the services of the Army Corps of Engineers. The state of Florida may also contribute funds to the project. ..TX.- A further Dollars 21.8m per year could be raised from from a special local tax, although this must be approved by voters. ..TX.- The plan has emerged after a series of lawsuits by federal officials and environmentalists. Phosphate fertilisers running off from sugar farms have caused new vegetation to choke native plants. Changes in the course of the Kissimmee river also damaged the Everglades by cutting water supplies. ..TX.- While some environmental groups gave general support to the plan, criticism is already emerging from environmentalists such as the Audubon Society, who say they were excluded from the negotiations. ..TX.- Issues left unresolved by the framework agreement include the timetable, construction schedules and water quality standards, Mr Babbitt said. ..TX.- One issue that promises to be contentious is whether sugar-growers can be asked to contribute more money in 20 years if the goals of this project are not reached. ..CN.- Countries: US United States of America. ..IN.- Industry: P9512 Land, Mineral, Wildlife Conservation. ..TP.- Types: RES Pollution. ..IX.- P9512. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGNB5AARFT ..HL.- 930714FT 930714 Canada senate cancels its rise (372) ..BL.- By BERNARD SIMON ..DL.- TORONTO ..TX.- LAWMAKERS around the world who contemplate voting themselves large pay rises in tough times may wish to take note of the recent humbling experience of the Canadian senate. ..TX.- The upper chamber of parliament has bowed to a public outcry by rescinding a CDollars 6,000-a-year (Pounds 3,180) rise in expense allowances, which it approved less than three weeks ago. ..TX.- 'The senate made a mistake on June 23, and public opinion on a matter of this kind must be respected,' said Senator Lowell Murray, government leader, at a special session convened on Monday night to overturn the increase. ..TX.- The 104 senators owe their seats to patronage appointments by former Conservative and Liberal prime ministers, but they are at present a little more sensitive to public opinion than usual. ..TX.- With a general election coming up within the next four months, both the Conservatives and Liberals want to avoid anything that might risk driving voters into the arms of smaller parties, several of which favour either abolition or drastic reform of the Canadian federal parliament's upper chamber. ..TX.- The senators could not have chosen a worse time to award themselves an increase. ..TX.- The province of Ontario has just passed a law requiring 950,000 civil servants to accept a three-year pay freeze and 12 days of unpaid leave a year. ..TX.- With the national unemployment rate at 11.3 per cent and inflation at 1.8 per cent, most private-sector workers can look forward to, at best, a token pay rise this year. ..TX.- Faced with the combined opprobrium of their party leaders, the media and the public, the senators meekly accepted that an increase was not such a good idea after all. ..TX.- The vote to rescind the extra allowance was 80-1, with two abstentions. ..TX.- The about-turn is 'not a humiliating thing,' Senator Murray declared, but 'the right thing.' ..TX.- Not all his colleagues agree. The lone senator from New Brunswick who stuck by his original vote noted that the arguments made last month, in support of more generous travel and accommodation allowances, still applied. ..TX.- 'I've seen nothing to change my mind,' he said. ..CN.- Countries: CA Canada. ..IN.- Industry: P9121 Legislative Bodies. ..TP.- Types: NEWS General News. ..IX.- P9121. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGNB5AAQFT ..HL.- 930714FT 930714 Schlesinger says ERM tensions are 'short term' (382) ..BL.- By CHRISTOPHER PARKES ..DL.- FRANKFURT ..TX.- THE tension within the European exchange rate mechanism is of a 'very short-term nature', according to Mr Helmut Schlesinger, president of the Bundesbank. ..TX.- Attempting to play down pressure on the French franc, he said in Basle that the ERM was more stable than at the time of disruptions last September and December. ..TX.- Mr Schlesinger claimed the Bundesbank's intervention in support of the French currency showed co-operation between the two countries' central banks was 'as close as ever'. ..TX.- However, co-operation is unlikely to extend as far as assistance through further reductions in Germany's leading interest rates at tomorrow's meeting of the Bundesbank council. On July 1, the Bundesbank cut the internationally important discount rate by half a point to 6.75 per cent and the lombard rate by a quarter-point to 8.25 per cent. ..TX.- A further move, following so soon after the Group of Seven meeting in Tokyo and this week's squeeze on the franc, could damage the bank's prized credibility by giving the impression that its policy can be swayed by political pressure and 'short-term' exchange rate fluctuations. ..TX.- Germany's latest inflation and money supply figures, the key to the bank's rates policy, have been revised upwards since the last rate cuts, suggesting little room for manoeuvre at present. ..TX.- Inflation in June was 4.2 per cent a year, compared with 4.4 per cent in January, while the growth in the M3 money supply measure was 6.9 per cent a year, compared with the bank's target of 4.5 to 6.5 per cent. ..TX.- While M3 expansion is expected to have fallen closer to the upper limit in June, the Bundesbank's latest bout of franc-buying could push it up again, according to Mr Gerhard Grebe, chief economist at the Bank Julius Bar in Frankfurt. ..TX.- The condition of the franc and the state of the German economy demanded urgent supportive action support, he said yesterday. Even so, he expected no immediate cuts, favouring July 29 - the bank council's last meeting before the summer break - as the most likely and beneficial time. ..CN.- Countries: QR European Economic Community (EC). DE Germany, EC. FR France, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Inflation. ECON Economic Indicators. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGNB5AAPFT ..HL.- 930714FT 930714 Duisenberg in strong defence of French currency (566) ..BL.- By LIONEL BARBER ..DL.- STRASBOURG ..TX.- A STRONG defence of the french franc's parity with the D-Mark was issued yesterday by Mr Wim Duisenberg, chairman of the committee of European Community central bank governors. ..TX.- 'In no way are the fundamentals out of line with existing parities,' he told the European parliament. Interventions by the French authorities and other central banks had defended the franc successfully so far, he said. ..TX.- But he added that these interventions had been accompanied by firm measures by the French authorities. He said the concerted voluntary defence of the french currency was a 'true signal of co-operation within the exchange rate mechanism'. ..TX.- On the foreign exchange markets the franc steadied against the D-Mark, ending a succession of sharp declines, after a show of support from French and German politicians and central bank officials. ..TX.- Currency traders said that sentiment toward the franc had improved and that there had been fairly strong buying interest. But they warned that the instability facing the currency might not yet have run its course. ..TX.- Mr Duisenberg, who is also head of the Dutch central bank, argued that the credibility of the EC's plans for economic and monetary union depended on member states taking tough action to restrain budget deficits. ..TX.- He said said public sector deficits would rise to more than 6 per cent of the EC's gross domestic product this year - the highest ever recorded in the Community's history and double the target set out in the Maastricht treaty's goal of economic and monetary union. ..TX.- He said tackling budget deficits was a prerequisite for easing monetary policy. 'A credible, predetermined and irreversible path towards fiscal balance is essential to improve the potential of the Community's economies, and thus to retain confidence in the successful transition to economic and monetary union.' ..TX.- Mr Duisenberg's appearance at a plenary session of the parliament is rare, reflecting a new assertiveness by the legislature whose powers will expand once Maastricht is ratified. ..TX.- Last spring, the central bank governors submitted a report on last September's crisis in the ERM to the parliament, as well as the European Commission and EC finance ministers. The report blamed a lack of economic convergence among member states, inadequate policy mixes and a deteriorating economy for the crisis and found no structural fault-lines in the ERM. ..TX.- Mr Ben Patterson, a British Conservative MEP, challenged this interpretation in a report to the parliament. 'Why was no action taken to ensure an orderly realignment of currencies before the markets started the chaos,' he asked. 'What advice were the central bankers actually giving to the politicians at that time?' ..TX.- Mr Duisenberg had earlier set out the considerable difficulties in creating a single European currency with uniform banknotes. National experience suggested that it could take up to seven years, possibly even longer - a hint that a real monetary union will not happen this century. ..TX.- In his statement to MEPs, Mr Duisenberg urged member states not just to tackle public spending but also structural rigidities in the labour markets and to main wage restraint. ..TX.- Wage growth in the EC in 1993 was 2 per cent lower than in 1992 and it was vital to 'lock in' expectations that this trend would continue. ..CN.- Countries: FR France, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGNB5AAOFT ..HL.- 930714FT 930714 Embattled franc fort ready to pull up the drawbridge: Without a common monetary system, there is no Europe. That is French policy. John Ridding and David Buchan on the fight to keep the franc strong (1031) ..BL.- By JOHN RIDDING and DAVID BUCHAN ..TX.- IS France ready, in the midst of recession, to raise interest rates to defend the franc, if joint declarations and interventions by French and German politicians and central bankers fail to stem the currency's slide against the D-Mark? ..TX.- This is the question underlying the plight of the franc. On Monday it dropped to below FFr3.41 to the D-Mark, or within two centimes of its floor in the European exchange rate mechanism, although it steadied yesterday. ..TX.- In its first three months, the Balladur government has had all its own way. Since early April, French official rates have been cut nine times, while the Bundesbank has only lowered German rates twice. ..TX.- 'The Bank of France has cut its intervention rate from 9.1 to 6.75 per cent since April while keeping the franc stable, said Mr Piers Butler of Baring Securities in Paris yesterday. 'Now we are seeing the turnaround.' ..TX.- In 1991 and 1992 France repeatedly showed itself ready to raise rates when necessary. But times are different now. The country is in recession and unemployment rising. Indeed the main catalyst of the latest wave of franc selling - apart from a general rebound in market sentiment about the D-Mark - appeared to be last Thursday's forecast by Insee, France's national statistics institute. ..TX.- It was gloomier than the government in estimating that France's gross domestic product would contract by 0.7 per cent this year while its jobless rate would hit 12.5 per cent by December. ..TX.- The sight of a government increasingly constrained from raising rates by domestic political and economic factors precisely at the moment when it might need to do so for external monetary reasons, is always an enticing prospect for speculators, as Britain found to its cost last autumn. ..TX.- In retrospect, it is clear that Mr Edmond Alphandery, the economy minister, was guilty of a bit of hubris on June 24 when he proudly said: 'The franc is performing well, perhaps better than the D-Mark.' After the French minister went on to make it appear that he was summoning his German opposite number, Mr Theo Waigel, and Mr Helmut Schlesinger, the Bundesbank president, to Paris for a discussion of 'concerted' interest rate cuts, Mr Waigel pleaded pressing business and stayed home. ..TX.- In the event, no lasting harm was done. The Franco-German economic council meeting has been rescheduled for early August, and co-operation between the two central banks seems as close as ever. ..TX.- Addressing a joint press conference in Basle on Monday with his French counterpart, Mr Jacques de Larosiere, Mr Schlesinger called the franc's problems 'temporary', and said that the Bundesbank's co-operation with the Bank of France 'is as close as it has ever been'. ..TX.- Much of the franc's 'temporary' problem is due to the revival of the D-Mark. Investors, having taken short positions on the German currency in June following a series of pessimistic economic forecasts and warnings from Mr George Soros, the influential currency trader, that the D-Mark was overvalued, have hurried back to the German bond market. ..TX.- 'We have seen a huge shift from French to German bonds,' said Mr Alain Galibert, economist at SG Warburg in Paris. 'Investors felt they were underweight in the D-Mark. They are responding to attractive German bond prices and to improved economic news from Germany.' ..TX.- But many of the fundamentals of the French economy remain very sound, particularly in relation to Germany. France's retail inflation dropped in June to an annual rate of 1.9 per cent. Its superior wage discipline has given it a 15 per cent competitive edge in terms of hourly wage costs over Germany in the past five years. It recorded a FFr16.2bn (Pounds 1.85bn) trade surplus in the first quarter of this year, and is set to retain its current account surplus in 1993. ..TX.- But the flip side of many of these achievements is recession, which has depressed industrial prices, wages and imports. Prime Minister Edouard Balladur is beginning to press on the fiscal accelerator, and promises generalised tax cuts in the autumn. But these would only take effect next year. Despite increased spending already on public works and housing, the French construction industry is still forecasting a 4 per cent decline in activity this year. ..TX.- In these circumstances, the last thing the government wants to do is raise interest rates, whose recent reduction is also considered essential to giving the stock market a lift before the sell-off of state companies starts in the autumn. Mr Balladur has had a considerable stroke of luck in that the trouble for the franc only began just before subscriptions to his very successful bond issue closed last Friday. ..TX.- Some 1.4m French bought FFr110bn of the four-year Balladur bonds carrying a 6 per cent coupon, presumably calculating with the recent interest rate decline they could not get a much better return elsewhere. Having got their money, Mr Balladur could now raise interest rates, if he had to. If that happened, some investors might cry foul. But there is no mistaking the determination of the French political establishment to keep the franc locked to the D-Mark. Mr Balladur himself said this week that he would resign rather than devalue. 'If anyone wanted to carry out another policy' of devaluation, protectionism, increasing the budget deficit, 'they would first have to change prime minister,' he said. ..TX.- Some backbenchers in Mr Balladur's RPR Gaullist party and the odd maverick within the UDF, its coalition partner, are restive with Mr Balladur's strong money stance. But no one of any import is pressing him to change. Least of all, the president. On nominating Mr Balladur, Mr Mitterrand called for the preservation of the European monetary system, saying that 'keeping the franc's parity with the D-Mark is a precondition of this. Without a common monetary system, there is no Europe'. That is French policy. ..CN.- Countries: FR France, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGNB5AANFT ..HL.- 930714FT 930714 Bonn acts to curb soaring budget deficit: Sharp cuts in welfare spending intended to prompt reduction in interest rates (592) ..BL.- By QUENTIN PEEL ..DL.- BONN ..TX.- THE German cabinet yesterday approved plans for sharp cuts in social spending and unemployment benefits in an effort to curb the government's soaring deficit and encourage the Bundesbank to continue cutting interest rates. ..TX.- Budget spending for 1994 was fixed at DM478.4bn (Pounds 187.6bn), up 4.4 per cent on the current year, with a forecast borrowing requirement of DM67.5bn - almost identical to the current deficit. ..TX.- At the same time the cabinet approved a medium-term financial plan to impose a virtual freeze on nominal spending in 1995, and tight restraint until 1997, to reduce the deficit to DM48bn in 1996 and DM38bn by 1997. 'We have laid the foundations for improving the ability of the Bundesbank to cut (interest) rates,' Mr Theo Waigel said after the cabinet meeting, which was attended by both Mr Helmut Schlesinger, the Bundesbank president, and Mr Otmar Issing, his chief economist. ..TX.- The 1994 budget is based on a forecast growth rate of 1 per cent in western Germany next year, assuming a recovery in the first half of the year. For the whole of Germany, the economy is forecast to decline by 1 per cent this year, and grow by 1.5 per cent in 1994. ..TX.- The budget of the labour ministry, including the payment of unemployment benefit and financing job creation and retraining schemes in eastern Germany, remains by far the largest single element: almost DM122bn, or a quarter of total spending next year. Mr Waigel forecast an unemployment total of 3.75m in 1994, suggesting a continuing rise in joblessness even if the recession bottoms out. He said the aim of the budget, and the medium-term financial plan, was to bring central government spending under control, while still taking action to promote economic recovery. ..TX.- The DM21bn savings package approved for next year includes a cut of three percentage points in unemployment and social assistance benefits, a freeze on pay in the public sector, and a clampdown on social security and tax fraud intended to yield DM6bn. The cuts in spending resulting from the package should produce savings of more than DM28bn in the federal budget by 1996, and more than DM34bn if the 16 federal states are included. ..TX.- The package has antagonised trade unions and the Social Democratic Party, the main opposition party in the German Bundestag, the lower house of parliament. The SPD controls a majority in the Bundesrat, the upper house, but it can only block cuts amounting to 5 per cent of the total package, according to finance ministry officials. ..TX.- The medium-term plan shows the federal budget deficit remaining at the present level of more than DM67bn - or almost 15 per cent of the budget - until 1995, before the spending squeeze and economic recovery bring it back down to 10 per cent of spending by 1996 and under 8 per cent in 1997. ..TX.- Mr Waigel said that the only alternative to the sharp cuts in social benefits would have been to increase the level of borrowing, or to increase taxation during the recession. ..TX.- The former would mean that there would be no room for manoeuvre for the Bundesbank to cut its interest rates further, whereas a further increase in taxation would counteract any hopes of economic recovery. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P9441 Administration of Social and Manpower Programs. ..TP.- Types: ECON Employment & unemployment. ..IX.- P9311, P9441. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGNB5AAMFT ..HL.- 930714FT 930714 Salvatore Ligresti freed following questioning on corruption charges (82) ..TX.- Mr Salvatore Ligresti, one of Italy's richest businessmen, was freed yesterday after questioning on corruption charges. Mr Ligresti now awaits trial over L13bn (Pounds 5.58m) of bribes his insurance company SAI SpA is alleged to have paid to secure a contract from state energy company Eni. ..CO.- Companies: SAI. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P6331 Fire, Marine, and Casualty Insurance. P9211 Courts. ..TP.- Types: PEOP People. ..IX.- P6331, P9211. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGNB5AALFT ..HL.- 930714FT 930714 German cabinet passes draft law on labour flexibility (401) ..BL.- By QUENTIN PEEL ..TX.- A DRAFT law on flexible working hours in German industry was approved yesterday by the German cabinet. ..TX.- The draft, which will replace 28 existing laws and regulations on working hours, was hailed by Mr Gunter Rexrodt, the economy minister, as a leap towards deregulation and improving the competitiveness of German industry. ..TX.- Among a series of moves to introduce flexibility, the draft law would allow companies to cite cheap foreign competition as a reason for requiring extra production shifts on Sundays and holidays. ..TX.- The reforms are intended to give individual enterprises and their workers more responsibility for negotiating their own working hours, within limits prescribed by the law. ..TX.- While the normal working day for wage-earners remains fixed at eight hours, they may work up to 10 hours a day taking time off to compensate for the overtime over a period of six months. Hitherto they have been required to take the time off within two weeks. ..TX.- Workers and employers at individual enterprises will be allowed to negotiate a compensation period of longer than six months, if they wish. ..TX.- There will be a significant extension of the exemptions to allow for Sunday and holiday working. ..TX.- As far as foreign competition is concerned, employers can appeal for the right to introduce Sunday and holiday shifts if they can prove that jobs are threatened by cheaper manufacturers in other countries, where labour hours and other social conditions reduce their costs. ..TX.- The law, which has to be passed by the German parliament, will also remove existing discrimination on women's working hours, such as night-shift working, although it will continue to outlaw female labour in underground mining. ..TX.- Mr Norbert Blum, the labour minister, called on both workers and employers to use all the available flexibility to decide their own working hours. 'We need more creativity and more imagination in fixing working time,' he said. 'That could produce a significant improvement in productivity.' ..TX.- He insisted, however, that the law would not mean a dramatic change in the enforcement of Sundays and holidays as rest days. ..TX.- 'Sunday should not be a day like all the other days,' he said. 'People would lose all sense of direction if they worked in a continuous grey time-porridge.' ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P9441 Administration of Social and Manpower Programs. ..TP.- Types: PEOP Labour. ..IX.- P9441. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGNB5AAKFT ..HL.- 930714FT 930714 Italy to contain budget deficit with spending cuts (459) ..BL.- By ROBERT GRAHAM ..DL.- ROME ..TX.- THE Ciampi government intends to hold down the 1994 budget deficit to L150,000bn (Pounds 64.4bn) through swingeing spending cuts and only limited extra revenue from taxes. ..TX.- The combined effect of these measures will be to save L32,000bn on previous projections. Officials involved in the preparation of the budget estimate that without this, the rise in the public sector deficit would push the figure beyond L180,000bn. ..TX.- As much as two-thirds of the L32,000bn will come from spending cuts, affecting both current expenditure and investment. The 1993 budget was obliged to find L93,000bn to hold the deficit to L145,000bn - L150,000bn, but the emphasis then was on a bigger tax take, while spending tended to be frozen rather than cut. ..TX.- In contrast, officials involved in the preparation of the 1994 budget say fiscal pressure will be lowered 1.4 per cent next year. With the public unhappy at having to pay out unprecedented quantities of money this year in various taxes, a further tightening of the fiscal net risks being unproductive. As a result, the emphasis will be on improving the efficiency of tax collection and simplifying the way in which taxes are paid. ..TX.- On top of an across-the-board cut of 3 per cent in each ministry's spending, the government is looking at the health, welfare and education budgets for additional savings. Considerable savings can be achieved through a freeze on job creation especially in teaching where the education ministry has continued to recruit extra teachers despite a stagnant population. ..TX.- In health, reforms introduced in the 1993 budget are only just being felt and the ministry's L100,000bn budget has overrun by L14,000bn. Yesterday, one of Italy's research institutes claimed there were at least L11,000bn worth of unproductive expenditure in the health budget. ..TX.- Mr Carlo Azeglio Ciampi, prime minister and former Bank of Italy governor, will explain the budget to parliament on Thursday. ..TX.- It is the first time in the post-war era that a budget for the coming year has been prepared so quickly. Normally, the budget is not presented until close to the obligatory cut-off date of September 30. But the current plan was outlined by Mr Giuliano Amato, the previous prime minister, and pursued by Mr Ciampi to underline Italy's commitment both to tackle the country's budget deficit, which has reached over 10.5 per cent of GDP, and begin to cut the level of debt, equivalent to nearly 110 per cent of GDP. ..TX.- The macro-economic projections for the next three years showed 1994 growth of 1.6 per cent rising to 2.5 per cent by 1996. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGNB5AAJFT ..HL.- 930714FT 930714 Sabotage of relief effort may force UN pullout from Bosnia, warns Stoltenberg (558) ..BL.- By LAURA SILBER and FARHAN BOKHARI ..DL.- BELGRADE, ISLAMABAD ..TX.- MR Thorvald Stoltenberg, the international peace mediator for the former Yugoslavia, warned yesterday that the United Nations might be forced to pull out of Bosnia if the warring sides continued to sabotage the relief effort. ..TX.- His warning came as an escalation in the fighting threatened to block humanitarian relief from reaching besieged communities throughout Bosnia. ..TX.- Mrs Sadako Ogata, the UN's High Commissioner for Refugees, is due to visit Sarajevo today as Serb forces close in on the Bosnian capital. ..TX.- While Bosnian Serbs tightened their grip on Sarajevo, Croats clashed with Moslems near Mostar, south-west of the capital. 'It's an all-out Moslem offensive on our positions,' said Mr Veso Vegar, spokesman for the Croatian Defence Council (HVO). Bosnian radio said HVO units used small aircraft to bombard the Moslems, stranded on the left bank of the River Neretva which runs through Mostar. ..TX.- Serb forces pressed forward, seizing three more villages after recapturing Trnovo on Monday, reported Tanjug, the Serbian news agency. The military campaign seemed of great importance because it was directed by Bosnian Serb commander General Ratko Mladic. ..TX.- The loss of Trnovo severed any link between Sarajevo and Gorazde, two Moslem enclaves ostensibly under UN protection. ..TX.- 'The doors of Sarajevo are now open to the Serbs,' warned the 'war president' of Trnovo in an interview broadcast on Bosnian radio. ..TX.- Mrs Ogata's visit will coincide with a meeting of Bosnia's collective presidency about peace proposals for the Geneva talks. The mainly Moslem leadership has rejected Serbo-Croat plans for the republic's ethnic partition. ..TX.- Just 18 miles to the south, Sarajevo remains without electricity and water, raising fears of epidemics. ..TX.- While attacking UN 'safe areas', Bosnian Serb officials and their counterparts in Serbia were stopping the relief operation by demanding visas. ..TX.- Ms Lyndall Sachs of the Belgrade UNHCR, office said: 'The visas are completely outrageous. It will severely hamper operations, not only to the Moslems, but to the Serbs as well.' ..TX.- Seven Islamic countries yesterday committed themselvesto provide up to 18,000 troops for the United Nations protection force in Bosnia, Farhan Bokhari reports from Islamabad. ..TX.- Iran offered up to 10,000 troops, Pakistan 3,000, Bangladesh 1,220, Malaysia 1,500, Tunisia 1,000, the Palestinian delegation 1,000 and Turkey offered up to a brigade in response to a request by Mr Boutros Boutros Ghali, UN secretary general, for more troops to protect safe zones. ..TX.- Foreign ministers at the Organisation of Islamic Conference meeting also agreed a 20-point action plan and called for measures to ensure prompt delivery of humanitarian relief supplies, even if that required the use of force. ..TX.- 'The OIC countries emphasised that their forces will be assigned for this humanitarian mission to protect the people in Bosnia-Hercegovina,' the plan said. 'They will in no condition be a party to any plan to partition the country or to create refugee ghettos in Bosnia-Hercegovina.' ..TX.- Diplomats said more commitments were expected within the next fortnight. The meeting also called for an immediate lifting of the arms embargo. ..TX.- The Islamic foreign ministers urged that the London conference on the former Yugoslavia be reconvened to consider proposals submitted by the Bosnian government for a political solution. ..CN.- Countries: BA Bosnia-Hercegovina, East Europe. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGNB5AAIFT ..HL.- 930714FT 930714 Community aid coffers run low: Warning from Brussels as EC under pressure to give more (440) ..BL.- By DAVID GARDNER ..DL.- BRUSSELS ..TX.- THE European Community, which will face pressure on Friday to commit substantial new aid money to Bosnia, has all but run out of resources from its humanitarian aid budget. 'We've emptied all the drawers; we're dry; we have no money left,' said Mr Manuel Marin, commissioner in charge of development and humanitarian aid. ..TX.- The European Commission will this week approve an extra Ecu57.3m (Dollars 74.5m), on top of the Dollars 872m the Community and its 12 member states have provided for the former Yugoslavia between September 1991 and the end of this June. ..TX.- But the United Nations High Commissioner for Refugees, which is calling Friday's meeting of aid donors, is looking for Dollars 1bn-Dollars 1.5bn more for the Yugoslav crisis, on top of the Dollars 1.3bn already spent. ..TX.- The UNHCR is banking on the commitment made by last week's Group of Seven meeting in Tokyo, which agreed in its political declaration that 'the flow of humanitarian aid to Bosnia must be increased'. ..TX.- As the donor of two thirds of funding so far, the EC will be expected to provide the larger portion of new money, for what the US and Japan regard as primarily a European problem, according to Mr Marin. ..TX.- 'The Community budget is in no condition to meet these demands,' he added, unless the Twelve agree to raise the budget ceiling, a politicaly difficult decision at a time when all member states are under pressure to narrow widening budget deficits. ..TX.- Since the Yugoslav crisis began two years ago, the EC humanitarian aid budget has increased ten-fold, to around Ecu800m a year. But this money is required for emergencies in some 30 countries, among them Somalia, Ethiopia, Angola, northern Iraq, southern Sudan, Cambodia, the former Soviet republics and central America. ..TX.- A reserve emergency fund of some Ecu300m set up at the end of last year is now virtually exhausted, and limited funds transferred from other areas like the Phare programme for eastern Europe, or unspent commitments from the Lome Convention programme for Europe's former colonies, have been used. ..TX.- Mr Marin is essentially saying the Twelve will have to put their money where, at least, the four EC members of the G7 put their mouths last week. ..TX.- -------------------------------------- HUMANITARIAN AID TO FORMER YUGOSLAVIA -------------------------------------- Dollars m % -------------------------------------- EC 872 68 US 164 13 Japan 32 2 Others 217 17 Total 1285 100 -------------------------------------- ..CN.- Countries: QR European Economic Community (EC). BA Bosnia-Hercegovina, East Europe. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGNB5AAHFT ..HL.- 930714FT 930714 German exports, imports rise in March (67) ..TX.- German exports rose sharply in March and imports also rose. According to the federal statistics office, exports in March were almost 7 per cent higher than in Februsray while imports rose 2.9 per cent during the month. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: MKTS Foreign trade. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGNB5AAGFT ..HL.- 930714FT 930714 Stock and Currency Markets (229) ..TX.- ------------------------------------------------------------ STOCK MARKET INDICES ------------------------------------------------------------ FT-SE 100: 2837.1 (+6.2) Yield 4.03 FT-SE Eurotrack 100 1235.91 (+3.01) FT-A All-Share 1408.44 (+0.2%) FT-A World Index 160.19 (+0.9%) Nikkei 20,180.42 (+200.42) New York: Dow Jones Ind Ave 3515.44 (-8.94) S&P Composite 448.09 (-0.89) ------------------------------------------------------------ US RATES ------------------------------------------------------------ Federal Funds: 2 15/16% (3 1/16%) 3-mo Treas Bills: Yld 3.085% (3.064%) Long Bond 106 19/32 (106 15/32) Yield 6.611% (6.621%) ------------------------------------------------------------ LONDON MONEY ------------------------------------------------------------ ..TX.- 3-mo Interbank 6% (same) Liffe long gilt future: Sep 107 31/32 (Sep 108 7/32) ------------------------------------------------------------ NORTH SEA OIL (Argus) ------------------------------------------------------------ Brent 15-day (Aug) dollars 17.025 (16.87) ------------------------------------------------------------ Gold ------------------------------------------------------------ New York Comex (Aug) dollars 394.5 (394.9) London dollars 393.75 (394.05) ------------------------------------------------------------ STERLING ------------------------------------------------------------ New York: Dollars 1.49775 (1.477) London: Dollars 1.4935 (1.478) DM 2.57 (2.555) FFr 8.775 (8.7275) SFr 2.27 (2.26) ..TX.- Y 161.75 (162) Pound Index 81.2 (80.8) ------------------------------------------------------------ DOLLAR ------------------------------------------------------------ New York: DM 1.7185 (1.7298) FFr 5.86825 (5.9065) SFr 1.5177 (1.52985) Y 107.95 (109.35) London: DM 1.72 (1.7285) FFr 5.875 (5.905) SFr 1.52 (1.5285) Y 108.3 (109.6) Dollar Index 66.1 (66.5) Tokyo open Y 108.025 ------------------------------------------------------------ ..CN.- Countries: GB United Kingdom, EC. JP Japan, Asia. US United States of America. ..IN.- Industry: P6231 Security and Commodity Exchanges. P1311 Crude Petroleum and Natural Gas. P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: COSTS Commodity prices. COSTS Equity prices. ..IX.- P6231, P1311, P9311. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGNB5AAFFT ..HL.- 930714FT 930714 BA chief attacks Virgin court action (219) ..TX.- BRITISH AIRWAYS chairman Sir Colin Marshall yesterday attacked Virgin Atlantic Airways for its continued pursuit of legal action over the 'dirty tricks' his airline played on it. ..TX.- Sir Colin, pictured with some of the board at BA's annual meeting in London, denied prior knowledge of the 'dirty tricks' and renewed his call for arbitration. He said: 'We do not believe that what was done caused significant damage to Virgin or brought significant benefit to BA.' ..TX.- Virgin Atlantic chief Mr Richard Branson dismissed the offer. 'We might just as well decide the matter by having a trans-atlantic hot air balloon race,' he said, referring to an earlier exploit of his. ..TX.- 'I think it is looking more and more inevitable that it will end up in court. You have to ask why BA wants the battle to be fought before an arbitrator and not in the courts,' Mr Branson added. ..TX.- 'It is like Napoleon asking Wellington if he would move the battle of Waterloo to a more convenient spot once fighting had already begun.' ..TX.- BA on the offensive, Page 19; Lex, Page 18. ..CO.- Companies: British Airways. Virgin Atlantic Airways. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4512 Air Transportation, Scheduled. P9211 Courts. ..TP.- Types: COMP Company News. ..IX.- P4512, P9211. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGNB5AAEFT ..HL.- 930714FT 930714 Islamic force offered for Bosnia as relief fears grow (575) ..BL.- By MICHAEL LITTLEJOHNS, FARHAN BOKHARI and LAURA SILBER ..DL.- NEW YORK, ISLAMABAD, BELGRADE ..TX.- SEVEN ISLAMIC countries yesterday offered to provide up to 18,000 troops for the United Nations protection force in Bosnia-Hercegovina as top UN officials warned that the international humanitarian relief effort might have to be abandoned. ..TX.- The officials in New York said there was a 'real risk' that the world body might be unable to continue its operations in Bosnia. ..TX.- In a further sign of mounting frustration in the Islamic world at the plight of the Bosnian Moslems, the Islamic Conference Organisation called for an immediate lifting of the arms embargo on Bosnia and backed the Bosnian presidency's rejection of the Serbo-Croat plan to partition the former Yugoslav republic. ..TX.- Meeting in Islamabad, foreign ministers of 16 Islamic countries also called on Mr Boutros Boutros Ghali, UN secretary-general, and members of the Security Council to act immediately to relieve the grave situation in Sarajevo and other Bosnian towns. ..TX.- The offer to send troops to join the UN force - with Iran pledging up to 10,000 soldiers - poses a dilemma for Mr Boutros Ghali. ..TX.- Despite promising to defend 'safe areas' for Bosnia's Moslems, western countries have failed to provide sufficient ground forces for the task. ..TX.- Pakistan has offered to send 3,000 troops, Bangladesh 1,220, Malaysia 1,500, Tunisia 1,000 and the Palestinian delegation 1,000, while Turkey has offered up to a brigade in response to an earlier request by the UN secretary-general for more troops to protect safe zones. ..TX.- In a sombre report to the Security Council, Mr Boutros Ghali spoke of 'the deteriorating situation on the ground'. His special representative, Mr Thorvald Stoltenberg, said the choice facing the UN in the republic was 'simple and stark'. ..TX.- It was up to the UN secretary-general to decide how the OIC offer could be used in the interests of peace, he said. ..TX.- Noting that original estimates were that up to 32,000 UN troops were needed just to protect the safe areas in Bosnia, including the besieged capital of Sarajevo, he reported that only 1,120 had been deployed so far in a force already scaled down to 7,500 at the Security Council's insistence. ..TX.- Mr Stoltenberg explicitly rejected a contention by the Bosnian delegate, Mr Muhamed Sacirbey, that his warning of a possible UN withdrawal was designed to pressure the Moslem authorities into entering new negotiations. Mr Stoltenberg appeared confident that all three parties to the conflict would go to Geneva next week for talks aimed at a durable settlement. ..TX.- In his own report, Mr Boutros Ghali said the 'stark realities were that there was little prospect for implementing the safe areas policy before new resources arrived and that the civilian population would face devastating hardship next winter unless Unprofor focused on efforts to restore utilities and humanitarian relief deliveries'. ..TX.- Yesterday, in preparation for possible protection of UN troops guaranteeing the safe areas, the US sent 12 ground attack aircraft from Germany to an air base in northern Italy. ..TX.- Defence officials in Paris said the French and British were also to send aircraft which might be deployed if the UN called upon Nato air forces to step up their missions in the no-fly zone over Bosnia. ..TX.- EC aid coffers run low, Page 2 ..TX.- No bite without teeth, Page 16 ..CN.- Countries: BA Bosnia-Hercegovina, East Europe. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGNB5AADFT ..HL.- 930714FT 930714 Troops in Somalia defy orders from local commanders: Critical decisions face UN as two peace operations encounter growing troubles (576) ..BL.- By MICHAEL LITTLEJOHNS at the UN and ROBERT GRAHAM ..DL.- ROME ..TX.- THE CRISIS over the United Nations' peacekeeping role in Somalia deepened yesterday as it emerged that UN troops in the country have been refusing to obey orders from their local commanders, apparently on instructions from their governments. ..TX.- According to UN officials in New York, Italian, Kuwaiti and Saudi contingents have been refusing to carry out orders given by the Turkish commander, General Civek Bir. ..TX.- Underlining the sense of disarray in the UN force, officials said some troop commanders in riot-torn Mogadishu were reported to have been unwilling to commit contingents to UN sorties because of the risk of casualties. ..TX.- Last night, Mr Malcolm Rifkind, UK defence secretary, referring to UN operations, including those in Somalia and Bosnia, said the organisation could find itself out of its depth unless expert military advice to the secretary-general, Mr Boutros Boutros Ghali, was vastly improved. ..TX.- 'There is a powerful case for enhancing the military expertise available,' he said in London. 'Otherwise the UN will be out of its depth very quickly, if it is not so already.' Such assistance could take the form of a UN staff college. ..TX.- The UN ambassadors of the half-dozen countries with more than 1,000 soldiers in Somalia were recently summoned to discuss the growing crisis by Mr Kofi Annan, under-secretary general in charge of UN peacekeeping operations worldwide. The envoys were told it was unacceptable for national capitals to issue orders to contingents serving under the UN flag and Gen Bir's authority must be respected. ..TX.- The latest blow to the UN's authority in Somalia emerged as Italy, which has voiced disquiet about the increasingly bloody operation, asked the UN for its troops in Mogadishu to be moved out to safer terrain unless agreement could be reached. ..TX.- Mr David Andrews, Irish defence minister, called for a conference of the countries contributing troops to Somalia. After addressing 80 Irish troops about to go to Somalia, he said: 'It is important not to lose sight of the fundamental reason for the UN presence in Somalia, which was to help create the political and economic conditions whereby ultimately the Somali people could help themselves.' ..TX.- His call came a day after US helicopters blasted the command centre of General Mohamed Farah Aideed, the fugitive warlord, leaving more than a dozen dead and provoking a mob to kill four journalists in revenge. The Organisation of African Unity called yesterday for a review of the UN operation, saying the world body should resume dialogue with people there. ..TX.- On Monday, UN officials rejected a proposal by Mr Fabio Fabbri, Italy's defence minister, that combat operations be suspended in an effort to reduce tension in the former Italian colony. This led yesterday to calls from the opposition in parliament to withdraw the Italian contingent. ..TX.- The US, which recently boosted its Somalia firepower to strike at Gen Aideed's militia, announced yesterday it had again moved a task force of 2,200 marines away from Somalia and would begin withdrawing four AC-130 attack aircraft. But the Pentagon said this did not signal any softening of US support for a military crackdown against Gen Aideed. ..TX.- Rising death toll stokes hatred against UN, Page 4 ..TX.- Editorial Comment, Page 17 ..CN.- Countries: SO Somalia, Africa. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGNB5AACFT ..HL.- 930714FT 930714 World News in Brief: Franc steadies against D-Mark (90) ..TX.- The French franc steadied against the D-Mark, ending a succession of sharp declines, following a show of support from French and German politicians and central bank officials. It closed in London at FFr3.414, almost unchanged from its opening rate. In New York, it closed at FFr3.4148. Embattled franc prepared to fight off attackers, Page 2; Currencies, Page 35 ..CN.- Countries: FR France, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGNB5AABFT ..HL.- 930714FT 930714 Output rise boosts pound and hope of firm growth (488) ..BL.- By EMMA TUCKER, ALISON SMITH and PETER JOHN ..TX.- THE SHARPEST monthly rise in manufacturing output for four years has strengthened hopes for a sustained UK recovery. ..TX.- The 1.8 per cent increase in May output was almost 10 times stronger than market expectations, and points to robust economic expansion in the second quarter. The rise was the highest since April 1989. ..TX.- It was fuelled by buoyant car, computer and metals production, but the Central Statistical Office said that the late May bank holiday had possibly inflated the monthly figure. ..TX.- The underlying trend, however, continued to show a healthy rise. In the latest three months, output grew by 2.1 per cent compared with the previous quarter, and was 3 per cent up on the same period a year ago. ..TX.- The news sent the pound sharply higher against the D-Mark and the dollar. Sterling closed 1 1/2 pfennigs higher at DM2.57 and rose 1 1/2 cents to end the day at Dollars 1.4935. In New York the pound closed at Dollars 1.49775 and in late trading was at DM2.5735. ..TX.- UK share and government bond prices were largely unchanged, treating the figure as erratic after the CSO warning to regard the monthly figure cautiously. ..TX.- The FT-SE share index closed up 6.2 at 2,837.1, with dealers worried that chances of an early interest rate cut were fading. In the government bond market, an initial fall corrected itself, leaving prices only marginally lower by the close. Traders said any price weakness reflected technical pressures from weaker European markets rather than a substantial shift of opinion on UK economic prospects. ..TX.- The figures are likely to reinforce the hopes of Mr Kenneth Clarke, the chancellor, that a strong recovery will reduce the need for tax increases to tackle the budget deficit. ..TX.- In the House of Commons, Mr John Major, the prime minister, said the figures were 'clearly very good news indeed'. 'But it is only one of a large number of signs that the economy is recovering. Retail sales are up, car registrations are up, confidence is up, and unemployment is down,' he said. ..TX.- Yesterday's figures cheered Tory MPs, still divided over the Maastricht treaty and faced with unpopular policies such as imposing value added tax on domestic fuel. Most Conservatives believe there will be a chance to ease their political difficulties only when people become convinced the recession is over. The CSO said all manufacturing sectors, other than food, drink and tobacco, showed an even output growth in the latest three months. ..TX.- Total industrial production, which includes energy and water supply, rose 2 per cent month-on-month and was up 0.4 per cent in the latest three months compared with the previous quarter. ..TX.- Graphic, Page 7 Lex, Page 18 Currencies, Page 35 London stocks, Page 44 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGNB5AAAFT ..HL.- 930714FT 930714 World News in Brief: India flood deaths reach 175 (56) ..TX.- Flood waters began receding in northern India as the death toll from four days of heavy monsoon rains rose to at least 175. ..CN.- Countries: IN India, Asia. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: RES Natural resources. ..IX.- P9229. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGMB6AD0FT ..HL.- 930713FT 930715 Non-confirmation of Markham as chairman seen as reason for resignation (144) ..BL.- By RICHARD WATERS ..DL.- NEW YORK ..TX.- A DECISION not to confirm Mr Richard Markham, heir apparent at Merck & Co, to the position of chairman was yesterday seen as the most likely reason for his unexpected resignation, writes Richard Waters in New York. ..TX.- Since he was appointed to the number-two job of president and chief operation officer last December, he had installed his own appointees at senior management level. The speed of change and a reputedly aggressive management style are understood to have caused disquiet. ..TX.- Merck said yesterday that 'Mr Markham was a leading candidate' for the chairmanship, 'but he was never the named successor'. ..TX.- Lex, Page 16 ..CO.- Companies: Merck and Co Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P2834 Pharmaceutical Preparations. ..TP.- Types: PEOP People. ..IX.- P2834. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGNB5AIMFT ..HL.- 930713FT 930714 Merck board seek successor (285) ..BL.- By RICHARD WATERS ..DL.- NEW YORK ..TX.- A DECISION not to confirm Mr Richard Markham, heir-apparent at Merck, to the position of chairman was yesterday seen as the most likely reason for his sudden and unexpected departure from the company. ..TX.- Since the 42-year old Mr Markham was appointed to the number-two job of president and chief operation officer last December, leapfrogging more experienced Merck executives, he had moved fast to install his own appointees at senior management level. ..TX.- The speed of the change, and an aggressive management style, are reported to have caused disquiet among other senior executives. ..TX.- Merck refused to say whether the board had decided against confirming Mr Markham as successor to Mr Roy Vagelos, the chairman who is due to retire next year. However, it added: 'Mr Markham was a leading candidate to succeed Dr Vagelos, but he was never the named successor.' ..TX.- The most likely successor to Mr Vagelos is expected to come from among the four vice-presidents on the seven-person chairman's staff. No decision is likely soon. Mr Markham is unlikely to be succeeded by another chief operating officer, a title that had been created for him, the company said Merck denied that the departure had been prompted by any disagreement over business style, saying only that it was for 'personal' reasons. ..TX.- Mr Markham's departure was seen on Wall Street as likely to make little difference to Merck's overall strategy. By midday in New York the company's shares had slipped by only Dollars 1/4 to Dollars 34 1/2 . ..TX.- Lex, Page 14 ..CO.- Companies: Merck and Co. ..CN.- Countries: US United States of America. ..IN.- Industry: P2834 Pharmaceutical Preparations. ..TP.- Types: PEOP People. ..IX.- P2834. ..DS.- The Financial Times ..XP.- International Page 15 ***************************************************************** ..AN.-00DGNB5AILFT ..HL.- 930713FT 930714 UN arms expert may fly to Baghdad this week (526) ..BL.- By MARK NICHOLSON ..DL.- CAIRO ..TX.- MR ROLF EKEUS, head of the United Nations special commission into Iraq's weapons of mass destruction, may fly to Baghdad this week in a further attempt to resolve peacefully the latest stand-off between Iraqi officials and UN weapons inspectors, diplomats at the UN said yesterday. ..TX.- The UN Security Council was last night discussing its next move in the impasse, which follows the abrupt departure from Iraq on Sunday of a UN weapons inspection team after it failed to win Iraq's agreement to seal monitoring equipment at two missile testing sites. ..TX.- Mr Ekeus has visited Iraq before to defuse similar stand-offs. One UN diplomat said another trip this week would enable the Security Council 'not to act precipitately, but show that it was serious' about forcing Iraqi compliance with Gulf war ceasefire resolutions. ..TX.- Iraqi newspapers yesterday suggested Mr Ekeus would find little warmth in Baghdad. The official al-Jumhuriya decried attempts to monitor the test sites as 'evidence of the wicked and malicious intentions of Ekeus and the criminal designs of those standing behind him'. ..TX.- The Security Council has already warned in a June 18 statement of 'serious consequences' should Iraq continue to resist UN attempts to monitor the sites at al-Rafah and Yam al-Azim, respectively 70km west and south-west of Baghdad. An earlier UN team failed to persuade Iraqi authorities to install video monitors to prevent testing of missiles with a range of more than 150km, prohibited under ceasefire resolutions. ..TX.- Diplomats in New York consider that no further warning to Iraq or UN resolution would formally be required before a strike on the two sites, but last night they were playing down any prospect of immediate action. 'We're not at crisis point yet,' one said. ..TX.- China, one of the five permanent members of the Security Council, yesterday distanced itself from talk of a strike, with Foreign Ministry officials in Beijing saying the confrontation should be resolved 'through consultation and dialogue'. ..TX.- Some officials in New York said they were inclined to apply more pressure, but wait and see if Iraq would eventually back down, as it has in most previous run-ins with UN inspection teams. ..TX.- Nevertheless, an attack remains a clear option, one which was raised immediately by Mr Al Gore, the US vice president, who warned Iraq not to 'trifle' with the world community. ..TX.- The two sites are understood to be in industrial zones where there would be far less risk of 'collateral' damage and civilian casualties than in last month's US cruise missile raid on Iraqi intelligence headquarters in central Baghdad. ..TX.- Each site comprises a small cluster of buildings, with a test stand at each to allow the monitored firing of missile engines - with liquid fuel at al-Rafah and solid fuel at Yam al-Azim. The housing for these stands would offer a natural target in any raid. It was at these that UN teams sought to install cameras and later to seal and lock monitoring sensors. ..TX.- Editorial comment, Page 13 ..CN.- Countries: IQ Iraq, Middle East. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- International Page 3 ***************************************************************** ..AN.-00DGNB5AIKFT ..HL.- 930713FT 930714 Togo parties agree on elections (81) ..BL.- By REUTER ..DL.- LOME ..TX.- Togo's government and opposition have signed an accord for the West African country's first multi-party elections after two years of often bloody transition, Reuter reports from Lome. The president of the COD 2 opposition alliance said the agreement meant Togo was finally on the way to democracy. ..CN.- Countries: TG Togo, Africa. ..IN.- Industry: P9199 General Government, NEC. P8651 Political Organizations. ..TP.- Types: GOVT Government News. ..IX.- P9199, P8651. ..DS.- The Financial Times ..XP.- International Page 3 ***************************************************************** ..AN.-00DGNB5AIJFT ..HL.- 930713FT 930714 Liberians seek ceasefire pact (96) ..BL.- By REUTER ..DL.- GENEVA ..TX.- Liberia's three warring factions yesterday began drafting a new ceasefire accord to try to end the country's civil war, Reuter reports from Geneva. ..TX.- United Nations and African officials said the factions and the interim government of national unity were reworking a failed 1991 pact. The text was being finalised before going to a full session of the week-long negotiations, which began on Saturday at the UN's European headquarters. ..CN.- Countries: LR Liberia, Africa. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- International Page 3 ***************************************************************** ..AN.-00DGNB5AIIFT ..HL.- 930713FT 930714 China to cut metal jobs (124) ..BL.- By REUTER ..DL.- BEIJING ..TX.- China's metal industry is the latest state-owned operation to announce a big restructuring, promising to cut 330,000 jobs during the next seven years, Reuter reports from Beijing. ..TX.- But few if any of the workers to be laid off by the China National Nonferrous Metals Industry Corp (CNNC) will end up jobless, the China Daily said yesterday. 'Workers made redundant are to be re-employed in service industries and other profitable businesses set up under collective ownership by CNNC's subsidiaries,' the official newspaper said. ..CO.- Companies: China National Nonferrous Metals Industry Corp. ..CN.- Countries: CN China, Asia. ..IN.- Industry: P3339 Primary Nonferrous Metals, NEC. P3341 Secondary Nonferrous Metals. ..TP.- Types: PEOP Labour. ..IX.- P3339, P3341. ..DS.- The Financial Times ..XP.- International Page 3 ***************************************************************** ..AN.-00DGNB5AIHFT ..HL.- 930713FT 930714 Moroccan unionist pardoned (120) ..BL.- By FRANCIS GHILES ..DL.- LONDON ..TX.- Mr Noubir Amaoui, the secretary general of Morocco's influential trade union, the Confederation Democratique du Travail (CDT), was released from prison yesterday after being pardoned by King Hassan, writes Francis Ghiles in London. He had been sentenced to two years' imprisonment for allegedly 'insulting the government' in an interview published 18 months ago. ..TX.- Mr Amaoui is a member of the ruling council of the Moroccan opposition party Union Socialiste des Forces Populaires (USFP). Three weeks ago the USFP won 48 seats in elections considered by observers to be the fairest in many years. ..CN.- Countries: MA Morocco, Africa. ..IN.- Industry: P8631 Labor Organizations. ..TP.- Types: PEOP People. ..IX.- P8631. ..DS.- The Financial Times ..XP.- International Page 3 ***************************************************************** ..AN.-00DGNB5AIGFT ..HL.- 930713FT 930714 World News in Brief: Kidnap fear (62) ..TX.- Warnings that tourists should avoid eastern Turkey were renewed after it was confirmed that a missing British engineer and his Australian cousin had been kidnapped by the rebel Kurdistan Workers' party. ..CN.- Countries: TR Turkey, Middle East. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: NEWS General News. ..IX.- P9229. ..DS.- The Financial Times ..XP.- International Page 1 ***************************************************************** ..AN.-00DGNB5AIFFT ..HL.- 930713FT 930714 World News in Brief: Intellectuals to monitor the far right (85) ..TX.- Forty European intellectuals warned that the political far right was infiltrating the press, publishing houses and universities and announced the creation of a special monitoring group. The 40, who include Italian author Umberto Eco (left) and French semiologist Jacques Derrida, said the far right was conducting a 'charm offensive' to legitimise itself in mainstream circles. ..CN.- Countries: XA World. ..IN.- Industry: P8651 Political Organizations. ..TP.- Types: NEWS General News. ..IX.- P8651. ..DS.- The Financial Times ..XP.- International Page 1 ***************************************************************** ..AN.-00DGNB5AIEFT ..HL.- 930713FT 930713 Union pact wins late reprieve for NY Post (338) ..BL.- By MARTIN DICKSON ..DL.- NEW YORK ..TX.- THE ailing New York Post newspaper staggered back to life last night when its unions agreed to large cost concessions demanded by Mr Rupert Murdoch, who last Friday ended publication of the tabloid and abandoned plans to buy it. ..TX.- News Corporation, the media empire headed by Mr Murdoch, said it would resume publication of the Post today. ..TX.- The pact appeared to clear away the last big hurdle to Mr Murdoch's purchase of the paper, although he still faces negotiations in the bankruptcy court over a purchase price. ..TX.- News Corporation has been managing the business under a contract with the court since March 29. ..TX.- Mr Murdoch walked away from the contract on Friday, complaining that the group's 11 unions had failed to agreed to Dollars 6.2m (Pounds 4.1m) of cost concessions which News Corporation said were vital to ensure the paper's viability in the crowded New York market. ..TX.- His action threatened the demise of the irreverent 192-year-old tabloid, America's oldest continuously published newspaper, since no other serious purchaser appeared in sight. ..TX.- However, following a weekend of fresh negotiations, which New York governor Mario Cuomo played a role in initiating, 10 of the Post's 11 unions agreed to fresh concessions. ..TX.- The eleventh, the Newspaper Guild, which represents about 290 of the Post's 700 workers, has not accepted a new contract but agreed to return to work while negotiations continue. It is concerned about job security, while News Corporation wants the power to make staff redundant. ..TX.- Mr Murdoch owned the Post until 1988 but was forced to sell it because of US rules forbidding cross-ownership of both a local television station and a local newspaper. ..TX.- However, the Post's dire financial straits encouraged the Federal Communications Commission, the government body which oversees the media industry, to give him a permanent waiver from this ruling. ..CO.- Companies: New York Post. ..CN.- Countries: US United States of America. ..IN.- Industry: P2711 Newspapers. ..TP.- Types: PEOP Labour. ..IX.- P2711. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGMB6AGMFT ..HL.- 930713FT 930713 London Stock Exchange: More downward pressure on equities (588) ..BL.- By STEVE THOMPSON ..TX.- THE recent uncertainty in the UK equity market was again in evidence yesterday, with share prices coming under renewed downward pressure and the market moving further away from the top end of its perceived trading range of 2,600 to 2,900 on the FT-SE 100 Index. ..TX.- Senior dealers were hard pressed to come up with a good reason for the market's latest unhappy showing, but there was a growing feeling in some areas of the City that the government's sale of its remaining near 22 per cent stake in BT may not be going quite as well as some would have it. ..TX.- 'There is something unsettling the market and it is definitely not rights issue stories; with BT3 so close, the authorities would not have allowed any other substantial calls,' said one dealer. ..TX.- He pointed out that Wall Street had made a relatively comfortable opening, in spite of widespread worries that the US market could be overbought, and that the big Continental bourses had performed well yesterday, with the DAX up 20 points and the Paris market rallying well. ..TX.- 'The domestic economic news is okay, which leaves one thing - BT3,' he said. Worries about the drain on institutional cash balances, following the massive government borrowing requirement and the spate of rights issues - more than Pounds 7bn worth - so far this year, have been around for some time. An economist at one of the UK agency brokers put it bluntly: 'The institutions have run out of cash.' ..TX.- The Share Shops deadline for BT3 applications was 3.30pm yesterday, with the public offer closing at 10am tomorrow. The international and retail tender closes at 5pm on Friday, with dealings commencing on Monday. ..TX.- Carr Kitcat & Aitken, the stockbroker, issued a bearish review of BT yesterday, claiming that consensus profits estimates for the company 'are too high'. The broker lopped Pounds 520m off its current-year estimate and Pounds 650m off that for next year, citing 'ominous regulatory developments and a downbeat BT3 prospectus'. ..TX.- The equity market opened on a drab note and was on the retreat for the rest of an uninspiring session. The FT-SE 100 was down almost seven points by 10am, before staging a minor rally towards midday and then embarking on a further slide, eventually coming to rest a net 12.3 down at 2,830.9, its lowest since June 4, and a fall of almost 70 points since the start of the month. ..TX.- Turnover yesterday was low at 448.1m shares, with non-FT-SE 100 stocks accounting for 61 per cent of the total. Mondays are traditionally low turnover sessions for the market and dealers are worried that activity will remain under pressure for the rest of the week. The value of customer business transacted last Friday was Pounds 1.23bn. ..TX.- The outbreak of price war among the UK tabloid newspapers, instigated by the Rupert Murdoch-controlled Sun, triggered some sizeable selling of the newspaper companies, with Mirror Group Newspapers shares notably weak, along with United Newspapers. ..TX.- Composite insurance stocks were given a rough ride as analysts began to count the costs of the floods in the US. Banks provided one of the FT-SE 100's few firm spots in TSB, where there was talk of the imminent sale of the Hill Samuel merchant banking operation. Oil shares were helped by a further rise in crude oil prices. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 36 ***************************************************************** ..AN.-00DGMB6AGLFT ..HL.- 930713FT 930713 London Stock Exchange: Newspapers hit (1004) ..BL.- By STEVE THOMPSON, JOEL KIBAZO, CHRISTOPHER PRICE and CHRISTINE BUCKLEY ..TX.- The outbreak of tabloid price wars sent newspaper shares into a tailspin. After The Sun cut its cover price by 5p to 20p and the Daily Mirror returned fire with a one-day offer to buy the paper for only 10p, heavy trading in Mirror Group Newspapers pushed the price down 14 to 153p. Volume in the shares, which have enjoyed a strong run lately, was 3.3m. ..TX.- Casualties spread throughout the popular press as some investors feared that News International's strategy may take the Sun's price lower if it was reaping sales, while others believed that the furore was merely a summer campaign. ..TX.- United Newspapers - exposed to the price battle through the Daily Star and Daily Express - lost 7 to 535p. Daily Mail & General Trust shares fell back Pounds 1 1/4 to Pounds 99, while News International, owner of The Sun, softened a penny to 215p. ..TX.- Analysts felt that although Mirror shares had taken a knock there was underlying support for the stock amid the uncertainty sparked in the sector. One dismissed the fall as 'a knee-jerk reaction'. ..TX.- A stock overhang resulting from a large sell order was said to have unsettled Kwik Save and the shares came off 16 to 691p. Dairy Farm was identified as the buyer of 600,000 of the rumoured 1.5m line, with some suggestions in the market that a further block of stock may be around. The Dairy Farm purchase takes its stake in Kwik Save up to 29.4 per cent. ..TX.- Avonmore advanced 7 to 150p after announcing the purchase of a Midlands dairy business, although the news depressed Northern Foods, off 5 at 251p. ..TX.- Results from MFI Furniture were at the bottom of most analysts' expectations, but after the recent weakness in the share price it closed the session 1 1/2 better at 128 1/2 p. ..TX.- Flat sales figures from Darty, the French electrical retailer owned by Kingfisher, hurt the latter, which fell 11 to 589p. ..TX.- Nervous trading in Tiphook, the container rental group, sent the shares further into retreat ahead of tomorrow's figures. The stock ended 14 lower at 274p. ..TX.- Reports that BAA, the UK airport operator, was in discussions to take a stake in Chicago's O'Hare airport, left the shares 4 easier at 709p. However, a further decline was prevented by news of a 4.2 per cent increase in passenger traffic for the month of June, against the same period a year earlier. ..TX.- Conglomerate Tomkins tumbled 11 1/2 to 212 1/2 p, making it the day's worst performer in the FT-SE 100 Index. Strong selling saw volume rise to 6m shares, as the group reported figures at the bottom end of market expectations. ..TX.- Profits jumped 29 per cent to Pounds 171m, but analysts were particularly unhappy with the lack of detail on the performance of RHM, which it acquired last year. Tomkins' prediction of earnings growth of between 13 and 14 per cent also left some analysts unimpressed. ..TX.- Television stocks, still in an excitable state after the wave of takeover fever in the sector, traded nervously while awaiting a statement by Mr Peter Brooke, the national heritage secretary, on ownership rules for ITV companies. ..TX.- Anglia TV fell back 15 to 320p; Central Independent TV lost 52 to close at 1978p; Scottish TV, which also saw Morgan Grenfell's stake fall to below 3 per cent, gave up 15 to 524p; Yorkshire-Tyne Tees TV lost 8 to 196p; and Carlton Communications retreated 10 to 767p. LWT Holdings preference shares lost 12 to 458p and Granada dipped 4 to 407p. ..TX.- Mr Brooke's statement came late in the trading day and said little other than he was reviewing the rules. ..TX.- A specialist said investors are puzzled by the complexity of the ownership rules and the sector is suffering uncertainty. He added, however, that there was a growing market expectation that some consolidation in television ownership was an inevitability. ..TX.- Weekend press speculation that the chairman and chief executive of Spring Ram, the troubled building products group, may resign saw the shares advance rapidly, closing 5 1/2 up at 54p. However, sources close to the company were still insisting yesterday that Mr Bill Rooney, who was returning from holiday, retained the support of the board and would only volunteer to resign one of his posts. ..TX.- Light profit-taking and a big seller of Commercial Union seen early in the day left the shares 11 cheaper at 604p. Worries about the floods in the US and the constant fear of hurricanes in the US was also said to have played its part in the decline. Those same fears hurt General Accident, leaving the shares 8 lower at 613p. ..TX.- Several stocks in the aerospace sector benefited from the speculation of a big aircraft order from Saudi Arabia. These included Rolls-Royce, where the shares advanced 5 1/2 to 142 1/2 p, on volume of 3.4m, on suggestions that it was in line to win the order for the engines that will power the aircraft bought by Saudi Arabia. ..TX.- Dealers were also cheered by reports that the UK government plans to raise the ceiling on foreign ownership in both Rolls-Royce and British Aerospace, from the current level of 29.5 per cent to between 40 and 50 per cent. Rolls-Royce reached its limit last month but remains attractive, especially to US buyers, some of which have had to settle for warrants issued through Lehman Brothers. ..TX.- Another possible beneficiary of an order from Saudi Arabia is TI Group, whose subsidiary Dowty manufactures the landing gear on the Airbus aircraft. The shares firmed 2 to 338p in thin trading. ..TX.- Bid speculation returned to Lucas Industries shares, which finished 2 ahead at 148p. Volume was 3.2m. ..CO.- Companies: Mirror Group Newspapers. United Newspapers. Daily Mail and General Trust. News International. Kwik Save Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2711 Newspapers. P5411 Grocery Stores. P6231 Security and Commodity Exchanges. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P2711, P5411, P6231. ..DS.- The Financial Times ..XP.- London Page 36 ***************************************************************** ..AN.-00DGMB6AGKFT ..HL.- 930713FT 930713 London Stock Exchange: Devenish deal (238) ..BL.- By STEVE THOMPSON, JOEL KIBAZO, CHRISTOPHER PRICE and CHRISTINE BUCKLEY ..TX.- Drinks group Boddington finally exited from JA Devenish yesterday as it off-loaded the near 20 per cent holding it had been sitting on since its failed attempt to land its rival two years ago. Boddington's stake had been overhanging Devenish since and prompted continued speculation that the northern brewer would return to the fray - a threat dispelled last month by the bid for Devenish by Greenalls. ..TX.- The Boddington disposal now clears the way for the smooth takeover by Greenalls, whose Pounds 214m bid has since been recommended by the Devenish board. ..TX.- Boddington was said to have sold its holding at an average of 360p a share - a healthy premium to the average 211p a share it paid in July 1991 when it was building up its predatory stake. The sale price was also at a premium to the 356.5p cash alternative offered by Greenalls, whose all-paper offer valued Devenish at 390p a share. The main reason for the high bid price had been to prevent Boddington from rebidding. Boddington shares steadied at 277p, Greenalls slipped 2 to 354p and Devenish lost a penny to 363p. ..CO.- Companies: Boddington Group. JA Devenish. Greenalls Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2082 Malt Beverages. P6231 Security and Commodity Exchanges. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P2082, P6231. ..DS.- The Financial Times ..XP.- London Page 36 ***************************************************************** ..AN.-00DGMB6AGJFT ..HL.- 930713FT 930713 London Stock Exchange: BAe rises on sales hopes (192) ..BL.- By STEVE THOMPSON, JOEL KIBAZO, CHRISTOPHER PRICE and CHRISTINE BUCKLEY ..TX.- SPECULATION of a lucrative order and news of an improvement in car sales sent British Aerospace sharply forward yesterday. Talk heard last week that Saudi Arabia was about to announce a substantial order for Airbus aircraft gathered momentum, with the order said to be for both the A320 and A340 aircraft. ..TX.- Buyers were further attracted by news that sales of Rover cars rose by 13 per cent in the first half of this year, above market expectations. ..TX.- Analysts also predicted that the company's regional jets joint venture with Taiwan Aerospace was about to be completed. Yesterday the stock surged ahead 15 to 420p in brisk trade of 5.3m shares. ..TX.- Mr Keith Hodgkinson at Lehman Brothers believes the shares will remain in the 400p to 450p trading range in the near future and predicted that they will rise to more than 500p next year. ..CO.- Companies: British Aerospace. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3721 Aircraft. P6231 Security and Commodity Exchanges. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P3721, P6231. ..DS.- The Financial Times ..XP.- London Page 36 ***************************************************************** ..AN.-00DGMB6AGIFT ..HL.- 930713FT 930713 London Stock Exchange: Equity Futures and Options Trading (260) ..BL.- By CHRISTINE BUCKLEY ..TX.- PRE-BT3 excitement was blamed for thin volume in the stock index futures, with investors thought to be saving themselves for trading in the stock, Christine Buckley writes. ..TX.- A total of 6,618 lots were traded in the FT-SE 100 September future in a range which stretched from 2,850 at its high point about half an hour into the day's trading to its low of 2,825 which was hit about 3pm when any optimistic signs from the US were dampened by a subdued Wall Street opening. ..TX.- 'There were just not the institutional buyers out there,' said one trader. ..TX.- The directionless trading which has been one of the main features of the futures market continued with little prospect of a change as dealers struggle to find a handle on economic prospects. ..TX.- The September Footsie contract started the day at 2,844 and closed 3 points lower at 2,841. It was 3 points ahead of its fair value premium to cash, which is 7 points. ..TX.- Traded options also suffered from low volume, a total of 16,553 lots being traded, against last Friday's 24,314. Of the stock options, BAA was the most active with 1,517 contracts dealt. ..TX.- The expiry of the July contract on the Euro FT-SE 100 option - which is due this Friday - was seen to stimulate some action, with a squeeze pushing its volume to 1,012 lots. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6221 Commodity Contracts Brokers, Dealers. ..TP.- Types: MKTS Market data. ..IX.- P6221. ..DS.- The Financial Times ..XP.- London Page 36 ***************************************************************** ..AN.-00DGMB6AGHFT ..HL.- 930713FT 930713 London Stock Exchange: New highs and lows for 1993 (509) ..TX.- NEW HIGHS (143) ..TX.- BRITISH FUNDS (14) OTHER FIXED INTEREST (2) African Devlpt. 11 1/8 pc '10, Hydro Quebec 15pc '11, AMERICANS (12) Allegheny & Wstn., Chrysler, Citicorp, Echlin, General Elect., Honeywell, Lockheed, Lowe's, Merrill Lynch, Sears Roebuck, US West, Whirlpool, BANKS (6) Fuji, Mitsubishi, Natl. Australia, NatWest, Sanwa, Westpac, BLDG MATLS (1) Lafarge Coppee, CHEMS (1) Porvair, CONGLOMERATES (1) Fletcher Chlnge., ELECTRICALS (3) Arlen, Dewhurst, Ericsson, ELECTRICITY (1) London, ELECTRONICS (3) Quality Software, Radamec, Sema, ENG AERO (1) AIM, ENG GEN (4) Carclo, Dyson (J & J), Renold, SKF, FOOD MANUF (1) Avonmore, HEALTH & HSEHOLD (1) Amersham, HOTELS & LEIS (3) Friendly, Harmony, Stanley, INSCE COMPOSITE (2) American Intl., Sun Alliance, INV TRUSTS (42) Abtrust New European, Castle Cairn Wts., City of Oxford Zero Pf., Cont'l Assets Wts., Contra-Cyclical Zero Pf., Drayton Recovery Prfd. Gwth., European Assets, European Smllr. Co's Wts., First Ireland, Flmg. Overseas, For. & Col. German Wts., Genesis Emrg. Mkts. C Prf., German Inv., I & S Optimum Zero Pf., JF Philippine, Jakarta, Korea-Europe, Latin American, Do Wts., Law Debenture, M & G Recovery, Malacca Fd., Mediterranean Fd., Murray Enterprise Fd., Do Cv. '94, New Zealand Inv., Olim Zero Pf., Overseas Inv. Wts., Rights & Issues, St David's Zero Pf., Schroder Split Zero Pf., Scott. Natl. Zero Pf., Selective Assets, Smaller Co's Wts., Sth. America Wts., Sphere Inv., TR Technology Stppd. Pf., Templeton Emrg. Mkts., Do Wts., Throgmorton Dual Cap., Warrants & Value, Yeoman Zero Pf., MEDIA (3) City of London, More O'Ferrall, Sterling Pblshg., MTL & MTL FORMING (1) Thyssen, MISC (5) Amberley, Minmet, Nobo, Norbain, Osborne & Little, MOTORS (4) Abbey Panels, General Mtrs. Units, Lookers 8pc Pf., Sanderson Murray E, OIL & GAS (1) Aviva, OTHER FINCL (6) BWD, INVESCO, Intrum Justitia, M & G, Mercury Asset Mngmt., Oceana Consld., OTHER INDLS (1) Suter, PACKG, PAPER & PRINTG (2) Low & Bonar, Sappi, PROP (1) Daejan, STORES (5) Coles Myer, Essex Furn., French Cncnt., GUS, Moss Bros, TEXTS (4) Allied Textile, Atkins, Parkland, Stirling, TRANSPORT (2) Bergesen, Forth Ports, WATER (1) South Staffs, SOUTH AFRICANS (1) Gold Fields Prop., MINES (8). ..TX.- NEW LOWS (31). ..TX.- BRITISH FUNDS (1) Exch. 13 1/2 pc '94, AMERICANS (2) Malvy Technology, Woolworth, BREWERS (1) Bass, BLDG MATLS (1) Cakebread Robey, BUSINESS SERVS (3) Holmes Prctn., RCO, Scott Pickford, CONGLOMERATES (1) Tomkins, ELECTRONICS (1) Micro Focus, ENG GEN (1) Barry Wehmiller, FOOD RETAILING (4) Kwik Save, Low (Wm), Sainsbury (J), Tesco, INV TRUSTS (1) China Inv., MEDIA (1) Hodder Headline, MTL & MTL FORMING (1) GBE, MISC (4) Appld. Holographics, BAT Inds., Cosalt, Sthn. Business, MOTORS (1) Cowie (T), OIL & GAS (1) New London, OTHER INDLS (2) Marling, Tomkins 6 1/4 pc Pf., PACKG, PAPER & PRINTG (1) Microgen, PROP (1) Bredero, STORES (2) Boots, Reject Shop, TRANSPORT (1) BAA. ..TX.- MARKET REPORTERS: Steve Thompson, Joel Kibazo, Christopher Price, Christine Buckley. ..TX.- Other statistics, Page 25 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 36 ***************************************************************** ..AN.-00DGMB6AGGFT ..HL.- 930713FT 930713 World Stock Markets (America): Dow subdued awaiting inflation news (565) ..BL.- By PATRICK HARVERSON ..DL.- NEW YORK ..TX.- Wall Street ..TX.- US SHARE prices were stuck in a narrow range amid light trading yesterday as dealers and investors prepared for this week's important inflation data and the start of the quarterly reporting season, writes Patrick Harverson in New York. ..TX.- At the close the Dow Jones Industrial Average was up 3.32 at 3,524.38. The more broadly based Standard & Poor's 500 ended 0.87 firmer at 448.98, while the American SE composite gained 3.73 at 438.10 and the Nasdaq composite put on 1.86 at 707.67. Trading volume on the New York SE was 203m shares, and rises outnumbered declines by 1,023 to 886. ..TX.- The week opened on a subdued note, with volume modest by recent standards and prices trapped close to opening values. The lack of activity was due primarily to caution ahead of this week's inflation figures. ..TX.- The June producer prices index is due to be released today, and the consumer prices index tomorrow, and although analysts have forecast good inflation news, investors were reluctant to trade in front of the figures. ..TX.- The start of the reporting season, which will get under way in earnest this week, also seemed to be keeping many on the sidelines. ..TX.- Ford, which has been well-bid in recent weeks, ran into heavy selling after a downgrade by broking house Salomon Brothers, and a cut in its earnings forecast. ..TX.- Salomon's analyst said he was concerned by the deterioration in the manufacturer's product mix, in particular its growing reliance on fleet sales. Ford dropped Dollars 2 to Dollars 50 1/8 in volume of 2.3m shares. ..TX.- Although the rest of the sector held up well on the news for much of the day, late selling eventually took its toll. General Motors lost Dollars 1/2 at Dollars 46 7/8 and Chrysler eased Dollars 5/8 to Dollars 47. ..TX.- Federal National Mortgage Association, the country's largest mortgage provider, fell Dollars 2 to Dollars 82 5/8 amid profit-taking after the company announced second-quarter earnings of Dollars 458.8m, the 22nd consecutive quarter of record profits. ..TX.- Merck dipped Dollars 1/4 to Dollars 34 1/2 in reaction to the announcement, released late last Friday, that Mr Richard Markham, the company's president and chief operating officer, had resigned. ..TX.- Aluminum Company of America (Alcoa) declined Dollars 1 to Dollars 70 1/2 after posting second-quarter earnings down 21 per cent, before special items, from a year earlier. ..TX.- Home Shopping Network rose Dollars 1 to Dollars 13 5/8 in volume of 3.8m shares after its main rival, QVC Network, proposed a merger between the two in a stock swap transaction. QVC, traded on the Nasdaq market, jumped Dollars 2 1/2 to Dollars 67 3/4 . ..TX.- Canada ..TX.- TORONTO'S gold and energy issues rebounded from last week's soft levels, leaving the TSE 300 index closing 23.1 ahead at 3,950.5 after a week of consolidation. But volume was moderate, falling to 45.7m shares from Friday's 60.2m. ..TX.- Precious metals shares were outstanding, the gold and silver index showing a gain of 2.1 per cent, while the oil and gas sector rose 1.0 per cent. ..TX.- Hyal Pharmaceutical, up 20 cents at CDollars 4.65, said studies show that its drug delivery system aids in delivering drugs to cancer tumours. ..CN.- Countries: US United States of America. CA Canada. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 33 ***************************************************************** ..AN.-00DGMB6AGFFT ..HL.- 930713FT 930713 World Stock Markets: South Africa (76) ..TX.- GOLD shares receded from higher opening levels as investors remained wary of bullion's short term potential, some brokers said. The golds index finished just 4 up at 1,976 after a day's peak of 2,018. Industrials weakened 21 to 4,638 and the overall index declined 14 to 4,103. ..CN.- Countries: ZA South Africa, Africa. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 33 ***************************************************************** ..AN.-00DGMB6AGEFT ..HL.- 930713FT 930713 World Stock Markets: German powerhouse for Europe (585) ..BL.- By WILLIAM COCHRANE ..TX.- Europe, up 2.4 per cent in local currency terms and excluding an unsettled UK market, took most of the credit for last week's 0.9 per cent gain in the FT-Actuaries World index. Nordic markets maintained their recent contribution with a rise of 1.9 per cent, but Germany was the powerhouse with a climb of 5.4 per cent, virtually all of which came last Wednesday and Thursday. ..TX.- Dealers were more bullish than analysts on Frankfurt ahead of the event. Mr Patrick Bettscheider, equity dealing head at Bank Julius Bar in Frankfurt, said last Friday week that the bank was seeing strong US demand for scrip, and that foreign demand for German equities had been a feature of its business over the previous six weeks. ..TX.- German daily turnover was moderate at that time, in the DM6bn area, but last week it hit a sequence of DM5.2bn, DM8.3bn and DM15.5bn. ..TX.- In Dusseldorf, Merck Finck said there had been a change in Anglo-Saxon investment attitudes, a feeling that the bottom had been reached in the German economic cycle, a willingness to look through what will be some dreadful results for 1993 into recovery prospects for 1994 and 1995. ..TX.- In London, however, Nikko Securities, a bear of the market, expresses the doubts which many share over the valuation base of the market. 'We believe that the forthcoming reporting season will reveal that Geman industry is still suffering from the recession and that the turnround is not close at hand,' says Nikko in its current German weekly. ..TX.- 'In addition, the underlying structuring problems of reduced international competitiveness and resilient inflation have yet to be addressed by the market,' adds the Japanese broking house. ..TX.- 'The market is a fundamental sell, but in the near term, inward capital flows and traders' reluctance to be short could mean a brief period of activity around the (DAX) 1,800 level.' ..TX.- ------------------------------------------------------------------------ MARKETS IN PERSPECTIVE ------------------------------------------------------------------------ % change % change in US % change in local currency* sterling* Dollars* 1 Week 4 Weeks 1 Year Start of Start of Start of 1993 1993 1993 ------------------------------------------------------------------------ Austria +3.18 +5.87 +0.50 +12.69 +7.85 +5.53 Belgium +1.15 +8.01 +14.34 +17.78 +12.73 +10.31 Denmark -0.88 +4.45 +0.54 +20.43 +16.17 +13.68 Finland +6.91 +14.75 +76.84 +56.41 +45.31 +42.21 France +1.89 +3.55 +7.75 +9.15 +5.34 +3.08 Germany +5.38 +6.22 +1.45 +16.24 +11.80 +9.40 Ireland -1.52 +2.12 +26.64 +33.21 +18.02 +15.48 Italy +1.68 +5.30 +41.33 +32.63 +26.48 +23.77 Netherlands +1.86 +4.57 +15.43 +17.15 +12.53 +10.12 Norway +3.20 +9.63 +14.63 +20.62 +16.53 +14.03 Spain -0.59 -0.42 +11.33 +20.62 +6.98 +4.68 Sweden +2.00 +3.31 +27.41 +13.64 +2.89 +0.68 Switzerland +1.59 +3.98 +28.71 +17.41 +14.89 +12.42 UK -0.42 -0.56 +16.18 +1.66 +1.66 -0.52 ------------------------------------------------------------------------ EUROPE +1.25 +2.47 +14.66 +10.29 +7.35 +5.05 Australia +0.59 +2.73 +3.78 +11.31 +13.21 +10.77 Hong Kong -2.20 -3.57 +14.05 +28.69 +31.28 +28.46 Japan +1.62 -2.47 +26.68 +21.85 +41.79 +38.75 Malaysia -0.50 -4.34 +39.71 +24.82 +29.62 +26.84 New Zealand +2.09 +6.18 +9.79 +14.85 +25.71 +23.01 Singapore -1.12 -2.88 +13.41 +15.52 +19.08 +16.52 Canada -1.92 -0.05 +6.24 +10.42 +12.27 +9.86 USA +0.53 +0.45 +8.81 +3.02 +5.28 +3.02 Mexico +1.00 +5.39 +10.10 -7.58 -5.67 -7.70 South Africa -0.76 +5.21 +19.59 +32.02 +41.94 +38.88 ------------------------------------------------------------------------ WORLD INDEX +0.92 -0.05 +14.93 +10.79 +16.09 +13.60 ------------------------------------------------------------------------ * Based on July 9th 1993. Copyright, The Financial Times Limited, Goldman Sachs & Co, and NatWest Securities Limited. ------------------------------------------------------------------------ ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 33 ***************************************************************** ..AN.-00DGMB6AGDFT ..HL.- 930713FT 930713 World Stock Markets (Asia Pacific): Nikkei average rises on hopes of an interest rate cut (811) ..BL.- By EMIKO TERAZONO ..DL.- TOKYO ..TX.- HOPES OF an interest rate cut brought buying and this, together with speculation on a reduction in income taxes, enabled the Nikkei average to break briefly through the 20,000 level during the session for the first time since June 16, writes Emiko Terazono in Tokyo. ..TX.- The 225-issue index was finally 102.61 firmer at 19,980.00, after a day's high of 20,011.70 and low of 19,889.89. ..TX.- Prices eased back later from their earlier highs on reports of the bankruptcy of an over-the-counter company, and uncertainty over financial support for EIE International, an unlisted speculative property developer. ..TX.- Volume fell to 230m shares from 473m. Advances led declines by 542 to 419, with 181 issues unchanged. The Topix index of all first section stocks rose 5.06 to 1,613.68. In London the ISE/Nikkei 50 index was unchanged at 1,227.62. ..TX.- The yen weakened as the US-Japan bilateral talks ended with a trade framework agreement calling for Japan to decrease its current account surplus by increasing domestic demand, and expanding market access for foreign products. ..TX.- The dollar closed Y1.60 up at Y109.93, helping leading exporters. Hitachi appreciated Y10 to Y851, Matsushita Electric Industrial gained Y30 at Y1,300 and Toyota Motor added Y30 at Y1,580. ..TX.- Long Term Credit Bank and leading creditor banks of EIE International announced that they would abandon restructuring of the company and write off their exposure. Sea Com, an affiliate listed on the second section of the TSE, was suspended, while another affiliate, Electronic and Industrial Enterprises, was also suspended on the OTC market. ..TX.- Phoenix Electric, a lighting equipment maker on the OTC market, was another suspension, this time due to a subsidiary filing for bankruptcy. ..TX.- Nikkatsu, the movie producer which recently filed for court protection, was the most active issue of the day. It accounted for 30 per cent of total volume and rose Y4 to Y29 in speculative trading. ..TX.- Some financials gained ground on hopes of lower interest rates, with Industrial Bank of Japan moving up Y10 to Y3,060 and Fuji Bank advancing Y40 to Y2,490. ..TX.- Firm sales of new condominiums for June lifted real estate companies and housing linked issues. Mitsui Fudosan rose Y10 to Y1,290. ..TX.- In Osaka, the OSE average ended 28.99 ahead at 21,958.22 in volume of 11.6m shares. Many investors remained inactive ahead of the general election this weekend. ..TX.- Roundup ..TX.- THERE WAS a mixture of performances from the region's markets yesterday. ..TX.- AUSTRALIA broke through the 1,800 level for the first time since October 1987 as investor demand spilled over from the successful flotation of Woolworths. The All Ordinaries index closed 18.9 higher at 1,801.8; trading was extended by 3 1/2 hours to cope with the new listing. ..TX.- Shares in Woolworths reached ADollars 2.98 within a minute of listing, against an issue price of ADollars 2.45, and finished with a 36-cent premium at ADollars 2.81. Turnover in the stock was estimated at ADollars 91.8m, boosting market turnover to ADollars 604.2m. ..TX.- HONG KONG fell back sharply on selling by overseas institutions, but losses were trimmed by late bargain hunting. The Hang Seng index finished 118.02, or 1.7 per cent, off at 6,952.59, after an earlier fall of 167 points. ..TX.- The current uncertainty in Sino-British talks on the future of the colony continued to depress sentiment. Turnover was a thin HKDollars 2.9bn, against Friday's HKDollars 3.3bn. ..TX.- TAIWAN slipped back slightly on profit-taking and the weighted index closed 0.88 off at 4,078.71. Turnover shrank to TDollars 16.3bn from the TDollars 21.1bn registered during Saturday's half-day session. ..TX.- The Investment Commission reported yesterday that new foreign investment in the country had declined by 24 per cent in the first six months, compared with the same period in 1992. ..TX.- On a regional basis, investment from Japan and the US dropped by 60 per cent and 24 per cent respectively. However, investment from Europe climbed by 72 per cent. ..TX.- MANILA relinquished a little ground on profit-taking following last week's rally. The composite index closed 1.71 down at 1,629.79 in turnover of 392.8bn pesos, compared with Friday's 355.8bn pesos. ..TX.- SINGAPORE was led lower by weakness in bank and shipyard shares. The Straits Times Industrial index fell 20.45, or 1.1 per cent, to 1,777.16. Volume dropped to 95.4m shares from Friday's 126.3m. ..TX.- BOMBAY fell in thin trading, the BSE index losing 33.73 at 2,181.10. Brokers said the downward trend in the official trading session continued in after-hours' kerb deals. ..TX.- COLOMBO was firmer on strong demand for bank and hotel shares. The all-share index rose 11.85 to 671.45 while turnover eased to Rp106.2m from Friday's Rp116.3m. ..CN.- Countries: JP Japan, Asia. AU Australia. TW Taiwan, Asia. HK Hong Kong, Asia. PH Philippines, Asia. SG Singapore, Asia. IN India, Asia. CO Colombia, South America. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 33 ***************************************************************** ..AN.-00DGMB6AGCFT ..HL.- 930713FT 930713 World Stock Markets (Europe): Frankfurt bourse sets a new three-year high (959) ..BL.- By Our Markets Staff ..TX.- INSTITUTIONAL enthusiasm for German equities, and the interlinked strength of the US dollar gave bourses a reasonably good day, writes Our Markets Staff. ..TX.- FRANKFURT extended its official session to make up for early technical problems, and ended the official session close to its best. The DAX index closed another 20.76 higher at 1,818.17, its highest for nearly three years. German turnover fell back to DM10.6bn after Friday's DM14.3bn. ..TX.- Mr Nigel Longley of Commerzbank in Frankfurt credited G7 tariff cuts, and apparent agreement about the prospect for further interest rate cuts between the Chancellor, Mr Helmut Kohl, and the Bundesbank president, Mr Helmut Schlesinger, for the changing tide of US, French and domestic investment opinion about German equities. ..TX.- 'A couple of weeks ago,' he said, 'everybody had decided what to buy in Germany - once the market had consolidated between 1,650 and 1,680. It did not consolidate,' he added, 'and it impressed a lot of people that German institutions were buying strongly in the latest rally'. ..TX.- The institutions were apparent yesterday when share price rises were mixed in scale but the market leaders, Daimler, Siemens and Deutsche Bank, rose by DM16 to DM666, DM12.20 to DM655.50, and DM9 to DM734.50 respectively. ..TX.- A number of the big blue chips, including the Bavarian mortgage banks, and BMW and Hoechst, did relatively little; and Volkswagen actually fell DM1.80 to DM371.80 on news that papers had been found in connection with allegations of industrial espionage against VW by the General Motors subsidiary, Adam Opel. ..TX.- VW was as much as DM9.50 lower on the Ibis market where, after hours, profit-taking took the indicated DAX to 1,806 before it closed at 1,808.81. ..TX.- PARIS took little inspiration from domestic news, either the slightly better than expected June inflation data or the three times oversubscription for the 'Balladur' bond. In spite of continuing pressure on the franc in the currency markets the CAC-40 index moved up 6.52 to 1,992.22. ..TX.- Roussel-Uclaf eased FFr17 to FFr558 as the stock was requoted following the sale by Rhone Poulenc, up FFr3.30 to FFr149.00, of its 35 per cent stake which was priced at FFr563 per share. ..TX.- Accor gained FFr19 to FFr642 on news that an Australian group planned to purchase its hotel interests in the Asia-Pacific region. ..TX.- AMSTERDAM's CBS Tendency index gained another 0.6 points to 117.3 with strong overseas interest seen in DSM. The chemicals group put on Fl 4.20 to Fl 99.30 as it benefited from recent interest in cyclicals. The shares have risen by more than 46 per cent since they hit an all time low in March. ..TX.- MILAN remained subdued ahead of today's expiry of options contracts, while investors were also awaiting details of the government's budget proposals which are expected later this week. The Comit index closed up 1.76 at 546.00. ..TX.- Many of the budget details have already leaked out in the domestic media. According to NatWest Securities in London, the proposals are expected to bring further spending cuts, rather than new taxes. ..TX.- Fiat gained L77 to L6,482 at the fix, before easing back to L6,435 on the kerb as profits were taken. There have been repeated rumours that the Italian group might be considering a strategic alliance with Peugeot. ..TX.- Ferruzzi fell L46.10 to L416.70: an executive of a subsidiary was arrested at the weekend in connection with the wide-ranging investigation into bribery. ..TX.- BRUSSELS outpaced most bourses as foreign buying took the Bel-20 index up 16.77, or 1.3 per cent to 1,318.33 in high turnover of BFr1.2bn. ..TX.- Ms Alison Kirk at Williams de Broe said that the share price gains were broadly based, reflecting the potential effect of German interest rates, and a rising dollar on the Belgian corporate economy. ..TX.- STOCKHOLM closed at a new high for the year, mainly in reaction to the strength of the dollar. The Affarsvarlden general index gained 12.40 or 1.1 per cent to 1,127.60 as turnover dropped to SKr755m from Friday's SKr871m. ..TX.- Ericsson B shares, the day's most active issue, rose to an all time high with a gain of SKr4 to SKr352. ..TX.- The building and construction sector rose by 4 per cent on hopes of economic recovery, with Skanska up SKr7 to SKr125. ..TX.- VIENNA's ATX index ended 8.36 higher at 876.75, but the move did not reflect the market's real gains as four stocks went ex dividend, including the miner, Veitscher, which rose Sch10, ex a Sch6 dividend, to Sch272 and the builder, Universale, which fell Sch5 to Sch935, ex Sch20. ..TX.- ISTANBUL recovered some of last week's losses, although most investors remained nervous in spite of an indication from the government that tougher action would be taken against the Kurdistan Workers Party, which is seeking a separate homeland in south east Turkey. ..TX.- The composite index gained 462.9 or 4.5 per cent to 10,745.0 in turnover down to TL554bn from Friday's TL839.5bn. ..TX.- ------------------------------------------------------------------------ FT-SE Actuaries Share Indices July 12 THE EUROPEAN SERIES ------------------------------------------------------------------------ Hourly changes ------------------------------------------------------------------------ Open 10.30 11.00 12.00 FT-SE Eurotrack 100 1230.06 1230.66 1231.42 1231.83 FT-SE Eurotrack 200 1274.12 1276.51 1276.53 1276.52 13.00 14.00 15.00 Close FT-SE Eurotrack 100 1234.54 1234.69 1233.56 1232.90 FT-SE Eurotrack 200 1278.67 1277.56 1275.62 1274.63 ------------------------------------------------------------------------ Jul 9 Jul 8 Jul 7 Jul 6 Jul 5 FT-SE Eurotrack 100 1230.56 1225.73 1211.33 1203.04 1197.01 FT-SE Eurotrack 200 1274.12 1270.80 1260.04 1257.80 1253.51 ------------------------------------------------------------------------ Base value 1000 (26/10/90) High/day: 100 - 1235.95; 200 - 1280.47 Low/day: 100 - 1229.80 200 - 1273.57. ------------------------------------------------------------------------ ..CN.- Countries: DE Germany, EC. FR France, EC. NL Netherlands, EC. IT Italy, EC. BE Belgium, EC. SE Sweden, West Europe. AT Austria, West Europe. TR Turkey, Middle East. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: MKTS Market data. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 33 ***************************************************************** ..AN.-00DGMB6AGBFT ..HL.- 930713FT 930713 Foreign Exchanges: Germany supports franc (488) ..BL.- By STEPHANIE FLANDERS ..TX.- THE Bundesbank intervened to support the French franc yesterday as the currency continued to face strong speculative pressure, writes Stephanie Flanders. ..TX.- In early morning trading the franc fell as low as FFr3.4125 per D-Mark, less than 2 centimes above its ERM floor against the D-Mark of FFr3.4305. The intervention caused some firming in the middle of the day, but afterwards the franc continued to fall, closing at FFr3.416 from a previous FFr3.399. ..TX.- The Bundesbank's purchases of francs came after supportive comments by Mr Theo Waigel, the German finance minister, who reaffirmed the close ties between Germany and France and expressed confidence in the fundamentals of the French economy. ..TX.- The day's developments confirmed the market belief that, to have a positive effect, action to support the French currency would have to come from Germany, rather than France. 'Because the trigger for recent events has been the French need to cut interest rates, traders are not likely to take an increase in French rates seriously,' one trader said. ..TX.- Dealers now expect the Bundesbank to shave a few basis points from the repo rate when it is announced tomorrow. The more important possibility is a cut in the German Lombard rate when the Bundesbank council meets on Thursday, but opinion is divided about whether this will occur. ..TX.- 'There is increasing optimism that there will be further rate adjustment before the summer recess,' said a London-based dealer. 'But the people expecting a cut on Thursday are being a little premature.' ..TX.- On balance, most thought that the Bundesbank would do its best to hold out until the council meeting on July 29 before a further cut in rates. Rate reductions before then would risk a domestic bond market backlash, since little has changed to German economic conditions in the 10 days since rates were last cut. ..TX.- However, the precipitous decline of the franc once the Bundesbank had left the market cast doubt on the German authorities' ability to hold out. 'The bottom line,' said Julian Jessop at Midland Global Markets in London, 'is that Germans will cut rates if they have to.' ..TX.- Some thought that even a cut in German rates would not be enough to avert a crisis: 'this is about confidence in two economies, not the level of interest rates,' one London-based trader opined. ..TX.- The dollar benefited from its status as a safe haven currency, as well as the fact that European interest rates are expected to fall soon. It rose steadily against the D-Mark to end at DM1.7285 from Friday's DM1.7210. In New York it finished at DM1.7298. ..TX.- During the day, sterling seemed to benefit from its isolation from the ERM. The currency closed 50 basis points firmer at DM2.5550. ..CN.- Countries: DE Germany, EC. FR France, EC. US United States of America. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: MKTS Market data. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 27 ***************************************************************** ..AN.-00DGMB6AGAFT ..HL.- 930713FT 930713 Money Markets: French rates jumpy (405) ..BL.- By STEPHANIE FLANDERS ..TX.- FRENCH money market rates were jittery yesterday, reflecting uncertainty about the immediate outlook for the franc, writes Stephanie Flanders. ..TX.- The nature of the pressure facing the franc makes it difficult for traders to know which way to jump. The market still feels that the French authorities are desperate to cut interest rates for the sake of the domestic economy. But there is a realisation, too, that the selling of the French currency is exerting upward pressure on market rates. ..TX.- Three-month French money market rates moved slowly upwards through the course of the day, closing at around 7.87 per cent, compared with their opening level of 7.75 per cent. A dealer suggested that this was more for lack of anything better to do than any clear sense of direction. ..TX.- French interest rate futures markets were even more subdued. The September Pibor contract rose 2 basis points, ending at around 93.02, although the bid-ask spread was narrow enough for this to amount to no change from this morning's opening. ..TX.- The Bank of England fore-cast a small shortage of Pounds 850m in the morning, which was later revised to Pounds 900m. This was dispatched by early afternoon in discount market dealing. Overnight rates fell to 4 per cent. ..TX.- Further out, rates were mostly unchanged. The three-month interbank rate contin-ued to reflect a very slight easing of monetary policy by the autumn. ..TX.- Generally, UK money markets were quiet, with dealers distracted by events on the Continent. They were also awaiting a string of official data due this week. The first of these, May's producer prices index, failed to move the markets in any way. One trader said that traders were preparing for a long, dull summer. ..TX.- German call money traded in a relatively broad span of 7.35/50 per cent yesterday as the market weighed up the chances of a cut in key Bundesbank interest rates to allay tensions in the EMS currency grid. At the end of last week, call money had been at 7.40/45 per cent. ..TX.- Dealers speculated that the central bank might alleviate pressure from the D-Mark's regained strength on other European currencies through a token cut in its repo rate, or even a reduction of the 8.25 per cent Lombard rate. ..CN.- Countries: FR France, EC. DE Germany, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: MKTS Market data. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 27 ***************************************************************** ..AN.-00DGMB6AF9FT ..HL.- 930713FT 930713 World Commodities Prices: Tea (114) ..TX.- There was less demand than of late, reports the Tea Broker's Association. Landed best liquoring East Africans were very irregular, turning easier by the close while improved mediums were firm, others several pence lower with plainest neglected. Ceylons came in for limited enquiry and lost 4 to 8p with brokens weak. Offshore teas received fair support but at lower rates for all descriptions. Quotations quality 155p/kg, nom good medium 130p/kg, medium 108p/kg low medium 83p/kg. The highest price realised this week was 176p for a Rwanda pf. 1. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P0831 Forest Products. ..TP.- Types: COSTS Commodity prices. ..IX.- P0831. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGMB6AF8FT ..HL.- 930713FT 930713 Commodities and Agriculture: Oil price up on Iraq/UN deadlock (260) ..BL.- By DEBORAH HARGREAVES ..TX.- NORTH SEA oil prices rose 30 cents after news of deadlock in the United Nations/Iraq oil talks in New York over the weekend saw some traders taking positions in the market early yesterday. But as the talks resumed in the afternoon uncertainty over the outcome reasserted itself and trading dried up. ..TX.- North Sea Brent crude for August delivery rose to Dollars 16.90 a barrel - still close to an 18-month low, but with traders more optimistic about the price outlook. ..TX.- Although the UN's difficulties with Iraq over weapons inspections are separate from the oil talks, the conflict over the weekend led many traders to increase the odds against Iraqi exports. ..TX.- Baghdad must agree to allow UN officials to monitor the distribution of food and medical aid purchased with the proceeds of the Dollars 1.6bn oil sales under discussion. The details of the monitoring procedure have not been discussed and the talks are believed to have made little progress. ..TX.- The oil market will still be subject to increased volatility while the talks are under way. But analysts are increasingly seeing the market's reaction to the talks as exaggerated. ..TX.- 'If the talks finish in complete failure, I would expect to see Dollars 1 a barrel - if not more - added to the oil price pretty rapidly,' said Mr Geoff Pyne, oil analyst at UBS. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. ..TP.- Types: COSTS Commodity prices. ..IX.- P1311. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGMB6AF7FT ..HL.- 930713FT 930713 World Commodities Prices: Market Report (228) ..BL.- By REUTER ..TX.- GOLD traders were divided yesterday on the likely direction of the market's next decisive move. An early rise in reaction against Friday's setback was capped by profit-taking at Dollars 395 a troy ounce and the price closed at Dollars 394.05 an ounce, up Dollars 1.30 on the day but Dollars 5.45 below last week's peak. At the London Metal Exchange the COPPER market continued Friday's retreat as profit-taking and general liquidation weighed down sentiment. Expected support at Dollars 1,950 a tonne failed to hold as the three months delivery contract slipped Dollars 46 to Dollars 1,937.50 a tonne. ALUMINIUM prices lost further ground following the International Primary Aluminium Institute's announcement of a 50,000-tonne rise in producer stocks in May, which reinforced bearish pressure. The three months price closed at Dollars 1,217.50 a tonne, down Dollars 27 on the day, taking it below the level ruling two weeks ago when Aluminum Company of America sparked an upturn with the announcement of plans for substantial production cuts. Dealers said disappointment at the failure of other producers to follow Alcoa's lead had eroded the constructive impact of that move. ..TX.- Compiled from Reuters ..CN.- Countries: US United States of America. ..IN.- Industry: P1041 Gold Ores. P1021 Copper Ores. P1099 Metal Ores, NEC. ..TP.- Types: COSTS Commodity prices. ..IX.- P1041, P1021, P1099. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGMB6AF6FT ..HL.- 930713FT 930713 Commodities and Agriculture: China treats foot-and-mouth outbreak as 'state secret' (636) ..BL.- By LYNNE O'DONNELL ..DL.- BEIJING ..TX.- THE CHINESE government is treating as a 'state secret' widespread outbreaks of foot and mouth disease on pig farms in the country's south while infected meat is still being sent to market. ..TX.- Agriculture officials have confirmed outbreaks of epizootic aphthae, which they refer to as 'disease number five', in Jiangsu, Guangdong and Anhui provinces. One official in the south-eastern city of Suzhou in Jiangsu, refusing to give details, would say only that it was a 'state secret'. ..TX.- The disease is an air-born virus that, while not infecting people who eat the meat of diseased pigs, render sthe pork unfit for human consumption. A western agriculture expert based in Beijing said it was standard international procedure to slaughter all infected animals and then incinerate their carcasses. ..TX.- He said that once epizootic aphthae made an appearance among livestock, it spread rapidly and could be 'very nasty'. He added that it could easily be prevented with wide-ranging anti-viral drugs not widely used or in some cases even available in China. ..TX.- Pigs farmers in China's south began slaughtering hogs in large numbers about two months ago, but there has been no suggestion of localised quarantining or of preventing the sale of the infected meat. ..TX.- Pork is by far the favourite meat of the Chinese. Rising affluence has led in recent years to a drop in pork consumption, though it still accounts for more than 70 per cent of all meat eaten in China. ..TX.- Figures from the Ministry of Agriculture show that last year China raised 380m pigs, 13.17m in Guangdong and 21.22m in Anhui. Most of the country's pork is produced in south-western Sichuan Province, which is also China's most populous. There have been no reports so far of any foot and mouth outbreaks in Sichuan. ..TX.- A veterinarian in Nantong city on the Yangste River north of the major port of Shanghai said the disease was 'no longer a serious problem in Jiangsu Province'. But he said there were outbreaks in Guangdong and Anhui provinces, where substantial quantities of pork are produced for both domestic and export consumption. Officials in both those provinces denied the existence of foot and mouth disease on local pig farms. ..TX.- The Nantong vet said 'disease number five' usually spread through southern pig farms in early spring but pork from infected animals was sent to market, as normal and as a matter of course. ..TX.- He said details were kept secret because China was 'not a signatory to the relevant international agreement that bans the export and sale of infected pork'. ..TX.- Most of the pork consumed in the British colony of Hong Kong and the nearby Portuguese enclave of Macau, both of which border Guangdong Province, is imported from China. China also exports significant quantities to the states of the former Soviet Union and to North Korea, with smaller amounts sold to Japan, Thailand, Singapore, the Netherlands, Germany, France and Czechoslovakia. Last year Hong Kong also imported 25m kg of frozen Chinese pork. ..TX.- On an average day, 7,686 live pigs cross the Chinese border into Hong Kong, 1,411 from Guangdong. The colony's health department says imported pigs are routinely inspected for foot and mouth disease, as well as other infectious diseases and pest infestations. ..TX.- The colony's veterinary officer said he had no knowledge of people getting sick from eating meat from pigs infected with epizootic aphthae. 'Meat from animals with foot and mouth disease, even accidentally contaminated, rarely cause disease in human beings,' the health department said. 'There has not been any case (of illness) reported through consumption of meat in Hong Kong.' ..CN.- Countries: CN China, Asia. ..IN.- Industry: P0213 Hogs. P9641 Regulation of Agricultural Marketing. ..TP.- Types: TECH Safety & Standards. MKTS Market data. ..IX.- P0213, P9641. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGMB6AF5FT ..HL.- 930713FT 930713 Commodities and Agriculture: Canada accuses EC over lumber ban (428) ..BL.- By BERNARD SIMON ..DL.- TORONTO ..TX.- THE EUROPEAN Community has banned imports of most kinds of untreated softwood lumber from Canada to protect European forests from a microscopic but voracious pest known as the pinewood nematode. The ban, which was formally notified to EC members last Friday and takes effect on Aug 15, has blown up into the most bitter current trade dispute between Canada and the EC. While EC officials regard the new rules as a plant-health precaution, Canada sees them as a trade barrier. ..TX.- The Canadians accuse the EC of over-reacting to the nematode threat, thereby endangering the livelihood of many sawmill workers in the provinces of Nova Scotia, New Brunswick and British Columbia. The Canadian high commission in London has already made several direct representations to UK prime minister Mr John Major, asking for the ban to be relaxed. The ban affects the bulk of Canada's CDollars 500m-a-year (Pounds 265m) exports of untreated lumber to EC states, of which CDollars 350m is shipped to the UK. Under the new rules, all Canadian lumber exports to Europe, with the exception of cedar, must be either kiln-dried or heat-treated. ..TX.- EC member states agreed earlier this year to allow an exemption for non-pine species until October 1. But the commission's plant-health committee revoked the exemption late last month after UK authorities discovered the wood-boring insects that carry the nematode in two shipments of lumber from Canada. ..TX.- The nematode has devastated large tracts of pine forest in Japan, and Canada has acknowledged that pine exports should be heat-treated or dried. ..TX.- But Ottawa disputes scientific evidence supporting the EC's case for treating other species, such as hemlock, spruce and fir. The EC is unwilling to take the risk of relaxing the ban, but has offered to co-operate in further scientific studies. ..TX.- The Canadians are concerned that the ban will put their timber at a competitive disadvantage to Scandinavian supplies. Canadian mills will be forced to spend substantial amounts to install kilns or heat-treating facilities. ..TX.- The Canadian argument has an ironic twist, in that resource industries have for years been urged to put more emphasis on adding value to commodity exports. But by heating or drying their lumber, the Canadian mills face being excluded from the large market for cheap, untreated lumber used, for instance, for cement moulds on construction sites. ..CN.- Countries: QR European Economic Community (EC). ..IN.- Industry: P0831 Forest Products. P2411 Logging. P9611 Administration of General Economic Programs. ..TP.- Types: MKTS Foreign trade. ..IX.- P0831, P2411, P9611. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGMB6AF4FT ..HL.- 930713FT 930713 Commodities and Agriculture: Indonesia's withdrawal from gas field talks may be tactical (475) ..BL.- By WILLIAM KEELING ..DL.- JAKARTA ..TX.- THE INDONESIAN government has withdrawn from negotiations with Exxon Corporation of the US over the Dollars 20bn development of the Natuna gas field in the South China Sea. The move may, however, only be a tactical ploy with the field remaining central to the future of Indonesia's liquefied natural gas industry. ..TX.- General Ida Bagus Sudjana, the energy minister, told local journalists of the surprise decision last week whilst visiting oil facilities in East Kalimantan. He is reported to have described Exxon's proposal as 'inefficient and unprofitable to Pertamina', the state-owned oil and gas company. Exxon has a 50 per cent stake in the field with Pertamina holding the remainder. ..TX.- Pertamina has since confirmed the decision but an Exxon official in Jakarta denied negotiations were now dead. 'We are currently in conversations with Indonesia on this matter,' he said. ..TX.- The Natuna field has 40 trillion (million million) cubic feet of proven and probable reserves and could produce 14m tonnes of LNG a year, worth about Dollars 2.4bn to Indonesia. ..TX.- Divisions between the Government and Exxon apparently centre on how production is shared with both parties demanding more than half the field's output. Government officials say Exxon is also insisting on a concessionary tax regime and a sovereign guarantee for its investment covering force majeure risk. ..TX.- Industry officials believe the two parties will end up back at the negotiating table. While the Government had earlier warned it would consider other partners, Exxon is considered one of only a few companies with the expertise and capital to develop the field. ..TX.- Natuna's high cost stems from the technical difficulties in separating the natural gas from an estimated 70 trillion cu ft of carbon dioxide. The field would take eight years to bring on stream, entail more than 700,000 tonnes of offshore platforms and nearly 1,000 km (620 miles) of pipelines. ..TX.- The field's economics may be marginal but industry officials say Indonesia needs to develop Natuna to maintain its dominant position in the world's LNG industry. The country exported more than 22m tonnes of LNG last year to Japan, Taiwan and South Korea but 12m tonnes was produced by Pertamina's Arun plant in North Sumatra, where reserves are running low. ..TX.- New reserves have been found in Kalimantan and the completion of a sixth unit and other improvements will boost production at Pertamina's Badak plant in East Kalimantan by 40 per cent to 14m tonnes by 1995. Badak's higher output is unlikely, however, to be sufficient to roll over long-term export contracts, which begin to expire in 1999. ..CN.- Countries: ID Indonesia, Asia. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. P9611 Administration of General Economic Programs. ..TP.- Types: COMP Strategic links & Joint venture. RES Natural resources. ..IX.- P1311, P9611. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGMB6AF3FT ..HL.- 930713FT 930713 Commodities and Agriculture: Olive branch offered in banana dispute - A plan for Caribbean/Latin American peace talks (915) ..BL.- By CANUTE JAMES ..TX.- LATIN AMERICAN banana producers have offered an olive branch to their Caribbean neighbours, saying they want to prevent the increasingly strident debate over access to the European Community market from becoming a banana war. ..TX.- The Caribbeans have grabbed at the opportunity for dialogue and have invited the Latin Americans to a meeting of trade ministers, likely to be held in St Lucia later this month, to discuss the banana market, amid Caribbean hopes that the arguments can be resolved without damage to the islands' exports and their fragile economies. ..TX.- The appeal for conciliation was made by Mr Rafael Calderon, the president of Costa Rica, to the Caribbean Community (Caricom), when he addressed the community's annual summit meeting. Costa Rica is not a member of the community but is seeking observer status. ..TX.- 'We should resolve this dialogue without a banana war,' Mr Calderon said after speaking to the Caribbean leaders. 'The fight for just relations with Europe must continue, but there should not be a south-south fight. We back preferences for Caribbean bananas, but we do not want the EC to lower the quantities now exported by Latin America to the EC.' ..TX.- The community's leaders immediately issued the invitation to the Latin Americans to attend this month's ministerial meeting. 'There is a glimmer of hope in the Costa Rican statement that a banana war should be avoided,' said Mr John Compton, the prime minister of St Lucia, one of the four islands of the Windward group whose economies are heavily dependent on bananas. ..TX.- At the heart of the dispute is the new EC banana import regime that took effect at the start of this month, which imposes a 2m-tonnes-a-year quota for Latin American fruit. Shipments within the quota attract a duty of Ecu100 (Pounds 77.60) a tonne while for imports above this level the duty is Ecu850 a tonne. Caribbean and other traditional suppliers, such as those in Africa, will have tariff-free access for the remainder of the EC's needs, about 1.5m tonnes a year. ..TX.- The Latin Americans, who are the more cost-efficient producers, wanted an open market but traditional suppliers to the EC, mainly African and Caribbean countries, said that without protection their industries, and some economies, would be destroyed. Following the recent failure of Germany and the Benelux countries to have the new import regime overturned by the European court, the continuing dispute now hinges on attempts by the Latin Americans to have a panel of the General Agreement on Tariffs and Trade declare the regime untenable. ..TX.- The immediate concern of the Latin Americans, who shipped 2.4m tonnes of bananas to the EC last year, appears to be what to do with the 400,000 tonnes they will not now be able to ship. Latin American official have said they will lose about USDollars 1bn in export earnings over the next two years. ..TX.- 'The new European regime means lower prices for bananas sold to the United States,' said Mr Calderon. 'If Latin America has 400,000 tonnes left over after it is allowed to sell its quota to the European market, and this goes to the US market, then that will affect the price of the fruit which Latin America sells to the United States.' ..TX.- Mr Compton maintained that the Caribbean producers, and others in the African, Caribbean and Pacific group of countries, which has a trade treaty with the EC, were under attack from the Gatt, the Latin American producers and the US companies involved in the Latin American banana industry. He said there were already signs of increasing quantities of 'dollar' bananas as the Latin American supplies are called, in the European market, and that that was depressing prices. ..TX.- Caribbean producers have tried, with no apparent success, to recruit the support of the US in the debate over the allocation of market shares. The mood in the region is somewhat bitter. Mr Edwin Carrington, the secretary general of Caricom, said there was 'concern' in the region over the position of 'friendly countries' such as the US that favoured the Latin American arguments. ..TX.- The region is clearly not convinced by statements made in Washington a fortnight before the summit by Ms Donna Hrinak, the US deputy assistant secretary for Inter American Affairs, that the US had not taken sides and was not supporting Latin Americans producers to the detriment of those in the Caribbean. ..TX.- 'The EC banana regime is inconsistent with the obligation which Gatt members have, and inconsistent with what we hope will be the outcome of the Uruguay Round which, when completed, will benefit all trading partners,' she said. US officials at the Caricom summit said Washington's position had not changed. ..TX.- Mr Calderon forecast 'victory' for the Latin Americans in their effort to win enough support at the Gatt and 'morally oblige the Europeans to negotiate with us, although it is not our intention to harm, in any way whatsoever, the exports of Caribbean countries.' ..TX.- 'There is no doubt that we in the Caribbean support open trade and fully support the objectives of the Uruguay Round in GATT,' countered Mr PJ Patterson, Jamaica's prime minister. 'Yet, we must find the right balance that allows small exporters to find security in traditional markets.' ..CN.- Countries: XC Latin America. XF Caribbean. QR European Economic Community (EC). ..IN.- Industry: P0179 Fruits and Tree Nuts, NEC. ..TP.- Types: MKTS Foreign trade. ..IX.- P0179. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGMB6AF2FT ..HL.- 930713FT 930713 Commodities and Agriculture: Futures players line up to trade in Taiwan (155) ..BL.- By REUTER ..DL.- TAIPEI ..TX.- TAIWAN, PREPARING to begin trade in foreign futures contracts, had received applications from 11 foreign and 15 local companies to set up futures brokerages when the deadline for applications was reached yesterday, reports Reuter from Taipei. ..TX.- The Securities and Exchange Commission (SEC) said applications would be screened over the next few months and trade was expected to start in the first half of 1994. ..TX.- Taiwan, which at present bans futures trading, plans to legalise the industry as part of efforts to internationalise its financial markets and become a regional financial centre. ..TX.- The island already has a flourishing underground futures market in which about 100 houses are believed to be generating total daily turnover of at least USDollars 100m. ..CN.- Countries: TW Taiwan, Asia. ..IN.- Industry: P6221 Commodity Contracts Brokers, Dealers. ..TP.- Types: NEWS General News. ..IX.- P6221. ..DS.- The Financial Times ..XP.- London Page 26 ***************************************************************** ..AN.-00DGMB6AF1FT ..HL.- 930713FT 930713 Government Bonds: French debt prices hold the line amid currency battle (765) ..BL.- By PETER JOHN and PATRICK HARVERSON ..DL.- LONDON, NEW YORK ..TX.- MILITARY analogies were back in fashion yesterday as the European bond markets watched the French franc smash down through key support levels against the D-Mark. ..TX.- But while the currency appeared to retreat in tatters, French government debt prices held the line and even advanced throughout the day. ..TX.- Speculators sold the French currency down to FFr3.4150 against the D-Mark yesterday morning, backed off and then returned in the afternoon to take it down to within a centime of its floor in the European exchange rate mechanism. ..TX.- In the meantime, the German finance minister Mr Theo Waigel had offered verbal support and the Bundesbank said it had intervened to support the franc. ..TX.- The Banque de France was conspicuous by its silence but it did attempt to stem the tide by draining liquidity from the system at its weekly repo. ..TX.- The central bank only provided the commercial banks with FFr10bn against their demand for FFr70bn. The rationale according to one economist was that the banks would have to use their available funds to deal with their daily commitments and would have less spare cash to sell in the international currency markets. ..TX.- 'The big guns are in place, the trenches have been dug and if it can hold on until the summer recess, France should be clear until the autumn,' said one bond trader yesterday. ..TX.- That view found support in the bond market, which held firm throughout the day. The September futures contract traded on the Matif slipped a little in early trading but recovered its losses to close firmer at 119.78. ..TX.- There was support also from consumer prices data for June, showing a year-on-year rise of between 1.9 per cent and 2 per cent, while the oversubscription for the Balladur privatisation bond was interpreted as allowing the government more funds to stimulate the flagging economy. ..TX.- Also, overseas investors had already piled out of the French market at the end of last week and domestic bonds received some support from short covering. ..TX.- Finally, there was a feeling that the government was committed to lower interest rates and to maintaining at the very least a dual central role within the ERM. ..TX.- GERMAN government bonds performed against initial expectations, sliding gently on low volume as the D-Mark remained under pressure against the dollar. ..TX.- Traders said that, as with the franc, foreign investors had already adjusted their funds by the end of last week and there was nothing to focus on. ..TX.- The market is now concentrating on the possibility of an easing at Wednesday's repo, which was carried out last week at 7.3 per cent. ..TX.- More importantly, they are looking towards Thursday's Bundesbank council meeting and the prospect of a further cut in the floor lending rate, the discount rate, which is at 6.75 per cent, parity with the French intervention rate. ..TX.- THE rise and rise of UK gilts continued to surprise and astonish the London market yesterday. ..TX.- Apart from slightly encouraging data on inflation there was nothing to galvanise the market but maturities at the long end of the yield curve powered ahead again with 25-year maturities up half a point on Friday's close. ..TX.- SWEDISH government bond investors were diverted by an SKr6.5bn auction of 10-year and six-year government bonds. ..TX.- The 10-year bond was relatively well covered at 1.62 times achieving an average accepted bid price of 112.02 and a yield of 8.39 per cent. The six-year maturity was also tightly bid but traders said the cover of 1.45 times was disappointing. ..TX.- US Treasury prices firmed slightly at the long end of the maturity range yesterday as the market traded quietly before this week's important inflation data. ..TX.- In late trading the benchmark 30-year government bond was up 7/32 at 106 1/2 , yielding 6.618 per cent. At the short end of the market, the two-year note was unchanged at 100 9/32 , to yield 3.957 per cent. ..TX.- Business was subdued throughout the day for two reasons. First, many traders were absent, attending the annual Public Securities Association golf event in New Jersey. Second, participants were reluctant to commit funds to the market ahead of today's release of the June producer prices data and tomorrow's release of the consumer prices figures. Analysts expect the data to be bullish for bonds. ..CN.- Countries: QR European Economic Community (EC). DE Germany, EC. GB United Kingdom, EC. SE Sweden, West Europe. US United States of America. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: MKTS Market data. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGMB6AF0FT ..HL.- 930713FT 930713 International Capital Markets: Steady stream of commitments to Spanish facility (326) ..BL.- By SARA WEBB ..TX.- THE Kingdom of Spain's Ecu4bn borrowing facility, hailed as the largest financing to be put together by a European government this year, is 'drawing a steady stream of commitments from banks', according to bankers involved in the deal. ..TX.- The three-year, multi-currency revolving credit facility is being arranged by NatWest Capital Markets and has been described as fairly aggressive in its pricing. ..TX.- The Kingdom of Spain, which has a double A credit rating, will be paying a margin of 7.5 basis points over the London interbank offered rate (Libor) in addition to an annual facility fee of 5 basis points, to be paid irrespective of whether the facility is drawn or not. ..TX.- The participation fees (the fees paid to a participating bank) are understood to be in the region of 7 basis points for Ecu300m, 5 basis points for Ecu150m, and 3 basis points for Ecu75m. ..TX.- NatWest Capital Markets points out that the terms on Spain's loan are higher than those commanded by the UK, which last September set up an emergency funding programme aimed at helping to support sterling in the foreign exchange market. The UK is a triple-A rated borrower. ..TX.- The UK Treasury's Ecu10bn funding programme consisted of an Ecu5bn three-year multi-currency revolving credit facility with a margin of 9.375 basis points over Libor. There was a commitment fee of 5 basis points, which applied if the facility was not drawn, and a front-end fee of 3.125 basis points. ..TX.- The Kingdom of Spain's deal is not intended for currency support, but as a means of establishing long-term liquidity. ..TX.- The facility has already been fully underwritten by a group of banks consisting of ABN-Amro Bank, Banco Bilbao Vizcaya, Citibank, Dresdner Bank, National Westminster Bank, Societe Generale, and Sumitomo Bank. ..CN.- Countries: ES Spain, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGMB6AFZFT ..HL.- 930713FT 930713 International Bonds: Investors snap up Y150bn Eurobond offer from Italy (429) ..BL.- By SARA WEBB ..TX.- THE Republic of Italy took another step forward in its international borrowing campaign yesterday with the launch of a Y150bn, 10-year Eurobond issue. ..TX.- Dealers said the issue was snapped up by institutional investors, many of whom were keen on the relatively high coupon and wanted to get into long-dated yen-denominated bonds ahead of a possible interest rate cut. ..TX.- There is plenty of speculation that the Bank of Japan may ease soon, even though the official discount rate is already at 2.5 per cent, and some investors appear to be looking for further appreciation of the yen against the US dollar, dealers said. ..TX.- Italy, which has an A1/AA credit rating, last tapped the Euroyen sector in 1987 with a Y150bn issue that matured last year. ..TX.- Yesterday's deal was priced to yield 72 basis points over the widely-followed No 145 JGB (which has a nine-year maturity), or 62 basis points over the No 157 government bond which has a 10-year maturity. ..TX.- Nomura, the lead manager, said the bonds traded up from the re-offer price of 99.474 to 99.50-99.52 by late afternoon. ..TX.- Other dealers said the coupon of 5.125 per cent was seen as attractive by investors, giving a yield of 5.2 per cent at the issue price. ..TX.- The lead manager looked at comparable long-dated Euroyen issues from Spain and Finland when pricing Italy's bond - these borrowers have nine-year issues trading at yield spreads of 52 basis points and 62 basis points respectively over the JGB. ..TX.- Among the handful of new issues in the international bond market, a Eurolira offering from UBS Finance raised some eyebrows because of its aggressive pricing. ..TX.- UBS Finance launched a L250bn, seven-year bond with a coupon of 9.25 per cent - the lowest coupon seen so far this year in the Eurolira sector, which has only recently grown accustomed to the idea of coupons below 10 per cent. ..TX.- At the re-offer price of 99.50, investors obtained a yield of 9.351 per cent, which is seen as far less generous than the yield on recent triple-A issues such as the EBRD's latest deal. ..TX.- Deutsche Bank London, which is joint lead for the issue with UBS, admitted that 'not every bank is pleased with the price'. ..TX.- However, it claimed that with the joint leads' very strong retail network, the deal would be placed 'almost entirely' with retail investors. ..CN.- Countries: IT Italy, EC. JP Japan, Asia. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: MKTS Market data. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGMB6AFYFT ..HL.- 930713FT 930713 International Capital Markets: Japan eases curbs on foreign borrowers (256) ..BL.- By REUTER ..DL.- TOKYO ..TX.- JAPAN'S Ministry of Finance has eased restrictions on Euroyen bond issues by foreigners and overseas bond issues by Japanese companies, Reuter reports from Tokyo. ..TX.- An MoF official said the deregulation will allow foreign governments and institutions without a credit rating to issue Euroyen bonds. ..TX.- He said the requirements were scrapped as foreigners wishing to tap the Euroyen bond market tended to receive a credit rating automatically. ..TX.- The MoF will also allow Japanese corporations to issue foreign bonds overseas under a programme through which issuers can launch bonds quickly up to a certain ceiling whenever conditions are favourable, the official said. ..TX.- This is expected to shorten the time that it will take to issue foreign bonds from the current 20 days to three days and at the same time reduce the costs of documentation. ..TX.- But the MoF will leave in place rules that require issuers to present a statement of each bond issue to the ministry, he said. The system will be useful for firms that often raise funds outside Japan. ..TX.- The MoF official said there were not so many firms hoping to use the new system, but that there was some demand. ..TX.- Up to now, overseas subsidiaries of Japanese firms have been allowed only to issue bonds abroad under a medium-term notes programme. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P9651 Regulation of Miscellaneous Commercial Sectors. ..TP.- Types: NEWS General News. ..IX.- P9311, P9651. ..DS.- The Financial Times ..XP.- London Page 24 ***************************************************************** ..AN.-00DGMB6AFXFT ..HL.- 930713FT 930713 International Company News: A maverick takes to the golf course - EIE faces collapse as banks get tough (875) ..BL.- By ROBERT THOMSON ..TX.- When Mr Harunori Takahashi, president of EIE International, the Japanese property developer, heard that five leading banks were planning to halt their lending to his debt-ridden company, he took the news calmly. 'I'm off to play golf,' he is reported as saying. ..TX.- At least Mr Takahashi has a fine range of EIE International-owned golf courses on which to practise while the payments mount on his company's debts, conservatively estimated at Y700bn (Dollars 6.38bn). But there could be cause for nervousness. The tough line being taken by the banks may yet mark a turning point in the treatment of ailing companies in post-bubble era Japan. ..TX.- The action was initiated by the Long-Term Credit Bank of Japan, EIE International's main bank, which has about Y190bn in loans to the company, about half of which LTCB has categorised as bad. LTCB wants to distance itself from Mr Takahashi and his approach to the property empire's troubles. ..TX.- Mr Takahashi was still confident last night that he would find other banks to fund his company, but with LTCB and other past friends, including Mitsui Trust and Banking and Mitsubishi Trust and Banking, not willing to lend directly, it will be difficult for him to raise new funds in Japan. ..TX.- At EIE's peak, Mr Takahashi had a glittering array of trophy properties. He owns a fleet of luxury hotels including the Beverly Wilshire in Beverly Hills, and a floating hotel in Vietnam. He also established a private university in Queensland in tandem with Mr Alan Bond, the failed Australian entrepreneur. ..TX.- The conflict between the aggressive EIE International and its banks is being played out against a background of a rising pile of non-performing property loans. Japanese banks were able to exploit interest rate falls last year to boost profits and write off a small portion of their exposure, but they face increasing difficulties this year. ..TX.- Officially, the country's 11 leading commercial banks have Y8,400bn in non-performing loans, but that figure is unofficially estimated to be about half the actual total. The banks generally do not include 'restructurings', such as the EIE case, where interest rates are shaved to almost zero, or the problem loans of finance company affiliates. ..TX.- Japanese banks, unlike their US counterparts, are generally determined to deal with their problem loans over the longer term, avoiding the embarrassment of short-term losses. This strategy, mildly criticised by the Bank of Japan, restricts the banks' lending ability and encourages them to pass on the charges to more solidly based clients. ..TX.- But, in the case of EIE International, the banks have decided that enough is enough, although LTCB still plans to support some individual projects, including Bond University and the vast Sanctuary Cove resort in Queensland. A statement from the bank issued in Australia said that it 'wishes both projects to carry on without interruption'. ..TX.- The bank has also indicated that it will not necessarily abandon the debt-burdened shipping and resort affiliate, Sea-Com, listed on the second section of the Tokyo exchange, in which EIE International has a 45.7 per cent stake, or the affiliated over-the-counter electronics company, Electronic and Industrial Enterprises. Trading in both stocks was suspended yesterday. ..TX.- The timing of the banks' retreat is linked to unsuccessful attempts to renegotiate a restructuring package negotiated two years ago, when the EIE group's debts were estimated at Y1,000bn. LTCB says that it was interested in putting together a new package, but could not reach agreement with Mr Takahashi and had to stop fresh lending. ..TX.- Apart from cutting interest rates and pumping in enough funds to keep the company afloat, LTCB had provided EIE with five senior managers who were supposed to work in tandem with Mr Takahashi. The five were given new assignments at LTCB yesterday. ..TX.- 'We could not agree with EIE on the restructuring and have decided to end our support. We just could not go on providing funds the way things were going,' LTCB said. 'We are taking this action because we want to show that we are financially sound.' ..TX.- However, an EIE manager said the bank wants to distance itself from the company, but would be unable to abandon it entirely. He said LTCB had become annoyed because creditors were going to the bank before they called on the developer to collect their debts. ..TX.- 'I think we will be okay. Mr Takahashi is still confident. Today he gave us a rundown of the long-term business plans for the companies, so I don't think he is very worried. We are relaxed,' the EIE manager said. ..TX.- It is unclear whether LTCB and the other banks will be as prepared to pull the plug on more mainstream clients who have heavy exposure to the stock and property markets. The decision is easier in the case of EIE since it is not linked to the large Japanese corporate families, and because Mr Takahashi himself is seen as something of a corporate maverick. ..CO.- Companies: EIE International. Sea-Com Corp. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P6552 Subdividers and Developers, Ex Cemeteries. P4489 Water Passenger Transportation, NEC. P7011 Hotels and Motels. ..TP.- Types: COMP Company News. ..IX.- P6552, P4489, P7011. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGMB6AFWFT ..HL.- 930713FT 930713 International Company News: Woolworths relisting lifts market in Australia (267) ..BL.- By BRUCE JACQUES ..DL.- SYDNEY ..TX.- SHARES in Woolworths, the Australian retailer, relisted publicly yesterday at a hefty premium, pushing the Australian stock market to its highest level since 1987 and paving the way for a deluge of new company flotations. ..TX.- Woolworths shares, issued at ADollars 2.45, closed at ADollars 2.81 after trading as high as ADollars 2.98 following a three-hour extension of normal trading by the Australian Stock Exchange. ..TX.- The strong Woolworths trade, involving almost 92m shares worth ADollars 260.6m (USDollars 174.8), pushed total market turnover to ADollars 613m. ..TX.- The float, Australia's biggest ever, consisted of 1bn shares at ADollars 2.45 each. ..TX.- The vendors, Industrial Equity, received applications for 2.66m shares worth ADollars 6.52bn and were forced to scale back allocations to both institutional and public applicants. ..TX.- Analysts said last night the lively showing meant that demand was likely to spill over into other proposed Australian share issues, especially the ADollars 90m raising by AAPC, incorporating the Australian assets of the Accor Asia Pacific hotel group, and an ADollars 112m offering of gold interests held by Ashton Mining, the Australian diamond producer. ..TX.- The Australian government has also announced plans to float a further 19 per cent of the Commonwealth Bank of Australia around September this year while Burns Philp, the Australian industrial group, is also believed to be considering an ADollars 400m float of its hardware division. ..CO.- Companies: Woolworths. ..CN.- Countries: AU Australia. ..IN.- Industry: P5399 Miscellaneous General Merchandise Stores. P5411 Grocery Stores. ..TP.- Types: FIN Share issues. CMMT Comment & Analysis. ..IX.- P5399, P5411. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGMB6AFVFT ..HL.- 930713FT 930713 International Company News: Price rise boosts Gold Fields (273) ..BL.- By PHILIP GAWITH ..TX.- AN increase of 9 per cent in the average gold price offset lower production and allowed the four gold mines in the Gold Fields group to improve after-tax profits by 15 per cent to R306.6m (Dollars 92.3m) in the three months ended June compared with the March quarter. ..TX.- Gold Fields does not sell production forward so its results are closely geared to movements in the gold price. The average price per kg received during the quarter was R35,672 compared with R32,716 in March. ..TX.- This was offset, however, by the 6 per cent fall in gold produced to 28,775kg following a fire at West Driefontein and a fall in the grade at the Kloof division of the Kloof mine. ..TX.- The net effect of these conflicting trends was that working profit rose marginally to R337.8m from R330.8m. A large jump in net sundry revenue - mainly payouts from insurance claims related to fires - to R41.2m from R13.9m helped bolster after-tax profit. ..TX.- Commenting on the individual mines, Mr Michael Fuller-Good, general manager, said Driefontein should be able to improve on its profits as the west part of the mine had recovered from its fire. He said the Kloof division was performing well, despite the recent fall in grade. He thought the Libanon division, which made a working loss in the June quarter, was probably back in profit at current gold prices. ..CO.- Companies: Gold Fields of South Africa. Driefontein Consolidated. Kloof Gold Mining. ..CN.- Countries: ZA South Africa, Africa. ..IN.- Industry: P1041 Gold Ores. ..TP.- Types: FIN Interim results. ..IX.- P1041. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGMB6AFUFT ..HL.- 930713FT 930713 International Company News: Alcoa earnings surge to ADollars 199m in opening half (220) ..BL.- By BRUCE JACQUES ..TX.- ALCOA of Australia, the Australian integrated aluminium producer, has overcome flat demand and recorded a robust earnings performance in the half year ended June. ..TX.- Net earnings rose 45 per cent to ADollars 198.8m (USDollars 133.4m) in the six months on a 2 per cent improvement in revenue to ADollars 1.09bn. ..TX.- The result excluded an abnormal gain of ADollars 59.7m (against nothing previously) reflecting a tax adjustment while capital expenditure was down to ADollars 85.2m from ADollars 120.4m. ..TX.- The company lifted its dividend payout to ADollars 180m from ADollars 120m, most of it going to the two largest shareholders, Aluminum Company of America and Western Mining Corporation. ..TX.- Alcoa said the aluminium division had made a negligible contribution to earnings, and operations remained under review following American Alcoa's recent 25 per cent cut in primary metal output. ..TX.- Tax took ADollars 100.8m and depreciation ADollars 73.4m. Interest expense totalled ADollars 13.0m. ..TX.- High aluminium stocks and low prices have hit the aluminium business worldwide. ..TX.- A large part of the industry's difficulties stem from an upsurge in imports to the west from the former Soviet Union. ..CO.- Companies: Alcoa of Australia. ..CN.- Countries: AU Australia. ..IN.- Industry: P3334 Primary Aluminum. ..TP.- Types: FIN Interim results. ..IX.- P3334. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGMB6AFTFT ..HL.- 930713FT 930713 International Company News: Anglo American confirms opposition to unbundling (382) ..BL.- By PHILIP GAWITH ..DL.- JOHANNESBURG ..TX.- ANGLO American Corporation, South Africa's largest company, has restated its opposition to the concept of unbundling as a means of reducing its size and influence in the local economy. ..TX.- In his annual statement, Mr Julian Ogilvie Thompson, chairman, noted: 'The corporation has no intention of mounting a major unbundling exercise. We believe the corporation's overall structure is sound and continues to serve the interests of the shareholders and the country well.' ..TX.- Unbundling has been much in the news in South Africa recently following the May announcement by Gencor, South Africa's second largest mining house, that it planned to break itself up into smaller units, and last month's cautionary statement from Barlow Rand, the largest industrial group in the country, that it will split itself into three. ..TX.- Mr Ogilvie Thompson had two main messages to deliver. First, that Anglo was a dynamic company which benefited the economy. The second was a strongly argued case about the appropriate aims and limits of competition policy, unbundling and black empowerment - areas set for greater prominence under any new black dominated government. ..TX.- Anglo, and much of corporate South Africa, fears that the heavy-handed or confused application of these policies could cause considerable economic damage. ..TX.- Mr Ogilvie Thompson argued that the most important aspect of competition policy was to reintegrate the country into the global economy. ..TX.- He conceded that Anglo and its associates controlled about 25 per cent of the capitalisation of the Johannesburg stock market but he disputed that this conferred excessive power which could be used to thwart the state. ..TX.- He noted that Anglo accounted for about 6 per cent of the country's fixed capital stock. He argued that far from being an 'acquisitive, short-term orientated US-style' conglomerate, Anglo had been characterised by organic growth, which accounted for as much as 80 per cent of the capitalisation it controlled. ..TX.- Mr Ogilvie Thompson said South Africa would have to find the right balance between policies which sought to promote competition, and those which sought to promote industrial capability, which probably involved favouring large companies. ..CO.- Companies: Anglo American Corp of South Africa. ..CN.- Countries: ZA South Africa, Africa. ..IN.- Industry: P1041 Gold Ores. ..TP.- Types: FIN Annual report. ..IX.- P1041. ..DS.- The Financial Times ..XP.- London Page 23 ***************************************************************** ..AN.-00DGMB6AFSFT ..HL.- 930713FT 930713 International Company News: More PC price cuts at Apple (378) ..BL.- By LOUISE KEHOE ..TX.- APPLE Computer yesterday announced further cuts in the US prices of several of its personal computer products. ..TX.- The move followed reductions in May and June, as the company, which last week announced deep job cuts, struggles to maintain its sales momentum amid an industry-wide price war. ..TX.- The latest round of price cuts applies to Apple's popular Powerbook notebook computers as well as its highest performance Macintosh Quadra models. ..TX.- In addition, Apple expanded a rebate promotion to cover the Performa product line, which is aimed primarily at individual buyers rather than companies. ..TX.- 'The price reductions, and the Performa rebates, are part of our overall company strategy to take aggressive actions in order to increase our market share,' said Mr Bob Puette, president of Apple USA. 'With these actions, we are making some of our most popular products more competitive.' ..TX.- Apple reduced the US price of its Macintosh Quadra 950 systems by up to 29 per cent and also cut the price of its recently introduced workgroup server computers by up to 20 per cent. ..TX.- Powerbook prices have been reduced by seven to 34 per cent. Buyers of Apple's Macintosh Performa PCs will receive cash rebates of Dollars 100 to Dollars 200. ..TX.- Despite the price cuts, Apple's share of the world PC market is stagnating, according to industry analysts, and the company's profit margins have declined. ..TX.- In a move to boost profits the company said last week that it would lay off 2,500 people, or more than 15 per cent of its worldwide workforce, over the next 12 months. Most of the job cuts are due to occur this month. ..TX.- Apple has also frozen pay increases for all employees for an indefinite period, and the company's top executives must take a 5 per cent pay cut, the company said. ..TX.- Mr Michael Spindler, Apple president, who was promoted to chief executive officer last month, has declined to make any comment on the cost cutting moves. Mr John Sculley, who remains chairman of the company, is on sabbatical. ..CO.- Companies: Apple Computer Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P3571 Electronic Computers. ..TP.- Types: COSTS Product costs & Product prices. PEOP Labour. ..IX.- P3571. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGMB6AFRFT ..HL.- 930713FT 930713 International Company News: Coors to cut 500 jobs (94) ..BL.- By KAREN ZAGOR ..TX.- ADOLPH Coors, the third biggest US brewer, is to cut 500 jobs, or about 20 per cent of its white collar workforce, in an attempt to reduce costs and improve long-term profitability. ..TX.- Coors hopes to achieve the job reductions through enhanced early retirement packages, incentives for voluntary redundancy and attrition. ..CO.- Companies: Adolph Coors. Beech Aircraft Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P2082 Malt Beverages. P3721 Aircraft. ..TP.- Types: PEOP Labour. PEOP Appointments. ..IX.- P2082, P3721. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGMB6AFQFT ..HL.- 930713FT 930713 International Company News: Peak profit at Motorola matches Wall St hopes (308) ..BL.- By LOUISE KEHOE ..DL.- SAN FRANCISCO ..TX.- MOTOROLA, the US electronics and semiconductor manufacturer, reported record second-quarter earnings, matching Wall Street expectations. ..TX.- Net income rose 57 per cent to Dollars 224m, or 81 cents a share, from Dollars 143m or 53 cents fully diluted. Revenues were Dollars 3.9bn, up 25 per cent from the Dollars 3.1bn of the same period last year. Net profit margins on sales were 5.7 per cent , up from 4.6 per cent a year ago. ..TX.- Semiconductor sales rose 28 per cent to Dollars 1.39bn, with orders up 30 per cent at an all time high, the company said. Orders increased most rapidly in chips for the communications market. ..TX.- Motorola's general systems group sales, which includes telecommunications equipment, recorded sales of Dollars 1.18bn, up 40 per cent from the second quarter of 1992. In the communications segment, including land mobile products and the paging and wireless data group, sales rose 23 per cent to Dollars 1.13bn. ..TX.- Demand for Motorola's semiconductors, communications products and electronic equipment continued to increase throughout most of the world, even in regions such as Europe, where economic conditions remain sluggish, said Mr George Fisher, chairman and chief executive. ..TX.- For the half year, sales reached Dollars 7.56bn, up from Dollars 6.2bn in the first half of 1992. Earnings were Dollars 428m, or Dollars 1.58 per share, against Dollars 268m or Dollars 1.01, before the cumulative effect of a 1992 change in accounting related to retirement health insurance benefits. ..TX.- Fully diluted earnings per share were Dollars 1.53 for the first half of 1993, up from 99 cents a year earlier. ..CO.- Companies: Motorola Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P3674 Semiconductors and Related Devices. P3679 Electronic Components, NEC. ..TP.- Types: FIN Interim results. ..IX.- P3674, P3679. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGMB6AFPFT ..HL.- 930713FT 930713 International Company News: Northwest Airlines close to union deals (237) ..BL.- By KAREN ZAGOR ..DL.- NEW YORK ..TX.- NORTHWEST Airlines, the fourth largest US carrier, yesterday secured a tentative agreement with its machinists' union and an agreement with the Teamsters' union is believed to be immi-nent. ..TX.- The airline, which is integrating its operations with those of KLM Royal Dutch Airlines, needed significant labour concessions to remain operating outside the protection of the bankruptcy courts. ..TX.- Last week it ratified an agreement with its pilots' union which will save the carrier Dollars 365m over three years. ..TX.- Northwest has agreed that Dollars 61m of the savings from its pilots could come from work-rule changes instead of direct wage and benefits cuts. ..TX.- There is also a provision to give all employees the choice of being repaid for their concessions within 10 years, or they may choose to receive as much as 37.5 per cent of the common stock in the company. ..TX.- Previous agreements had called for employees to receive a 30 per cent stake. ..TX.- The machinists' pact replaces an agreement which was rejected by union members last month. ..TX.- The terms of the new agreement are believed to be similar to those of the pilots' agreement. Northwest is now expected to reach an agreement with its Teamsters' union shortly. ..CO.- Companies: Northwest Airlines Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P4512 Air Transportation, Scheduled. ..TP.- Types: PEOP Labour. ..IX.- P4512. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGMB6AFOFT ..HL.- 930713FT 930713 International Company News: GM cautious on third-quarter prospect (228) ..BL.- By REUTER ..TX.- GENERAL MOTORS is opti-mistic about its second-quarter sales results but third-quarter production schedules are not overly aggressive, Mr John Smith, the group's chief executive officer, said yesterday, Reuter reports. ..TX.- Mr Smith, speaking to reporters at a US-Japan business conference in Cleveland, said GM had a 'good' second quarter. He addded that the US car maker's vehicle sales were 'much stronger than anyone else on the retail side'. ..TX.- However, he said there was still a lot of uncertainty in the market place and GM had not been too ambitious in planning third-quarter production. ..TX.- According to Ward's Automotive Reports, GM plans to produce 655,000 cars in the third quarter, up 46.9 per cent from a year earlier. It also intends to produce 380,000 trucks in the third quarter, up 26.2 per cent from the third quarter of 1992. 'Those schedules don't look overly optimistic,' Mr Smith said. ..TX.- He said the European vehicle market was still very weak, but added that GM's European operations were performing satisfactorily. 'We're satisfied with how we're doing' in Europe, he said. ..CO.- Companies: General Motors. Powertrain Group. ..CN.- Countries: US United States of America. JP Japan, Asia. ..IN.- Industry: P3711 Motor Vehicles and Car Bodies. P3714 Motor Vehicle Parts and Accessories. ..TP.- Types: MKTS Sales. MKTS Production. MKTS Contracts. ..IX.- P3711, P3714. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGMB6AFNFT ..HL.- 930713FT 930713 International Company News: Jas Capel analysts defect to US rival (227) ..BL.- By DAMIAN FRASER ..DL.- MEXICO CITY ..TX.- THE HEAD of research and at least one other analyst from the Latin American department of James Capel have resigned to join Bear Stearns, in an effort by the US brokerage to boost its coverage of emerging markets. ..TX.- James Capel confirmed that Geoffrey Dennis, the head of research, and another analyst have quit, and that other defections were possible. But Mark Donegan, head of emerging markets for James Capel, said: 'If they were other resignations they would be very junior.' ..TX.- James Capel's New York-based Latin American research team was recently ranked joint first with Baring Securities in a survey of fund managers by Institutional Investor. Mr Donegan claimed the defections would not hurt James Capel's 29 member Latin America team, saying the brokerage 'has a wealth of in-house research talent . . to fill in any gaps." ..TX.- Bear Stearns confirmed the hirings but declined to comment further. However,the brokerage is known to have made coverage of emerging markets a priority. It was ranked fifth in the survey of Latin American research by Institutional Investor, behind the British brokerages, and Goldman Sachs and First Boston. ..CO.- Companies: Bear Stearns Companies. ..CN.- Countries: US United States of America. ..IN.- Industry: P6211 Security Brokers and Dealers. ..TP.- Types: PEOP Appointments. ..IX.- P6211. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGMB6AFMFT ..HL.- 930713FT 930713 International Company News: Record second-quarter earnings at Fannie Mae (394) ..BL.- By PATRICK HARVERSON ..DL.- NEW YORK ..TX.- THE FEDERAL National Mortgage Association (Fannie Mae) reported record second-quarter profits yesterday as the favourable domestic interest rate environment continued to provide a foundation for strong earnings growth. ..TX.- The company, which is the largest mortgage provider in the US, announced profits of Dollars 458.8m in the second quarter, up 14 per cent on its earnings in the same three months of 1992. ..TX.- It was the 22nd consecutive record-breaking quarter for Fannie Mae and was achieved despite Dollars 39.8m in after-tax losses incurred from the call of debt at a premium and the repurchase of high-coupon debt. ..TX.- In the first quarter of this year Fannie Mae earned Dollars 443.6m, which took six-month profits to Dollars 902.4m, an increase of 15 per cent on the previous first half and on target for annual earnings to outpace the Dollars 1.62bn achieved in 1992. ..TX.- Mr James Johnson, Fannie Mae's chairman, said a number of factors were behind the latest record quarter, including strong growth in the company's mortgage portfolio, increased interest income from the investment of proceeds from repaid mortgage-backed securities, and continued high levels of miscellaneous income, especially fees earned from the sale of REMICs (real estate investment conduits). ..TX.- Fannie Mae's net interest income jumped 22 per cent to Dollars 632.1m following a 21.4 per cent increase in the size of the company's net mortgage portfolio to Dollars 170bn and a widening in its net interest margin (the difference between the interest it earns on mortgage loans and the interest it pays to borrow money) from 139 basis points to 143 basis points. ..TX.- The readings on the state of the US housing market suggested that there has been little change in conditions over the past year. ..TX.- Although Fannie Mae's acquisitions of single-family foreclosed properties rose slightly in the second quarter to 2,790, its serious delinquency rate for single-family loans, a key indicator of credit quality, declined to 0.59 per cent in May, down from 0.60 per cent in May 1992. ..TX.- Fannie Mae shares rose Dollars 1 1/8 to Dollars 85 3/4 by midday yesterday but later slipped to Dollars 82 5/8. ..CO.- Companies: Federal National Mortgage Association (US). ..CN.- Countries: US United States of America. ..IN.- Industry: P6111 Federal and Federally-Sponsored Credit Agencies. ..TP.- Types: FIN Interim results. ..IX.- P6111. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGMB6AFLFT ..HL.- 930713FT 930713 International Company News: AlliedSignal sets up French offshoot (166) ..BL.- By AP-DJ ..TX.- ALLIEDSIGNAL Automotive, a unit of New Jersey-based manufacturing group AlliedSignal, is to set up a global automotive brake and friction material business, headquartered in Drancy in France, AP-DJ reports. ..TX.- AlliedSignal said the unit, AlliedSignal Braking Systems, will be its first outside the US. ..TX.- The group will also maintain offices at AlliedSignal Automotive's headquarters in Southfield, Michigan. ..TX.- The new company will be headed by Mr Stephen Rabinowitz, formerly vice president of AlliedSignal Friction Materials. ..TX.- Mr Rabinowitz said the brake business represents about half of AlliedSignal Automotive's annual sales of Dollars 4.5bn. ..TX.- The new subsidiary will provide 'complete braking systems capability, as well as . . . components, while reducing cycle times and taking advantage of synergies in product development, testing, sales and marketing', he said. ..CO.- Companies: AlliedSignal Automotive. AlliedSignal Braking Systems. ..CN.- Countries: FR France, EC. ..IN.- Industry: P3714 Motor Vehicle Parts and Accessories. ..TP.- Types: COMP Company News. RES Facilities. ..IX.- P3714. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGMB6AFKFT ..HL.- 930713FT 930713 International Company News: Alcan joins review of Kemano project (175) ..BL.- By ROBERT GIBBENS ..DL.- MONTREAL ..TX.- ALCAN Aluminium is joining a public review of its plans to complete the Kemano hydro expansion in British Columbia. ..TX.- The company has spent CDollars 500m (USDollars 391m) towards completing the project and will invest more than CDollars 500m on further construction. ..TX.- Kemano's first stage was built in the 1950s to support Alcan's 272,000 tonnes-a-year smelter nearby. Alcan's Canadian smelting capacity is 1.1m tonnes. ..TX.- The company suspended work on the Kemano project in 1991 after a federal court ruled the project must go to federal environmental review. This was reversed by the appeal courts, which found Alcan had fully met a 1987 agreement with the federal and British Columbia governments. ..TX.- Last January the provincial premier Mr Michael Harcourt said the British Columbia Utilities Commission would conduct the public review and report by September 13. ..CO.- Companies: Alcan Aluminium. ..CN.- Countries: CA Canada. ..IN.- Industry: P3334 Primary Aluminum. P4911 Electric Services. ..TP.- Types: RES Capital expenditures. RES Facilities. ..IX.- P3334, P4911. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGMB6AFJFT ..HL.- 930713FT 930713 International Company News: Coors to cut white collar staff by 20% (313) ..BL.- By KAREN ZAGOR and REUTER ..DL.- NEW YORK ..TX.- ADOLPH Coors, the third biggest US brewer, is to cut 500 jobs, or about 20 per cent of its white collar workforce, in an attempt to reduce costs and improve long-term profitability. ..TX.- Coors, which is trying to compete more successfully with market leaders Anheuser-Busch and Philip Morris, hopes to achieve the job reductions through enhanced early retirement packages, incentives for voluntary redundancy and attrition. ..TX.- The company said the job cuts were part of a a wider plan which will include reducing inventories of raw and finished goods, improving productivity, using excess capacity and increasing the effectiveness of market spending. ..TX.- In addition to reducing general and administrative costs, Coors plans to farm out a large part of its marketing services and field marketing. ..TX.- It said it would create a free-standing, independent marketing services company - to be called Front Range Communications - which will provide marketing support for Coors ranging from merchandising to trademark sales. ..TX.- About 100 Coors employees will be offered jobs in the new agency. ..TX.- Mr Leo Kiely, president and chief operating officer, said: 'Coors Brewing Company has outpaced the industry in volume growth rate for eight consecutive years. ..TX.- 'At the same time, we have lagged in providing adequate returns to our shareholders. We are committed to improved profitability while continuing to build our competitive position in the marketplace.' ..TX.- Mr Arthur Wegner has been appointed chairman and chief executive of Raytheon's Beech Aircraft unit, from July 19, Reuter reports. ..TX.- Mr Wegner, also appointed a senior vice president, succeeds Mr Max Bleck, who remains Raytheon president and group executive for aircraft products. ..CO.- Companies: Adolph Coors. Beech Aircraft Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P2082 Malt Beverages. P3721 Aircraft. ..TP.- Types: PEOP Labour. PEOP Appointments. ..IX.- P2082, P3721. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGMB6AFIFT ..HL.- 930713FT 930713 International Company News: Ontario Hydro sees bigger loss (302) ..BL.- By BERNARD SIMON ..DL.- TORONTO ..TX.- ONTARIO Hydro, North America's second-biggest power utility, has raised its 1993 loss estimate to CDollars 1.6bn (USDollars 1.25bn), citing slack demand for electricity, write-offs related to restructuring, and continuing problems at a nuclear power station. ..TX.- Long-term borrowings this year are also likely to rise from CDollars 3.2bn to CDollars 3.6bn, due to lower funds generated from operations and an increase in the amount of bonds called so far this year. ..TX.- A further CDollars 400m increase in the borrowing requirement will be necessary if debt-restructuring proposals are approved. ..TX.- The provincially-owned utility, which is based in Toronto, earlier this year forecast a break-even in operations. But it said yesterday that it now expected a CDollars 200m loss. ..TX.- It ascribed the setback to a variety of factors, ranging from the weak economy to unusual weather patterns and higher fossil-fuel energy costs. It also said the economic outlook for future years was less rosy than anticipated. ..TX.- The extent of this year's loss will probably result in the depletion of the utility's fund for rate stabilisation and contingencies, which stands at about CDollars 1.6bn. However, it reaffirmed its earlier promise to freeze electricity rates next year following several years of steep increases. ..TX.- The rates freeze was among the early moves made by Mr Maurice Strong, who organised last year's Earth Summit in Rio de Janeiro, when he took the reins of Ontario Hydro earlier this year. ..TX.- Mr Strong pledged a thorough shake-up and has also given notice of several thousand lay-offs. ..TX.- However, Energy Probe, a lobby group, expressed doubts yesterday whether the promise to keep rates unchanged next year can be met. ..CO.- Companies: Ontario Hydro. ..CN.- Countries: CA Canada. ..IN.- Industry: P4911 Electric Services. ..TP.- Types: FIN Annual report. ..IX.- P4911. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGMB6AFHFT ..HL.- 930713FT 930713 International Company News: GM cautious on third quarter (323) ..BL.- By REUTER ..TX.- GENERAL MOTORS is optimistic about its second-quarter sales results but third-quarter production schedules are not overly aggressive, Mr John Smith, the group's chief executive officer, said yesterday, Reuter reports. ..TX.- Mr Smith, speaking to reporters at a US-Japan business conference in Cleveland, said GM had a 'good' second quarter. He addded that the US car maker's vehicle sales were 'much stronger than anyone else on the retail side'. ..TX.- However, he said there was still a lot of uncertainty in the market place and GM had not been too ambitious in planning third-quarter production. ..TX.- According to Ward's Automotive Reports, GM plans to produce 655,000 cars in the third quarter, up 46.9 per cent from a year earlier. It also intends to produce 380,000 trucks in the third quarter, up 26.2 per cent from the third quarter of 1992. 'Those schedules don't look overly optimistic,' Mr Smith said. ..TX.- He said the European vehicle market was still very weak, but added that GM's European operations were performing satisfactorily. 'We're satisfied with how we're doing' in Europe, he said. ..TX.- Meanwhile, General Motors' Powertrain Group said it has agreed to supply Toyota Motor Manufacturing USA with iron engine blocks for Toyota's 2.2-litre engine beginning in mid-1994. ..TX.- The blocks, destined for Toyota Camrys built in Georgetown, Kentucky, will be produced at GM's Defiance, Ohio, facility. GM said it would provide 180,000 blocks annually for the 16-valve engines. ..TX.- GM said the agreement was part of a strategy to expand the business to secure jobs for General Motors and United Auto Workers-represented employees. ..TX.- GM Powertrain's plant in Defiance manufactures grey iron and nodular iron castings and employs 3,773. ..CO.- Companies: General Motors. Powertrain Group. ..CN.- Countries: US United States of America. JP Japan, Asia. ..IN.- Industry: P3711 Motor Vehicles and Car Bodies. P3714 Motor Vehicle Parts and Accessories. ..TP.- Types: MKTS Sales. MKTS Production. MKTS Contracts. ..IX.- P3711, P3714. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGMB6AFGFT ..HL.- 930713FT 930713 International Company News: Chile purchase by McGraw-Hill (85) ..BL.- By REUTER ..TX.- McGRAW-Hill, the US publisher, has acquired Distribuidora Ciencia y Tecnica, a Chilean book distributor, Reuter reports. Terms were not disclosed. ..TX.- Distribuidora Ciencia y Tecnica has distributed McGraw-Hill's professional and college books in Chile for eight years. ..CO.- Companies: McGraw-Hill. Distribuidora Ciencia y Tecnica. ..CN.- Countries: US United States of America. CL Chile, South America. ..IN.- Industry: P2731 Book Publishing. P5192 Books, Periodicals, and Newspapers. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P2731, P5192. ..DS.- The Financial Times ..XP.- London Page 22 ***************************************************************** ..AN.-00DGMB6AFFFT ..HL.- 930713FT 930713 International Company News: First Greece state sale oversubscribed (224) ..BL.- By REUTER ..DL.- LONDON ..TX.- THE GREEK Ministry of National Economy raised Dr7.17bn (Dollars 32m) through the partial-privatisation of its monopoly sugar producer, Hellenic Sugar Industries, according to the ministry's advisers, Reuter reports from London. ..TX.- It was the first public flotation of a state-owned company in Greece and paves the way for the privatisation of OTE, the telecommunications company, due later this year. ..TX.- 'We are delighted with the outcome of the first public offering in Greece's extensive privatisation programme,' Mr Stephanos Manos, Greek minister of national economy, said in the statement issued in London. ..TX.- The public offering of 4.652m bearer shares at Dr1,200 was more than five times oversubscribed and the private placement for employees and sugar beet producers more than one and a half times over-subscribed, the statement said. ..TX.- Following the part-privatisation, the state-owned Agricultural Bank of Greece holds 70.48 per cent of HSI. ..TX.- 'Following this success, we look forward to the privatisation of OTE later this year with a great deal of confidence,' Mr Manos said. ..TX.- HSI has five factories and produces over 310,000 tonnes a year. It had 1992-93 pre-tax profits of Dr6.318bn. ..CO.- Companies: Hellenic Sugar Industries. ..CN.- Countries: GR Greece, EC. ..IN.- Industry: P9611 Administration of General Economic Programs. P2063 Beet Sugar. ..TP.- Types: FIN Share issues. ..IX.- P9611, P2063. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGMB6AFEFT ..HL.- 930713FT 930713 International Company News: Japanese builder's debt downgraded (222) ..BL.- By EMIKO TERAZONO ..DL.- TOKYO ..TX.- MOODY'S, the US credit ratings agency, has downgraded the long-term debt rating of Hazama, the Japanese construction company. ..TX.- Hazama faces government penalties due to the involvement of executives in an alleged bribery scandal. Moody's said the company's operating performance and financial flexibility will be damaged by penalties, effectively contract bidding suspensions, and downgraded its long term debts to B2 from B1. ..TX.- The Ministry of Construction, the Ministry of Transportation and local governments have suspended Hazama from bidding for new public projects in the near term, after three executives were arrested. ..TX.- Moody's said the penalty could affect Hazama's profits for the next few years due to the company's dependence on public works projects. Some 30 per cent of Hazama's non-consolidated revenue for the year ended March 1993 was generated by public sector work. ..TX.- The agency said the case would affect the company's relations with banks and investors, and its private sector business. ..TX.- Hazama already faces asset problems due to aggressive business expansion in the late 1980s, and Moody's said the company was not prepared to face a further fall in revenue. ..CO.- Companies: Hazama. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P1542 Nonresidential Construction, NEC. P1611 Highway and Street Construction. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P1542, P1611. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGMB6AFDFT ..HL.- 930713FT 930713 International Company News: QVC in share-swap deal with Home Shopping (512) ..BL.- By MARTIN DICKSON ..DL.- NEW YORK ..TX.- QVC, one of the leading US television shopping networks, yesterday proposed a share-swap merger with its chief rival, scandal-battered Home Shopping Network. ..TX.- The deal would create a formidable power in the emerging market for electronic retailing with annual sales of around Dollars 2bn. ..TX.- QVC has been headed since January by Mr Barry Diller, who helped Mr Rupert Murdoch build Fox into America's fourth national television network. ..TX.- Shares in QVC have more than doubled since his arrival, with investors hoping he will inject programming flair into television shopping, a retailing form which many analysts believe could enjoy explosive growth in an age of inter-active television. ..TX.- Home Shopping, a pioneer of electronic retailing, has been under a cloud in recent months as a federal grand jury has investigated allegations that Mr Roy Speer, chairman, and former executives of the group engaged in improper financial dealings. ..TX.- QVC, which reaches some 47m US homes, concentrates on the more up-market end of TV retailing, and has a relatively polished style of presentation. ..TX.- Home Shopping, which reaches some 60m homes, sells to the lower end of the market and has a more aggressive retailing style. It is known for its advanced telecommunications technology. Both companies generate around Dollars 1bn in sales. ..TX.- A merger would represent one of the last big consolidations in an industry which attracted many participants in the 1980s, most of which failed to generate the sales necessary for strong profits. Despite its supposed potential, electronic shopping only generates sales around Dollars 2.3bn a year ..TX.- The QVC bid seems likely to go through since it has the backing of Liberty Media, the controlling shareholder of Home Shopping, with 41 per cent of its equity and 71 per cent of investors' voting power. ..TX.- Liberty, which also holds a large stake in QVC, is a company spun off from America's largest cable TV service company, Tele-Communications Inc, and is chaired by Mr John Malone, who heads TCI. ..TX.- QVC is proposing a reverse takeover under which Home Shopping would issue five of its shares to the holder of each QVC share. QVC investors would also be entitled to additional shares in Home Shopping, up to a maximum of 10 per cent of its capital stock, dependent on unknown liabilities facing the company - an apparent reference to the alleged scandal. ..TX.- Home Shopping would retain its listing on the New York Stock Exchange, but would change its name to QVC Network Inc, and the current QVC board would replace Home Shopping's board. ..TX.- QVC, quoted on the Nasdaq over the counter market saw its shares rise Dollars 2 1/2 yesterday to stand at Dollars 67 3/4, giving it a market capitalisation of around Dollars 2.6bn, while Home Shopping rose Dollars 1 to Dollars 13 5/8, for a capitalisation of around Dollars 1.1bn. ..CO.- Companies: QVC Network Inc. Home Shopping Network Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P5961 Catalog and Mail-Order Houses. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P5961. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGMB6AFCFT ..HL.- 930713FT 930713 International Company News: Espirito Santo in NY placing (312) ..BL.- By PETER WISE and REUTER ..DL.- LISBON ..TX.- ESPIRITO Santo Financial Holding, which heads one of the largest financial groups in Portugal, has placed 2.65m American depository shares, on the New York stock exchange. ..TX.- The shares were placed at Dollars 29 each and are being quoted at around Dollars 27, said Mr Ricardo Espirito Santo Salgado, head of the group. ..TX.- The offer was increased from an original 2m shares because of heavy demand, which would have been enough to buy 5.2m shares. A total of 1.9m shares were placed with institutional investors and the remainder with individuals in the US and Canada. This was the second placement of shares in New York by ESFH, which is quoted in London and Luxembourg. ..TX.- Some 28 per cent of the group's capital is held by US and Canadian investors. Grupo Espirito Santo continues to hold a majority of the company followed by Grupo Freres of Belgium and Grupo Agnelli, which together hold 9 per cent. ..TX.- Foreign institutions will be allowed to buy an 80 per cent stake in Portugal's state-owned Banco Pinto e Sotto Mayor when it is sold in October, Mr Fernando de Almeida, the bank's president said, Reuter reports from Lisbon. ..TX.- 'The (BPSM privatisation) law does not set any limit on foreigners,' Mr Almeida said. ..TX.- The government would approve the law outlining conditions for the BPSM sale in the next few days. 'Then there will be three months for candidates to apply, so the operation should occur in October,' Mr Almeida added. ..CO.- Companies: Espirito Santo Financial Holding. Banco Pinto e Sotto Mayor. ..CN.- Countries: PT Portugal, EC. US United States of America. ..IN.- Industry: P6719 Holding Companies, NEC. P6081 Foreign Banking and Branches and Agencies. P9611 Administration of General Economic Programs. ..TP.- Types: FIN Share issues. COMP Company News. ..IX.- P6719, P6081, P9611. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGMB6AFBFT ..HL.- 930713FT 930713 International Company News: Ericsson issue raises SKr2.2bn (301) ..BL.- By HUGH CARNEGY ..DL.- STOCKHOLM ..TX.- ERICSSON, the Swedish telecommunications group, said yesterday it had raised SKr2.17bn (Dollars 301.3m) through a convertible bond issue to stiffen its financial muscle in fast-growing markets where competition was intense from rivals such as Siemens of Germany and AT&T of the US. ..TX.- Ericsson said orders were set to grow by more than 30 per cent this year to more than Dollars 9bn and it needed the cash for 'acquisitions, financing requirements by customers and because of general problems in the financial market' - although it declined to be more specific. ..TX.- 'This is a way to try to ensure we have the financial wherewithal in a relatively tight financial market,' the company said. ..TX.- Ericsson has been riding a rise in new orders for more than a year, particularly in its radio communications division. It has established a 40 per cent share of the world market for mobile telephone infrastructure systems and has signalled a significant improvement this year on last year's SKr1.30bn pre-tax profit. ..TX.- It has been growing fast in China, which accounts for 7 per cent of group sales, and is anxious to ensure it can continue to compete for business where customer financing is required. 'In China and even in some other markets there may be a need for us to help the customer with the financing of deals,' the company said. ..TX.- The issue of 4.25 per cent convertible subordinated debentures was fully subscribed, with 50 per cent taken up by foreign investors. The bonds will mature on June 30, 2000, with conversion to B shares available from August 2 at SKr300. ..CO.- Companies: LM Ericsson. ..CN.- Countries: SE Sweden, West Europe. ..IN.- Industry: P3661 Telephone and Telegraph Apparatus. ..TP.- Types: FIN Share issues. ..IX.- P3661. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGMB6AFAFT ..HL.- 930713FT 930713 International Company News: Mensucat Santral suspended (397) ..BL.- By JOHN MURRAY BROWN ..DL.- ISTANBUL ..TX.- MENSUCAT Santral, one of Turkey's leading textile companies, and its listed affiliates, have been suspended from trading on the Istanbul exchange, after the parent company applied to the courts for protection from its creditors which are owed an estimated TL2,200bn (Dollars 213m). ..TX.- The company is controlled by the Bezmen family. Last week the group sought a court-arranged agreement with its creditors, to allow it to restructure its debts with some 23 banks, which are owed about TL1,500bn. ..TX.- The creditors list includes the foreign banks, UBS, Standard Chartered, Bankers' Trust and West Deutsche Landes Bank. ..TX.- However, the banks most exposed are those of the local Cukurova industrial conglomerate - Interbank, Pamukbank and Yapi Kredi which are owed TL600bn. ..TX.- The court has to make a decision within 10 days. If banks refuse to agree a restructuring, the company will be forced into bankruptcy. Bankers say a final settlement may take up to six months. The company has to show it has a positive net worth and that its assets are greater than its liabilities. Furthermore, two thirds of the creditors have to agree the planned restructuring. ..TX.- Yesterday, Mr Halil Bezmen, chairman and controlling shareholder, was referring all enquiries to his lawyers. ..TX.- Mensucat is one of the leading producers of textiles, Turkey's largest export item, earning more than Dollars 4bn a year. Mr Bezmen, was described yesterday by a foreign consultant as one of the best textile magnates in the Mediterranean. However, the group is undercapitalised and over the past two years has become over extended with a Dollars 120m investment programme coupled with moves to diversify into copper and chemicals businesses. ..TX.- Rabak, the copper business, has been particularly badly hit by the world slump in copper prices. ..TX.- Mensucat Santral, the cotton textile arm, made a loss of TL38bn in 1992 on turnover of about TL1,000bn. Rabak reported a TL25bn loss over the same period. ..TX.- Last week, the exchange suspended shares of Santral Holding, Mensucat Santral, Rabak and the chemicals operation Koruma while awaiting further clarification from the company. ..TX.- The market was earlier alerted to problems after the company had failed to present year-end figures for 1992. ..CO.- Companies: Mensucat Santral. ..CN.- Countries: TR Turkey, Middle East. ..IN.- Industry: P2211 Broadwoven Fabric Mills, Cotton. P6719 Holding Companies, NEC. ..TP.- Types: COMP Company News. ..IX.- P2211, P6719. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGMB6AE9FT ..HL.- 930713FT 930713 International Company News: Asko sells remaining AVA stake (218) ..BL.- By DAVID WALLER ..DL.- FRANKFURT ..TX.- ASKO Deutsche Kaufhaus, one of Germany's biggest retailers, said yesterday it had sold its remaining 7 per cent stake in AVA Allgemeine Handelsgesellschaft der Verbraucher, another quoted German retailer in which Asko used to own a 50 per cent interest. ..TX.- In a brief statement, the Saarbrucken-based Asko said the sale of its entire AVA stake since February had raised more than DM1bn (Dollars 625m). Mr Klaus Wiegandt, chief executive, said that the sale had been achieved at slightly above book value. ..TX.- 'With this step we have completed the most important part of our disinvestment programme,' the chief executive said. Asko, majority-owned by Metro, the large Swiss-based retailer, expanded rapidly in the late 1980s but has embarked on a drastic rationalisation plan in order to cut its debts, which stood at DM4.7bn at the end of March. ..TX.- The Bielefeld-based AVA, nearly 50 per cent owned by Edeka Zentrale, had turnover of DM6.8bn last year, up from DM5.1bn in 1991. It operates in the discount market and derives 60 per cent of its turnover from food retailing. ..CO.- Companies: Asko Deutsche Kaufhaus. AVA Allgemeine Handelsgesellschaft der Verbraucher. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P5399 Miscellaneous General Merchandise Stores. ..TP.- Types: COMP Disposals. ..IX.- P5399. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGMB6AE8FT ..HL.- 930713FT 930713 International Company News: Sharp fall at Sabena prompts shake-up (234) ..BL.- By REUTER ..DL.- BRUSSELS ..TX.- SABENA, the Belgian national airline, said its first-half earnings fell by BFr1.5bn (Dollars 45m) reflecting the difficult conditions in the international air transport industry, Reuter reports from Brussels. ..TX.- Sabena gave no final figure on its first-half 1993 earnings. ..TX.- It said the earnings drop reflected the serious structural crisis in the sector and the drop in prices this was causing, the economic crisis, currency devaluations in a large number of European countries and the political events in central Africa. ..TX.- The board of directors had approved measures worth BFr5bn to deal with the crisis in the air transport sector. The package involved an adjustment of wage costs during three years to save BFr2bn, Sabena said. It included measures to optimise its intercontinental and European networks, where the hub and spoke network at Brussels airport would remain the focus of Sabena's strategy. ..TX.- Sabena said there would be large savings by making work organisation flexible. This would be done by striking a balance between the workload and available workforce in accordance with the agreement with organisations representing the workforce. ..TX.- Sabena employs about 9,000 staff. ..TX.- Sabena is 37.5 per cent owned by Air France and about 49 per cent by the Belgian state. ..CO.- Companies: Sabena. ..CN.- Countries: BE Belgium, EC. ..IN.- Industry: P4512 Air Transportation, Scheduled. ..TP.- Types: FIN Interim results. ..IX.- P4512. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGMB6AE7FT ..HL.- 930713FT 930713 International Company News: Suez disposes of subsidiary (116) ..BL.- By REUTER ..DL.- PARIS ..TX.- COMPAGNIE De Suez has sold its 99.32 per cent stake in Compagnie Industrielle Maritime for FFr965.35 a share, or a total of FFr795m (Dollars 147.2m), to Compagnie Generale Europeene de Stockage, Reuter reports from Paris. ..TX.- The operation was undertaken on June 30 and is to be followed by a procedure under which remaining shareholders in Maritime can sell their shares at the same price. ..CO.- Companies: Compagnie De Suez. Compagnie Industrielle Maritime. Compagnie Generale Europeene de Stockage. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6719 Holding Companies, NEC. P4412 Deep Sea Foreign Transportation of Freight. ..TP.- Types: COMP Disposals. ..IX.- P6719, P4412. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGMB6AE6FT ..HL.- 930713FT 930713 UK Company News: BAA may redevelop US airports (196) ..BL.- By DANIEL GREEN ..TX.- BAA, the UK airport operator, is in talks with several large US airports including Chicago's O'Hare, the world's busiest, and New York's JFK, over redeveloping the airports. ..TX.- The company wants to take an equity stake in an airport or buy a lease on a terminal. A deal could be signed in the second half of 1994. ..TX.- The move would extend BAA's presence in North America beyond Pittsburgh Airport where last October it opened a Pounds 4m shopping mall. ..TX.- Since then, the average amount spent by a passenger at the airport has more than doubled to Dollars 6 (Pounds 4) and BAA sees the project as a success. ..TX.- The company is only in talks with international airports. That is where its experience lies and where it can build lucrative duty free shops. ..TX.- The Pittsburgh project has also served to introduce UK retailers such as WH Smith to US airports and US retailers to the UK. ..CO.- Companies: BAA. ..CN.- Countries: US United States of America. ..IN.- Industry: P4581 Airports, Flying Fields, and Services. ..TP.- Types: COMP Strategic links & Joint venture. ..IX.- P4581. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AE5FT ..HL.- 930713FT 930713 UK Company News: Debt precludes dividends at Lep (268) ..BL.- By ANDREW BOLGER ..TX.- LEP GROUP, the freight forwarding and security company, said that its heavy debt burden effectively precluded any prospect of a return to dividend payments in the foreseeable future. ..TX.- Mr David James, the company doctor appointed chairman when Lep was last year restructured by its banks, also told yesterday's AGM that a rights issue was not an option. ..TX.- He said: 'The most logical alternative is that the board will seek to develop, as best as possible, the vitality of the core subsidiaries in order that they themselves may, at some future date, be divested from the group to realise their value.' ..TX.- Lep may float off all or part of the equity in core businesses to reduce its debt of Pounds 385m. Mr James said Pounds 143m of the debt was wholly used as working capital in the remaining trading subsidiaries. The balance of Pounds 242m was within the parent company and mainly reflected past losses incurred in closed or divested activities. ..TX.- Mr James believed the stage was set for recovery of the group, but the timing would depend on a lifting of recessionary conditions in continental Europe. ..TX.- 'The performance of our company in the east has been excellent and there has been a strong recovery in North America. The recessionary conditions in Europe remain much more severe than many politicians would admit.' ..CO.- Companies: Lep Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4731 Freight Transportation Arrangement. P7381 Detective and Armored Car Services. ..TP.- Types: FIN Annual report. FIN Share issues. ..IX.- P4731, P7381. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AE4FT ..HL.- 930713FT 930713 UK Company News: Dalepak reduced to Pounds 2.2m after second half setback (401) ..BL.- By MAGGIE URRY ..TX.- FIERCE competition in the food industry, higher meat prices and teething troubles with a new freezer plant hit profits of Dalepak, the frozen foods and ready meals maker. ..TX.- At the pre-tax level they dropped from Pounds 3.93m to Pounds 2.21m over the year to April 30. ..TX.- In the second half pre-tax profits fell from Pounds 2.2m to Pounds 600,000, after Pounds 1.6m (Pounds 1.7m) for the opening period. ..TX.- The group warned in March that profits would be significantly below market expectations at that time, but indicated that the dividend would be maintained. ..TX.- Yesterday that promise was kept with the recommendation of a 4.5p final to give an unchanged total of 6p. With earnings per share down from 23.01p to 13p, the dividend is still covered 2.2 times. ..TX.- Margins were affected in the second half by 'substantial increases in meat raw material prices' triggered by sterling's devaluation last September. Those higher costs could not be fully recovered through increased selling prices. ..TX.- Dalepak did not say how much delays in commissioning the new freezing plant had cost. ..TX.- The shares have fallen from a peak of 383p in January, when the interim profits were announced, making Dalepak one of the worst performers in the market in the first half of the year. Yesterday the shares fell again, closing at 193p, down 12p. ..TX.- Sales rose 4 per cent to Pounds 42.2m, but the financial year covered 53 weeks and on a comparable 52-week basis they were 2 per cent higher. In frozen meat grill steaks, where Dalepak is the market leader, sales were slightly up, but in vegetable products there was a fall, despite a 17 per cent growth in the market. ..TX.- Trading profits fell from Pounds 3.96m to Pounds 2.48m, with margins down from 9.7 to 5.9 per cent. Interest rose from Pounds 33,000 to Pounds 268,000 reflecting a two-year Pounds 7.3m capital expenditure programme. ..TX.- The group said trading conditions remained difficult, although meat prices had stabilised. New products had been introduced and the completion of the new plant should bring cost savings. ..TX.- Gearing at the year end was just below 40 per cent (23 per cent). ..CO.- Companies: Dalepak Foods. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2038 Frozen Specialties, NEC. P5961 Catalog and Mail-Order Houses. ..TP.- Types: FIN Annual report. ..IX.- P2038, P5961. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AE3FT ..HL.- 930713FT 930713 UK Company News: Low & Bonar advances 21% (495) ..BL.- By PAUL TAYLOR ..TX.- LOW & Bonar, the international packaging and materials group, yesterday reported a 21 per cent increase in interim profits, reflecting improved operating margins following a restructuring programme. ..TX.- The Dundee-based group, which has also made two significant acquisitions in the UK carton sector in recent months funded by a Pounds 50.2m rights issue in April, reported pre-tax profits of Pounds 14.3m for the six months to May 31, up from Pounds 11.8m a year earlier. ..TX.- Turnover improved 13 per cent to Pounds 171.1m (Pounds 151m), boosted by the acquisitions, which added Pounds 4.87m, and by currency translation movements. Sales volumes were flat. ..TX.- An interim dividend of 2.9p (2.7p) is payable from earnings per share ahead 14 per cent to 10.22p (8.94p restated). ..TX.- Mr Jim Leng, who took over as chief executive last year, said the improvement in earnings had been delivered 'in tough market conditions, particularly on the Continent.' ..TX.- Group operating profits increased by 28 per cent to Pounds 16.3m (Pounds 12.8m), including Pounds 857,000 attributed to acquisitions. Currency movements accounted for a further Pounds 1m of the gain, although strong currencies adversely affected a number of the group's Continental businesses. Overall margins increased from 8.6 per cent to 9.9 per cent. ..TX.- European profits rose by 20 per cent to Pounds 13.2m (Pounds 10.9m) with Bonar Cereal Packaging, acquired from Kellogg in April, making 'an encouraging' first contribution. The UK now accounts for nearly two thirds of European profits. ..TX.- European margins improved from 10.6 per cent to 11.2 per cent helped by a continuing cost reduction programme. ..TX.- North American profits rose by 68 per cent from Pounds 2.2m to Pounds 3.7m following a restructuring programme begun in the second half of last year which helped lift margins from 4.4 per cent to 7 per cent. ..TX.- The higher operating profits were partly offset by increased interest charges of Pounds 2.02m (Pounds 1.24m) reflecting acquisition payments made in May last year. Following the rights issue at the end of April net borrowings fell to Pounds 18m (Pounds 37m), equivalent to gearing of 11.2 per cent. ..TX.- COMMENT ..TX.- The new management team is beginning to deliver the margin and profit improvements that Low & Bonar needed. Costs, including the headcount, are being cut and the North American operations have been turned around. The acquisition last month of CMB Carton Systems for Pounds 17.35m has introduced leading packaging systems technology into the carton division which is now underpinned by a five-year supply contract with Kellogg. Analysts were raising their profit forecasts yesterday and profits before tax could reach Pounds 31m this year, producing earnings of 20.8p per share and a prospective multiple of 16.6. The share price has been rising, but could still go higher. ..CO.- Companies: Low and Bonar. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2621 Paper Mills. P2657 Folding Paperboard Boxes. ..TP.- Types: FIN Interim results. CMMT Comment & Analysis. ..IX.- P2621, P2657. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AE2FT ..HL.- 930713FT 930713 International Company News: Avonmore buys Dairy Crest arm for Pounds 20m (346) ..BL.- By MAGGIE URRY ..TX.- AVONMORE FOODS, the Irish dairy and meat group, has moved into fifth place in the UK liquid milk market with the Pounds 20.5m purchase of two dairies and 32 distribution depots from Dairy Crest, the milk and dairy products side of the Milk Marketing Board. ..TX.- The dairies are in Birmingham and Hereford, and mainly supply doorstep deliveries. Avonmore is already strong in Birmingham and the West Midlands and has a sizeable business with supermarkets in the area. It also wants to expand in the south. ..TX.- Dairy Crest is reconfiguring its milk capacity as a result of the falling volume of milk sold on doorsteps and the shift to producing for supermarkets. It has also completed its sale to Unigate of Marshfield Dairy in Cardiff. ..TX.- Mr Pat O'Neill, Avonmore group managing director, said the changes in the UK milk industry, which will take place next year when the MMB is abolished, presented Avonmore with an opportunity to use skills developed in Ireland where the industry has been deregulated for over a century. ..TX.- The acquisition will give Avonmore an extra 39m gallons of liquid milk volume, taking its total to over 85m gallons, or 7 per cent of the UK liquid milk market. ..TX.- Avonmore also buys milk for cheese manufacture, and, with the liquid milk, will buy a total of 130m gallons a year. ..TX.- The businesses Avonmore is buying have net assets of Pounds 19.7m, and make annual sales of Pounds 87m and pre-tax profits of Pounds 4.6m. Avonmore is paying Pounds 10m on completion with a further Pounds 10.5m next January. Mr O'Neill said the group's cash flow would cover the consideration without raising gearing, currently 65 per cent. ..TX.- Avonmore said the integration of two dairies in Wiltshire and Hampshire acquired last November was proceeding to plan. ..TX.- Avonmore shares rose 7p to 150p. ..CO.- Companies: Avonmore Foods. Dairy Crest. ..CN.- Countries: IE Ireland, EC. ..IN.- Industry: P2026 Fluid Milk. P2011 Meat Packing Plants. ..TP.- Types: RES Facilities. ..IX.- P2026, P2011. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AE1FT ..HL.- 930713FT 930713 UK Company News: Monarch sees upturn from Revemin plant (355) ..BL.- By KENNETH GOODING ..TX.- MR MICHAEL Beckett, chairman of Monarch Resources, the London-quoted gold company with activities in Venezuela, told the annual meeting that the Revemin processing plant, which suffered a loss of Dollars 1.84m (Pounds 1.22m) last year, would return to 'significant profitability' after a new hard-rock crushing plant began operating next month. ..TX.- Mr Anthony Ciali, chief executive, said later that Monarch had located at its Canaima concession 75,000 tonnes of hard rock containing 9.7 grams a tonne, enough to keep Revemin going for a year, and for the first time Monarch would 'be in charge of its own destiny for feed for Revemin.' ..TX.- A special task force had been established to identify more high-grade, hard rock feed resources for Revemin from the group's concession holdings and from third parties. ..TX.- Mr Beckett said he expected the second call of the recent rights issue to be fully taken up. The 20p a unit second instalment, due by July 30, involved holders paying a total of 66p a share compared with a recent market price of 180p. ..TX.- This Dollars 10m net would help finance the La Camorra gold mine, development of which was under budget and ahead of schedule. ..TX.- He recalled that the mine, set to start up in June next year, would be one of the world's lowest-cost gold producers with cash costs predicted to be Dollars 115 a troy ounce. ..TX.- With projected annual output of 86,000 tonnes for four years, La Camorra would generate a great deal of cash - for a company of Monarch's size - to be used for further projects in Venezuela and, possibly, Mexico and North America. ..TX.- Mr Ciali said Monarch's exploration expenditure would remain relatively high this year at about Dollars 2.5m and be concentrated mainly in the La Camorra area, where there was a good chance of more ore being discovered to lengthen the life of the mine. ..CO.- Companies: Monarch Resources. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1041 Gold Ores. P1429 Crushed and Broken Stone, NEC. ..TP.- Types: FIN Annual report. ..IX.- P1041, P1429. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AE0FT ..HL.- 930713FT 930713 UK Company News: AG Barr hit by sugar price (284) ..BL.- By CATHERINE MILTON ..TX.- AG BARR, the soft drinks company which bills its best known product as being made in Scotland from girders, was hit by high sugar prices in the half year to May 1 and pre-tax profits fell from Pounds 3.05m to Pounds 2.1m. ..TX.- Mr Robin Barr, chairman of the company which makes Irn-Bru and Tizer, said that by February 1993 the fall in the value of the Green Pound, following the UK's departure from the ERM in September, resulted in an 18 per cent increase in the price of sugar. ..TX.- He said the decline in profits was exacerbated because comparative figures included a Pounds 409,000 surplus on the sale of the investment in Taverners, a confectionery company. ..TX.- Group turnover fell to Pounds 42m (Pounds 42.4m), an increase in sales of Barr's brands being offset by a decrease of retailers' own label products. ..TX.- Mr Barr said turnover in the nine weeks since May 1 had been well below last year, when the weather was exceptionally favourable. The 'better spell of weather' recently was encouraging, he added. ..TX.- Operating profits fell to Pounds 2.49m (Pounds 3.27m) and interest charges dropped to Pounds 389,000 (Pounds 624,000). ..TX.- Mr Barr said: 'We borrowed less money. We did borrow money from the bank some five years ago to fund an acquisition. We are always cash generative each year and we have gradually paid the bank loan.' ..TX.- The interim dividend is maintained at 1.75p payable from reduced earnings of 7.67p (10.74p) per share. ..CO.- Companies: AG Barr. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2086 Bottled and Canned Soft Drinks. ..TP.- Types: FIN Interim results. ..IX.- P2086. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEZFT ..HL.- 930713FT 930713 UK Company News: Reject Shop shows 49% decline (186) ..TX.- THE REJECT Shop announced a profits fall of 49 per cent and a dividend cut of 52 per cent for 1992-93, and warned that trading circumstances surrounding its sector were likely to continue into 1994. ..TX.- The company felt that its market, consisting of 18-35 year old customers predominantly from the south-east, had been more affected by recession than others. ..TX.- For the year to March 21, pre-tax profit came to Pounds 346,000 (Pounds 652,000) and earnings per share worked through at 2.52p (4.47p). The final dividend is cut to 1p for a total of 1.5p (3.15p). ..TX.- Turnover rose to Pounds 22m (Pounds 20.7m) through new store openings. Action had been taken to market more positively the company's products with the introduction of a furniture catalogue and other initiatives. ..TX.- There had been some growth in London, a substantial increase in sales of some furniture ranges, and a higher take up of credit. ..CO.- Companies: Reject Shop. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5947 Gift, Novelty and Souvenir Shops. ..TP.- Types: FIN Annual report. ..IX.- P5947. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEYFT ..HL.- 930713FT 930713 UK Company News: Downturn at French arm hits Kingfisher (97) ..TX.- Shares in Kingfisher fell 11p to 589p yesterday as Darty, the UK retailing group's recently acquired French electrical retailing subsidiary, announced a 0.5 per cent decline in sales in the nine months to May 31. ..TX.- Darty, which has some 130 stores throughout France, reported that sales for the period had fallen from FFr6.63bn to FFr6.59bn (Pounds 758m). ..CO.- Companies: Kingfisher. Darty. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5311 Department Stores. P5731 Radio, Television, and Electronic Stores. ..TP.- Types: MKTS Sales. ..IX.- P5311, P5731. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEXFT ..HL.- 930713FT 930713 UK Company News: Lightship losses cut to Pounds 316,000 (122) ..TX.- Lightship, the financial services group, cut pre-tax losses from Pounds 415,000 to Pounds 316,000 in the half year to December 31. ..TX.- Losses per share were down from 7.49p to 5.69p. ..TX.- Directors said the reconstruction and other material events being worked on would be passed to shareholders as soon as possible. ..TX.- Against the loss was charged Pounds 411,000 (Pounds 835,000) for exceptional items and Pounds 435,000 (Pounds 1.73m) interest payable. ..TX.- Continuing operations made a profit of Pounds 530,000 (Pounds 1.19m) before exceptionals and interest. ..CO.- Companies: Lightship. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5932 Used Merchandise Stores. P6722 Management Investment, Open-End. ..TP.- Types: FIN Interim results. ..IX.- P5932, P6722. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEWFT ..HL.- 930713FT 930713 UK Company News: Ensor deficit down to Pounds 2.96m (122) ..TX.- Ensor Holdings, the USM-traded building materials group, reported losses of Pounds 2.96m over the 12 months to March 31. ..TX.- The outcome, which compared with a deficit of Pounds 3.03m in the previous year, came on turnover of Pounds 35.8m (Pounds 46.7m) of which just Pounds 13.5m (Pounds 13.8m) related to continuing operations, and was struck after a loss of Pounds 1.31m on the disposal of discontinued operations. Losses at the trading level increased from Pounds 489,000 to Pounds 897,000. ..TX.- Losses per share worked through at 24p (23.5p). ..CO.- Companies: Ensor Holdings. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5039 Construction Materials, NEC. ..TP.- Types: FIN Annual report. ..IX.- P5039. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEVFT ..HL.- 930713FT 930713 UK Company News: Equity Consort asset expansion (106) ..TX.- Over the 12 months to April 30 net asset value per ordinary share at Equity Consort Investment Trust rose from 618.3p to 652.7p. ..TX.- For the deferred shares the value increased from Pounds 10.36 to Pounds 11.05. ..TX.- Net income came to Pounds 1.46m (Pounds 1.52m) and led to earnings of 25.73p (26.38p) for the ordinary and 41.86p (43.76p) for the deferred. ..TX.- The final dividend is 13.5p for a total of 24.5625p (24.1875p). ..CO.- Companies: Equity Consort Investment Trust. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6726 Investment Offices, NEC. ..TP.- Types: FIN Annual report. ..IX.- P6726. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEUFT ..HL.- 930713FT 930713 UK Company News: Fleming Geared shows decrease (98) ..TX.- Fleming Geared Income & Assets Investment Trust reported a net asset value of 260.9p per share at May 31, against 278.5p a year earlier. The fully diluted figure dropped from 250.2p to 236.7p. ..TX.- Net revenue slipped from Pounds 3.31m to Pounds 3.01m and earnings per share were 7.77p (10.65p). Dividends totalling 7.6p (same) have already been paid for the period. ..CO.- Companies: Fleming Geared Income and Assets Investment Trust. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6726 Investment Offices, NEC. ..TP.- Types: FIN Annual report. ..IX.- P6726. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AETFT ..HL.- 930713FT 930713 UK Company News: Halved outcome at Optometrics (152) ..TX.- Optometrics saw pre-tax profits halved in the year ended March 31, from Dollars 200,000 to Dollars 103,000 (Pounds 69,640). ..TX.- Mr Frank Denton, chairman of this USM-traded company, said the year was one of investment for growth. Significant resources were committed to the acquisition of new technologies, product development and publishing of new catalogues. Operating expenses were up to Dollars 1.07m (Dollars 858,000) against sales virtually unchanged at Dollars 3.58m. ..TX.- The measures taken were beginning to impact positively. 'We look forward to a strong first half', Mr Denton said. ..TX.- First quarter shipments were 'comfortably ahead' but orders booked were running more than 40 per cent over a year ago. ..TX.- Earnings per share came through at 0.7 cents (1.4 cents). ..CO.- Companies: Optometrics Corp. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3827 Optical Instruments and Lenses. ..TP.- Types: FIN Annual report. ..IX.- P3827. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AESFT ..HL.- 930713FT 930713 UK Company News: Aviva Petroleum Dollars 11.5m placing (169) ..TX.- Aviva Petroleum, the Dallas-based oil and gas exploration and production company, has completed a 12.9m common share placing at 95 cents per share with a group of US institutions and private investors, to raise Dollars 11.5m (Pounds 7.6m). ..TX.- Aviva also reported that Ecopetrol, the Colombian national oil company, has declared the Mary and Miraflor fields to be commercial and therefore will contribute 50 per cent of the costs of developing and placing these fields on production. ..TX.- The company expects to develop the two fields during 1993 and 1994 and to have a pipeline system in place by the middle of next year. ..TX.- Aviva said that the Miraflor North No 1 exploration well reached a total depth of 6,040 ft, and production casing has been set. ..CO.- Companies: Aviva Petroleum. Ecopetrol. ..CN.- Countries: US United States of America. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. ..TP.- Types: FIN Share issues. COMP Strategic links & Joint venture. ..IX.- P1311. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AERFT ..HL.- 930713FT 930713 UK Company News: Lyons buys German biscuit manufacturer (109) ..TX.- Lyons, the food manufacturing operation of Allied-Lyons, has bought A Krombach, a German biscuit maker. ..TX.- The move forms part of Lyons' strategy of expanding in continental Europe and gives the company its first food manufacturing base in Germany. ..TX.- Krombach will become part of Lyons Continental Bakeries, which currently operates 10 factories in Benelux and France. The consideration is not material in relation to Allied-Lyons' assets. ..CO.- Companies: Lyons. A Krombach. Lyons Continental Bakeries. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6719 Holding Companies, NEC. P2052 Cookies and Crackers. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P6719, P2052. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEQFT ..HL.- 930713FT 930713 International Company News: Seafield gearing up for battle (171) ..TX.- Mr Brian Chilver, chairman of Seafield, the Dublin-based transport, warehousing and property group, has emphasised the board's intentions to defeat the proposals by Waterglade International. ..TX.- 'We have a clear strategy for growth and during the next few weeks we will tell our shareholders why they should support the board', he said. ..TX.- Waterglade wants an extraordinary meeting, yet to be fixed, to seek the removal from the Seafield board of Mr Chilver, Mr David Burke, and Mr David Stacey. In their places it proposes Mr David Cunningham, Mr Thomas Megas, Mr Peter Voller, and Mr David Grove, all directors of Waterglade. ..TX.- Mr Chilver felt 'very uneasy at these underhanded attempts to gain control of companies without making a cash bid. ..TX.- 'Waterglade's directors should be clear - Seafield will be no push over'. ..CO.- Companies: Seafield. Waterglade International. ..CN.- Countries: IE Ireland, EC. ..IN.- Industry: P4213 Trucking, Ex Local. P4225 General Warehousing and Storage. ..TP.- Types: COMP Company News. ..IX.- P4213, P4225. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEPFT ..HL.- 930713FT 930713 UK Company News: Exceptionals slow growth at Border (171) ..TX.- BORDER Television, the Carlisle-based ITV company, reported profits of Pounds 1.25m pre-tax for the 12 months to April 30 - a rise of just over 2 per cent on the comparable Pounds 1.22m. Turnover fell from Pounds 11.8m to Pounds 11m. ..TX.- The outcome, however, was struck after exceptional charges of Pounds 501,000 related to redundancies; profits at the operating level showed a 44 per cent jump to Pounds 1.75m. ..TX.- Mr Melvyn Bragg, chairman, said that while the early weeks of the current year matched the previous period, 'there are signs that the economy has stabilised which leads to an expectation of real growth in the second half'. ..TX.- A recommended final dividend of 2p brings the total for the year to 3.3p (2.7p), covered 2.5 times by earnings of 8.3p (7.6p). ..CO.- Companies: Border Television. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4833 Television Broadcasting Stations. P7812 Motion Picture and Video Production. ..TP.- Types: FIN Annual report. ..IX.- P4833, P7812. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEOFT ..HL.- 930713FT 930713 UK Company News in Brief: Southend Property (57) ..TX.- SOUTHEND PROPERTY says applications from shareholders, together with stock placed firm, total Pounds 12.1m (50.48 per cent of the amount offered). ..CO.- Companies: Southend Property Holdings. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6552 Subdividers and Developers, Ex Cemeteries. ..TP.- Types: FIN Share issues. ..IX.- P6552. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AENFT ..HL.- 930713FT 930713 UK Company News in Brief: Mowlem (John) Construction (110) ..TX.- MOWLEM (JOHN) Construction is to purchase Noreast Building Management, the Government owned PSA Building Management Organisation, for Pounds 8m, to be paid in deferred instalments. The agreement with the secretary of state for the environment also contains provisions for the department to pay up to an agreed figure for any redundancy payments which might arise within the five years after the acquisition. ..CO.- Companies: John Mowlem Construction. Noreast Building Management. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1542 Nonresidential Construction, NEC. P8741 Management Services. P9199 General Government, NEC. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P1542, P8741, P9199. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEMFT ..HL.- 930713FT 930713 UK Company News in Brief: Lynx Holdings (61) ..TX.- LYNX HOLDINGS has received applications for 28.13 per cent of the shares in the recent open offer; balance taken up by sub-underwriters. ..CO.- Companies: Lynx Holdings. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6719 Holding Companies, NEC. P5065 Electronic Parts and Equipment. ..TP.- Types: FIN Share issues. ..IX.- P6719, P5065. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AELFT ..HL.- 930713FT 930713 UK Company News in Brief: Jersey Electricity (59) ..TX.- JERSEY ELECTRICITY is paying interim dividend of 13p (12p). Pre-tax profit half year ended April 27 1993 was Pounds 3.22m (Pounds 4.37m). Electricity sales 246m units (236.6m). ..CO.- Companies: Jersey Electricity. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4911 Electric Services. ..TP.- Types: FIN Interim results. ..IX.- P4911. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEKFT ..HL.- 930713FT 930713 UK Company News in Brief: Forte (84) ..TX.- FORTE has a 96.5 per cent holding in French catering company, Corela, after its public bid. Corela, which runs motorway catering facilities, was formerly owned by Accor Unit Compagnie Internationale Des Wagons-Lit Et Du Tourisme, which sold its controlling stake to Forte last December. ..CO.- Companies: Forte. Corela. ..CN.- Countries: GB United Kingdom, EC. FR France, EC. ..IN.- Industry: P7011 Hotels and Motels. P5812 Eating Places. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P7011, P5812. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEJFT ..HL.- 930713FT 930713 UK Company News in Brief: First Spanish Investment Trust (62) ..TX.- FIRST SPANISH Investment Trust has received tenders for 13.14m units (46.4 per cent) of 1.5p (gross) per unit convertible unsecured loan stock 1997 for repurchase. ..CO.- Companies: First Spanish Investment Trust. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6726 Investment Offices, NEC. ..TP.- Types: FIN Share issues. ..IX.- P6726. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEIFT ..HL.- 930713FT 930713 UK Company News in Brief: Ferrari (63) ..TX.- FERRARI'S rights issue taken up by 25.7 per cent. Some 39 per cent of the issue had been placed and the balance of 1.4m shares sold in the market. ..CO.- Companies: Ferrari Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3711 Motor Vehicles and Car Bodies. ..TP.- Types: FIN Share issues. ..IX.- P3711. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEHFT ..HL.- 930713FT 930713 UK Company News in Brief: Excaliber Group (72) ..TX.- EXCALIBER GROUP subsidiary, Mibert Precision, has broadened its gear-making capabilities by purchasing MTS, a local grinding company. MTS will become part of Spencer Gears, one of Mibert's divisions. ..CO.- Companies: Mibert Precision. MTS. Spencer Gears. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3566 Speed Changers, Drives, and Gears. P6719 Holding Companies, NEC. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P3566, P6719. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEGFT ..HL.- 930713FT 930713 UK Company News in Brief: Dickie (James) (56) ..TX.- DICKIE (JAMES) has acquired Striker Engineering for Pounds 165,000, satisfied by the issue of new shares at 52.2p each. ..CO.- Companies: James Dickie. Striker Engineering. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3462 Iron and Steel Forgings. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P3462. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEFFT ..HL.- 930713FT 930713 UK Company News in Brief: Cairn Energy (70) ..TX.- CAIRN ENERGY shareholders have approved the issue by Cairn Energy USA (CEUSA) of 4.75m new shares of common stock and for Cairn to sell up to 1m existing shares in CEUSA. ..CO.- Companies: Cairn Energy. Cairn Energy USA. ..CN.- Countries: US United States of America. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. ..TP.- Types: FIN Share issues. ..IX.- P1311. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEEFT ..HL.- 930713FT 930713 UK Company News in Brief: Barlo Group (80) ..TX.- BARLO GROUP has received acceptances to its open offer in respect of 25.71m new ordinary shares, which together with 7.56m placed firm by Goodbody Corporate Finance, represents 95.06 per cent of issue. The remaining shares have been taken up by investors under the terms of the placing. ..CO.- Companies: Barlo Group. ..CN.- Countries: IE Ireland, EC. ..IN.- Industry: P3433 Heating Equipment, Ex Electric. ..TP.- Types: FIN Share issues. ..IX.- P3433. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AEDFT ..HL.- 930713FT 930713 UK Company News in Brief: Armour Trust (74) ..TX.- ARMOUR TRUST's newly formed subsidiary, Jenolite, is purchasing certain assets and the name and goodwill of Lacro from Lacro International, part of the Satra Group. Lacro comprises a range of car care products. ..CO.- Companies: Jenolite. Lacro. Lacro International. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6719 Holding Companies, NEC. P2842 Polishes and Sanitation Goods. ..TP.- Types: COMP Company News. ..IX.- P6719, P2842. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGMB6AECFT ..HL.- 930713FT 930713 UK Company News: Ellis & Everard declines 3% and warns of price pressure (445) ..BL.- By ROLAND RUDD ..TX.- ELLIS & Everard, the chemicals distributor, yesterday warned of continuing pressure on prices as it announced a 3 per cent fall in pre-tax profits for the year to April 30. ..TX.- Mr Peter Wood, chief executive, said: 'There is a lot of pressure on pricing which is in the hands of the manufacturers.' ..TX.- Profits fell from Pounds 12.6m - before exceptional losses of Pounds 9.6m - to Pounds 12.2m after reduction and rationalisation costs of Pounds 1.4m (Pounds 1m). Group sales rose to Pounds 394.6m (Pounds 383.4m). ..TX.- The departure of the former chairman Mr Michael Marshall accounted for Pounds 350,000 of the costs; the rest was divided between redundancy payments - 300 jobs were shed - and rationalisation expenses. ..TX.- Turnover in the UK increased to Pounds 145.2m (Pounds 133.1m) and operating profit was up 1 per cent to Pounds 9.6m. ..TX.- In the US, sales rose from Dollars 339.7m to Dollars 352.4m (Pounds 235m) and operating profit increased by 13 per cent to Dollars 9.9m as the number of operating sites was cut by seven to 30. ..TX.- European sales fell to Pounds 33.3m (Pounds 40.3m) showing breakeven at the operating level. The pool division, which makes and supplies accessories and chemicals for swimming pools, was still in loss. The Spanish operation also recorded a loss and was merged with Cat, a Spanish distributor. ..TX.- Borrowing remain static at Pounds 9.1m, representing 13 per cent of shareholders' funds. ..TX.- Earnings per share fell to 10.3p (11.5p adjusted for the exceptional items). The final dividend is maintained at 4.8p, making an unchanged 7.05p. ..TX.- COMMENT ..TX.- The price recovery longed for by Ellis & Everard is unlikely to materialise in the short term. US chemical prices, which fell by a further 5 per cent over the last year, show no signs of improvement. As a distributor the company can only look on as the manufacturers battle it out. At least volume gains suggest that customers and suppliers are making increasing use of distributors. By facing up to a number of problems nearer to home, such as the loss-making pool side and the Spanish operation, it will be in a stronger position to produce better figures next year. Analysts expect full year pre-tax profits of Pounds 14.5m, which put the shares - down 2p to 209p - on a prospective multiple of 17.4. That still looks too demanding against the market sector average of 14.5. ..CO.- Companies: Ellis and Everard. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5169 Chemicals and Allied Products, NEC. ..TP.- Types: FIN Annual report. CMMT Comment & Analysis. ..IX.- P5169. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGMB6AEBFT ..HL.- 930713FT 930713 UK Company News: Virgin claims BA incentives unfair (181) ..BL.- By DANIEL GREEN ..TX.- MR RICHARD Branson, chairman of Virgin Atlantic Airways, yesterday accused British Airways of more dirty tricks, including offering unfair incentives to travel agents to push BA at the expense of other carriers, writes Daniel Green. ..TX.- Mr Branson has complained to the European Commission, alleging that BA offers large corporations and travel agents financial incentives which contravene EC competition laws. ..TX.- 'Some travel agency staff are sometimes encouraged to offer products which are neither the best quality nor value for their customer . . . to reach (a) target,' Mr Branson said. Upon achieving that target the agent would be paid a 'kick back'. ..TX.- BA said it would not be appropriate to comment. It was 'not aware of the details of the allegations, nor have we been contacted by the EC'. The complaint to the EC follows a series of actions by Virgin. ..CO.- Companies: Virgin Atlantic Airways. British Airways. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4512 Air Transportation, Scheduled. ..TP.- Types: COMP Company News. ..IX.- P4512. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGMB6AEAFT ..HL.- 930713FT 930713 UK Company News: Menzies 'a step more than satisfactory' with Pounds 30m (514) ..BL.- By PETER PEARSE ..TX.- RESULTS of John Menzies for the year to May 1 were 'just that step more than satisfactory', Mr Ranald Noel-Paton, group managing director of the retail and wholesale group, said yesterday. ..TX.- Pre-tax profits under FRS 3 jumped 85 per cent from Pounds 30.7m to Pounds 16.6m, reflecting heavy restructuring costs a year earlier. Mr Noel-Paton said pre-tax profits from continuing operations under previous accounting standards grew at a more modest 17 per cent to Pounds 30.1m (Pounds 25.7m). Turnover was Pounds 1.17bn (Pounds 1.1bn). ..TX.- Distribution services drove the profits advance with a rise from Pounds 18.5m to Pounds 20.9m at the operating level on turnover ahead at Pounds 768.1m (Pounds 705.5m). Mr Noel-Paton expected the MMC investigation into news wholesaling to be published about September. ..TX.- Sales volumes and profits fell at TBD largely because of poor demand for music. Total Book Distribution, now folded into TBD, saw book sales rise 10 per cent. On a like-for-like basis Universal Office Supplies lifted sales 12 per cent, though including the acquired RMG they rose 22-23 per cent. ..TX.- Operating profits on the retailing side slid to Pounds 11.1m (Pounds 11.3m) on increased turnover of Pounds 375.7m (Pounds 356.2m). Here progress at Early Learning Centre, where sales were up 12 per cent and profits 'almost in proportion to sales', was offset by a 'slight' profits fall and 3.5 per cent sales growth at John Menzies Retail. ..TX.- Mr Noel-Paton said the 156 non-confectionery/tobacco/newspapers and non-station bookstall outlets in the 274-strong chain were to be revamped away from a generalist to a multi-specialist approach. ..TX.- Cash flow was a bright point, enabling borrowings to be reduced by Pounds 16m to about Pounds 8m, said Mr Noel-Paton. Consequently interest charges tumbled to Pounds 1.9m (Pounds 4.1m). ..TX.- FRS 3 earnings leaped to 35.3p (15.5p) and continuing earnings to 34.6p (28.4p) per share. The annual dividend is lifted to 10.8p (10p) with a 7p final. ..TX.- COMMENT ..TX.- Thought of as solid, rather than adventurous, Menzies' management has at last grasped the nettle at JM Retail, installing a new managing director with a brief to give it an identity on the high street. To help with this, capital expenditure is expected to rise from Pounds 15.5m this time to Pounds 20m. However, the chain operates in a dull market - especially newspapers and music - and the scope for improvement may be narrow. The wholesale side remains impressive, illustrated by the - admittedly acquisition-driven - 20 per cent sales growth at UOS in a tricky market. The unknown quantity is the outcome and fall-out of the MMC report, though it's likely to be neutral or worse. Assuming about Pounds 32m pre-tax pencilled in for the current year, the group is on a prospective p/e of 13.9. The shares are near the sector rating and perhaps have run ahead of themselves. ..CO.- Companies: John Menzies. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5994 News Dealers and Newsstands. ..TP.- Types: FIN Annual report. CMMT Comment & Analysis. ..IX.- P5994. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGMB6AD9FT ..HL.- 930713FT 930713 UK Company News: Smith's creditors mount challenge (311) ..BL.- By PEGGY HOLLINGER ..TX.- CREDITORS of Mr Clive Smith, the Midlands entrepreneur who recently avoided bankruptcy after incurring debts of more than Pounds 20m, are mounting a challenge to the individual voluntary arrangement which allows him to repay just 8.13p in the pound. ..TX.- Their appeal will be based on a clause in the insolvency act which allows court intervention if material irregularities at or in relation to a creditors meeting could be proved. The hearing is set for August. ..TX.- The challenge follows the creditors' meeting last month at which a majority of the debt was voted in favour of Mr Smith's proposals. However, disputing creditors are thought to be raising questions over the validity of debt claims from an offshore company linked to an associate of Mr Smith. ..TX.- Richard Pearce & Sons, a Hong Kong-based company with an Irish address, is Mr Smith's largest creditor, with claims of Pounds 12.3m. Mr Kelvin Myles, who shares the same Irish address and has managed many of Mr Smith's offshore interests, has refused to identify Richard Pearce's owners to other creditors. ..TX.- At the creditors meeting last month Mr Smith denied he had any connection to Richard Pearce. The proxy vote in favour of the IVA was cast by Mr Graham Wilson, Mr Smith's insolvency practitioner. Mr Wilson, who was arrested last year on suspicion of defrauding creditors in an insolvency procedure, is currently on police bail awaiting possible charges. ..TX.- Mr Smith's creditors include the Inland Revenue, owed Pounds 1.3m, Societe Bancaire de Paris, Pounds 1.5m, and accountants Moore Stevens with Pounds 199,935. Creditors also include Mr Robert Pollock, the former chairman of Alpine Double Glazing, whose mortgage was guaranteed by Mr Smith's family vehicle, Finchley Investments. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6799 Investors, NEC. ..TP.- Types: COMP Company News. ..IX.- P6799. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGMB6AD8FT ..HL.- 930713FT 930713 UK Company News: Dunedin launches Japan trust (199) ..BL.- By SCHEHERAZADE DANESHKHU ..TX.- Dunedin Fund Managers yesterday launched, via a placing and offer for subscription, a new closed-end Japanese investment trust which hopes to raise up to Pounds 40m. ..TX.- Dunedin Japan Investment Trust, which will invest for long term capital growth in Japanese companies, is issuing up to 8m units. Each comprises 5 shares with one warrant attached at 500p per unit. Each warrant will carry the right to subscribe for one share in any September from 1995 to 1999 at 100p per share. ..TX.- The sponsors, UBS, has arranged a placing of 2.86m units; the remaining units are available for public subscription. It had succeeded in placing Pounds 14.3m with institutions. ..TX.- For the first five years of the trust's life, Dunedin will donate 35 per cent of its 1 per cent annual management fee to Barnardos, the charity. Minimum subscription for the offer which closes on July 23 is Pounds 250. ..CO.- Companies: Dunedin Fund Managers. Dunedin Japan Investment Trust. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6722 Management Investment, Open-End. P6726 Investment Offices, NEC. ..TP.- Types: FIN Share issues. TECH Products & Product use. ..IX.- P6722, P6726. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGMB6AD7FT ..HL.- 930713FT 930713 UK Company News: Disposal gives boost to Daejan (175) ..TX.- Bolstered by a Pounds 2.53m surplus on the disposal of a subsidiary, pre-tax profits of Daejan Holdings, the property group, rose by Pounds 2.8m to Pounds 16.7m in the year to end-March. ..TX.- Gross income for the year increased from Pounds 22.1m to Pounds 23m, and at the operating level profits from continuing operations improved to Pounds 18.5m against Pounds 18.2m. ..TX.- The accounts have been prepared on an FRS 3 basis. ..TX.- The interest charge rose to Pounds 5.06m (Pounds 4.35m) and tax took Pounds 3.5m (Pounds 5.32m). ..TX.- The company said that the UK investment portfolio had been professionally valued at the year-end and the resultant decrease of Pounds 1.1m had been incorporated into the accounts. ..TX.- A final dividend of 15p (13p) is proposed for a 27p (25p) total. ..TX.- The dividend is three times covered by earnings per share of 81p. ..CO.- Companies: Daejan Holdings. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6552 Subdividers and Developers, Ex Cemeteries. ..TP.- Types: FIN Annual report. ..IX.- P6552. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGMB6AD6FT ..HL.- 930713FT 930713 UK Company News: Tomkins keeps earnings promise (507) ..BL.- By RICHARD GOURLAY ..TX.- TOMKINS, which reported pre-tax profits up 29 per cent to Pounds 171m yesterday, has always said its aim is to produce above average increases in earnings per share. ..TX.- Yesterday, on cue, it showed a 4 per cent rise compared with a UK average decrease of 3.8 per cent and, for good measure, a 21 per cent lift in the dividend, compared with a UK average fall of 7.6 per cent. ..TX.- But rather than welcome the news, the market promptly clipped 5 per cent off the share price. ..TX.- For some time Mr Greg Hutchings, chief executive, has been able to rely on his track record and exhortations to 'trust us'. ..TX.- While this record has indeed been impressive, investors who dipped deep in their pockets to fund the Pounds 935m RHM acquisition appear disappointed they have been given so little ammunition with which to judge for themselves Tomkins' prospects - at RHM and at the existing businesses. ..TX.- The first disappointment revolves around Tomkins' failure to produce a figure for fair market adjustments at RHM, seven months after the company was acquired. ..TX.- Mr Ian Duncan, finance director, provided half an answer yesterday. While praising the calibre of the accountants at RHM, he said the reporting systems were inadequate. The extent of the fair value provisions will, in any case, be resolved with six weeks when the accounts are published. ..TX.- Nor has Tomkins set down any milestones in the reorganisation of RHM, against which the outside world can judge Mr Hutchings and his team. Analysts said this might be a result of caution, but when a business is as closely followed as the milling and baking industry is in the UK, the absence of a clearly spelled out strategy for reorganisation is likely to lead to unease. ..TX.- At the operational level in the existing businesses, the company is little more specific about the last year or prospects. ..TX.- Operating margins in the non-RHM business slipped slightly to 9 per cent last year with margins down in three of the four divisions. Fluid controls, services to industry and professional, garden and leisure products saw reduced margins. ..TX.- Margins were under pressure in the UK and the US to varying degrees, and Tomkins said it has seen no strong evidence yet of a recovery of industrial or consumer confidence. ..TX.- The industrial products division improved margins from a strong base on strongly increased sales - up 23 per cent - as the group benefited from operational gearing born of investing in low cost production during the recession. ..TX.- Mr Hutchings has identified his main product as financial performance. With the share price under some pressure, holders are sending a clear signal that they want to know more about how that performance is to be achieved. ..CO.- Companies: Tomkins. Ranks Hovis McDougall. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5084 Industrial Machinery and Equipment. P2041 Flour and Other Grain Mill Products. P6719 Holding Companies, NEC. ..TP.- Types: FIN Annual report. ..IX.- P5084, P2041, P6719. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGMB6AD5FT ..HL.- 930713FT 930713 UK Company News: Dirty tricks cloud the horizon - The issues raising a storm at British Airways' AGM (654) ..BL.- By DANIEL GREEN ..TX.- LORD KING of Wartnaby will have a front row seat today to see Sir Colin Marshall, his successor as chairman of British Airways, defend the airline publicly against allegations of 'dirty tricks' on Virgin Atlantic Airways. ..TX.- In his first British Airways annual meeting as merely a VIP he will expect a spirited performance from his protege. ..TX.- He should not be disappointed. Sir Colin will make his account of the Virgin affair a central plank of his speech to the 1,000-plus shareholders crammed into London's Barbican Centre. ..TX.- But Sir Colin's task will not be made easier by some carefully planned questions from the floor. The company has received questions from more than 2,000 shareholders, one third of which relate to the Virgin affair. ..TX.- Although BA has already apologised to Virgin for the campaign, which involved the misuse of computer information on Virgin's passengers - and paid Pounds 600,000 to the airline - it faces further legal action in the UK and Brussels. ..TX.- BA's board has denied involvement in this misuse of passenger information, which was said to have been carried out by junior staff. ..TX.- However its position may be attacked by questions from Mr Brian Basham, who was sacked at the start of the year as public relations adviser to British Airways for his part in the dirty tricks campaign. ..TX.- Mr Basham has submitted four questions to be answered at the annual meeting. In a letter to Sir Colin detailing the questions, he says: 'it remains entirely implausible to me . . . that you could not have known' of the misuse of computer data. ..TX.- Mr Basham has sent copies of this letter to institutional investors in the airline and outlined further charges against Sir Colin. ..TX.- Such accusations are likely to distract from what should have been a triumphant debut for the new chairman. ..TX.- While almost every airline in the world has struggled against recession and overcapacity, the past year has seen BA consolidate its position as the western world's most profitable airline. Sir Colin has taken advantage of this financial strength to push ahead with a plan to create the world's first global airline. ..TX.- Since the last annual meeting, BA has taken a Pounds 198m stake in USAir, and paid Pounds 304m for 25 per cent of Qantas, the Australian carrier. It has bought into TAT, the French regional carrier, into Delta, a German airline, and taken over the loss-making operations of Dan-Air, the UK carrier based at London's Gatwick airport. ..TX.- To pay for it all, BA successfully raised Pounds 442m from its shareholders in a rights issue. ..TX.- On the industrial relations front, the company has overcome strikes by some of its staff with apparently little lasting damage. ..TX.- Sir Colin has also begun to impose his own personality on the business shaped by Lord King, who took it from a mediocre state-owned enterprise into one admired by the world's airline entrepreneurs. ..TX.- Since Lord King left the board in March, allowing Sir Colin to move up from chief executive, two new independent non-executive directors have been appointed. They are Baroness O'Cathain, the managing director of the Barbican Centre, and Mr Charles Mackay, chief executive of Inchcape. ..TX.- With these changes, the British Airways that Lord King constructed during his 11 years in power is beginning to change. ..TX.- But one feature of the company that may not be so easy to alter is the liveliness, even rowdiness, of the airline's annual meetings. ..TX.- Lord King thrived in those meetings, becoming known for his brusque and often witty control of questioners. ..TX.- The quieter Sir Colin may have cause today to search for a similar fund of stage skills. ..CO.- Companies: British Airways. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4512 Air Transportation, Scheduled. ..TP.- Types: CMMT Comment & Analysis. FIN Annual report. ..IX.- P4512. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGMB6AD4FT ..HL.- 930713FT 930713 UK Company News: Sema sells stake in subsidiary (313) ..TX.- SEMA GROUP, the Anglo-French computing services company which is quoted in London, has sold a 24.5 per cent interest in Sema Group Facilities Management, its UK-based outsourcing arm, to FT LIS - a wholly owned subsidiary of France Telecom - for Pounds 8.77m. ..TX.- The sale is being arranged through the creation of a UK joint venture company in which Sema and FT LIS will have equal shares and which will own 49 per cent of SGFM. ..TX.- Sema, which has built up a strong position in the fast expanding UK market for facilities management, will retain ownership of 75.5 per cent of the subsidiary. ..TX.- The facilities management operations made pre-tax profits of Pounds 3.7m in the year to end-December and had net assets of Pounds 2.61m. ..TX.- The move was welcomed in the market yesterday where Sema's share price gained 10p to close at 371p. Sema said it will use the proceeds of the sale for further development of its activities. ..TX.- The UK joint venture represents the latest in a growing number of links between Sema, which wants to expand its communications related operations, and the French telecommunications group, which is eager to develop its international business. ..TX.- In October FT LIS acquired an indirect stake in Sema after it established a joint venture company with Paribas to hold the French bank's 39 per cent shareholding in Sema. France Telecom owns a 49.9 per cent stake in the holding company. ..TX.- Following that agreement Mr Charles Rozmaryn, head of France Telecom, and Mr Michel Huet, head of FT LIS, joined the Sema board. ..CO.- Companies: Sema Group. Sema Group Facilities Management. FT LIS. ..CN.- Countries: GB United Kingdom, EC. FR France, EC. ..IN.- Industry: P7379 Computer Related Services, NEC. P7376 Computer Facilities Management. ..TP.- Types: COMP Disposals. COMP Strategic links & Joint venture. ..IX.- P7379, P7376. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGMB6AD3FT ..HL.- 930713FT 930713 UK Company News: Spring Ram chief awaits fate (172) ..BL.- By ANDREW BOLGER ..TX.- The fate of Mr Bill Rooney, chairman and chief executive of Spring Ram, is likely to be decided at a board meeting of the bathroom and kitchens group tomorrow ..TX.- Prudential Corporation, the group's biggest institutional shareholder, wants to see the departure of Mr Rooney, who yesterday returned early from a holiday in Barbados to fight for his future in the company, which he co-founded. ..TX.- Sources close to the company suggested that the other executive directors would not wish to work with an imposed chairman, but the Prudential seems confident that its views will prevail. ..TX.- Spring Ram's shares yesterday closed 5 1/2 p higher at 54p, well below last year's peak of 181p. ..TX.- The shares have collapsed because of three profits warnings in eight months, the most recent a fortnight ago. ..CO.- Companies: Spring Ram Corp. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2434 Wood Kitchen Cabinets. P3261 Vitreous Plumbing Fixtures. ..TP.- Types: PEOP People. ..IX.- P2434, P3261. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGMB6AD2FT ..HL.- 930713FT 930713 Companies in this issue (200) ..TX.- ---------------------------------------- UK ---------------------------------------- Allied-Lyons 20 Aviva Petroleum 20 Avonmore Foods 20 BAA 20 Barr (AG) 20 Boddington 36 Border Television 20 British Aerospace 36 British Airways 18 Daejan 18 Dairy Crest 20 Dalepak 20 Dunedin Japan Trust 18 Ellis & Everard 18 Ensor 20 Equity Consort 20 Fleming Geared 20 J Sainsbury 12 JA Devenish 36 ..TX.- James Capel 22 Kingfisher 20 Kwik Save 36 Lep 20 Lightship 20 Low & Bonar 20 MFI 17 MW Marshall 12 Menzies (John) 18 Mirror Group News 36 Monarch Resources 20 Optometrics 20 Reject Shop 20 Seafield 20 Sema 18 Spring Ram 18 Tomkins 18, 17 Waterglade Intl 20 ---------------------------------------- Overseas ---------------------------------------- ..TX.- AVA 21 Alcan 22 Alcoa Australia 23 Anglo American 23 Apple Computer 22 Asko 21 Bear Stearns 22 Cargill 3 Compagnie de Suez 21 Cons. Gold Fields 23 Coors 22 EIE International 23, 17 Ericsson 21 Espirito Santo 21 Fannie Mae 22 General Motors 22 Hazama 21 Home Shopping 21 Mensucat Santral 21 Merck 17 Northwest Airlines 22 Ontario Hydro 22 QBC 21 Sabena 21 Woolworths 23 ---------------------------------------- ..CN.- Countries: XA World. ..IN.- Industry: P99 Nonclassifiable Establishments. ..TP.- Types: COMP Company News. ..IX.- P99. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGMB6AD1FT ..HL.- 930713FT 930713 Intel's second quarter yields record results (256) ..BL.- By LOUISE KEHOE ..DL.- SAN FRANCISCO ..TX.- INTEL, the world's largest maker of computer chips, yesterday reported record revenue and earnings for the second quarter. It said it had shipped more than 10,000 Pentium chips, its new high performance microprocessor. ..TX.- Revenue for the second quarter rose 61 per cent to Dollars 2.13bn (Pounds 1.4bn) from Dollars 1.32bn in the same period last year. Net income was up 167 per cent at Dollars 569m, or Dollars 1.30 per share, compared with Dollars 213m or 50 cents per share in last year's second quarter. ..TX.- Earnings were in line with Wall Street expectations, but failed to reach the highest estimates. Intel's share price fell slightly yesterday to Dollars 55 1/2 at midday, down from a Friday close of Dollars 56. ..TX.- 'We had an excellent quarter. Intel486 microprocessor volume continued to expand and shipments of Pentium processor-based systems began,' said Mr Andrew Grove, president and chief executive. ..TX.- For the first six months of 1993, Intel's revenues rose 62 per cent to Dollars 4.15bn, from Dollars 2.56bn last year. Net income surged 181 per cent to Dollars 1.12bn or Dollars 2.53 per share, versus Dollars 397m or 93 cents per share. ..TX.- First half earnings exceeded the Dollars 1.07bn the company earned for the whole of 1992. Per-share earnings were restated to reflect a 2-for-1 stock split in May, 1993. ..CO.- Companies: Intel Corp. ..CN.- Countries: US United States of America. ..IN.- Industry: P3674 Semiconductors and Related Devices. ..TP.- Types: FIN Interim results. ..IX.- P3674. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGMB6ADZFT ..HL.- 930713FT 930713 Boardroom symptoms of a sectoral malaise: The pressure building up on the world's drugs groups (863) ..BL.- By PAUL ABRAHAMS ..TX.- THREE of the world's top six drugs companies have lost their president or chief executive since March. The boardroom bust-ups are a symptom of disarray in the pharmaceuticals industry over how to respond to the rapidly changing healthcare environment. ..TX.- The reasons for Mr Richard Markham's departure from Merck & Co, the world's biggest drugs group, are still being debated. But the other two resignations, that of Mr Ernest Mario as chief executive of Glaxo, the world's second largest group, and Mr Vaughn Bryson as chief executive of Eli Lilly were clearly the result of differences within the board over the companies' future direction. ..TX.- The cause of the drugs groups' difficulties is a combination of healthcare reform in Europe and Japan, and changes in the customer base in the US, the world's largest market, where an increasing number of clients are demanding ever greater discounts. ..TX.- Mr Hans Joachim Langmann, chairman of E. Merck, the privately owned German group, has lamented: 'The world is falling apart' for drugs manufacturers. ..TX.- Reforms launched in Germany, the world's fourth largest market, led to an 11 per cent collapse in sales in the first four months of this year, according to IMS International, the market research group. Overall, growth in the European market has slowed to 1.4 per cent, compared with 8 per cent during 1992. ..TX.- In the US, the changes taking place among drugs companies' customers are probably more significant than the reforms being prepared by Mrs Hillary Rodham Clinton and her healthcare taskforce. ..TX.- Employers and individuals are grouping together to buy their healthcare in bulk. The bulk providers, which include Medicare and Medicaid, the state programmes for the old and poor, health maintenance organisations (HMOs) and mail order companies, are much more cost-orientated than traditional insurers. Known as 'managed' organisations, they are less interested in the relative merits of drugs than their price and are able to play one drug manufacturer off against another, negotiating substantial discounts. ..TX.- Figures compiled by The Boston Consulting Group suggest the growth of the managed sector has been explosive, increasing from 20 per cent of the non-hospital drugs market in 1987 to 35 per cent last year. Merck reckons that by the end of the decade 90 per cent of its American pharmaceuticals sales will be to bulk buyers. At present the figure is about 60 per cent. ..TX.- More alarmingly for the drugs groups, the size of the discounts the managed groups can negotiate has increased from 10 per cent to 25 per cent in the past five years. Merck has been affected by discounting more than most. Its best selling products, heart drugs and antibiotics, all suffer from price competition. ..TX.- The net effect of the changes in the US and Europe has been tumbling volumes and prices. As a result, brokers Wertheim Schroder reckon the average profits growth rate in the industry will fall from 19 per cent in the late 1980s to about 8 per cent this year. Some companies will suffer a decline. ..TX.- Faced with such a rapidly changing environment, drugs company boards need to make some tricky decisions about how their organisations should adapt. It is these decisions that appear to be causing the friction in senior management. ..TX.- The implications of the deteriorating market are frightening. First, the groups must find alternative strategies to cope with the changing US customer base. ..TX.- Second, they must decide whether to remain pure pharmaceuticals groups, or use their scientific base to become healthcare companies. They would offer diagnostics and over-the-counter (OTC) medicines which are less profitable than prescription products, but generate more stable earnings. ..TX.- In the US, the adjustment to managed care will be painful. Many of the thousands of sales representatives, who used to convince doctors about a particular medicine's effectiveness, may be made redundant. Schering'Plough of the US reckons a third of its sales are though managed care schemes, but require only 60 salesmen. A further 1,600 sales staff are required for the other two-thirds. ..TX.- One analyst estimates there could be between 50,000 and 100,000 job losses in the industry over the next few years, saving the sector Dollars 5bn (Pounds 3.3bn) a year. ..TX.- Meanwhile, the debate within the pharmaceuticals groups about alternative strategies continues. Merck has announced it will take the unprecedented step of manufacturing generic non-patented products once its medicines' patents expire. It has also formed an alliance with the consumer group Johnson & Johnson to market OTC products. ..TX.- The irony is that many drugs groups spent the 1980s becoming pure prescription medicine companies, disposing of their OTC and consumer brands businesses. The sacking of Mr Mario at Glaxo may have been partly caused by the reluctance of the board to reverse the company's policy of exiting from OTC medicines. ..TX.- With no sign of the external pressures ameliorating, more boardroom ructions are undoubtedly in the pipeline. ..CO.- Companies: Merck and Co Inc. Glaxo Holdings. Eli Lilly and Co. ..CN.- Countries: GB United Kingdom, EC. US United States of America. ..IN.- Industry: P2834 Pharmaceutical Preparations. ..TP.- Types: CMMT Comment & Analysis. PEOP People. MKTS Market data. ..IX.- P2834. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGMB6ADYFT ..HL.- 930713FT 930713 MFI sweetens the pill of a 39% decline (451) ..BL.- By NEIL BUCKLEY ..TX.- MFI, the furniture group, sent a mixed message to the City yesterday, reporting a 39 per cent fall in pro forma pre-tax profits to Pounds 40.2m because of disappointing sales, but giving an upbeat statement on current trading. ..TX.- It was the company's first full-year results presentation since its flotation last July. The shares gained 1 1/2 p to close at 128 1/2 p. ..TX.- 'We are trading 3 per cent ahead, but 11 weeks is nowhere near a trend, and we are still cautious,' said Mr Derek Hunt, chairman. ..TX.- Turnover for the year to April 24 fell 6.7 per cent to Pounds 603.9m. ..TX.- Mr John Randall, finance director, said trading had been particularly disappointing during the 10-week new year sale, when MFI makes about a third of its turnover. ..TX.- While this partly reflected lower levels of activity in the housing market, he admitted MFI had made mistakes in its promotional campaigns which led to competitors stealing market share. MFI had since adjusted some prices and revamped its advertising. ..TX.- Sales suffered most in kitchens and bedrooms, which carry a higher profit margin because MFI manufactures them itself. Gross margins fell 1.7 points to 57.4 per cent because of the unfavourable sales mix and exchange rate movements. ..TX.- But Mr Randall said the company's progress in cutting costs made it optimistic it could increase profits next year, even if the economic upturn was weak. ..TX.- MFI has reduced overheads by 7.2 per cent through cutting staff by 800, investing in new systems, reducing stockholding and purchasing freeholds on four previously leasehold properties. ..TX.- Surplus space in some stores has been sub-let, leading to lower costs and rental income for the year of Pounds 7.2m. ..TX.- Mr Randall said at least another 100,000 sq ft of surplus space would be leased out in the current year, taking rental income to Pounds 8.5m. ..TX.- Analysts expect costs to fall further this year, and based on an improvement in sales of 3 or 4 per cent are forecasting pre-tax profits of Pounds 60m to Pounds 65m this year. ..TX.- Proceeds from the flotation allowed MFI to redeem its preference shares and reduce borrowings to Pounds 62m, taking gearing from 80 per cent to 52 per cent. Since the year-end, the company has received Pounds 21m from the sale of its 20 per cent stake in Carpetright, which was floated last month. ..TX.- Pro forma earnings were 4.5p (7.4p). The final dividend was held at 2.5p, making a total of 3.75p. ..TX.- Lex, Page 16 ..CO.- Companies: MFI Furniture Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5712 Furniture Stores. ..TP.- Types: FIN Annual report. CMMT Comment & Analysis. ..IX.- P5712. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGMB6ADXFT ..HL.- 930713FT 930713 Japanese banks halt lending to troubled property group (415) ..BL.- By ROBERT THOMSON ..DL.- TOKYO ..TX.- FIVE leading Japanese banks yesterday said they would halt lending to EIE International, a property developer weighed down by Y700bn (Pounds 4.3bn) in debts. ..TX.- Japanese banks have traditionally been reluctant to cut their lifelines to debt-stricken corporate customers. But the EIE case could mark a tougher approach, as the banks write off a pile of non-performing property loans. ..TX.- EIE owns hotel resorts and office buildings in the UK, the US, Australia and south-east Asia. Its break with the banks came after a dispute with the Long-Term Credit Bank of Japan, which has Y190bn in loans outstanding to the company, about half defined as 'bad'. LTCB said any loan losses would be covered through the sale of its long-term holdings of shares. The bank said the decision to confront the bad debts was taken in the interests of 'financial soundness'. ..TX.- The removal of LTCB's support sends a clear signal to other banks that it will no longer be responsible for EIE debts and raises questions about how the EIE group will service its debts. ..TX.- Trading in two affiliates of the unlisted EIE International was suspended yesterday. Sea-Com, a shipping and resort company, is listed on the second section of the Tokyo exchange while Electronic and Industrial Enterprises, an electronics supplier, is traded on the over-the-counter market. ..TX.- Mr Harunori Takahashi, president of EIE reassured staff that the company would continue trading. LTCB said it would not immediately cut links to the two listed affiliates. ..TX.- EIE group and its bankers, LTCB, Mitsui Trust and Banking, Mitsubishi Trust and Banking, Sumitomo Trust and Banking and Nippon Credit Bank, have been renegotiating a restructuring package. ..TX.- The banks say the developer was unwilling to accept terms, which included a quickening of property disposals. ..TX.- The extent of the break with LTCB can be gauged by the fact that the bank has recalled five managers sent in to underpin the property developer. ..TX.- LTCB said the worsening of the international property market and the appreciation of the yen, which cut the value of foreign holdings, had undermined the chances of a successful bank-sponsored restructuring. ..TX.- Maverick on the golf course, Page 23 ..CO.- Companies: EIE International. Sea-Com Corp. Electronic and Industrial Enterprises Inc. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P6552 Subdividers and Developers, Ex Cemeteries. P4489 Water Passenger Transportation, NEC. P5065 Electronic Parts and Equipment. P7011 Hotels and Motels. ..TP.- Types: COMP Company News. ..IX.- P6552, P4489, P5065, P7011. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGMB6ADWFT ..HL.- 930713FT 930713 Tomkins shares fall despite raised dividend (407) ..BL.- By RICHARD GOURLAY ..TX.- TOMKINS, the conglomerate which in December bought Ranks Hovis McDougall, the milling and baking company, increased earnings per share by 4 per cent last year but showed it has yet to convince investors of the merit of the acquisition. ..TX.- Reporting a year that demonstrated little consumer or industrial recovery in the UK or the US, Tomkins said pre-tax profits rose 29 per cent at Pounds 171.0m, on sales up 62 per cent at Pounds 2.06bn. ..TX.- Mr Greg Hutchings, chief executive, said RHM had neither enhanced nor diluted earnings in the period. ..TX.- Fully diluted earnings per share rose from 12.74p to 13.26p. The group is recommending a 4.545p final dividend - on a capital base enlarged to pay for the RHM acquisition - to make a 6.35p total, up 21 per cent. ..TX.- Although Tomkins' profits were in line with City expectations, the shares shed 11.5p to close at 212.5p. The fall follows a 16 per cent underperformance relative to the FT-All Share index since the start of the year. ..TX.- Mr Hutchings said it was not that institutional investors were criticising the acquisition as being less than good, 'it's just that they are saying 'prove it'.' ..TX.- Analysts said the share price fall reflected disappointment that Tomkins had given no more information on the extent of asset write-downs at RHM. Nor had the conglomerate produced evidence that RHM could be quickly turned around. ..TX.- Tomkins said operating margins at RHM were marginally lower on an annualised basis but that cost cutting measures this year should reverse the decline. Mr Hutchings said that in spite of closing four bakeries, which had removed about 8 per cent of baking capacity, RHM had not lost market share. 'There is not significant overcapacity left' in baking, he said. ..TX.- Tomkins finished the year with Pounds 120m of net cash. The group remained strongly cash generative and saw scope for reducing working capital at RHM. ..TX.- It did not see any signs of recovery in consumer or industrial confidence. But its high operational gearing would enable it to benefit when its markets did begin to grow strongly. ..TX.- Lex, Page 16; Details, Page 18 ..CO.- Companies: Tomkins. Ranks Hovis McDougall. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5084 Industrial Machinery and Equipment. P2041 Flour and Other Grain Mill Products. P6719 Holding Companies, NEC. ..TP.- Types: FIN Annual report. CMMT Comment & Analysis. ..IX.- P5084, P2041, P6719. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGMB6ADVFT ..HL.- 930713FT 930713 Probe widens as secret GM papers are found: Prosecutors look for link to VW production head (509) ..BL.- By CHRISTOPHER PARKES ..DL.- FRANKFURT ..TX.- GERMAN prosecutors are looking for links between Volkswagen's controversial new production director, Mr Jose Ignacio Lopez de Arriortua, and secret General Motors' documents found in a Wiesbaden apartment, according to legal officials. ..TX.- The investigation of the US group's claims that Mr Lopez and junior colleagues took confidential information with them when they defected to VW this spring took a new turn yesterday after confirmation from Adam Opel, GM's German subsidiary, that the discovery included details of a top-secret model it was planning. ..TX.- It also emerged that Mr Jorge Alvarez Aguirre, who lived in the apartment until recently, was formerly involved in Opel's new model policy through his job as head of Opel's advance purchasing department. ..TX.- Mr Alvarez was one of two Opel employees who switched to VW shortly after Mr Lopez, head of global purchasing at GM, joined the German company in March. A further five members of his US team also moved to VW at around the same time. ..TX.- 'It is not only a question of the papers we found. We also have to see if there is proof that Mr Lopez has anything to do with the matter,' Mr Georg Nauth, spokesman for the Darmstadt prosecutor's office, said yesterday. Interviews with VW and Opel employees were continuing, but the issues raised by the Wiesbaden discovery made it 'hard to say' how long the investigation would last, Mr Nauth said. There were many questions to be answered. For example: 'If Mr Lopez had asked to see or saw the papers.' ..TX.- Four boxes of documents had been discovered, 'which did not belong where they were found', Mr Nauth added. He refused to confirm that they included details of Opel's most important current project - a cheap mini-car codenamed the O-car. But that was not to say reports to that effect were wrong, he noted. ..TX.- The O-car is due for launch in the second half of this decade. The concept bears a striking resemblance to a projected 'people's car' announced since Mr Lopez's arrival by Mr Ferdinand Piech, VW chairman. ..TX.- Opel's plans for a super-lean works to make the vehicle, provisionally earmarked for Hungary, also closely match those unveiled recently by Mr Lopez for his homeland in the Basque country, northern Spain. Mr Lopez played a leading role in developing Opel's project, and it was his disappointment that it would not be built in Spain which led to him leaving GM and being appointed head of production at VW. ..TX.- VW, which last week stated that the Basque works would not be built 'at this time', yesterday repeated its claim that none of the documents was secret. A lawyer speaking for Mr Alvarez made a similar claim although he admitted he had not seen the papers. ..TX.- GM cautious on third quarter, Page 22 ..CO.- Companies: Volkswagen. General Motors Corp. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P3711 Motor Vehicles and Car Bodies. ..TP.- Types: PEOP People. ..IX.- P3711. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGMB6ADUFT ..HL.- 930713FT 930713 Producers strive to hold down prices as costs rise (383) ..BL.- By PETER MARSH, Economics Correspondent ..TX.- BRITISH manufacturers are holding down prices in an effort to rebuild sales, in spite of paying more for materials and fuel. ..TX.- Prices of factory-made goods for domestic sale rose 0.1 per cent during June, according to figures released yesterday by the Central Statistical Office. In the year to last month prices rose 4 per cent, the same as in the year to May. ..TX.- Materials and fuel purchased by manufacturers increased in price 7.8 per cent in the 12 months to June, compared with 7.5 per cent in the year to May. Seasonally adjusted, these prices rose 0.3 per cent during June. ..TX.- The figures confirm that the fall in sterling since last September's devaluation has yet to show up significantly in the prices that manufacturers are charging at the wholesale level. ..TX.- Manufactured goods excluding food, drink and tobacco - prices of which are thought to show underlying inflationary pressures - also showed little upward price movement in the past month. ..TX.- These goods rose in price 0.1 per cent during June. The year-on-rise of 2.6 per cent was the same as in the year to May. ..TX.- While the year-on-year increase in prices of all manufactured goods has edged up from the 3.5 per cent recorded in December, the measure for underlying inflation at the wholesale level has been fairly stable. It registered 2.4 per cent in December and has stayed at 2.6 per cent since February. ..TX.- In the year to last month, prices of petroleum products purchased by manufacturers increased 8.5 per cent. Prices of home-produced food rose 12.9 per cent and imported food 10.5 per cent. However these substantial increases were offset by subdued rises in prices of metals and other imported goods. ..TX.- Following the devaluation, the year on year rise in prices of materials and fuels bought by manufacturers reached a high of 8.4 per cent in March. Since then, however, inflationary pressures on the input side have been relatively muted. In April the year-on-year increase in these prices was 7.2 per cent. ..TX.- Currencies, Page 27 ..TX.- London stocks, Page 36 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3999 Manufacturing Industries, NEC. ..TP.- Types: COSTS Product costs & Product prices. ECON Economic Indicators. ..IX.- P3999. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGMB6ADTFT ..HL.- 930713FT 930713 The Lex Column: UK newspapers (251) ..TX.- Effective competition often involves doing what your competitors like least. On that basis, Mr Rupert Murdoch has delivered a dirty dig at Mirror Group Newspapers by launching a price war in the tabloid market. Just as MGN was beginning to recover its poise, it now faces the prospect of a long and bloody circulation war. Its knee-jerk response in cutting the Mirror's cover price to 10p for a day may have been an effective spoiler but hardly provides a sustainable long-term strategy. MGN's administrators now face a far trickier task in working out how to dispose of their 54 per cent holding. ..TX.- The biggest loser, though, may be the Daily Star. The timing is especially unfortunate given its parent, United Newspapers, is already having a rocky ride persuading shareholders to back a Pounds 190m cash call. Nevertheless, the muted response of United's share price is understandable. The Daily Star is only a small part of United's business while its core middle market newspapers are likely to emerge unscathed. ..TX.- As for News International, it can well afford the probable loss of Pounds 1m of revenue a week as it attempts to stimulate the Sun's flaccid sales. But past industry experience has shown that low prices are no substitute for editorial appeal. ..CO.- Companies: Mirror Group Newspapers. United Newspapers. News International. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2711 Newspapers. ..TP.- Types: CMMT Comment & Analysis. COSTS Product costs & Product prices. ..IX.- P2711. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGMB6ADSFT ..HL.- 930713FT 930713 The Lex Column: MFI (289) ..TX.- MFI's board seems content to wring its hands and blame economic conditions for the poor profits figures it turned in yesterday. That looks a little thick since the management picked up Pounds 11m in bonuses for successfully floating the company after a few weeks of improved trading in 1992. Doubtless MFI's board has had to struggle with difficult trading conditions over the past five years. But then, so has everybody else. Perhaps the bonus was simply a reward for good timing. ..TX.- MFI argues that devaluation had a disastrous impact on its business, yet interest rates are now four percentage points lower than at flotation and there are faint stirrings in the housing market. The dilapidated home improvement business would surely be a wasteland if sterling were still in the ERM and interest rates 10 per cent. The exit from the management buy-out thus leaves something of a nasty taste in the mouth. ..TX.- There are also reasons to be sceptical about the company's much-vaunted operational gearing. Consumers may be moving house a little more frequently, but they are loath to spend money on high-margin kitchen units which cannot easily be moved with them. Those tax increases already announced will hit MFI's blue collar customer base particularly hard. The sag in sales and margins which followed pressure from other DIY retailers earlier this year is also worrying. Even the most optimistic profits estimates leave MFI at a 30 per cent premium to the market. On that basis the market's love affair with recovery stocks is surely overdone. ..CO.- Companies: MFI Furniture Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5712 Furniture Stores. ..TP.- Types: CMMT Comment & Analysis. FIN Annual report. ..IX.- P5712. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGMB6ADRFT ..HL.- 930713FT 930713 The Lex Column: Merck (306) ..TX.- The uncanny symmetry between Merck and Glaxo continues to impress. The leading pharmaceutical companies in the US and Europe peaked against their local markets within a fortnight of each other in January 1992, after a bull run lasting the best part of a decade. Both shares have since fallen by 40 per cent. Now the unexpected resignation of Mr Richard Markham from Merck mirrors that of Mr Ernest Mario from Glaxo in March. Both were appointed over the heads of established candidates as heir apparent to a chairman approaching retirement. Their departure throws wide open the question of succession. ..TX.- Without a full explanation, it is difficult to believe Mr Markham's decision to bow out owes nothing to issues of strategy. A spate of management changes elsewhere in the industry suggests more general pressures - the more aggressive attitude of governments on drugs prices being a case in point. Merck has so far made a reasonable fist of adapting to tougher conditions. Its joint venture with Johnson & Johnson in over-the-counter medicines dates from 1989, for example, while Glaxo has yet to announce its plans in this area. ..TX.- That might explain the relaxed attitude of investors yesterday. But Merck has yet to prove that it can bargain successfully with bulk buyers of healthcare in the US. It remains to be seen whether the policy of discounting to defend market share introduced by Mr Markham is carried forward. Either way, Merck - like others in the industry - will remain under pressure to cut costs in the interest of earnings growth, even if that means management friction and the sacrifice of sacred cows. ..CO.- Companies: Merck and Co Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P2834 Pharmaceutical Preparations. ..TP.- Types: CMMT Comment & Analysis. PEOP People. ..IX.- P2834. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGMB6ADQFT ..HL.- 930713FT 930713 The Lex Column: Hard grind for Tomkins (313) ..TX.- Nine months after the acquisition of Ranks Hovis MacDougall, it is clearer than ever that the deal will make or break Tomkins' reputation. The trouble is the market has no firm feel which it will be, although a 5 per cent fall in Tomkins' share price yesterday, following a bout of underperformance, highlights its suspicions. If Tomkins can squeeze more value from RHM's stodgy dough then both confidence and a premium rating will be restored. That would enable the conglomerate to skip merrily on to new prey in a few years' time. With net cash of Pounds 120m at the year-end and the ability to milk yet more from its mature businesses, Tomkins should certainly have a strong launchpad. ..TX.- Yet worries about RHM may continue to undermine Tomkins' rating. The paucity of detailed information about RHM's progress does little to dispel doubts. Tomkins appears to have successfully managed the tricky task of maintaining market share while cutting baking capacity by 7 per cent. Combined with a surprising rise in market volumes, this has helped bring the supply-demand balance closer to equilibrium. The shedding of 2,000 jobs will also bring significant cost benefits. Still, judging by its thin contribution to Tomkins' results, RHM had still not reached the bottom of its cycle when it was bought. RHM's shareholders must be smiling at their good fortune. ..TX.- So far, Tomkins' response to the doubters has been: trust us. The company's fine financial record certainly commends it. But with Tomkins deriving little uplift from its existing businesses, the market is right to suspend judgment. ..CO.- Companies: Ranks Hovis McDougall. Tomkins. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5084 Industrial Machinery and Equipment. P2041 Flour and Other Grain Mill Products. P6719 Holding Companies, NEC. ..TP.- Types: CMMT Comment & Analysis. FIN Annual report. ..IX.- P5084, P2041, P6719. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGMB6ADPFT ..HL.- 930713FT 930713 No takers for the available tickets: The government has so far failed to attract private finance for public sector projects (1341) ..BL.- By JOHN WILLMAN ..TX.- The involvement of private capital in public sector projects could harness government and business together to build a new prosperity across Britain, Mr John Major told a Confederation of British Industry conference in May. ..TX.- The prime minister was referring to the private finance initiative launched in last year's Autumn Statement, to encourage the use of private investment for public projects. Mr Norman Lamont, the then chancellor, said the initiative would mobilise the private sector 'to meet needs which have traditionally been met only by the public sector'. ..TX.- Yet eight months after the Autumn Statement, the government has yet to announce a significant new public sector project which involves private finance. There is disenchantment among industrialists and financiers, who fear the initiative will run out of steam unless there is some early progress. ..TX.- The Autumn Statement promised several measures to encourage greater use of private finance for public projects: ..TX.- Joint ventures between the private and public sector were to be encouraged, with the government offering concessionary loans, equity participation and transfer of assets. ..TX.- The Treasury would relax its accounting rules for leasing to allow greater use of long-term leases. The private sector could then lease expensive equipment to the health service, for example. ..TX.- Financially free-standing projects that could cover costs by charging users would be allowed, even though they could in theory be financed more cheaply in the public sector. (In most cases, such projects would, in practice, be unlikely to go ahead because of Treasury restrictions on public borrowing.) ..TX.- There have been attempts to present projects such as the Heathrow Express rail link as evidence of a new partnership between public and private sector. However, this joint venture between the British Airports Authority and British Rail was first mooted in 1988, long before last year's Autumn Statement. ..TX.- The environment department's contribution to the private finance initiative has been to publish a list of urban development schemes seeking private sector partners. These are similar to dozens of other inner-city regeneration schemes in which public sector funds are used to prime the pump for private sector development. Building business parks and housing estates is hardly meeting 'needs which have traditionally been met only by the public sector'. ..TX.- And the Department of Health has relaxed the rules on leasing capital equipment in the health service. But requirements that the Treasury scrutinise half of all leases worth between Pounds 1m and Pounds 10m leave the rules too inflexible to attract the private sector, according to Mr Peter Jacobs, chief executive of Bupa, Britain's biggest private healthcare group. The initiative is likely to collapse 'if the private sector keeps facing blockages', Mr Jacobs warns. ..TX.- Mr Howard Davies, director-general of the CBI, said recently the whole initiative would be discredited 'unless real holes can be dug in the ground pretty soon'. ..TX.- Business people interested in the initiative complain that the Treasury is itself uncertain about the sort of contribution the private sector could make. ..TX.- According to one banker who has been involved in several infrastructure projects: 'The government does not understand how the private sector operates, what it's looking for in an investment project and how to attract investors.' ..TX.- An executive involved in the leasing business says that 'the Treasury still has a lot to learn. Its paper on leasing and risk transfer showed that they do not understand how the industry works.' The transfer of risk from the public to private sectors has been at the heart of the difficulties in making the private finance initiative work. The Treasury insists that a private sector company which builds a toll bridge, for example, must bear the risk that tolls might be insufficient to cover the costs. If the government accepts responsibility for bailing out the company, the project counts as public expenditure under UK public accounting rules. The Treasury's main - and understandable - concern is that raising private finance to fund public expenditure should not be a form of additional government borrowing. ..TX.- The Treasury accepts that there should be some sharing of risk in joint ventures. Its guidance for departments says that the legal agreements should set out in 'specific and clear terms . . . so that the risk which each party undertakes properly reflects a clearly agreed structure of risk and reward'. ..TX.- But the more the risk is transferred out of the public sector, the higher the return the private sector expects to earn. Keen though it is to see the initiative succeed, the Treasury is uncomfortable with the idea of putting sufficient public money into joint ventures to allow the private sector partner to earn a return on capital of 20 per cent or more. ..TX.- There are also disagreements over what sort of risks it is fair to transfer to the private sector. The Treasury expects government departments to demand the maximum transfer of risk to private sector partners: the partners are concerned to minimise the risk as far as possible to those factors under their control. ..TX.- In transport projects, for example, the private sector should be expected to take risks associated with design efficiency, cost and time overruns during the construction phase, and the efficiency of operations, according to Mr Peter Foy, senior partner at McKinsey, the management consultants. ..TX.- In his role as chairman of the transport group of London First, a business organisation set up to tackle London's problems, Mr Foy has identified a number of risks that the group believes the government needs to assume in joint transport ventures. These include responsibility for losses caused by planning delays, changes in design of the project imposed by public bodies and delays in getting legislative approval. ..TX.- 'Taking responsibility for these types of risk, which are clearly not within the control of the private sector, would be unacceptable to shareholders,' he says. ..TX.- In between these two extremes lie grey areas, says Mr Foy, where the government needs to help private sector operators manage revenue risks, perhaps by guaranteeing a minimum income (and maybe sharing in excess profits). It is in such areas that the greatest difficulties have been encountered in forming joint ventures in which the Treasury can be satisfied that risk has been substantially transferred to the private sector. ..TX.- A second significant obstacle to private and public sector partnerships is the Treasury requirement for competition for public sector contracts. This is a long-standing requirement in public sector contracts as a means of ensuring value for money, and fair competition. ..TX.- However, the requirement can be a disincentive to companies coming up with new or innovative proposals which, once adopted, must then go out to competitive tender for implementation. A company which invests its own money in devising a project could then find that a competitor wins the contract to build it. ..TX.- The government has promised to look into the intellectual property rights of project proposals, so that the companies which develop them can be paid for their efforts. ..TX.- A better solution, according to one banker who is keen to participate in joint ventures, would be for the government to make early progress on creating a stream of joint projects which the private sector can bid for. ..TX.- 'If there are several similar projects coming up, companies will be prepared to invest in a bid on the basis that they will win a contract sooner or later,' he says. 'But with one-offs or occasional contracts, they are less willing to risk their capital.' ..TX.- And that is the nub of the government's problem in convincing the private sector that it is serious about the private finance initiative. Unless it can launch some joint venture projects soon, private partners will become increasingly sceptical about its intentions. Dispelling the growing scepticism requires early progress if the initiative is to succeed. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9611 Administration of General Economic Programs. ..TP.- Types: CMMT Comment & Analysis. COMP Strategic links & Joint venture. RES Capital expenditures. ..IX.- P9611. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGMB6ADOFT ..HL.- 930713FT 930713 Personal View: Estonia draws up reformers' blueprint (761) ..BL.- By Dr LUCJA SWIATKOWSKI CANNON ..TX.- Estonia has assumed the pioneer position among the post-Soviet republics in implementing political and economic reforms. This is due to a large extent to the political consensus among its citizens about the concept and pace of reforms, as well as the determination of its current leadership to carry them out. These reforms, started in 1989, were much accelerated after the country regained its independence following the attempted Moscow coup of 1991. ..TX.- A new democratic constitution was adopted in June 1992 and free parliamentary elections were held in September. This resulted in the formation of the majority centre-right coalition government. In order to isolate itself from the economic chaos and inflation affecting Russia and other post-Soviet republics, Estonia introduced in 1992 its own currency, the kroon, pegged to the German D-Mark, and a stabilisation programme. This was a great success. However, a severe drop in industrial production caused by disruptions in inter-republic trade is threatening to overwhelm the Estonian economy with bankruptcies and unemployment. ..TX.- To deal with the issue, the Estonian government has made restructuring and privatisation of state-owned enterprises its main task. So far, progress in privatising large enterprises has been slow, about 30 per cent of services and small enterprises have already been auctioned. ..TX.- This spring, the Estonian government elaborated and then adopted in June a new, comprehensive law to integrate and simplify privatisation. The re-establishment of independence was legitimised by claiming continuity with the prewar Republic of Estonia. In privatisation, this has meant a policy based on restitution of property lost in 1940 after the country was incorporated into the Soviet Union and on compensation for exploitation by the Soviets. ..TX.- To carry out the programme, an elaborate system of vouchers was instigated. The restitution scheme attracted more than 200,000 claims, of which about 15 per cent have been resolved. Where it has been impractical to return property in kind, compensation vouchers are issued to claimants. In addition, 'work contribution' vouchers are given out, based on years of work in Estonia between 1945 and 1991. These are interchangeable and can be used in the privatisation of housing, land, collective farm implements and state-owned enterprises, or redeemed for shares in the compensation fund. ..TX.- While the voucher system has been implemented, commercial sales of property are proceeding on a pilot basis, with the Estonian Privatisation Agency having already sold 30 large, state-owned enterprises. This success bodes well for Estonia because of the interest shown by foreign, mainly Scandinavian and German, investors. ..TX.- The aim of the new privatisation law is twofold. The first is to spell out the principles for the integration of these two aspects of privatisation policy: the use of citizen vouchers and commercial sales. A small percentage of shares, determined individually for each company, will be reserved for sale in exchange for citizen vouchers. The majority of shares will be sold for cash to strategic investors, in the tender for sale of 52 state-owned enterprises, announced in May. ..TX.- The second central issue of this law is the creation of the State Property Agency. This will combine separate small and large enterprise privatisation operations and include a restructuring unit which will assume authority over all state enterprises and direct efforts to prepare them for privatisation. ..TX.- Separate laws deal with the privatisation of housing, and of collective farms, three-quarters of which have been dismantled on the basis of resolved restitution claims or leases based on anticipated restitution. Another law creates a compensation fund, the shares of which can be obtained for vouchers. These laws create the legislative framework for privatisation and hopes are high for rapid progress. ..TX.- Estonia is ahead, not only of the post-Soviet republics but also of some east European countries, in its efforts to build a demo-cratic society and a free market economy. ..TX.- It has a democratic consensus on the direction of its reforms, a legitimate government, a sound currency, and a credible economic transformation and privatisation programme that aptly balances the needs of foreign investors with the desire for participation and a sense of justice of the local population. Fulfilment of its demonstrable promise could serve as a model to others in the former Soviet Union who have to travel the difficult and uncertain road of return from the communist system. ..TX.- The author was between March and May 1993 an adviser on privatisation to Liia Hanni, Estonia's deputy prime minister ..CN.- Countries: EE Estonia, East Europe. ..IN.- Industry: P9611 Administration of General Economic Programs. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9611. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGMB6ADNFT ..HL.- 930713FT 930713 Leading Article: US-Japan trade (491) ..TX.- WE AGREE,' declared last week's communique from the summit of the seven leading industrial countries 'that no recourse should be made to initiatives and arrangements that threaten to undermine the multilateral, open trading system.' After uttering these fine words, the US and Japanese governments promptly announced agreement on a new 'negotiating framework' to resolve the bilateral issues that divide them. Communiques are often ignored, but their promises usually last more than a few hours. ..TX.- The framework does not, at least so far, either establish quantitative goals for changes in Japanese macro-economic policy or lay down precise criteria by which the opening of the Japanese economy can be assessed. The two agreed aims are simply a reduction in Japan's current account surplus and the opening of markets. ..TX.- Talks on the latter are to be subdivided further into Japanese public procurement, particularly of foreign computers, supercomputers, satellites, medical technology and telecommunications; regulatory reform, which covers financial services, insurance, the distribution network and competition policy; 'other major sectors', particularly cars and car parts; economic harmonisation, including intellectual property; and the monitoring of agreements. ..TX.- One question is whether the objectives make sense. The answer is that they do so only up to a point. Faster growth in Japanese demand is desirable, for example, but a smaller external surplus may well not be. ..TX.- A second question is whether the 'objective criteria' the Japanese have proposed as a way of assessing the openness of their markets will turn into precise target, or not. Probably they will. Results-oriented trade would then become managed trade. ..TX.- A final question is whether these proposals are consistent with the summit's declaration in favour of multilateralism. They are not, in at least three respects: first, participants other than the US and Japan have been excluded; second, the discussion is being conducted outside the purview of the Gatt; finally, the agenda is dictated by specific US concerns. ..TX.- Many in the US believe that their concerns are more legitimate than those of other countries. They are mistaken. Judged by the ratio of their bilateral deficits to their total trade with Japan, many countries have a bigger problem, among them being Hong Kong, Taiwan and the European Community as a whole. ..TX.- Other countries should address their own demands to Tokyo. The US and Japan would probably reply that they are not powerful enough for a seat at the table, which would at least confirm the emptiness of the summit's declaration in favour of multilateralism. But perhaps the two powers would feel obliged to agree. Then the discussion would involve all of Japan's trading partners, not just the US. This particular cartel needs to be broken right now. ..CN.- Countries: QR European Economic Community (EC). US United States of America. JP Japan, Asia. CA Canada. ..IN.- Industry: P9611 Administration of General Economic Programs. P9721 International Affairs. ..TP.- Types: CMMT Comment & Analysis. ECON Balance of trade. ..IX.- P9611, P9721. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGMB6ADMFT ..HL.- 930713FT 930713 Observer: Neighbours (93) ..TX.- 'Is Charlie in?' asked the morning caller as the door was opened to him by a sad-faced woman. 'You mustn't have heard,' she faltered. 'Soon after he came in from the pub last night, he collapsed and died.' ..TX.- The visitor staggered. 'I'm terribly sorry,' he said. 'Were you with him when it happened?' The widow nodded. ..TX.- 'Well, did he say anything about lending me a tin of red paint?' ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P99 Nonclassifiable Establishments. ..TP.- Types: NEWS General News. ..IX.- P99. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGMB6ADLFT ..HL.- 930713FT 930713 Observer: Gone missing? (255) ..TX.- It's hard to believe, but it sounds as if something rather important may be missing from the new Battle of Britain memorial atop the white cliffs of Dover. ..TX.- The granite statue of a young pilot, which was unveiled last Friday with a minimum of publicity by the Queen Mother, is meant to be a permanent tribute to those who served in the most famous air battle of the Second World War. ..TX.- Although it has taken some time to raise the money, there is no shortage of big names on the Battle of Britain memorial trust notepaper. Robin Leigh-Pemberton, who stepped down as governor of the Bank of England at the start of the month, is patron, air chief marshall Sir Christopher Foxley-Norris is president, and the trustees include defence minister Jonathan Aitken and Lord Tebbitt, a former chairman of the Conservative Party. ..TX.- Hence it could be rather embarrassing for all involved if a couple of famous names really have gone missing. According to one old airman who attended the ceremony, squadron leader Boleslaw Drobinski, the badges of the 302 and 303 Polish squadrons are not among the 66 squadrons which decorate the memorial. The 303 squadron, which Drobinski commanded, was probably the most famous of all foreign squadrons serving with the RAF. ..TX.- Hard to believe that such a high-falutin' lot could have committed quite such a resounding faux-pas. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8412 Museums and Art Galleries. ..TP.- Types: NEWS General News. ..IX.- P8412. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGMB6ADKFT ..HL.- 930713FT 930713 Observer: Reverse charges (175) ..TX.- While police chiefs may prove easy pickings when it comes to stealing mobile telephones, travelling locksmiths can be a tougher prospect. ..TX.- Witness the one who had his phone nicked soon after being set up in business by the Prince's Youth Business Trust. ..TX.- Distraught at the loss, which cut him off from his main source of orders, he used another phone to get through to his own number and begged for the return of the instrument, offering Pounds 50 and no questions asked. The line went dead. ..TX.- But his wife had an idea. She called the number, asked the man who answered if he was a locksmith, then on being told 'yes' said she'd lost the key to her flat and would he come and help. After bidding the price up to Pounds 65, the man agreed. ..TX.- When he arrived, the waiting police posse took him off to the lock-up. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7699 Repair Services, NEC. ..TP.- Types: NEWS General News. ..IX.- P7699. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGMB6ADJFT ..HL.- 930713FT 930713 Observer: Artistic licence (185) ..TX.- Dyed-in-the-wool opponents of the Channel Tunnel will be happy to hear that there will soon be one less reason to use it. ..TX.- From September, it will no longer be necessary to cross into former enemy territory to inspect the Bayeux tapestry because a rather good replica resides much closer to home in Reading. ..TX.- The Museum of Reading, which is soon to be reopened, is planning to show off a 230ft Victorian replica of the famous eleventh-century tapestry recording William the Conqueror's invasion of England in 1066. The replica, presented to Reading a century ago by a patriotic alderman, is said to be a remarkably good copy. ..TX.- However, it suffers from one defect. The Victorian embroideresses made the naked male warrior put on a pair of trunks and an overly-endowed stallion was cut down to size and appears as a gelding. ..TX.- If you want to see all the naughty bits, a trip across the channel will still be necessary. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8412 Museums and Art Galleries. ..TP.- Types: NEWS General News. ..IX.- P8412. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGMB6ADIFT ..HL.- 930713FT 930713 Observer: Stay young (126) ..TX.- Catch them while they are young, is one of the oldest marketing ploys around. But keeping up with teenage mores is no easy task judging by the latest intelligence from that estimable US trade publication Adweek. ..TX.- Its latest issue includes a list of current youth crazes, as identified by consultants BKG Youth Inc. They range from Al Gore, capital punishment, mothers, intelligence, the environment, to taking big risks, lacrosse and coloured denims. ..TX.- No doubt the more entrepreneurial types will be able to devise a marketing strategy by capitalising on the above fads, but Observer would welcome any money-making suggestions. ..CN.- Countries: US United States of America. ..IN.- Industry: P8732 Commercial Nonphysical Research. ..TP.- Types: NEWS General News. ..IX.- P8732. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGMB6ADHFT ..HL.- 930713FT 930713 Observer: A family affair (205) ..TX.- One person seems to have been overlooked in all the gossip about who will take over the presidency of the European Bank for Reconstruction and Development. Jacques de Larosiere, governor of the Bank of France, may be the natural front runner in the eyes of the French government. But getting the nod from Madame de Larosiere may be a different matter. ..TX.- De Larosiere - due to retire from the Bank of France at the age of 65 next year - would certainly have the gravitas Jacques Attali lacked, but his wife may have other ideas. The owner of a chateau in Picardy, she played a strong role in persuading her husband to return to France in 1987 from his post in Washington as IMF managing director - a job he swapped with his countryman Michel Camdessus. ..TX.- However, central bankers do soldier on, so it would be odd if de Larosiere didn't accept the London job, if offerred. In which case expect Jean Claude Trichet, top man at the French Treasury, to get the Bank of France job. ..CN.- Countries: LU Luxembourg, EC. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: PEOP Appointments. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGMB6ADGFT ..HL.- 930713FT 930713 Leading Article: Private pensions (494) ..TX.- SHOULD Britain's state pensions be privatised? ..TX.- If Mr Frank Field, the back-bench Labour MP, did not already know how sensitive raising this topic would be, he found out at the weekend. The Labour leadership immediately dismissed him as a maverick for proposing radical reforms. Even Mr Peter Lilley, the Conservative social security secretary, has not dared to question the state pension openly in his current review of the welfare state, though he did welcome Mr Field's contribution to the debate. ..TX.- Mr Field is to be congratulated for airing the issue for three reasons. First, the state pension is already below the poverty line and will become increasingly inadequate as a basis for retirement since it is increased in line with inflation rather than earnings. Second, the growth of occupational pensions and other forms of savings means it is no longer necessary for the state to provide pensions for all to combat poverty in old age. Third, providing state pensions to all in the long run is probably unsustainable. The current cost of over Pounds 30bn a year will rise inexorably as the population ages. ..TX.- Although this demographic time-bomb will not explode until early next century, that is no excuse for putting off decisions. Since pensions schemes cannot be reformed quickly, the sooner politicians debate alternatives the better. ..TX.- Any reform would, of course, face serious hurdles. The biggest would be to find ways to encourage people to take out private pensions while at the same time protecting those who were too poor to save for their old age. ..TX.- Mr Field's solution is to make private provision compulsory and for the government to contribute to the private pensions of those not in work. Another solution could be to bribe people to opt-out of the state scheme by reducing their National Insurance Contributions - the approach taken by the government when it decided to phase-out the state earnings related pensions scheme in the mid-1980s. ..TX.- The main drawback with both approaches is that they could cost the exchequer large sums of money in the short-run, with the full savings accruing only after several decades. ..TX.- A cheaper option would to announce that the state pension would gradually wither on the vine. Such an approach would rely on people receiving a sufficient motivation to save for their pensions from the generous tax-reliefs that are available. Those who still did not save enough for a minimum retirement income would be protected by a means-tested safety net. ..TX.- There may be other, more attractive alternatives. But they will not be devised and get the public hearing they need unless there is a full and open debate on the subject. That debate should not be left to a few brave souls like Mr Field. Front-bench politicians must join in. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8651 Political Organizations. P9441 Administration of Social and Manpower Programs. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P8651, P9441. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGMB6ADFFT ..HL.- 930713FT 930713 Leading Article: Brinkmanship in Baghdad (503) ..TX.- IF NOTHING else, President Saddam Hussein is consistent. Since the invasion of Kuwait nearly three years ago, the Iraqi leader has persistently refused to obey UN Security Council resolutions. Time and again he has challenged the authority of the world body. On occasion defiance has been a prelude to retreat but, when he has proved inflexible, the Gulf war allies have had, jointly or individually, to consider a military response. ..TX.- The justification for such a response under international law needs to be fully demonstrable, because it is vital to act under the authority of the UN and to maintain, so far as possible, the political cohesion of the international alliance which was created to force Iraq out of Kuwait. That legality and political cohesion were stretched beyond the limit by the US missile strike on Iraqi intelligence headquarters in Baghdad last month. The attack, in retaliation for an alleged plot to assassinate former President George Bush, was justified by Washington under a country's right of defence provided for by Article 51 of the UN Charter. Several of America's allies expressed no more than 'understanding' for the raid. Others were deeply sceptical about the reasoning behind it, sensing that it owed more to President Clinton's domestic difficulties. ..TX.- There should be fewer doubts at the UN or in Baghdad about the consequences of the latest confrontation with the Iraqi leader. As part of its programme to deny Iraq weapons of mass destruction, UN teams have sought to install cameras at two missile testing sites south-west of the capital. Although, under the terms of the ceasefire resolutions, Iraq was permitted to retain missiles with a range of less than 90 miles, UN officials rightly suspect that Iraq would use its test facilities to develop weapons with a longer range. They want to make sure that Iraq has no such opportunity. ..TX.- Iraq argues that by installing cameras the UN would be violating its sovereignty and this action could be used subsequently as a pretext for shutting down other factories used for industrial purposes. Neither argument carries weight and by refusing to allow the remote-control cameras to be introduced, Iraq only deepens suspicions about its intentions. ..TX.- Unlike the American missile attack last month, the present confrontation is limited to two sites and one issue. The buildings housing the Iraqi test facilities are clearly grouped and the Iraqis know precisely what is required of them. The permanent members of the Security Council might reasonably argue that Saturday's refusal by Iraq even to allow inspectors to seal the missile sites while negotiations continued provided justification enough for military action. ..TX.- Even so, they must be mindful of the need to explain and justify. Once that is done, the responsibility of any subsequent military action belongs to Saddam Hussein. He must learn to expect consistency from the UN. ..CN.- Countries: IQ Iraq, Middle East. ..IN.- Industry: P9711 National Security. P9721 International Affairs. ..TP.- Types: CMMT Comment & Analysis. RES Facilities. ..IX.- P9711, P9721. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGMB6ADEFT ..HL.- 930713FT 930713 The hole in our pocket: The chancellor's dilemma, an inside view (1158) ..BL.- By BILL ROBINSON ..TX.- The Treasury expects to borrow Pounds 50bn this year. Yet only three years ago, in his March 1990 Budget, then-Chancellor Major expected a balanced budget for 1993-94 after giving away Pounds 3bn in tax cuts. ..TX.- What has caused this rapid deterioration in the public finances and can it be reversed? ..TX.- Some blame excessive public spending ahead of the election. On this view, the deficit will not be cured until what was given away then is clawed back by further spending cuts. ..TX.- Others claim the main problem is the recession, which pushes up social security payments irresistibly while reducing tax receipts. On this view, much of the deficit will melt away as the recovery gathers strength. ..TX.- A third factor, less widely recognised, is an unexpected erosion of tax revenues because of policy changes, such as the introduction of independent taxation, new tax breaks for savings, and generous carry-back of losses for corporation tax. ..TX.- There is a lively debate among forecasters - including the Seven Wise Men and the OECD - about the respective importance of these factors, on which their policy recommendations depend. If the deficit is mainly due to the recession, it will disappear in the upturn. If not, action must be taken to correct it. ..TX.- Unfortunately, you can only quantify the effect of the recession by comparing the actual outturn with a hypothetical no-recession scenario. ..TX.- That gets you straight into the world of economic models, the debate about the underlying growth rate of the economy, and the extent to which output is currently below trend. Economists differ sharply on these issues and about the effect of output on tax and spending. ..TX.- To avoid these problems, we can adopt a much simpler approach, which is to compare the latest official revenue and spending projections for 1993-94 with those made in March 1990. That date was the last occasion on which the government's fiscal plans showed the economy still on course for a balanced budget in the medium term. ..TX.- The comparison shows how much of the extra borrowing is due to extra spending and how much reflects lost tax revenue. We can roughly quantify the effect of the recession on tax revenues, even though we do not know the size of the output gap, because we do know that we have lost nearly 5 per cent of output compared with earlier plans. Since tax revenue depends, other things being equal, on the level of output, that implies a 5 per cent loss of revenue, worth some Pounds 11bn. ..TX.- The remaining Pounds 13bn of lost revenue must be attributed to tax changes that were not forecast in 1990. ..TX.- On the spending side, we know that the social security budget bears the brunt of the recession. If we assume that all the extra social security spending (compared with previous plans) is due to the recession, we get a rough idea of how much of the extra spending is recession-induced. ..TX.- We find that planned social security spending for 1993-94 has been revised upwards by Pounds 11bn since 1990. (Although the published 1990 spending plans do not include a breakdown by spending department beyond 1992-93, we can use the rate of growth of social security spending published in the 1991 plans to fill in the missing number.) ..TX.- Since total public spending has been revised upwards by no less than Pounds 30bn, it is tempting to conclude that discretionary spending must have risen by Pounds 19bn. However, this ignores a very important item of unavoidable spending: the interest charges on past borrowing. ..TX.- When public borrowing goes up, whether because of recession or because of extra discretionary spending, debt interest charges also rise. The deterioration in the public finances has brought about a sharp rise in the government's outstanding debt, and hence in the interest accruing on it. ..TX.- Strictly speaking, some of that in-crease should be scored as discretionary, since it is past spending decisions as much as the recession that have pushed up today's debt interest bill. On the other hand, the government has no discretion about paying the bill today. When debt interest charges go up, it is an irresistible claim on the public purse, just as it is when rising unemployment pushes up social security claims. ..TX.- Which brings us to the central issue. The whole point of trying to calculate how much of the rise in borrowing has been due to the recession is to estimate how much will be automatically reversed by economic recovery. ..TX.- ln this context, it is immaterial why the extra debt interest charges have arisen. The point is they are an extra charge on the public purse which is both irresistible and, unlike social security spending, irreversible. Compared with its March 1990 plans, the government will have Pounds 110bn of extra debt by the end of this year. At today's interest rates, that is some Pounds 8bn of extra public spending on debt interest charges. ..TX.- These calculations, summarised below, are intended to cast light on two issues: how we got into this mess; and how we might get out of it. ..TX.- The figures suggest that our problems are two-fifths due to the recession, one-fifth due to extra discretionary spending and one-fifth due to missing tax revenue. The missing-fifth is the combined effect of all these factors on the debt interest bill. ..TX.- Getting the public finances back to the healthy state shown in the 1990 plans requires some Pounds 11bn of spending cuts and Pounds 13bn of tax increases. But even that would not eliminate the residue of debt interest charges resulting from a permanently higher national debt. Nor is it by any means certain that all the recession-induced social security spending will simply disappear in the upturn. The social security budget has tended to ratchet upwards in the past, leaping ahead in recessions but not falling back in the subsequent re-covery. ..TX.- In the first Budget of 1993, Mr Norman Lamont proposed tax increases which will raise an extra Pounds 10bn of revenue by 1995-96. Mr Clarke has hinted that he may do more in the November Budget. So the problem of revenue shortfall is being addressed. However, it cannot be right to tackle a deficit which is partly caused by excessive spending simply by raising taxes. Action is also needed on the spending side. Yet none has so far been proposed. Why not? I shall try to explain next week. ..TX.- The author is former director of the Institute for Fiscal Studies and was special adviser to the former chancellor, Mr Norman Lamont. ..TX.- --------------------------------------------------- How and why borrowing has changed --------------------------------------------------- Changes in Plans for 1993-4 between 1990 and 1993 (Pounds bn) --------------------------------------------------- Due to Recession Other factors Total --------------------------------------------------- Revenue -11 -13 -24 Spending 11 19 30 --------------------------------------------------- ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGMB6ADDFT ..HL.- 930713FT 930713 Letter: Break with model habit will improve forecasting results (281) ..BL.- From Prof PAUL ORMEROD ..TX.- Sir, The interchange between Professors David Currie and Tim Congdon in your letters columns (July 8 and 2 respectively) about forecasting records points to an important conclusion. ..TX.- There are many nuances within the body of orthodox macroeconomics which are the subject of legitimate disagreement. Both the particular discussion between David Currie and Tim Congdon and the more general flurries of argument between the Seven Wise Men who advise the Treasury illustrate this point. ..TX.- But whatever approach is used, whatever the particular emphasis given to this or that point of theory, the forecasting record of the models is poor. ..TX.- David Currie makes the point very clearly when he writes: 'Differences between individual predictions are typically small compared with forecasting mistakes.' ..TX.- The poor short-term forecasting record of these models has persisted since their inception in the UK some two decades ago. Similar problems exist with similar models in other countries. ..TX.- On any normal scientific criterion, the conclusion would be drawn that conventional macro-economics, whether Keynesian or monetarist, does not offer an adequate description of the behaviour of developed economies. ..TX.- It is difficult, both psychologically and intellectually, to set aside a conventional paradigm. But as a former macro-modeller myself, I have come to the view that it is possible. And it is also necessary, for until economists are prepared to do this and to investigate alternative methodologies, their ability to understand the world will not improve. ..TX.- Paul Ormerod, ..TX.- 35 The Avenue, ..TX.- Kew, ..TX.- Richmond, ..TX.- Surrey TW9 2AL ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9611 Administration of General Economic Programs. ..TP.- Types: NEWS General News. ..IX.- P9611. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGMB6ADCFT ..HL.- 930713FT 930713 Letter: Changes that threaten employment prospects of disabled (243) ..BL.- From Dr STEPHEN DUCKWORTH ..TX.- Sir, David Hunt, secretary for employment, has announced proposed changes to special schemes for disabled people in employment ('Grants to employers on disabled to be halved', June 26). This signalled an end to the Disabled Person's (1944) Employment Act. The fact that people qualifying for special schemes will not under the proposals need to be registered - which they currently are under the act - implies the 'quota' requiring 3 per cent of a workforce to be registered disabled people is dead. Does this indicate the government's intention to introduce new laws to protect the rights of disabled people? ..TX.- Other proposed changes have not been thought through. Currently, disabled people who need extra equipment or services to work receive them with no additional cost to the employer. After April 1994, employers will be required to pay 50 per cent. This may be acceptable to large companies but what about self-employed people and small companies which have just survived the recession? ..TX.- My company employs five people and has eight associates; all but one are highly qualified, skilful disabled people. The other is severely able-bodied. What will I tell them if these proposals put me out of business? ..TX.- Stephen Duckworth, ..TX.- Disability Matters, ..TX.- Berkeley House, ..TX.- West Tytherley, Wilts ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9441 Administration of Social and Manpower Programs. ..TP.- Types: NEWS General News. ..IX.- P9441. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGMB6ADBFT ..HL.- 930713FT 930713 Letter: Relatively imprecise about kin (297) ..BL.- From Mr HELMUT KULITZ ..TX.- Sir, I've read with satisfaction and joy that Donald Duck and his kin - plus a certain mouse called Mickey - have returned to Chinese news stands. That's good news. However, I'd like to call your attention to a number of imprecisions ('Mickey Mouse squeaks back into Beijing on best behaviour', international and early UK editions): ..TX.- 1. Donald Duck does not have 'exuberant offspring' because, of course, Hughie, Dewey and Louie are his nephews, not his sons. They were sent to Mr Duck by a certain cousin Della in 1937. ..TX.- 2. You call Mr McDuck, the money-worshipping arch-capitalist, 'Dagobert' by first name. In fact, his name is Scrooge McDuck, while 'Dagobert' is the Christian name chosen for the German edition. I don't think that you, even as a leading paper in economic and financial affairs, will get invited to Mr McDuck's billionaires' parties if you continue to use his name wrongly. ..TX.- 3. You mention Mr McDuck's 'habit of bathing in piles of dollar bills'. This is not entirely correct. Mr McDuck does in fact swim in heaps of money (three cubic hectares, to be precise). However, he relishes coins as much as or more than bills. Allow me to draw your attention to 'Only a poor old man' (1952): 'And I like to dive around in my money like a porpoise] And burrow through it like a gopher] And toss it up and let it hit me on the head]' All this would be very difficult if he had nothing but dollar bills. ..TX.- Helmut Kulitz, ..TX.- Gudenauer Weg 134-136, ..TX.- 63127 Bonn, Germany ..CN.- Countries: CN China, Asia. ..IN.- Industry: P2721 Periodicals. P7812 Motion Picture and Video Production. ..TP.- Types: NEWS General News. ..IX.- P2721, P7812. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGMB6ADAFT ..HL.- 930713FT 930713 Letter: Experience of crime (184) ..BL.- From Mr LEN BISHOP ..TX.- Sir, I represent the electoral division of Kent County Council in which the Police Authority HQ is located. Immediately adjacent to it are two large estates, both of which suffer from serious deprivation and, not unconnected, petty crime. ..TX.- While home secretary Michael Howard was no doubt right when he told the Association of Chief Police Officers that farmers, head teachers and shopkeepers all knew something about crime ('Howard rejects criticism of police authority reform', July 9), I am certain crime and fear of crime are more likely to be part of the everyday experience of my constituents than of the groups he names. ..TX.- However, I doubt that his proposed reforms will lead to any of my constituents being asked to make the short walk up the road to join the Kent Police Authority to share their experiences with Mr Howard's political appointee friends. ..TX.- Len Bishop, ..TX.- Kent County Council, ..TX.- County Hall, ..TX.- Maidstone, Kent ME14 1XQ ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9221 Police Protection. ..TP.- Types: NEWS General News. ..IX.- P9221. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGMB6AC9FT ..HL.- 930713FT 930713 Letter: Flaws in argument on wage checks (234) ..BL.- From Mr IVAN K COHEN ..TX.- Sir, Peter Ingram (Personal View: 'Give shareholders more power over pay', July 8) suggests that one way of providing a greater check on wage inflation is through greater control being exerted by shareholders, particularly the large institutional shareholders. While greater shareholder activism is to be encouraged in general, Mr Ingram's argument is flawed by failing to recognise the full chain of responsibility. Institutional shareholders, especially the pension funds, are responsible in turn to those on whose behalf they manage these large asset holdings. In most cases, these are the very people Mr Ingram suggests should have their wage increases checked by institutional shareholders. While it is true that fund managers are not as accountable as might be optimal, any wage increases that do occur will usually result in a greater inflow of contributions to the institutional shareholders. Mr Ingram must be a microeconomist, as his arguments fail to acknowledge the whole panorama. ..TX.- Besides, if we need to address the 'problem of wage growth outstripping productivity' we would be better served by concentrating on the productivity side of the issue. ..TX.- Ivan K Cohen, ..TX.- lecturer in finance, ..TX.- The Management School, ..TX.- Imperial College, ..TX.- 53 Prince's Gate, ..TX.- Exhibition Road, ..TX.- London SW7 2PG ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: NEWS General News. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGMB6AC8FT ..HL.- 930713FT 930713 Unusual show of strength: Japan's election poses questions about the bureaucracy's role (1127) ..BL.- By CHARLES LEADBEATER ..TX.- Mr Kiichi Miyazawa, Japan's prime minister, apparently mortally wounded by a no-confidence vote against him two weeks ago, turned the conventional wisdom of Japanese politics on its head last week: he took a decision. ..TX.- Not only was the decision significant - to make concessions to secure a framework for trade talks - but Mr Miyazawa did so despite opposition from one of the most powerful arms of Japan's bureaucracy, the Ministry for International Trade and Industry. ..TX.- Mr Miyazawa bypassed Miti with a personal letter to President Bill Clinton to reopen talks with the US, stalled in Tokyo 10 days ago. Miti was furious, but worse was to come. ..TX.- Mr Miyazawa repeatedly intervened last week to keep negotiations going. His boldness sent a shudder through the ordered world of Kasumigaseki, the Tokyo district between the Imperial Palace and parliament, which is home to Tokyo's shabby ministries. ..TX.- The life of the elite bureaucrats of Kasumigaseki rests upon a clear division of labour: they decide the policies, the politicians present them; the bureaucrats worry about Japan's long-term interests, the politicians worry about getting re-elected; the bureaucracy prides itself on probity, the political system is lubricated by corruption. ..TX.- It was widely assumed that this division of labour would be reinforced by the political turmoil in the run-up to next weekend's general election, which was triggered by the no-confidence vote. ..TX.- The prime minister was supposed to be a lame duck. The splits in the Liberal Democratic party ranks mean the next government is almost certain to be a coalition, preoccupied with political reform. So, many assumed, the bureaucrats would fill the vacuum by increasing their already prodigious power. ..TX.- Mr Miyazawa's sudden transformation into a man of action has sent the bureaucracy a warning. The political upheaval is not simply a challenge to the LDP's political dominance, it is threatening to rewrite the rules by which Japan has been governed since 1945. Under those rules, the LDP, in power for 38 years, has provided a political umbrella under which the bureaucracy can work untroubled by political interference. The LDP has benefited from its privileged access to ministries, and can press for concessions on behalf of constituents who may want building regulations relaxed or a bridge built, for instance. ..TX.- So the bureaucracy shares with the LDP a vested interest in maintaining the post-war framework which has given it such influence. ..TX.- Japan's top civil servants have been bred to rule. They are as powerful as their counterparts in France, while being more pragmatic. They are more practical than the British and less politicised than the Americans. ..TX.- The bureaucrats are also a closed society - the top echelons of the finance ministry, the pinnacle of the bureaucracy, are drawn almost exclusively from one department of Tokyo University, the law faculty. The graduates of the handful of universities - Tokyo, Waseda, Keio - which staff the upper posts of the civil service will move through their careers together at the same orderly pace, frequently crossing paths. ..TX.- Yet in spite of this incestuousness, ministries compete fiercely to guard their turf. The finance ministry, Miti and the foreign ministry run parallel, but sometimes conflicting, foreign policies which cover trade, finance and diplomacy. ..TX.- Each ministry has a mission. At the finance ministry it is to keep the public finances out of the clutches of spendthrift politicians. At Miti it is to promote the interests of Japanese industry. At the foreign ministry it is to shepherd Japan into a wider world role to match its economic dominance. ..TX.- Mr Noboru Hatakeyama, until recently the top official at Miti, believes the bureaucrats will steer Japan through the political turmoil ahead. He explained: 'This may be a fundamental change in the political structure but not in the bureaucratic system, which is very stable, with capable people who will serve their country even if there is are big changes in politics.' ..TX.- In the short term, bureaucrats may gain more power. A senior finance ministry official said: 'The bureaucracy is powerful when the politicians are divided. When they cannot agree they turn to us for policies. If Japan is now going to have rather unstable coalition government, with divisions between partners on policies, then the bureaucracy may have to do more by way of making policy.' ..TX.- Yet the idea that the civil service will emerge after the election as the main winner is probably mistaken, for two reasons. ..TX.- First, top officials admit big decisions can only be taken by democratically accountable politicians rather than unelected bureaucrats. As a rising stars at the finance ministry admitted: 'The bureaucracy will keep the wheels of government moving on small, routine decisions. But big issues, like tax reform or whether another pump-priming package is needed to boost the economy, require political leadership. The bureaucracy is too cautious to take such decisions on its own.' ..TX.- Mr Shinichi Kitaoka, professor of politics at Rikkyo University, put it this way: 'Japanese bureaucrats are generally a talented lot but the bureaucracy operates effectively only when it has good precedents. The end of the cold war and the turmoil in Japan is taking us into a world without precedents. Politicians must lead the way where no precedent exists, especially when decisions such as on trade have global repercussions.' ..TX.- Second, Japan's young reformers want to reorganise the relationship between politics and the bureaucracy, to put politicians firmly in the driving seat. Mr Ichiro Ozawa, one of the leaders of the Japan Renewal party, formed after splitting from the LDP, argues Japan needs two parties capable of governing to reinvigorate political debate. Mr Ozawa also believes Japan needs more decisive leadership. ..TX.- Mr Kazuo Aichi, another Japan Renewal member, said: 'Policies should be decided openly by political debate, not in ministries. Politicians should make decisions, set priorities and then the bureaucrats should carry them out.' ..TX.- There are few finer symbols of the system the reformers say they want to overhaul than Mr Miyazawa, a cautious former civil servant turned politician. They have poured scorn on his record and ridiculed his failure to introduce reforms. ..TX.- Yet as a lame duck, at the end of his career, he was suddenly freed last week from the inhibiting customs and practices with which he has lived. As a result he was able to take a decisive political initiative which would have been unthinkable a month ago when he was nominally the most powerful man in the country. In perhaps his final act as prime minister, Mr Miyazawa may have set an example of decisiveness which the reformers will struggle to match. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P8651 Political Organizations. P9111 Executive Offices. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P8651, P9111. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGMB6AC7FT ..HL.- 930713FT 930713 Arts: Lessons from the low life - Mary Rose Beaumont reviews Peter Howson in Glasgow (978) ..BL.- By MARY ROSE BEAUMONT ..TX.- It may sound somewhat premature for an artist to have a major retrospective at the age of 35, but Peter Howson has no difficulty whatever in filling the vast halls of Glasgow's McLellan Galleries with astonishing conviction. The earliest work in the exhibition is a small but vivid crucifixion; painted at the precocious age of six, it is prophetic of the subject of many of his mature paintings, in which a single figure is tied to a post, a humiliation actually undergone by a schoolfriend of the young Howson. This unpleasant event left an indelible memory of human cruelty which has never been exorcised and is indeed one of the constant motifs in his work. ..TX.- Howson attended the Glasgow School of Art from 1975-77. He did not flourish and left, ironically, to join the Scottish Infantry, which confirmed his early experience of male brutality, later recorded in several shocking pictures. Before returning to the School of Art, he did various menial jobs which gave him a unique insight into the low life of Glasgow, a fruitful source of inspiration ever since. His repertoire of characters, observed during those years, include boxers, dossers, derelicts and drinkers, all failures and rejects of our society. ..TX.- Scottish Expressionism came to the fore during the 1980s, and Howson, along with other graduates of the Glasgow School of Art, sprang to prominence in an exhibition called New Image Glasgow which alerted the world to a new, feisty, urban-based art, inspired to an extent by German Expressionism, but with a compassion for the underdog which was peculiar to Scotland. Baudelaire would have been delighted with this late 20th century celebration of 'the heroism of modern life'. ..TX.- Howson has been accused of excessive caricature. I think exaggeration is a better word, exaggeration of features and gestures to make his point: the bully boys look more bestial, the depraved look more delinquent, and the depressed look suicidal. Mob hysteria, such as at a football match, and Nazi salutes given by those taunting a trussed and helpless victim, are warnings against the kind of mindless violence with which we are becoming increasingly familiar. So-called 'Patriots', as we know, are easily transformed into right wing extremists. ..TX.- Howson's most impressive achievements are his triptychs, which have rightly been called apocalyptic. The world is his stage and human conflicts and desires his subjects. Violence on a global scale is endemic in these works, yet he can present sympathetically the predicament of a single individual: in 'The Three Faces of Eve', 1990, the three panels trace the downfall of a young woman from innocent childhood through the stew of a grotesquely decadent nightclub to her degradation and probable death in a graveyard. One is swept along by the narrative, marvelling at the technical skill with which the artist has deployed the complex compositions. ..TX.- Portraits are important to Howson. He has portrayed himself in many moods and aspects, but perhaps his most sustained achievement is the set of 25 etchings entitled 'Saracen Heads', 1988, a gallery of exquisitely drawn heads of types encountered in the Saracen pub close to his studio in Glasgow's East End. A series of 'Gallowgate Guests', 1991, in mixed media on paper, investigates another terrifying array of mostly evil-looking people, many of whom, like the pig-faced patriot have appeared in the paintings (to September 5). ..TX.- At the Glasgow Print Studio Adrian Wiszniewski is showing a new suite of ten prints in a variety of techniques entitled 'Sex and Matisse'. The prints play on a variety of themes by or of Matisse - a bather, an odalisque, a musical instrument in an interior and a photograph of the wheelchair-bound old man directing an assistant (an odalisque up a ladder) on the placing of his paper cut-outs. Wiszniewski also had in mind Madonna's book Sex, the titles of his prints wittily playing on the crossover between artist and artiste, between camp and vamp. ..TX.- Wiszniewski has abandoned his erstwhile dreaming youths for wall paintings covered with huge abstract marks made with a house painter's brush. Cursively written neon signs give full rein to his visual jokes and puns, such as 'If In Doubt, Use Black', a hoary art school cliche, or 'This Happy Void', a phrase with which the artist aims to counteract the prevailing fin de siecle gloom with bouncing optimism. ..TX.- The most recent work is in cut and painted perspex. Here too, the titles are important: 'Coffee and Cream' is a small white square set over a larger one in 'Cafe au lait'. A set of glorious carmine rectangles arranged according to the Fibonacci system is entitled 'Rosebud', a not so oblique reference to Citizen Kane. These seem to me to be key works, perhaps a turning point in Wiszniewski's career (to July 24). ..TX.- The William Hardie Gallery is showing Some Very New Paintings by David Hockney. The paintings are designated simply as 'The First (or Twenty First) VN Painting', and what is VN about them is that they are brilliantly coloured, almost entirely abstract paintings in the same mode as those currently on show in the Royal Academy Summer Exhibition. The works stem from Hockney's designs for Richard Strauss's Die Frau Ohne Schatten, performed at Covent Garden last autumn. As the hero of the opera is Barak the Dyer, Hockney conceived the settings in terms of colour, light and texture, which has translated very effectively into easel paintings. Those who think of Hockney as a consummate draughtsman and figurative painter will hate these VN paintings, but those who are prepared to follow him onto the stage will enjoy them for their lush ebullience (to August 27). ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8412 Museums and Art Galleries. ..TP.- Types: NEWS General News. ..IX.- P8412. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGMB6AC6FT ..HL.- 930713FT 930713 Arts: Sunset Boulevard - Theatre (922) ..BL.- By MALCOLM RUTHERFORD ..TX.- Given the imminent closure of City of Angels, which I described as the wittiest musical I have seen, I shall try to be exceptionally careful about any adjectives applied to Sunset Boulevard, the new show by Sir Andrew Lloyd Webber. ..TX.- Certainly 'witty' is not a word that comes to mind. The nearest it comes to a mordant joke is 'It's fun to see how bad bad writing can be.' There's also a rather good line about it taking tiles to tango. But perhaps the absence of wise-cracking, double meanings and sly asides is part of its charm. Possibly City of Angels failed to be appreciated in London because it seemed too clever by half, trying to combine a script with a musical. ..TX.- There is no such distraction in Sunset Boulevard, which is odd in a way because it comes from a similar Los Angeles set-up. The piece is based on Billy Wilder's 1950 movie and there is plenty of pain in the background. Firmly in the foreground, however, is a sentimental show with some of the stunning Lloyd Webber staging to which we have become accustomed over the years. ..TX.- In Patti LuPone, there is also a star. Ms LuPone played Evita on Broadway in what has always seemed to me Lloyd Webber's best work. As the faded movie idol, she is no less glittering now. It must be deliberate: the show does not effectively get under way until she appears, which is 20 minutes into the first act. Then Sunset Boulevard takes off. ..TX.- There is something else about Ms LuPone's first entry. She starts to sing almost without having bothered to talk: not just one song, but two. That is when you think what a clever composer Lloyd Webber is: the master of the slow build-up. The sound of a growingly confident orchestra fills the house and you are persuaded that the piece can never look back. ..TX.- The illusion lasts through the interval and into the start of the second act. As the curtain goes up again, the writer Joe Gillis launches with great panache into the song which has the same name as the show. It looks as if he has come to terms with living off the riches of Ms LuPone's Norma Desmond and is at home in her palatial house and (no doubt) palatial bed. ..TX.- Yet illusion it is. There is another, younger, poorer girl who also writes scripts. Joe falls for her and she for him. It is not the sentimentality that one objects to. After all, why not? It is the fact that Sunset Boulevard then begins to lose its power. All the momentum that has been built up starts to ebb away. The plot, never the strongest point, becomes ridiculous. It is a curious dramatic failing that the girl, having been invited to the great house, should depart with a line as banal as 'I can't look at you any more, Joe.' She leaves an extraordinary sense of anti-climax. ..TX.- Again, there is the strange business of Ms LuPone's protective butler. Quite late on he claims that he was her first husband and first director. Is it true? Does Norma Desmond remember or has she simply forgotten as she dreams of returning to stardom? Nothing of this is explained; nothing is developed. ..TX.- True, there are great set-pieces still to come, not least the finale, though even that is prefaced by the rather feeble shooting of Joe by Ms LuPone as he walks down her stairs. Still, she gets her last great moment. When the media arrive to cover the killing, the butler tells her that the cameramen have come to film her for a new movie. And, of course, she believes it: 'This is my life. Just a camera and all you wonderful people out there in the dark.' ..TX.- The sets, designed by John Napier, are as ambitious as you would expect in a Lloyd Webber spectacular, so much so that the production was postponed for two weeks because the machinery failed to work. Ms LuPone wears some wonderful costumes, the work of Anthony Powell, though the variety of gear worn by the extras does not make for great visual harmony in the chorus scenes. This can be distracting from the music. ..TX.- One song, in particular, stands out and passes the hummable test. 'The Perfect Year' is composed to go along side 'Auld Lang Syne' on New Year's Eve, and at one stage cleverly it does. What I admire about it is that it looks forward not back, even when the grounds for hope are slim. The words are simple, but touching. ..TX.- I also admired Kevin Anderson's performance as Joe, very casual at first, very straight and therefore a hard part to play. Yet the trouble with a role like this is that it doesn't lead anywhere. He's just a decent guy who isn't even allowed a dying word. It's a great pity that Noel Coward wrote the song 'Mad About the Boy' some years ago. Sunset Boulevard quotes it several times, and it would have fitted very well, for that largely is what the piece is about. ..TX.- Daniel Benzali sings very well as the butler, and he, too, has played in Lloyd Webber before. But it is too strange, phantomish a part to be convincing. Trevor Nunn directs. ..TX.- Adelphi Theatre (071) 344 0055 ..CN.- Countries: US United States of America. ..IN.- Industry: P7922 Theatrical Producers and Services. ..TP.- Types: NEWS General News. ..IX.- P7922. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGMB6AC5FT ..HL.- 930713FT 930713 Arts: A symphony of familiar effects - Concert (472) ..BL.- By DAVID MURRAY ..TX.- At the Barbican on Sunday, Radu Lupu gave an immaculate account of Beethoven's C minor piano concerto, the Third. The light gravity which is Lupu's special grace - everything judiciously weighted, nothing portentous - was ideal for the work. Though his platform demeanour was dour as ever, he lit up every movement, from his beautifully poised entry in the first movement to the playfully pointed Rondo. The Largo was a singing idyll. ..TX.- The London Symphony was conducted by Mstislav Rostropovich, who is regularly at his best when accompanying an artist he admires. Throughout, he was as attentive and sympathetic as could be. So he was, evidently, in the Fourth Symphony - 'The Morning Star Arises' - of Vyacheslav Artyomov, which was receiving its world premiere here through his good offices; that, however, was surely misplaced loyalty. Artyomov is yet another Russian composer of whom the West has scarcely heard, but he sounds most unlikely to acquire the almost-overnight fame of Gubaidulina or even Gorecki. ..TX.- His Fourth completes a tetralogy, after 'The Way to Olympus', 'On the Threshold' and 'Gentle Emanation'. The project has a Skryabinesque ring, confirmed by Artyomov's declaration that his music 'is an expression of my inner soul as a composer, and that is how it reflects the soul of the world'. Without wishing to contradict him (for what he writes is doubtless passionately felt), one may add that it also reflects the most ear-catching devices of recently fashionable Western composers. It is a 'symphony' of familiar effects, notable only for squeezing so many of them into one work. ..TX.- It took nearly three-quarters of an hour, of which a record number of minutes outstayed their welcome. It began with stormy churnings, like the more hectic passages in a Skryabin symphony, though there was a sudden echo of Holst's 'Uranus'. (At the close, 'Neptune' would come irresistibly to mind as well, and some Britten and Messiaen surfaced too.) There was an interlude of slow, ticking harps over menacing rumbles, with florid outbursts for unison strings; the climax lay agonisingly high for the violins. A skirling oriental march came and went like an irrelevant memory of Borodin. ..TX.- Eventually the music settled into middle-period Berio mode, almost immobile: long, sustained chords shifting only by a note or two at a time. A groundswell of 'celestial' binging and bonging which had threatened earlier - Artyomov's percussion is recklessly, self-defeatingly overdone - became a flood, and children's voices sang something uplifting (not identified in the programme). With only a construction of the loosest kind to shore them up, none of these effects seemed more than wilful hectoring. Not much fun. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7929 Entertainers and Entertainment Groups. ..TP.- Types: NEWS General News. ..IX.- P7929. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGMB6AC4FT ..HL.- 930713FT 930713 Arts: Today's Television (235) ..BL.- By CHRISTOPHER DUNKLEY ..TX.- At 8.30 BBC2 and ITV each launch a new run of a well established factual series. In Far Flung Floyd (BBC2) the most entertaining of today's television cooks, Keith Floyd, presents the first of seven programmes reporting on the food of the Far East. He begins in Vietnam, cooking a stew for an army volley ball team. In another series of The Cook Report (ITV) the increasingly large Roger Cook sets out again to stick his foot - figuratively and, when necessary, literally - in the doors of the world's villains. ..TX.- Switched At Birth is one of those productions for which the ITV chiefs would like to move 'News At 10'. An American mini series, it tells of the parents of a baby girl who discover that they cannot be her biological parents. It begins at 9.00, continues at 10.40 and ends tomorrow. ..TX.- In Scarfe On Class the cartoonist makes one of his periodic forays into Big Subjects: his previous programmes on art, sex and the afterlife will be repeated on forthcoming Tuesdays. In today's new programme he learns how to acquire the right accent, and even a lordship (9.50 BBC2). ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4832 Radio Broadcasting Stations. P4833 Television Broadcasting Stations. P4841 Cable and Other Pay Television Services. ..TP.- Types: TECH Services & Services use. ..IX.- P4832, P4833, P4841. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGMB6AC3FT ..HL.- 930713FT 930713 Arts: Neil Young - Pop (508) ..BL.- By ANTONY THORNCROFT ..TX.- The Gods seem to favour ageing hippies. Amazement that they have survived, touched with awe at the amount of death defying drugs they have absorbed, gives them an almost priestly authority. They also seem to have control over the elements. As Neil Young stepped on stage at Finsbury Park on Sunday night the rain stopped. It stayed cold, dank and dismal, but marginally the spirits perked up. ..TX.- They stayed perked for the next two hours as Young went through his considerable bag of tricks. He has over 20 years of recorded products to choose from, covering every highway and byway of pop, from Woodstock dottiness to poke-in -the-eye grunge. You somehow forget that he was responsible for such classics as 'Heart of Gold', 'Only Love Can Break Your Heart' and 'Alabama', and on and on. He could fill a week's play list on Classic Gold, yet he still retains a musical integrity and the respect of the myth makers . ..TX.- It was all on offer in the park. For a man who set up the original super group with Crosby, Stills, and Nash it is natural that he should now call on the revered Memphis blues band, Booker T and the MGs to back him. Not that he needs them. Young is a big musician, tall and sturdy, the mop of hair surprisingly dark, the bald spot well disguised, the presence commanding. He is also big in sound, contrasting his wailing, jagged, feed-back driven guitar with some plaintive harp blowing. If this is returning to the past it is exhilarating enough to make conservatives of us all. ..TX.- The band was very much a supporting group, despite the lustre of legendary guitarist Steve Cropper and Booker himself towering over the keyboards. This was Young's party. It began slowly, inhibited perhaps by the cold, and the rather forlorn-feeling crowd. The opening songs were equally melancholic, with Young, digging deep into his roots for 'Southern Man' and the stricken 'Helpless'. Gradually the atmosphere warmed up with 'Motorcycle Man', which brought in backing vocals, and a buzz in the audience. ..TX.- From being a static voice in a gathering gloom - and Young's voice has deepened for the better over the decades - Young started to stomp the stage, and the whole performance picked up steam. It is useless to pretend that a sombre evening in a scrappy London park is an ideal setting for such a manic performer. He flowers best in the claustrophobia of a small club, where he can pepper his wit and cynicism over his music. But as he concentrated on the classics, and brought in the band from the shadows for party pieces, you at least knew you were experiencing one of the true giants of pop, a man for all seasons. You can hardly grudge him his late flowering as a big venue money grabber. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7929 Entertainers and Entertainment Groups. ..TP.- Types: NEWS General News. ..IX.- P7929. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGMB6AC2FT ..HL.- 930713FT 930713 Arts: Rain stops play in Avignon - Anthony Curtis finds Moliere's Don Juan gets more than he bargained for (908) ..BL.- By ANTHONY CURTIS ..TX.- The Don Juan of Moliere has a career that is identical with that of Mozart's Don Giovanni, not surprisingly since they both stem from the same original written by a Spanish monk. In both play and opera the Don has a faithful servitor who accompanies him on his travels, takes much of the rap for his misdeeds, and at one point swaps identities with him. But, as emerges from the new production of Moliere's comedy at Avignon that opened this year's Festival, there is a world of difference between the mood of the two works. ..TX.- Through the interrogation of his master, amusingly combined with deference and flattery, Moliere's Sganarelle forces him to define and redefine his position in relation to the traditional Christian tenets he has repudiated. The result is a mixture of black comedy and socratic dialogue that rips apart the basic assumptions of family life. No wonder the Church saw that the play should remain unstaged for many years and then allowed it to reach the stage only in a sanitised version by Thomas Corneille. This was in spite of the climax, as in Mozart, when the statue of the Commander whom Don Juan has killed in a duel, comes to dinner - the subtitle is Le Festin de Pierre (The Stone Feast) - and consigns him to hell. ..TX.- At the first night in Avignon when the stone Commander nodded his head in acceptance from his plinth there were magnificent claps of thunder and flashes of lightning. Full marks, we thought, to Jacques Lassale, the administrator of the Comedie Francaise who has directed this production. But no, the storm was for real. Then the unthinkable happened, the heavens opened and the rain poured down. There is no shelter either for actors or audience in the Courtyard of the Papal Palace and so at around midnight the play was abandoned with two acts still to go. I cannot remember rain stopping play here ever before and I have been covering this Festival for at least 10 years. ..TX.- Even so three acts out of five were enough to take the measure of Lassale's production. The setting could not be more simple or more effective. A cluster of conifers to the left of the stage and a small stream in front serve as the decor. Towering above them is the great medieval facade of the palace alternatively shrouded in darkness or bathed in soft yellow light. It is a formidable arena for a conflict between good and evil, expressed through the discrepancy between appearance and reality, underlined by Lassale in a series of costume changes. The Don enters in the traditional black doublet and hose of a Spanish nobleman and we observe him being stripped of this habit by the tubby cynical Sganarelle of Roland Bertin, an experienced actor who has played many roles here in previous festivals. The hero is then shaved and re-attired on stage in a colourful costume suitable for a masquerade. This Don Juan has to contend not only with the ghost of the Commander but with several historical ones, the ghosts of those great actors who have played the role in living memory - Jouvet, Vilar, Strehler among them. ..TX.- Avignon's new Don Juan, the Polish actor Andrzej Seweryn has been working in France since 1980. He joined the Comedie Francaise this year and he gives an exciting interpretation of the exacting role. He has grace, agility, gentleness; his striking lantern-jawed face provides a fine impassive mask to match the enormity of his utterances and behaviour. He treats the tirades as if they were nocturnes by Chopin, delivering them with delicate, subtle articulation. The same lightness of touch is evident in his bodily contact with the other characters, notably when he encounters his discarded wife Elvira. This role of the one-time nun is played by Jeanne Balibar, a young actress still a pupil of the Conservatoire: a great opportunity which she seized passionately. Clearly we are going to hear a lot more of her in the future. ..TX.- The later scene with the two peasant girls (Catherine Sauval and Cecile Brune) to both of whom Don Juan has promised marriage was played with a similar balletic mobility. As Don Juan removed their bonnets and let down their hair, it seemed only right and proper that they should have rejected their longstanding rustic boyfriends in order to marry him. Seweryn elegantly deflects their questions, refusing to commit himself to either by name. In the end the two women are left embracing each other, the Don having once more escaped. ..TX.- Lassale is on record as saying that he views the comedy as 'a kind of road movie.' Don Juan uncovers new aspects of himself with each encounter. They are marked by the director's skilful use of the elements - water into which one of his assailants is thrown, earth on which he sits, fire by the light of which he unfolds his pragmatic morality to his servant. It will be interesting to see how Lassale copes with these effects when this essentially open-air production transfers to the Salle Richelieu in Paris later this year. At least it will not be rained off there. ..CN.- Countries: FR France, EC. ..IN.- Industry: P7922 Theatrical Producers and Services. ..TP.- Types: NEWS General News. ..IX.- P7922. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGMB6AC1FT ..HL.- 930713FT 930713 Business and the Law: Belgian pension rules discriminate - European Court (691) ..TX.- A Belgian law which laid down different methods for calculating pension payments depending on the sex of the recipient was declared to be discriminatory and contrary to European Community law despite the fact that the retirement age of 60 was the same for men and women. ..TX.- The case arose in the context of a preliminary reference from the Antwerp employment tribunal. Under Belgian law, pension rights were calculated on the basis of the number of years worked; this could not be higher than 45 for a man and 40 for a woman. The amount of the pension was fixed on the basis of a percentage of the individual's earnings. ..TX.- However, for the years worked before 1955, the amount fixed was a standard sum. The male applicant was given his pension on the basis of 45 years' work, nine of which were pre-1955. Had the applicant been female only four of the 'standard' years would have been taken into account and the recipient would have received a higher pension. ..TX.- The court held that EC social security provisions prohibited discrimination based on the sex of the individual when calculating benefits. The system under Belgian law was discriminatory on this basis. The court also held that the Belgian system did not fall within the exceptions laid down in the relevant EC provisions. ..TX.- The Court reiterated that the article in the EC directive laying down the principle of non-discrimination was of direct effect; and it had been so from the date set down for its implementation into national law. People discriminated against, it said, had the right to be treated the same as those who were at present favoured by national legislation. ..TX.- C-154/92: Remi van Cant v Rijksdienst voor pensloenen, ECJ, July 1 1993 ..TX.- Parallel imports and the EC- Austria Free Trade Agreement ..TX.- In a recent case, the Court was requested by a national court in Germany to give a preliminary ruling on the issue of parallel imports from Austria to Germany. This required the interpretation of certain provisions in the EC-Austria Free Trade Agreement. ..TX.- The case concerned parallel imports of a medicine from Austria to Germany. The medicine had been made and sold in Germany. It was also exported by the manufacturer to Austria, where it was sold by the manufacturer's Austrian company. ..TX.- A German parallel importer wanted to sell the same product in Germany by importing it from Austria. The only difference between the imported product and the domestic one was that the former would display a label with the importer's name and address. ..TX.- The importer sought permission for sale in Germany from the domestic authorities. Documents showing that the product was identical to the domestic product were lodged in support of the application. Under German law, it was also necessary to produce evidence on the manufacture of the product and quality control methods. The importer referred to the manufacturer's evidence on these points, which had been lodged with the national authorities. ..TX.- Authorisation was refused on the grounds that insufficient evidence had been produced. The matter was brought before a Berlin court, from where a reference was sent to the ECJ. ..TX.- The ECJ held that the provisions relating to the free movement of goods in the EC-Austria Free Trade Agreement, which are identical to the corresponding provisions in the EC treaty, should be construed as prohibiting such action by the national authorities. ..TX.- The British and Italian governments argued that, although the refusal to grant the relevant authorisation was contrary to the provisions in the EC treaty, the same could not be said when interpreting the provisions in the free trade agreement. This was because the free trade agreement did not envisage legislative harmonisation measures in the pharmaceutical sector. This argument was rejected by the ECJ. ..TX.- C-207/91: Eurim-Pharm Gmbh v Bundesgesundheitsamt, ECJ 5CH, July 1 1993 ..TX.- BRICK COURT CHAMBERS, BRUSSELS ..CN.- Countries: QR European Economic Community (EC). ..IN.- Industry: P6371 Pension, Health, and Welfare Funds. P9441 Administration of Social and Manpower Programs. P9611 Administration of General Economic Programs. ..TP.- Types: PEOP Labour. MKTS Foreign trade. ..IX.- P6371, P9441, P9611. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGMB6AC0FT ..HL.- 930713FT 930713 Business and the Law: Trademark award - Legal Briefs (128) ..TX.- Quaker Oats Co has been ordered to pay Dollars 26.5m in damages to Sands, Taylor & Wood Co, a small Vermont company, in what is believed to be the largest award for trademark infringement ever made. ..TX.- Quaker was originally ordered to pay Dollars 42.6m to Sands for infringing its trademark 'thirst-aid' by using it in an advertising campaign for Quaker's best selling soft drink, Gatorade. The award was reduced after a federal appeals court ruled that the original award was too high. ..CO.- Companies: Quaker Oats Co Inc. Sands Taylor and Wood Co. ..CN.- Countries: US United States of America. ..IN.- Industry: P2086 Bottled and Canned Soft Drinks. ..TP.- Types: TECH Patents & Licences. ..IX.- P2086. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGMB6ACZFT ..HL.- 930713FT 930713 Business and the Law: Regional firms compete with City of London - Legal Briefs (219) ..TX.- Large regional firms are competing increasingly for work that has traditionally been done by City of London law firms, according to the 1993 edition of The Legal 500*, the latest edition of the clients' guide to the UK's top 500 law firms, which has just been published. ..TX.- Regional firms have improved in quality terms, it says, and have proved very competitive on cost. During the recession this has proved attractive to commercial clients. ..TX.- Otherwise, this sixth edition of the guide contains few surprises. The list of the top 10 company and commercial law firms in London, for example, is the same as in 1992, except that Allen & Overy and Lovell White Durrant have moved up a couple of places at the expense of Norton Rose and Herbert Smith. ..TX.- One feature absent from the 1993 guide that will be sorely missed is its recommendation of 'firms going from strength to strength'. Perhaps this is an indication of the impact of the recession on the legal profession. ..TX.- *The Legal 500 - the Client's Guide to UK Law Firms, by John Pritchard, Legalease, Pounds 39 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8111 Legal Services. ..TP.- Types: NEWS General News. ..IX.- P8111. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGMB6ACYFT ..HL.- 930713FT 930713 People: Emmott shops down south at Sainsbury (198) ..TX.- The mystery over the destination of Bob Emmott, who resigned last week as joint deputy managing director of Wm Morrison, the Bradford-based superstore chain, was solved yesterday when J Sainsbury announced his appointment as managing director, specialist businesses. ..TX.- Sainsbury admits the appointment of an outsider to such a position is unusual, but observes that Morrisons is a 'highly-respected' regional superstore operator and Emmott has broad experience. ..TX.- Emmott, 49, will have full profit responsibility for Sainsbury's petrol stations, in-store bakeries and restaurants. It is the first time these businesses, currently the responsibility of different directors, have been brought together under one manager. Emmott also gets a seat on the board at Savacentre, Sainsbury's hypermarket chain. He will report to David Clapham, a member of Sainsbury's main board. ..TX.- Moving to Sainsbury may be something of a culture shock, but Emmott's 23 years with Morrisons - during which time he has had responsibility for trading, marketing, store operations, planning and formats, and distribution and factories - should equip him well. ..CO.- Companies: J Sainsbury. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5411 Grocery Stores. ..TP.- Types: PEOP Appointments. ..IX.- P5411. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGMB6ACXFT ..HL.- 930713FT 930713 People: Jim Wadia to become new managing partner for Arthur Andersen (228) ..TX.- Jim Wadia is to become managing partner of Arthur Andersen, the UK's fourth largest accountancy firm, in succession to Roy Chapman. ..TX.- Chapman, 56, is retiring following completion of his four-year term as managing partner for the UK. He will leave at the end of the year after a four-month transition period. ..TX.- Wadia, 45, whose appointment was ratified by a vote of the UK partners after internal consultation, has spent his career working on tax matters. Currently deputy managing partner, he takes on the new role on September 1 at the start of Andersen's fiscal year. ..TX.- Chapman became managing partner of the London office in 1984, and has been managing partner of the UK firm since 1989. He has served on the worldwide board of partners since 1988 and is chairman of its remuneration committee. ..TX.- He says he had long planned to retire in his mid-50s, and that it is standard practice to step down from major responsibilities at this age. He stresses that he is retiring, and intends to travel and pursue leisure interests for the first few months. After that, he says he may consider becoming a non-executive director. ..CO.- Companies: Arthur Andersen. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8721 Accounting, Auditing, and Bookkeeping Services. ..TP.- Types: PEOP Appointments. ..IX.- P8721. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGMB6ACWFT ..HL.- 930713FT 930713 People: Richard Farrant to head SFA (389) ..TX.- The Securities and Futures Authority, the self-regulatory organisation for the professional securities business, is replacing John Young, who has moved on to become chief executive of the Securities & Investments Board, with Bank of England veteran Richard Farrant. ..TX.- Farrant, 49, who has been at the Bank since 1967, is currently one of the four deputy heads of banking supervision, with specific responsibility for supervisory policy. He has therefore had no recent line-management responsibilities for the likes of BCCI, and is not named in the Bingham report which criticised the Bank of England's supervisory role in the collapse of the corrupt international bank. ..TX.- Christopher Sharples, chairman of the SFA, points out that Farrant is 'very knowledgeable' on the international aspects of the SFA's business. In addition to his familiarity with Brussels and the formulation of EC directives, he is one of the two UK members of the Basle Supervisors Committee, and has chaired its off balance sheet group since 1991. ..TX.- He has also had spells abroad, notably with the IMF in Washington and in Hong Kong. Between 1984 and 1986, he served as adviser to the Hong Kong Banking Commissioner, handling a succession of crises in local banks as well as working on the revision of the centre's bank supervision law. ..TX.- A keen cyclist, pedalling from Paddington to the Bank every morning, Farrant is already familiar with the SFA's style having worked with its capital committee. He claims to be impressed by the 'close practitioner involvement' in the SFA's approach to regulation. ..TX.- Young, a former deputy senior partner of Simon & Coates before he moved to the Stock Exchange, was there when TSA, the securities regulator which later merged with the futures regulatory body, was set up, and is credited with helping to set the tone for an informal and practical approach to regulation. 'The SFA has been good and diligent, and possibly lucky, in not having an accident on its doorstep,' comments one well-placed source. ..TX.- While there are few Bank of England alumni in senior positions at the SROs, the SFA's head of enforcement, Andrew Jennings, spent ten years at the Old Lady. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9651 Regulation of Miscellaneous Commercial Sectors. P6231 Security and Commodity Exchanges. ..TP.- Types: PEOP Appointments. ..IX.- P9651, P6231. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGMB6ACVFT ..HL.- 930713FT 930713 Business and the Law: Solutions to Chinese puzzle - The challenges posed by listing mainland companies on Hong Kong's stock exchange (1240) ..BL.- By SIMON HOLBERTON ..TX.- AN experiment in marrying China's socialist civil law system to Hong Kong's version of UK common law is nearing completion, with the listing this month of the first mainland Chinese state-controlled company on the Hong Kong Stock Exchange. ..TX.- Tsingtao Brewery, shares in which will be traded from this Thursday, is the first of nine companies being brought to market. ..TX.- Incorporated in Tsingtao's articles of association is an attempt to codify common law on matters such as the role and responsibilities of directors, protection of minorities, and accounting standards. ..TX.- Corporate law in China is still in its infancy. It was only in May last year that the Chinese government published a set of regulations governing companies, known as the Standard Opinion on Joint Stock Companies. The Standard Opinion applies to mainland Chinese companies which have issued, or plan to issue, shares to employees, the public or both. It is an interim set of regulations that has the force of law, and will stand until officials have drafted a comprehensive companies law - currently undergoing its fourth revision. ..TX.- A Hong Kong Stock Exchange team, led by Mr Anthony Neoh, QC, and incorporating outside legal experts and representatives from the Securities and Futures Commission, the colony's corporate watchdog, worked for nearly a year with mainland Chinese counterparts on the terms under which the Hong Kong exchange would accept a mainland company listing. The Hong Kong exchange and the SFC were concerned to ensure that minority shareholders in Chinese companies would have a level of investor protection comparable with that of shareholders in companies registered in Hong Kong. Hong Kong companies are subject to the colony's Companies Ordinance, stock exchange listing rules and regulation by the SFC. ..TX.- The most difficult issue they had to overcome was the difference between Hong Kong and Chinese law. In China, law is found only in written codes. Case law, where it exists, is used merely for reference. By contrast, Hong Kong's law, as with other common law jurisdictions, is based on statute and principles developed in the courts, and so is found only in case law. ..TX.- 'The whole law on the fiduciary responsibilities of directors or the rights of different classes of shareholders has been built up by our courts since the 1850s and 1860s,' says Mr Neoh. To ensure that mainland Chinese directors and managers would be subject to the same legal constraints as their counterparts in Hong Kong, 'we had to go back to the cases to extract the principles', he adds. ..TX.- The mainland companies are issuing class 'H' shares in Hong Kong. These shares differ legally from class 'A' shares, which will be issued to mainland shareholders, much in the same way as ordinary shares differ from preference shares. The question of class rights - between holders of 'H' and 'A' shares - was solved by adopting Canada's codification of common law on the subject, as enshrined in its Business Corporations Act. ..TX.- Other factors, such as the duties and obligations of directors, were derived from Hong Kong case law. China's Standard Opinion says the duty of directors is to act 'honestly and sincerely'; it is silent on a director's obligations. The articles of association of Tsingtao incorporate standard 'duties and obligations' familiar to any western director, such as: 'To observe obliga-tions of a fiduciary not to place himself in a position where his duty and his interest may conflict.' ..TX.- Another potential difficulty was shareholders' right of redress in the courts. This was solved by incorporating in the articles of association a provision for disputes to be adjudicated - at the choice of the claimant - in either the China International Economic and Trade Arbitration Commission or the Hong Kong International Arbitration Centre. Judgments in either tribunal are enforceable in either jurisdiction, because China and the UK (and by extension Hong Kong) are party to the New York Convention for the Recognition and Enforcement of Arbitral Awards. ..TX.- The mainland companies have also accepted that their directors can be sued personally. Under Hong Kong corporate law only the company can sue its directors. If a shareholder can prove oppression by a controlling shareholder, an individual can sue a director on behalf of other minority shareholders in what is known as a 'derivative action'. ..TX.- A derivative action, however, is an unknown legal concept in China. So, through a series of interlocking contracts signed by the directors and the company, shareholders in the nine state companies will be able to sue a director personally. ..TX.- Mr Neoh concedes that it is difficult to predict how this provision will develop, but says: 'This provision will put pressure on non-defaulting directors to act against the defaulting director to avoid their being embroiled in a legal dispute.' ..TX.- The talks between the mainland Chinese and Hong Kong officials were facilitated by the fact that many of them had western legal training, says Mr Neoh. He says, for example: 'I asked them what their conception of a limited company was. One senior official said a limited company was one where the company was liable only to the extent of its capital. Another, giving the correct answer, said a limited company meant shareholders were not liable for more than their initial subscription.' At that moment, says Mr Neoh, one mainland official piped up: 'Salomon against Salomon' - a reference to a US case from 1897 which established the limitations of liability of shareholders to their subscription of capital. ..TX.- The initial Chinese confusion stemmed from the definition of a company in the Standard Opinion, says Mr Neoh. It says a shareholder 'must, within the limits of his contribution, be responsible for the company's debts'. ..TX.- In spite of recent developments, modern law in China - only 14 years in the making - remains in a state of flux. It is a land where the rule of man has always prevailed over the rule of law. From imperial times to the present, the obiter dicta of the emperor or the Communist party chief has been accorded the force of law. In 1988, Mr Peng Zhen, a senior Communist party elder who, in UK legal terms, held the twin responsibilities of home secretary and Lord Chancellor, was asked if the law was more important than the Communist party. 'I'm not very sure about that,' Mr Peng said. ..TX.- The codified common law written into the articles of association of the Chinese companies being listed in Hong Kong does not recognise the Communist party. Duties and obligations are framed solely in terms of a company's relationship with its owners. ..TX.- Mr Neoh is cautiously optimistic. 'We have spent a lot of time with these companies - I have visited three of them myself - and they are very keen to comply with our rules,' he says. 'There are two forces working in our direction: management have a boss to report to; and there is market discipline. Their share price will fall if they break the rules.' ..TX.- But he concedes he cannot forecast how successful the changes will be. 'I can't predict anything; I'm just hoping. We should know within the next six months or so.' ..CN.- Countries: CN China, Asia. HK Hong Kong, Asia. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: CMMT Comment & Analysis. FIN Share issues. GOVT Legal issues. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGMB6ACUFT ..HL.- 930713FT 930713 People: British Telecommunications (338) ..TX.- The business logic behind British Telecommunications' investment in MW Marshall, one of the world's biggest foreign exchange brokers, may not be as powerful as it was, but for Barry Cameron Smail, who negotiated the deal, it has a happy ending. ..TX.- Cameron Smail, a 38-year-old Scottish accountant, has been BT's representative on the board of Marshalls Finance, MW Marshall's parent, since the Pounds 175m management buy-out in February 1989. After four and a half years working for Britain's biggest company he has decided to give up his job as finance director of BT's personal communications division and return to the financial services industry as an executive director of MW Marshall. ..TX.- His decision to return to full-time City life - he used to be treasurer of Commercial Union - is not entirely unrelated to the shrinkage in the size of BT. He was recruited to be BT's treasurer by Barry Romeril, the BT finance director, who recently departed for Xerox. The BT workforce has shrunk from 240,000 to 170,000 in Cameron Smail's time and he says that he missed the financial services industry. ..TX.- Mike Knowles, Marshall's chairman, says that now that the company has paid back much of its MBO debt it wants to start filling in some of the gaps in its activities and Cameron Smail will be responsible for expanding the capital markets side. 'We are very strong in cash markets but want to grow in off-balance sheet areas,' says Knowles. ..TX.- One of the reasons that BT took a 30 per cent stake in the MW Marshall buy-out was so that it could learn more about what its customers in the foreign exchange markets wanted. Although the market for sophisticated foreign exchange dealing equipment has not proved as lucrative as once thought, it is understood that in financial terms BT's investment in Marshalls has turned out well. ..CO.- Companies: MW Marshall and Co. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: PEOP Appointments. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGMB6ACTFT ..HL.- 930713FT 930713 Management (The Growing Business): Focus on bank charges (348) ..BL.- By CHARLES BATCHELOR ..TX.- Does it make sense to shop around among banks for a good deal? A trial carried out by Business Money, a new monthly newsletter,* reveals significant differences between the charges quoted by a range of banks. ..TX.- The 17 banks approached provided quotes ranging from Pounds 17 to Pounds 1,400 to manage an account for a year. Business Money asked the banks to quote for a customer expecting to write more than Pounds 100,000 worth of cheques a year, paying in 300 cheques and Pounds 2,000 in cash a month, and maintaining an average credit balance of Pounds 3,000. ..TX.- The newsletter is based in Street, Somerset and stipulated the account must be maintained elsewhere, to prevent discrimination against banks without a local branch. Many businesses prefer a local contact point but others with accounts in credit often never visit their branch, says Robert Lefroy, editor and a former banker with 28 years experience. ..TX.- The Pounds 17 quote came from Allied Trust, a London-based bank with no branch network; the Pounds 1,400 proposal from National Westminster. ..TX.- Other low quotes came from the Coop Bank (Pounds 750, though this included six months free banking) and Clydesdale Bank (Pounds 911). Offers from the other main clearers were Pounds 1,161 from Lloyds and Pounds 1,258 from Barclays while Midland refused to quote, citing, according to Lefroy, its 'aggressive new policy.' ..TX.- Quotes of between Pounds 1,100 and Pounds 1,200 came from Allied Irish, Bank of Scotland, Royal Bank of Scotland and Ulster Bank. ..TX.- One lesson to emerge was it might make sense for companies to split their banking, putting cash deposits through Girobank and other business through low-cost operations, suggests Lefroy. ..TX.- *Provides listings of loan costs across a range of business sectors and details of leasing and factoring charges. Annual subscription Pounds 59. PO Box 1658, Street, Somerset, BA6 9FE. Tel: 0458 48207. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6021 National Commercial Banks. ..TP.- Types: COSTS Service costs & Service prices. MGMT Management & Marketing. ..IX.- P6021. ..DS.- The Financial Times ..XP.- London Page 10 ***************************************************************** ..AN.-00DGMB6ACSFT ..HL.- 930713FT 930713 Management (The Growing Business): Second time around (331) ..BL.- By CHARLES BATCHELOR ..TX.- In the US, failure is often regarded as a learning experience. In the UK even success is no guarantee a businessman can raise finance. ..TX.- In contrast with the US, British venture capitalists make very little use of 'second time entrepreneurs,' businessmen and women who have sold one successful venture and want to move on to a second, according to a study* by the Centre for Management Buy-Out Research. ..TX.- Nearly three-quarters of venture capitalists polled said they would prefer to finance an entrepreneur or a manager who had played a leading role in a previous venture. But only 23 per cent had used a team leader from one of their own investments again. And while 53 per cent used a team leader previously backed by another venture firm these two figures overlapped and total use, as a share of deals completed, was low. ..TX.- The main reason given by venture capitalists was that they could not find suitable candidates. The entrepreneur's experience might be in a different sector or in a much smaller or larger company. Venture capitalists were suspicious that someone who had made one fortune would be insufficiently motivated to do it again. ..TX.- It also emerged that venture capitalists did not actively pursue entrepreneurs who had sold out. Only 17 per cent of venture firms polled evaluated their successful entrepreneurs. ..TX.- But the venture capitalists were not to blame alone. Many entrepreneurs were reluctant to go a second round with the same venture capitalist who had backed them the first time. Also, having made one fortune, the entrepreneur might have less need of venture funds to get started a second time. ..TX.- *Venture Capitalists and Second Time Entrepreneurs. M. Wright and K. Robbie. Centre for Management Buy-Out Research. Nottingham University, Nottingham NG7 2RD. Tel: 0602 515494. 27 pages. Pounds 25. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6799 Investors, NEC. ..TP.- Types: MGMT Management & Marketing. ..IX.- P6799. ..DS.- The Financial Times ..XP.- London Page 10 ***************************************************************** ..AN.-00DGMB6ACRFT ..HL.- 930713FT 930713 Management (The Growing Business): Understanding the issues - Charles Batchelor continues his series answering questions on the European single market (1431) ..BL.- By CHARLES BATCHELOR ..TX.- The Growing Business Page's Single Market Q&A series is intended to allow readers to raise issues prompted by the formal launch of the single European market on January 1, 1993. ..TX.- In theory the barriers have come down in Europe, but in practice doing business across borders can be complex and time consuming. ..TX.- Merits of a pan-European title ..TX.- Q: In your last Single Market Q&A you explained how EC legislation on the compatibility of professional qualifications would allow a British chartered engineer to register in Germany. ..TX.- We are consulting civil and structural engineers and are currently evaluating a number of projects in Germany. A few years ago all chartered engineers were encouraged to register as European Engineers and were rewarded with the qualification Eur. Ing. Does this qualification carry any real weight? Is it sufficient to guarantee acceptance on the official list of approved engineers at the regional chambers of architects (Architektenkammer). ..TX.- A: The Eur. Ing. title is a pan-European title for chartered engineers operating in Europe, though it is not covered by EC legislation on the freedom of establishment of professionals (89/48/EEC). It confers no extra privileges but its value lies in the fact that it is a readily recognisable professional qualification Europe-wide. ..TX.- More than 15,000 professional engineers in Europe currently hold the title, with some 300 applying every month. ..TX.- Although the Eur. Ing. title may only be obtained by qualified chartered engineers it is not sufficient to guarantee acceptance on the official list of approved engineers at the regional chambers of architects. ..TX.- VAT reporting requirements queried ..TX.- Q: I have recently set up a business and will shortly start exporting to other EC member states. What are the present VAT reporting requirements in the UK? ..TX.- A: UK VAT registered businesses are required to provide Customs and Excise with EC Sales Lists (ESLs), on a quarterly basis, for all sales to other VAT registered businesses in the Community. These lists itemise sales by values and VAT registration numbers of buyers. They are required by Customs at the end of each calender quarter - March, June, September and December. ..TX.- However, small businesses with an annual turnover of less than Pounds 62,000 and sales not exceeding Pounds 11,500 in the EC may be exempted from providing ESLs. This is discretionary and you should seek guidance from your Customs office. ..TX.- Businesses with exports exceeding Pounds 135,000 a year to the EC must also provide Supplementary Sales Declarations (SSDs) on a calender month basis. These reports must list a minimum of eight items of transaction data, for example, delivery term and mode of transport, for each sale. ..TX.- Importers who exceed the Pounds 135,000 threshold for EC purchases must also provide SSDs, the information for which is used to compile European Community trade statistics known as Intrastats. ..TX.- A green approach to labelling ..TX.- Q: I have heard there is a label which states that my products are environmentally sound. How can I obtain such a label and what are the objectives of the scheme? ..TX.- A: The label to which you refer is the EC Ecolabel which demonstrates that your product has the minimum adverse impact on the environment. To apply for an Ecolabel contact one of the national organisations set up to administer the scheme. In the UK it is: UK Ecolabelling Board, 7th Floor, Eastbury House, 30-34 Albert Embankment, London SE1 7TL. Tel: 071 820 1199. Fax: 071 820 1104. ..TX.- The purpose of the voluntary scheme is to promote the design, production, marketing and use of products that have the least impact on the environment. The Ecolabel also aims to encourage the production of more environmentally benign products. ..TX.- EC working groups have started to devise Ecolabelling criteria for a range of products, including washing machines, based on their environmental performance throughout their life cycle. ..TX.- Once the Ecolabelling organisation has decided to award a label it notifies the European Commission. The Commission then informs interest groups in other member states. After 30 days the Ecolabelling body may award the label, provided there are no objections from either the Commission or another member state. If objections are not resolved within a further 15 days the proposed award will be submitted to the Commission's Regulatory Committee for a decision. A contract is drawn up between the Ecolabelling authority and the applicant. ..TX.- Notice of the award is published in the Official Journal of the European Communities. ..TX.- The Ecolabelling authority in the UK charges an application fee of Pounds 500 including VAT. An annual license fee of 0.15 per cent plus VAT is also payable. This is based on the volume of sales of the product within the member states at ex-factory prices. Fees will vary slightly between member states. ..TX.- This subject is covered by the EC regulation on the Community Ecolabel award scheme (880/92) and applies to all products except for pharmaceuticals, beverages and foodstuffs. ..TX.- Directives affect UK employees abroad ..TX.- Q: I intend shortly to establish a subsidiary in France and will be posting at least one member of staff there. In the light of the UK's recent abstention from the vote on the EC directive on 'Working Time', what will be the position of a UK worker in France? ..TX.- A: Although your employees will still be working for a British company, they will be based in France and will be subject to French national legislation as well as any relevant EC regulations and directives in force. Once the 'Working Time' directive has been formally adopted in France all employees working for French, UK or other companies will have the legal right to: ..TX.- A minimum daily rest period of 11 consecutive hours ..TX.- At least one day off a week ..TX.- Four weeks annual paid holiday ..TX.- A restriction on night work to a maximum of an average of eight hours. The Commission has recommended the length of nightworking be averaged over 14 days but has left a final decision to the individual member states ..TX.- Mandatory daily rest breaks after six hours. ..TX.- These conditions will apply in all EC member states except the UK. ..TX.- However, the directive allows for exemptions if your company is involved in the fishery, agriculture, offshore and transport industries. Community workers will still be able to work more than 48 hours a week voluntarily if safeguards to prevent abuse are in place. The UK's abstention will therefore have no real affect on your staff in France. ..TX.- Help with language courses ..TX.- Q: I am a UK citizen living and working in Germany and would like to enrol on a German language course. Can I apply for a grant, loan or tax relief on such a course? ..TX.- A: There are no grants, loans or tax relief available for individuals wanting to pursue language training in Germany. But there are regional promotion programmes designed to help German companies prepare and develop their employees for working in the single market. ..TX.- These programmes do not exist in every Land and the conditions and benefits vary according to the development strategies of the region. ..TX.- On a Community level, the increased trade, mobility and cultural exchange which has resulted from the development of the internal market has led to the introduction of the Lingua programme. This is an EC initiative which promotes a more widespread understanding and use of the Community languages. It is not a programme targeted directly at business, although the aim is to promote foreign language skills in the workforce. ..TX.- For further information contact The UK Lingua Unit, Seymour Mews House, Seymour Mews, London WlH 9PE. Tel: 071 725 9493 Fax: 071 224 1906. The European headquarters of the programme is at Bureau Lingua, 10 rue du Commerce, B-1040 Brussels. Tel: 322 511 42 18 Fax: 322 511 43 76. ..TX.- Previous features in this series appeared on June 1, May 4 and March 9. ..TX.- If you have any queries relating to doing business in Europe or to the changes brought about by the creation of the single European market, please write or fax the address below. We can only print a selection of letters received and cannot reply individually. ..TX.- Charles Batchelor, Single Market Q&A Financial Times, Number One Southwark Bridge London SE1 9HL Fax: 071 873 3933 ..TX.- This feature has been compiled with the assistance of the European Information Centre of the London Chamber of Commerce. ..CN.- Countries: QR European Economic Community (EC). ..IN.- Industry: P9721 International Affairs. P9611 Administration of General Economic Programs. P8741 Management Services. ..TP.- Types: MGMT Management & Marketing. ..IX.- P9721, P9611, P8741. ..DS.- The Financial Times ..XP.- London Page 10 ***************************************************************** ..AN.-00DGMB6ACQFT ..HL.- 930713FT 930713 Technology: Going for gold (316) ..BL.- By ANDREW FISHER ..TX.- In the 19th century gold rushes, prospectors sought the seductive metal by trudging across rough terrain and studying streams and rocks for signs of hidden wealth. ..TX.- Today, mining companies have a much more sophisticated array of data to guide them to gold-bearing deposits. They can assemble a mass of information, by land or air, on a region's magnetic, gravitational, geological and chemical peculiarities and then work out where to start drilling. ..TX.- But this is where the difficulties come in. Drilling holes is expensive - about Dollars 50,000 (Pounds 33,000) a time, including laboratory analysis - and there are no rules on how to use all the data to pinpoint potential mines. However, if a computer program devised by a Sussex University scientist is taken up widely, much of the uncertainty and cost could be reduced. ..TX.- Lecturer Peter Williams' computer neural network program - such programs recognise patterns and trends among a dense mass of data rather than make complex calculations - has been tried successfully by a big US mining company. Using magnetic data from 171 drillings, it was tested on two sites. It predicted accurately that one would yield gold and the other (thought to have potential after 36 test drillings) would not. ..TX.- It has also been used in south-east Asia and attracted interest from an Australian mining group. Williams says his program can be used for small or large areas and even whole countries where the magnetic and gravitational data is available. He has developed his program over three years, but he does not claim it will replace present methods of looking for gold. ..TX.- 'It is another tool in the toolbox,' he says modestly. 'It tilts the odds in favour of the prospector.' ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7372 Prepackaged Software. ..TP.- Types: TECH Products & Product use. ..IX.- P7372. ..DS.- The Financial Times ..XP.- London Page 9 ***************************************************************** ..AN.-00DGMB6ACPFT ..HL.- 930713FT 930713 Technology: Drivers on the button - Almost any car could dispense with its gear lever (1193) ..BL.- By JOHN GRIFFITHS ..TX.- It would probably never occur to most drivers of non-automatic cars that changing gear might be possible by pressing a button instead of having to reach down and move a lever. Imagine being able to operate the gears as easily as turning on the lights or windscreen wipers. ..TX.- The technology is there, but has yet to be put into widely available form. However, a start is being made by Prodrive, the UK motor sport engineering concern which prepares some of the world's leading race and rally cars. It has developed a road-going version of the press-button, semi-automatic gearboxes hitherto confined to leading grand prix teams and the world championship rally cars Prodrive operates for Subaru of Japan. ..TX.- Although the system will make its off-track debut this year in one of Italy's best-known makes of exotic sports car, it could be added to almost any car's conventional manual gearbox. 'There is no reason why it should not be cheaper than, say, power steering,' according to David Lapworth, managing director of Prodrive's engineering services subsidiary. ..TX.- In its current road-going form, the system is being tested by Prodrive in a Subaru Legacy saloon. No modifications have been made to the car's conventional gearbox. Instead, the normal clutch operating cylinder is supplemented by an actuating mechanism whose operation is managed by an electronic control unit (Ecu) and an air tank and small compressors located remotely - in the Legacy's case, in the boot. ..TX.- The actuating unit is about a foot long. Along with the valve system it is small enough to have been installed in the Legacy's transmission tunnel without modifying the bodywork. ..TX.- The driver selects gears by touching buttons on the upper and lower surfaces of the steering wheel. Specific buttons do not select specific gears. Instead, any button on the upper surface takes the car up a gear, and any button on the lower surface takes it down. Repeated pressing takes the car sequentially up or down through the gears. ..TX.- The clever bit lies in what the Ecu does on receiving a gear change instruction - relayed electronically - from the driver. For upshifts, the driver simply presses the button without either lifting his foot from the accelerator pedal or operating the clutch pedal. The Ecu throttles back the engine at the same time as ordering the compressor to operate the clutch. The resultant upshift is as fast as any achievable manually by a Nigel Mansell or Ayrton Senna. ..TX.- The principles are the same for downshifts - except that the Ecu prevents the engine being strained through over-revving, should the driver seek to change down too early. In this event, the Ecu is capable of both 'blipping' the accelerator and delaying the clutch operation until gear and engine speeds are compatible. ..TX.- What are the benefits? In the area of performance motoring, gears can be changed with optimum efficiency while preserving maximum control over the car by keeping both hands on the steering wheel. Clutch wear is also minimised and manual operation of the clutch is required only when starting or stopping. ..TX.- Prodrive's Legacy test model retains both its clutch pedal and the conventional gear lever - a function of its close kinship to the rally cars, which can revert to manual clutch and gear changing as a competition 'fail safe'. On the back roads near Prodrive's Banbury, Oxfordshire, headquarters, it is disconcerting to have the gearshift seemingly operating itself while the driver uses the press button system. But, as Lapworth stresses, neither clutch pedal nor gear lever need be retained for non-sporting applications. ..TX.- Preoccupation with competition - the bulk of Prodrive's business - meant the company could not start on a road version until early last year. The development programme has three phases: ..TX.- First is the Legacy system, fitted as an aid to enthusiastic driving. ..TX.- Second is a system which selects the gears itself at the appropriate moment, depending on accelerator position - in effect a fully automatic gearbox. This system also allows drive-away from rest. ..TX.- This second phase still involves adding equipment to existing transmissions, and would be applicable in areas such as cheaply converting ordinary cars for use by the disabled. ..TX.- But the logical final phase, points out Lapworth, would be for car makers to manufacture gearboxes specially designed for the system. The unit cost of these could be much lower than for conventional manual gearboxes because - thanks to the 'autoshift' ensuring that gear and engine speeds are compatible during changes - synchromesh and all its complicated cones and other components could be dispensed with. ..TX.- There are rival transmissions, however, which their proponents might argue are a still more sophisticated answer to the average motorist's needs. Chief among these is the continuously variable transmission (CVT). Already fitted to some Ford, Fiat, Volvo, Rover Group and even Subaru models, the CVT provides an infinitely variable number of gear ratios by means of steel drive belts working around expandable pullers. ..TX.- The theory of the CVT is that the driver depresses the accelerator according to whether he wants maximum or mild acceleration, or a high or low cruising speed. The engine spins up to the required number of revolutions needed to meet these needs with maximum efficiency - and the transmission accelerates the car in the most efficient way to 'catch up' with the accelerator setting, and subsequently cruises the vehicle at the most economical engine speed. ..TX.- The proclaimed advantage of the CVT is that it allows the engine to operate in its most efficient revolution band. The driver has to do no more than engage forward or reverse; the energy-sapping losses caused by the hydraulic torque converter of a conventional automatic transmission - which typically produced fuel consumption 15 per cent worse than a manual as well as weakening performance - are largely absent. ..TX.- Lapworth acknowledges that the CVT is a desirable transmission. However, it costs more than a conventional automatic transmission - and still has more inherent energy losses than a manual transmission. 'It will become a better proposition if and when a car maker produces both a CVT and an engine which are specifically designed to work together,' says Lapworth. 'But if you had to rate them in cold energy efficiency terms, on a scale of one to 10, the manual would be at 10, fully developed CVT engine/transmission at nine and the existing conventional automatic at six or seven. ..TX.- 'And if you accept that you don't need synchromesh in our type of transmission, you could pack in six or seven gear ratios in the same space, so that for most drivers you would have something very close to a CVT anyway.' ..TX.- Although the autoshift is currently Prodrive's only serious road car project, Lapworth says there is much potential for applying motor sport-based technology on a wider front - 'cars are full of things hydraulic and mechanical which could be better controlled', he says. ..CO.- Companies: Prodrive Engineering. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3714 Motor Vehicle Parts and Accessories. ..TP.- Types: TECH Products & Product use. ..IX.- P3714. ..DS.- The Financial Times ..XP.- London Page 9 ***************************************************************** ..AN.-00DGMB6ACOFT ..HL.- 930713FT 930713 Technology (Technically Speaking): Multimedia in handcuffs (648) ..BL.- By TOM FOREMSKI ..TX.- Multimedia technology has the potential to spawn large new markets in entertainment and education, but a battle between copyright holders and multimedia publishers threatens to obstruct the emerging market. ..TX.- Multimedia developers see great potential in the use of CD-Rom discs to store thousands of audio, video, graphics and text clips. Organised as an interactive encyclopedia, adventure game or as a multimedia history of Christopher Columbus, for example, they become powerful educational and reference tools, allowing users to steer through enormous amounts of information easily and quickly. ..TX.- But developers of such applications complain that copyright holders are asking large fees for the use of small snippets of existing audio or video from tape and film libraries and that the copyright licensing process is complex and time consuming. ..TX.- In turn, copyright holders are worried about the integrity of their work, which when transformed into digital form can very easily be copied or modified. Writers, film-makers, artists and photographers fear they might lose control of their works and their ability to collect future royalties. ..TX.- The US Office of Technology Assessment has recognised the problem. In a report issued last year, it warned that the development of multimedia programs could be hurt by current copyright regulations that are not well suited to the new technologies. ..TX.- Multimedia title developers say they are willing to pay for copyright clearances, but simply locating copyright holders is a big problem. Warner New Media, for example, when developing a multimedia title on the Berlin Wall, wanted to use a clip from the musical film West Side Story. This involved obtaining and paying for copyright clearance from the film company, the musicians, the music composer, the actors and the writers. But Warner missed a copyright, held by the choreographer, and could not use the clip. ..TX.- One loophole some multimedia developers have successfully used is the 'fair use' provision of US copyright law. This allows use of a copyrighted work 'for purposes such as criticism, comment, news reporting, teaching, including multiple copies for classroom use, scholarship, or research'. ..TX.- However, US courts have interpreted fair use in unpredictable ways. Last year, for example, a US federal court ruled against Texaco which had argued that in photocopying scientific papers, it was protected from copyright infringement allegations since the papers were used for research. ..TX.- With fair use vaguely defined by US courts, many multimedia applications developers are looking for copyright-free material. The largest source of copyright-free text is Project Gutenberg. It offers 50 copyright-free publications in digital form, known as 'etexts'. These include classic books such as Alice in Wonderland and Peter Pan. Michael Hart, founder of Project Gutenberg, says it will offer 10,000 etexts by the end of the decade. ..TX.- Multimedia title developers can also turn to a growing number of CD-Rom disks full of music clips, photographs and video footage, all available without copyright fees. ..TX.- None the less, copyright-free or public domain material is a limited resource. A copyright clearance mechanism is needed that allows copyright holders to tap into the potentially lucrative multimedia applications market without surrendering control over their work. Multimedia title producers, in turn, need an easy way to reach copyright holders and negotiate copyright clearance fees. ..TX.- One solution could be the creation of copyright clearance centres that would represent the works of artists, musicians, photographers, video producers and authors. Such centres would allow multimedia developers to shop for content and pay a reasonable fee for the material used. The benefits of such a system would be to remove roadblocks to a new industry that could provide consumers with a wide range of multimedia titles. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3652 Prerecorded Records and Tapes. P7812 Motion Picture and Video Production. P7373 Computer Integrated Systems Design. ..TP.- Types: TECH Products & Product use. TECH Patents & Licences. ..IX.- P3652, P7812, P7373. ..DS.- The Financial Times ..XP.- London Page 9 ***************************************************************** ..AN.-00DGMB6ACNFT ..HL.- 930713FT 930713 Parliament and Politics: Insurance firms set for tax change (317) ..BL.- By IVOR OWEN, Parliamentary Correspondent ..TX.- CHANGES in the tax treatment of insurance companies are to be outlined in a consultation document, Mr Stephen Dorrell, financial secretary to the Treasury, told MPs last night. ..TX.- Earlier Miss Betty Boothroyd, the speaker, had rejected Labour demands that 44 Tory MPs who are Lloyd's Names - individuals whose capital backs the insurance market - should be barred from voting on provisions in the Finance Bill which would affect the tax treatment of Lloyd's. ..TX.- Mr Dorrell emphasised that the effect of the move was tax-neutral. The proposals open the possibility of limiting charges on insurance companies' premium income to facilitate the build-up of a reserve fund to meet future catastrophes. ..TX.- Mr Dorrell explained that the consultation document, to be published during the summer, would deal with whether insurance companies should continue to be taxed on the basis of annually declared profit. ..TX.- Mr Dorrell said it could be argued that it was not sensible to levy tax on the profit from annual premiums when the claims they were intended to cover could materialise during a later period. He emphasised that in the case of Lloyd's there would be a limit of 50 per cent on the amount of premium income which was not subject to tax. ..TX.- Miss Boothroyd ruled that the rule requiring MPs not to vote on matters in which they had a personal pecuniary interest did not apply to a public bill so long as other similarly situated persons would benefit in the same way. She stressed that the provisions in the bill were not confined to members of Lloyd's who were also MPs. ..TX.- MPs will be asked to give the Finance Bill a third reading today. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6311 Life Insurance. P6331 Fire, Marine, and Casualty Insurance. ..IX.- P6311, P6331. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6ACMFT ..HL.- 930713FT 930713 Parliament and Politics: Peers clash as Maastricht pressure grows (574) ..BL.- By PHILIP STEPHENS and ALISON SMITH ..TX.- MR JOHN MAJOR was last night under pressure from pro-European ministers to declare that he is ready if necessary to risk the imposition in Britain of the social chapter rather than abandon ratification of the Maastricht treaty. ..TX.- The mobilisation of the Europhiles in the Tory party was also reflected in the counter-attack by Conservative heavyweights against Lady Thatcher's decision to vote for a referendum on Maastricht when the issue is put to the House of Lords tomorrow. ..TX.- Downing Street refused to comment on mounting speculation at Westminster that a combination of opposition parties and rebellious Tory Euro-sceptics could defeat the government in a Commons vote on the social chapter on July 26. ..TX.- Euro-sceptics described a government defeat as 'a racing certainty' even if ministers managed to persuade some unionist MPs not to vote with the opposition. ..TX.- Mr Kenneth Clarke, the chancellor, was said to be among the ministers who want Mr Major to make it clear in advance of the vote that whatever the outcome the government will press ahead with ratification. ..TX.- The ministers hope that such a threat will dissuade the Euro-sceptics from voting for the inclusion of the social chapter in the belief that Mr Major would then abandon the treaty. ..TX.- But Mr Clarke is said to be among a majority who believe that even if the government is defeated it should press ahead with ratification. Initially the government could ignore the Commons vote - as it is technically outside the ratification legislation - but it might then be open to a legal challenge to the social chapter opt-out. ..TX.- The pro-European majority in the cabinet is arguing that if the UK were then forced to abandon the opt-out, the blame would fall directly on the Euro-sceptics. Ways of minimising the controversy of ratifying the treaty, even after a Commons defeat, are at the heart of contingency plans being drawn up by the government. ..TX.- One proposal is for a vote of confidence to be taken immediately after any defeat. This would bring back into line at least some of the Tory rebels, and might be framed to include an endorsement of the government's stance on the social chapter. ..TX.- Sir Nicholas Lyell, the attorney-general, is said to have advised colleagues that ratifying the treaty in spite of a defeat would not worsen the government's position in the threatened Euro-sceptic attempt to seek judicial review of what the government has done so far in its pursuit of ratification. ..TX.- Tory sensitivities about Maastricht were underlined as former cabinet ministers accused Lady Thatcher of disloyalty, even though the government is confident that her call for a referendum will be defeated. ..TX.- Lord Howe, the former chancellor and foreign secretary, said that if her predecessor had led an organised rebellion during her own premiership, then she would have regarded it as 'pretty disloyal'. ..TX.- He gave a warning that to embark on a referendum campaign would be 'total folly'. ..TX.- Lord Gilmour rejected Lady Thatcher's assertion that her support for a Maastricht referendum would not be an attack on Mr John Major. ..TX.- The pro-referendum lobby stepped up its pressure yesterday. Lord Blake, the Tory historian who will move the amendment, called it a campaign of 'peers for the people'. ..CN.- Countries: GB United Kingdom, EC. QR European Economic Community (EC). ..IN.- Industry: P9721 International Affairs. ..TP.- Types: GOVT Government News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6ACLFT ..HL.- 930713FT 930713 Parliament and Politics: Compensation urged for fuel VAT (390) ..BL.- By ALISON SMITH and IVOR OWEN ..TX.- GOVERNMENT advisers yesterday urged ministers to make an extra Pounds 400m a year available to people on social security benefits to compensate for the imposition of value added tax on domestic fuel. ..TX.- And in the Commons last night the government's majority was cut to 8 (307-299) when three Tory backbenchers joined with opposition MPs in voting against the extension of the tax. ..TX.- Mr William Powell (C Corby), who moved an amendment to remove the relevant provision from the Finance Bill, was accompanied by Mr Nicholas Winterton ( C Macclesfield), and Mr Geoffrey Dickens ( C Littleborough and Saddleworth) in voting against the government. ..TX.- Anxiety among Treasury ministers was heightened when it became clear that a number of government supporters, including Mr John Biffen, MP for Shropshire north and a former cabinet minister, had failed to reach the Chamber before the doors to the voting lobbies were locked. ..TX.- Mr Powell was cheered by Labour backbenchers when he recalled that during last year's general election the Conservative party gave an unequivocal promise that VAT would not be extended to domestic fuel. ..TX.- He said: 'I also gave that promise to my own constituents - I meant it and I propose to keep it'. ..TX.- The report from the social security advisory committee said increases promised by the impact of the VAT on the formula for benefits would meet only 'something under half' of higher fuel bills. ..TX.- It estimated that compensating some 8m people for higher fuel bills once the full rate of VAT was charged from 1995 would cost about Pounds 720m. ..TX.- Calling the additional Pounds 400m a 'modest proportion' of the revenue expected to be generated from the VAT increase, the report said: 'We would hope that Treasury ministers can be convinced that this unavoidable increase in the social security budget is fully justified and should not be seen as an increase in public expenditure.' ..TX.- The committee urged a look at how people on benefits unrelated to income could be compensated. This has particularly worried Tory MPs concerned at the plight of pensioners whose savings or income makes them ineligible for income support. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9441 Administration of Social and Manpower Programs. ..TP.- Types: NEWS General News. ..IX.- P9441. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6ACKFT ..HL.- 930713FT 930713 Parliament and Politics: Medical tax relief (64) ..TX.- ABOUT 500,000 individuals aged 60 or over have received tax relief for private medical insurance in each year since the relief was introduced in 1990-91, Mr Stephen Dorrell, financial secretary to the Treasury, said in a written answer. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6ACJFT ..HL.- 930713FT 930713 Parliament and Politics: Five N-test claims for compensation (114) ..TX.- FIVE CLAIMS for compensation by veterans of British nuclear tests are pending, Mr Jeremy Hanley, armed forces minister, said last night. ..TX.- But he also insisted that there was no new evidence to suggest previous assurances that all personnel involved in the tests 'received little or no radiation' were wrong. ..TX.- He said the five claims were being examined, but added: ..TX.- 'So far, no case of death or disease among British nuclear test veterans has been shown to have resulted from radiation from the tests.' ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8733 Noncommercial Research Organizations. ..TP.- Types: NEWS General News. ..IX.- P8733. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6ACIFT ..HL.- 930713FT 930713 Parliament and Politics: Wandsworth faces schools unrest (131) ..TX.- SCHOOL support staff in a flagship Conservative local authority last night voted to hold a strike ballot in protest at wage cuts. ..TX.- A walkout by the 700 workers in the London borough of Wandsworth would close all its primary and special schools, unions claimed. A meeting of workers including meal supervisors, transport attendants and special school helpers voted unanimously to hold a strike ballot over the next few weeks. Strike action could hit the schools in September. ..TX.- A council spokesman said the planned pay cuts affected workers once employed by ILEA and on higher rates than those paid by Wandsworth. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9411 Administration of Educational Programs. ..TP.- Types: NEWS General News. ..IX.- P9411. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6ACHFT ..HL.- 930713FT 930713 Parliament and Politics: Shell ready to cut N Sea oil jobs (159) ..TX.- SHELL UK is scaling down its North Sea oil drilling programme and cutting jobs in its exploration department by between 20 and 30 per cent. But the company yesterday denied this was a result of the government's planned changes to Petroleum Revenue Taxes. ..TX.- 'The PRT changes have underlined and given focus to what we were already looking at in the North Sea,' the company said. ..TX.- The changes, which abolish tax relief on exploration drilling while cutting the tax rate for existing fields from 75 per cent to 50 per cent, are due to become law in about a month. ..TX.- Six senior Tory MPs yesterday tabled an amendment to to introduce a transition period of three years. ..CO.- Companies: Shell Transport and Trading. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. ..TP.- Types: RES Natural resources. GOVT Taxes. ..IX.- P1311. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6ACGFT ..HL.- 930713FT 930713 Parliament and Politics: 8 MPs wrote to ministers on Nadir (179) ..TX.- SIR Nicholas Lyell, the attorney-general, yesterday disclosed that eight MPs - more than previously thought - had made representations to ministers about the case of Mr Asil Nadir, the fugitive former chairman of Polly Peck. ..TX.- But he dismissed demands to name all the MPs concerned. ..TX.- Of the eight, Sir Nicholas said, four had written or spoken to him or to his predecessor, Sir Patrick Mayhew, in the past two years. ..TX.- In a written parliamentary reply, Sir Nicholas explained the figure had risen to eight with the inclusion of letters written by two MPs to the then home secretary. ..TX.- So far, Mr Michael Mates, the ex-Northern Ireland minister who resigned over the affair, Mr Michael Heseltine, trade and industry secretary, Mr Peter Lloyd, Home Office minister, and Mr Peter Brooke, the national heritage secretary and Mr Nadir's MP, have been identified as having contacted the attorney-general over the case. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9211 Courts. ..TP.- Types: NEWS General News. ..IX.- P9211. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6ACFFT ..HL.- 930713FT 930713 Parliament and Politics: Rifkind fails to ease Rosyth fears (313) ..BL.- By GILLIAN TETT ..TX.- SCOTTISH fears about the long term future of the Rosyth dockyard seemed unlikely to be allayed yesterday, after Mr Malcolm Rifkind, defence secretary, admitted that he was unable to guarantee entirely the surface naval work that the government has promised to allocate Rosyth to ensure the dockyard's survival. ..TX.- The promises of the work, which entail the refitting of 18 major warships and 49 minor naval vessels over the next 12 years, were made by Mr Rifkind last week, as the government announced that Rosyth had lost its two-year battle with Devonport dockyard for the lucrative nuclear submarine refitting work, estimated at some Pounds 3bn to Pounds 5bn over the next 20 years. ..TX.- Mr Rifkind told the Commons' defence committee yesterday that although the government had a strong commitment to allocating the surface refitting work to Rosyth, the details of this commitment could not be guaranteed until the future management of the yard had been decided. ..TX.- 'You can't have a contractual agreement without a contractor,' Mr Rifkind said. ..TX.- The Rosyth yard is run by Babcock Thorn, a private consortium. However the government is due to re-assess its contract in two years' time and is considering a range of options, including the possible privatisation of the yard. ..TX.- Faced with accusations that the Ministry of Defence had not matched up to its allocation promises to other dockyards in recent years, Mr Rifkind insisted that the government's promises for surface work should be sufficient to guarantee Rosyth's survival. ..TX.- His arguments did little to placate opposition MPs, who accused Mr Rifkind of under-estimating the job losses, predicted to be 350 for Devonport and 450 at Rosyth. ..CO.- Companies: Babcock Thorn. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3731 Ship Building and Repairing. P9711 National Security. ..TP.- Types: MKTS Contracts. ..IX.- P3731, P9711. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6ACEFT ..HL.- 930713FT 930713 Parliament and Politics: Ashdown calls for 'dialogue' on reforms (371) ..BL.- By PHILIP STEPHENS, Political Editor ..TX.- MR PADDY Ashdown last night called for a 'constructive dialogue' on constitutional change between the Liberal Democrat and Labour parties to counter the electorate's growing disenchantment with politics and politicians. ..TX.- But the Liberal Democrat leader warned that 'half-hearted' Labour support for radical reform of Britain's outdated political system could bring a repeat of the damaging uncertainty which helped the Conservatives win last year's general election. ..TX.- In a speech to Charter 88, the independent pressure group, Mr Ashdown floated two other ideas - consultative referenda for important issues and the inclusion in government of talented individuals from outside parliament - to strengthen public involvement in decision-making. ..TX.- Mr Ashdown warned that disillusionment among voters with the government had widened into a general distrust of politicians of all parties. ..TX.- He said Britain faced not only a crisis of government and of leadership but also a 'crisis of democracy' resulting from the failure of its political institutions to maintain the respect and confidence of its citizens. ..TX.- Mr Ashdown, setting out his platform for constitutional reform, said that at the core of the crisis was a system which centralised power in Whitehall and treated citizens as passive 'subjects' rather than active participants in political life. ..TX.- The Liberal Democrat leader, promoting the case for reform of the voting system, a written constitution and bill of rights, and devolution of power to regional and local government, said other ways were also needed to 'bridge the gap that is opening up between government and governed'. ..TX.- Mr Ashdown welcomed the commitment to constitutional change offered by Mr John Smith, the Labour leader. He set his own speech last night in the context of a contribution to a 'continuing constructive dialogue between our two parties and others on constitutional matters'. ..TX.- He said a cross-party consensus offered the only route to the overhaul a 19th century model which had 'hit the limits of its own utility'. But if Labour were going to advocate change they 'must start to behave as if they are committed to change'. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8651 Political Organizations. ..TP.- Types: NEWS General News. ..IX.- P8651. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6ACDFT ..HL.- 930713FT 930713 Parliament and Politics: Lib Dems touch nerve over rail privatisation (387) ..BL.- By DAVID OWEN ..TX.- OFF-PEAK rail services to Christchurch are to be cut by half from this autumn, the Liberal Democrats claimed yesterday as rail privatisation and law and order dominated opening exchanges in the first week of by-election campaigning. ..TX.- Mr Nick Harvey, MP for Devon North and the party's transport spokesman, said off-peak services from London to the Dorset seaside town would be 'slashed' from two trains per hour to one from October as part of a 'slim-down' to pave the way for privatisation. ..TX.- As the party sought to exploit discontent at the government's sell-off plans, Mrs Diana Maddock, the Liberal Democrat candidate, released the results of a survey showing an overwhelming majority of local people wanted through ticketing and discount cards to continue after privatisation. ..TX.- 'It is all too apparent that rail privatisation has become one of the most unpopular policies of an already unpopular government,' Mrs Maddock said. ..TX.- As Network SouthEast said its winter timetable plans had yet to be finalised, Mr Robert Hayward, the Tory candidate, described the predictions of impending service cuts as 'speculation'. ..TX.- Mr Hayward - the former MP for Kingswood and a strong supporter of rail privatisation - has made no bones about his views on the subject being very different from those of rail enthusiast Mr Robert Adley, the maverick Tory MP whose death prompted the by-election. ..TX.- The Conservatives, who are defending a majority of 23,000 in what promises to be a crucial test of Mr John Major's battered authority, used a visit by Mr David Maclean, a home office minister, to attack the Liberal Democrats' record on law and order, described by Mr Maclean as the 'key issue' of the July 29 by-election. ..TX.- But with no member of the cabinet having yet set foot in Christchurch, there is an impression the Tory campaign has got off to a slow start. ..TX.- Law and order was also touched on by Labour during a visit by Mrs Margaret Beckett, the deputy leader. Mr Nigel Lickley, the Labour candidate, said Labour had recently tabled proposals in the Commons that would aid crime prevention, reduce crime and curb offending while on bail. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8651 Political Organizations. ..TP.- Types: NEWS General News. ..IX.- P8651. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6ACCFT ..HL.- 930713FT 930713 Parliament and Politics: Smith faces union deadlock over party reform - The problems facing the Labour leader's agenda for change (635) ..BL.- By DAVID GOODHART and RALPH ATKINS ..TX.- AN APPARENT concession by Labour leader John Smith in his confrontation with the trade unions yesterday alarmed some of Labour's 'moderniser' MPs as it became clear that the party leader's battle has entered a complex period of manoeuvre. ..TX.- Mr Smith has remained firm on his call for 'one member, one vote' in the selection of Labour parliamentary candidates. But his weekend promise that individual trade union members who pay the political levy would continue to vote in leadership elections led to fears that Mr Smith would be seen as having given ground. 'It is a tactical blunder,' said one MP. ..TX.- But the clash is not a matter of black versus white. Nor is Mr Smith's predicament as deep as it might seem - even though a decisive majority of trade unionists are now ranged against his proposals. ..TX.- For a start, the reforms on which the Labour conference will vote on are not yet clear. Mr Smith's idea of a register of Labour-supporting trade union members as part of a electoral college for leadership elections have not yet been detailed. ..TX.- The party's trade union links committee meets tomorrow and will agree a report for presenting to Labour's ruling National Executive Committee on Monday. There, Mr Smith will probably win a small majority for plans which will be submitted to the conference in September. ..TX.- The thinking among Mr Smith's aides is that once proposed reforms are documented, the leadership will be in a better position to sell its line. ..TX.- Moreover, there is a belief within Mr Smith's camp that some of his opponents are potential waverers on the selection of parliamentary candidates. Aides believe the conference delegations from three out of the big six unions affiliated to Labour - Nupe, the public service union, Usdaw, the shopworkers' union and MSF, the white collar union - could be persuaded to shift position to one-member-one-vote (OMOV). That might be enough to swing the vote in the Labour leader's favour. ..TX.- Another possibility, backed by some members of Labour's shadow cabinet, is a fudge between a 'register' of supporters in the unions, backed in principle by Nupe and the GMB, and Mr Smith's insistance on trade union members paying something extra, above the political levy, to become full Labour party members. Levy-paying trade unionists could become full members by, say, paying a nominal sum of 50p and promising to support the aims of the Labour party. ..TX.- Perhaps more likely is that division among the trade unions opposed to OMOV for parliamentary selections will result in the conference ending in impasse. Mrs Margaret Beckett, Labour's deputy leader, yesterday said there were about 25 different options being floated for reforms. It might be that none of the motions will be passed. ..TX.- The chances of a stalemate are quite strong. A motion backing the status quo from the TGWU or one of the small left-wing unions will almost certainly fall because the GMB general union and Nupe will both reject it. But their own variations of reform - a register of Labour supporters among levy payers from Nupe and a reform of the local electoral college from the GMB - will also probably be defeated by a combination of status quo camp and Smith supporters. ..TX.- The NEC, which narrowly favours OMOV, would then be in a strong position to present a resolution which supports Mr Smith. The less attractive option for the Smith camp is that supporters of the status quo shift their support to the register idea rather than accept OMOV. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8651 Political Organizations. P8631 Labor Organizations. ..TP.- Types: NEWS General News. ..IX.- P8651, P8631. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6ACBFT ..HL.- 930713FT 930713 Parliament and Politics: G7 backs benefits restraint, says PM (271) ..BL.- By PHILIP STEPHENS ..TX.- MR JOHN MAJOR yesterday claimed growing international recognition of the need to rein in the escalating cost of state-funded social provision, Philip Stephens writes. ..TX.- In a statement to MPs on the outcome of the Tokyo summit, the prime minister said that the seven leading industrial nations had also endorsed Britain's call for increased de-regulation and labour market flexibility to halt the rise in structural unemployment. ..TX.- But he faced calls from Labour leader Mr John Smith for an immediate cut in interest rates to bring down the jobless total. Mr Smith said he welcomed the recognition that there was insufficient growth and too much unemployment and called for 'closely co-ordinated international action' to combat both problems. ..TX.- Mr Major's comments came as Downing Street refused to rule out the possibility that the government's long-term spending review could suggest the eventual replacement of the basic state pension with private insurance schemes. ..TX.- Officials, however, said that there was no question of the government abandoning during this parliament its commitment to a universal state pension uprated annually in line with inflation. ..TX.- Mr Major said the agreement negotiated in Tokyo to restart the Gatt world trade talks had reawakened the prospect of a deal by the end of this year to complete the stalled Uruguay round. ..TX.- But Mr Major acknowledged that there were serious obstacles to be overcome on services and agriculture before a Gatt deal could be signed. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9441 Administration of Social and Manpower Programs. ..TP.- Types: GOVT Government News. ..IX.- P9441. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6ACAFT ..HL.- 930713FT 930713 Parliament and Politics: Shell set to cut jobs in N Sea oil (354) ..BL.- By DEBORAH HARGREAVES ..TX.- SHELL UK is scaling down its North Sea oil drilling programme and cutting jobs in its exploration department by between 20 and 30 per cent. But the company yesterday denied this was a result of the government's planned changes to Petroleum Revenue Taxes. ..TX.- 'The PRT changes have underlined and given focus to what we were already looking at in the North Sea,' the company said. ..TX.- An earlier memorandum sent to Shell employees referred to the fact that the tax changes will increase exploration costs by a factor of four, emphasising the need for cost-cutting measures. Shell has already begun a worldwide campaign to trim costs in an effort to improve profitability at a time of low oil prices. ..TX.- The changes, which abolish tax relief on exploration drilling while cutting the tax rate for existing fields from 75 per cent to 50 per cent, are due to become law in about a month. ..TX.- Six senior Tory MPs yesterday tabled an amendment to to introduce a transition period of three years. ..TX.- Many oil companies have opposed the changes because they believe up to 30,000 job losses in the sector could result from the subsequent downturn in exploration drilling. ..TX.- But Shell has always publicly supported the changes by saying the reduction in drilling would be offset by an increase in development work. ..TX.- An official at Shell called the reference to PRT in the company's memo 'rather unfortunate', but said that the rest of the memo made clear the job cuts were due to long-term structural changes within the company. ..TX.- The cuts in Shell's 200-strong workforce in the exploration department will take place by the end of next year. ..TX.- The Treasury is believed to have contacted the company over its apparent change of tone over the PRT issue. The company stressed that its support for the new PRT rules was unchanged. ..CO.- Companies: Shell Transport and Trading. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. ..TP.- Types: RES Natural resources. GOVT Taxes. ..IX.- P1311. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6AB9FT ..HL.- 930713FT 930713 Parliament and Politics: Five N-test claims for compensation (146) ..TX.- FIVE CLAIMS for compensation by veterans of British nuclear tests are pending, Mr Jeremy Hanley, minister for the armed forces, said last night. ..TX.- But he also insisted that there was no new evidence to suggest previous assurances that all personnel involved in the tests 'received little or no radiation' were wrong. ..TX.- In a Commons written reply he said the five claims were being examined in the usual way to see whether there was any evidence of exposure to radiation 'and if so whether this caused any subsequent disease'. ..TX.- He added: 'So far however, no case of death or disease among British nuclear test veterans has been shown to have resulted from radiation from the tests.' ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8733 Noncommercial Research Organizations. ..TP.- Types: NEWS General News. ..IX.- P8733. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6AB8FT ..HL.- 930713FT 930713 Parliament and Politics: Coal haulage probe confirmed (158) ..TX.- NOTTINGHAMSHIRE Police confirmed yesterday that fraud squad officers were investigating the affairs of a coal haulage company and its subsidiaries in which the Union of Democratic Mineworkers had a minority shareholding. ..TX.- National Plant and Transport, the group involved, was owned by a Nottingham business family which had close contractual arrangements with British Coal during the 1984-85 miners' strike. ..TX.- Mining Skills, the subsidiary, is at the centre of the inquiry. It was 49 per cent owned by the union but the UDM's involvement is not believed to be part of the investigation. ..TX.- Police are looking at transactions between Mining Skills and the factoring subsidiaries of two banks, Confidential Invoice Discounting, of Lloyds Bank, and RoyScot, part of the Royal Bank of Scotland. ..CO.- Companies: National Plant and Transport. Mining Skills. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4213 Trucking, Ex Local. ..TP.- Types: COMP Company News. ..IX.- P4213. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6AB7FT ..HL.- 930713FT 930713 Parliament and Politics: 8 MPs wrote to ministers on Nadir (228) ..TX.- SIR Nicholas Lyell, the attorney-general, yesterday disclosed that eight MPs - more than previously thought - had made representations to ministers about the case of Mr Asil Nadir, the fugitive Polly Peck boss. ..TX.- But he dismissed demands to name all the MPs concerned. ..TX.- Of the eight, Sir Nicholas said, four had written or spoken to him or to his predecessor, Sir Patrick Mayhew, in the past two years. ..TX.- In a written parliamentary reply, Sir Nicholas explained the figure had risen to eight with the inclusion of letters written by two MPs to the then home secretary. Sir Patrick had replied to these letters on various points. ..TX.- So far, Mr Michael Mates, the ex-Northern Ireland Minister who resigned over the affair, Mr Michael Heseltine, trade and industry secretary, Mr Peter Lloyd, Home Office minister, and Mr Peter Brooke, the national heritage secretary and Mr Nadir's MP, have been publicly identified as having contacted the attorney-general over the case. ..TX.- Sir Nicholas, speaking earlier in the Commons, said that while political donations were not his responsibility, 'what this case makes abundantly clear is that it does certainly not produce any favour or affection, either way, whatever party may be involved'. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9211 Courts. ..TP.- Types: NEWS General News. ..IX.- P9211. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6AB6FT ..HL.- 930713FT 930713 Parliament and Politics: Initiative launched to encourage women's involvement in politics (95) ..TX.- Sisters under the skin: Betty Boothroyd, the Speaker, and a model of Lady Thatcher at the launch yesterday of an initiative encouraging women's involvement in politics. Lady Thatcher will tomorrow unveil a plaque to Emily Wilding, who threw herself under the King's horse in the 1913 Derby. The exhibition marks the 163 women MPs since Nancy Astor took her seat in 1919. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9111 Executive Offices. ..TP.- Types: NEWS General News. ..IX.- P9111. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6AB5FT ..HL.- 930713FT 930713 Parliament and Politics: Labour deputy leader 'nervous' about pension privatisation scheme (163) ..TX.- MRS MARGARET Beckett, Labour's deputy leader, said yesterday she would be 'very nervous' about any move to enable people to opt out of the basic state pension scheme. ..TX.- Campaigning in Christchurch, she said private pensions were 'admirable as long as they are something that give people the freedom to top up' the basic state scheme. ..TX.- While Labour favoured improving the current system to take account of contemporary family and work patterns, it was not looking for savings at the expense of 'people already struggling with their pensions'. ..TX.- Her remarks came after Mr Peter Lilley, social security secretary, welcomed proposals by Labour MP Mr Frank Field - chairman of the Commons' social security committee - for privatising state pensions. Mr Lilley said the basic pension would remain as a 'building block'. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8651 Political Organizations. ..TP.- Types: NEWS General News. ..IX.- P8651. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGMB6AB4FT ..HL.- 930713FT 930713 Church may have to cut clergy, synod told (464) ..BL.- By ALAN PIKE, Social Affairs Correspondent ..TX.- SERIOUS FINANCIAL problems will force the Church of England to examine issues as fundamental as the number of full-time clergy it employs, its General Synod was told yesterday. ..TX.- The Right Reverend John Wayne, Bishop of Chelmsford and chairman of the Lambeth Group - a committee examining issues arising from the investment management of the church commissioners - told the synod that the Church's financial problems were likely to become 'even more difficult in the short term'. ..TX.- The problems have been brought to a head by a drop in the capital value of the church commissioners' property-dominated investment portfolio. Total value of income-producing assets fell from nearly Pounds 3bn in 1989 to Pounds 2.16bn last year. ..TX.- Criticism of the commissioners, who are responsible for handling the Church's main investments, led to the establishment of the Bishop of Chelmsford's group last year. But even before publication of its report the bishop set out some of the choices the Church will face. ..TX.- During the early 1980s, he said, the commissioners had financed better stipends, pensions, retirement housing and other benefits for its clergy. As a result, the Church had become too reliant on the commissioners. ..TX.- 'We became ever more ready to embark upon good and desirable work without facing up to the costs, or our ability or readiness to pay for it.' The Church had to look at such questions as the number of stipendiary clergy it needed, and might become increasingly dependent on a non-stipendiary ministry. ..TX.- Urgent action, said the bishop, must be taken to increase contributions from Church members, which did not compare with other churches. The Church of England needed to move rapidly towards making the majority of parishes self-financing. 'There can be little justification for the commissioners' money being used to assist parishes which scarcely need their help.' ..TX.- The average level of stipends financed by the commissioners - currently 41 per cent - is likely to fall to below 30 per cent by 1996. Mr John Smallwood, a commissioner, told yesterday's meeting that parishes would have to meet up to 90 per cent of clergy salaries by the end of the decade. ..TX.- Mr Michael Colman, chairman of Reckitt & Colman and the recently appointed first church estates commissioner, admitted that he shared the reservations of speakers who were concerned about the size of the commissioners' holdings in property and gilts. About half the commissioners' investments are in property - a much higher proportion than most investment institutions. Sir Michael said he did not see justification for the Church risking the market exposure this level of investment created. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8661 Religious Organizations. ..TP.- Types: NEWS General News. ..IX.- P8661. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6AB3FT ..HL.- 930713FT 930713 Rover sales rise as rivals suffer (316) ..BL.- By JOHN GRIFFITHS ..TX.- ROVER GROUP was the only large vehicle maker to increase sales in continental Europe in the first half of the year. They rose 5 per cent to 65,500. ..TX.- The British Aerospace subsidiary also increased its worldwide sales by 13 per cent in the period - helped by a 44 per cent sales rise in Japan, where the new-car market is suffering the first notable reverse in its history. ..TX.- Rover's Japanese sales rise is from a small base - up from 4,300 to 6,200 - but Rover executives see it as cause for further celebration following Honda's decision to sell the Land Rover Discovery model in Japan badged as a Honda - the first time a western manufacturer's model has received such an endorsement. ..TX.- Helped by sharp increases in other export markets outside Europe, Rover's total sales in the first half rose to 202,100 from 178,300 in the same period a year ago. UK sales were up 14 per cent, at 119,700, and export sales were 12 per cent higher at 82,400. ..TX.- Rover's total export sales outside Europe were up 54 per cent, to 16,900 units. ..TX.- The increase in continental European sales came in the face of estimates from the European Automobile Manufacturers Association last week that the combined total sales in 17 west European markets were down by 17.5 per cent in the first half of the year. ..TX.- In spite of the collapse in the German new-car market, where sales were down more than 20 per cent in the first half, Rover increased its sales in Germany by 6 per cent and plans to double the size of its German dealer network over the next two years. ..CO.- Companies: Rover Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3711 Motor Vehicles and Car Bodies. ..TP.- Types: MKTS Foreign trade. MKTS Sales. ..IX.- P3711. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6AB2FT ..HL.- 930713FT 930713 Henry Cooper sells Lonsdale belts (180) ..TX.- THE SALE of three Lonsdale Belts won by former heavyweight boxing champion Henry Cooper, was completed yesterday. ..TX.- The boxer was forced to sell the belts to meet losses at Lloyd's of London, where he was a Name. He stopped underwriting in 1985 and resigned from the market in 1989. Mr Cooper was a member of a number of syndicates, including at least one managed by the Oakeley Vaughan agency, which made heavy losses in the early 1980s. ..TX.- The belts were sold at a Sotheby's sale of sporting memorabilia held at Kent County Cricket Club's ground in Canterbury and fetched Pounds 42,000 against an expected price of Pounds 70,000. ..TX.- Mr Cooper, undefeated British boxing champion for 11 years from 1959, won the belts in 1959, 1964 and 1967. ..TX.- He is the only boxer of any weight to have won three Lonsdale belts outright. A belt is awarded for three successful British title defences. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7389 Business Services, NEC. ..TP.- Types: NEWS General News. ..IX.- P7389. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6AB1FT ..HL.- 930713FT 930713 PSA building division privatised (94) ..TX.- WS ATKINS, the engineering consultant, is to be paid Pounds 11.5m to take over the Manchester-based operations of the building management division of the Public Services Agency, Mr David Curry, local government minister, announced yesterday. ..TX.- It is the last part of the building management division to be privatised. ..CO.- Companies: WS Atkins Consultants. Public Services Agency. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9199 General Government, NEC. P8742 Management Consulting Services. P9611 Administration of General Economic Programs. ..TP.- Types: COMP Company News. ..IX.- P9199, P8742, P9611. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6AB0FT ..HL.- 930713FT 930713 Overseas building orders rise 29% (78) ..TX.- OVERSEAS orders won by British construction companies rose by 29 per cent last year to Pounds 2.9bn, figures published yesterday by the Department of the Environment show. ..TX.- The increase was due mainly to additional work in North America and Hong Kong, the department said. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1542 Nonresidential Construction, NEC. P1611 Highway and Street Construction. ..TP.- Types: MKTS Foreign trade. ..IX.- P1542, P1611. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6ABZFT ..HL.- 930713FT 930713 Ruling reserved in RSI case (152) ..TX.- JUDGMENT was reserved yesterday in the High Court case of a former Reuters journalist who is suing the news agency for compensation after developing repetitive strain injury working on computer keyboards. The judge is expected to announce his ruling in early September. ..TX.- Mr Rafiq Mughal, whose action is backed by the NUJ journalists union, has claimed Reuters failed to take heed of warnings issued by the Health and Safety Executive and other bodies about the dangers of using new technology. ..TX.- The action is seen by the NUJ as a test case with important implications for a series of similar pending cases. These include a number being brought against the Financial Times by some of its current and former journalists. ..CO.- Companies: Reuters Holdings. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7381 Detective and Armored Car Services. ..TP.- Types: COMP Company News. ..IX.- P7381. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6ABYFT ..HL.- 930713FT 930713 Independence call on school funding (117) ..TX.- THE Association of Teachers and Lecturers yesterday called for the funding of schools to be independent of the Department for Education. ..TX.- Mr Peter Smith, the association's general-secretary, wants the new Funding Agency for Schools to be given a guarantee of independence. He said the plans for a common funding formula would 'represent a serious lack of accountability for the system'. ..TX.- Consultation with members in both grant-maintained and local authority schools had shown that the department was 'already overwhelmed under the present pace and scope of the government reforms'. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9411 Administration of Educational Programs. ..TP.- Types: NEWS General News. ..IX.- P9411. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6ABXFT ..HL.- 930713FT 930713 Coal haulage probe confirmed (142) ..TX.- NOTTINGHAMSHIRE Police confirmed yesterday that fraud squad officers were investigating the affairs of National Plant and Transport, a coal haulage company, and its subsidiaries in which the Union of Democratic Mineworkers had a minority shareholding. ..TX.- Mining Skills, a subsidiary, is at the centre of the inquiry. It was 49 per cent owned by the union but the UDM's involvement is not believed to be part of the investigation. ..TX.- Police are looking at transactions between Mining Skills and the factoring subsidiaries of two banks, Confidential Invoice Discounting, of Lloyds Bank, and RoyScot, part of the Royal Bank of Scotland. ..CO.- Companies: National Plant and Transport. Mining Skills. Confidential Invoice Discounting. RoyScot. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4213 Trucking, Ex Local. P6153 Short-Term Business Credit Institutions. ..TP.- Types: COMP Company News. ..IX.- P4213, P6153. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6ABWFT ..HL.- 930713FT 930713 Insurance company alters flexitime (197) ..BL.- By DAVID GOODHART ..TX.- CLERICAL MEDICAL, the insurer, has abandoned its system of flexitime, reports the latest bulletin from Industrial Relations Services, the independent pay analysts, David Goodhart writes. ..TX.- Flexitime allows employees to decide their own hours of work around a core time specified by the company. Clerical and Medical said it had moved to a system of paying people to do a job rather than to sit at a desk for a fixed number of hours. This new culture clashed with the notion of 'counting hours and minutes' inherent in pure flexitime systems. ..TX.- It has run a flexitime system since 1975 for 1,200 of its 1,600 staff, but said it had had to change as a result of growing competitive pressures. ..TX.- The bulletin also reports on a survey of 123 organisations into fixed-term contracts. This found that on average only 2.5 per cent of staff were employed on such contracts with their use concentrated in the public sector. ..CO.- Companies: Clerical Medical and General Life Assurance. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6331 Fire, Marine, and Casualty Insurance. P6311 Life Insurance. ..TP.- Types: PEOP Labour. ..IX.- P6331, P6311. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6ABVFT ..HL.- 930713FT 930713 BBC regions to get 170 new jobs (173) ..TX.- THE BBC yesterday announ-ced what it described as its largest ever single investment in regional journalism with the creation of 170 new posts at a cost of Pounds 5.5m a year. ..TX.- The announcement was made by Mr Ron Neil, managing director of regional broadcasting, on the eve of this year's Radio Academy Festival in Birmingham. ..TX.- Mr Neil said the money, part of a Pounds 40m package of investments in programmes across all radio and television this year, had been funded entirely from savings. ..TX.- The jobs, to be advertised internally and externally, are made up of: ..TX.- 41 new regional bi-media radio and television correspondents in areas such as health and education. ..TX.- 90 extra news producer posts deployed across the BBC's 39 local radio stations. ..TX.- A new researcher post on every local radio station to improve planning. ..CO.- Companies: British Broadcasting Corp. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4832 Radio Broadcasting Stations. P4833 Television Broadcasting Stations. ..TP.- Types: PEOP Labour. ..IX.- P4832, P4833. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6ABUFT ..HL.- 930713FT 930713 Sky TV plans art and sport channels (210) ..BL.- By RAYMOND SNODDY ..TX.- SKY TELEVISION is looking at the possibility of launching two new satellite channels next year - a second sports channel and an arts channel, Raymond Snoddy writes. ..TX.- Mr David Elstein, Sky's director of programmes, said the satellite broadcaster had rights to many more hours of sports coverage than it could get on a single channel. ..TX.- 'I also personally would like to see an arts channel,' said Mr Elstein. ..TX.- One of the main barriers to an arts channel showing largely UK performances would be agreement with Equity, the actors' union, and the Musicians Union on performance and copyright fees. ..TX.- Mr Elstein suggested yesterday that the performance unions could be involved in the channel and given 30 per cent of the equity instead of copyright payments. ..TX.- Sky Television, in which Pearson, owner of the Financial Times, has a significant interest, will start offering 14 channels in a subscription package from September, and hopes to increase this to as many as 20 channels by early next year. ..CO.- Companies: British Sky Broadcasting. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4841 Cable and Other Pay Television Services. ..TP.- Types: TECH Services & Services use. TECH Patents & Licences. ..IX.- P4841. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6ABTFT ..HL.- 930713FT 930713 SFA reports sharp fall in complaints (275) ..BL.- By NORMA COHEN, Investments Correspondent ..TX.- THE Securities and Futures Authority, the self-regulating body for stockbrokers and futures groups, yesterday said that complaints against members and claims paid on behalf of members from the Investors Compensation Scheme had both fallen sharply during the past year. ..TX.- The authority's annual accounts for the year to March 31 showed that it received 421 complaints relating to 143 groups, compared with 542 the previous year. But it said that the complexity of complaints and the tendency of complainants to seek the aid of lawyers had grown. ..TX.- The total cost to authority members following complaints covered by the compensation scheme fell to Pounds 600,000 from Pounds 3.4m in 1991-92. ..TX.- Mr Christopher Sharples, the authority's chairman, said the authority hoped that the current review of the compensation scheme's financing would eliminate the element of cross-subsidy between different authorities in the industry. At present SFA members, who are engaged in wholesale business, underwrite a portion of claims against businesses in retail financial services. ..TX.- The authority is considering raising the maximum compensation which can be paid to claimants if cross-subsidisa-tion is eliminated, he said. ..TX.- The authority recorded an after-tax deficit of Pounds 714,000, partly reflecting lower subscription receipts, although these were offset by lower administration costs. The loss was covered by reserves. Operating expenses for 1993-94 are expected to be lower than the year which has just ended. ..TX.- People, Page 12 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6211 Security Brokers and Dealers. P6221 Commodity Contracts Brokers, Dealers. P9651 Regulation of Miscellaneous Commercial Sectors. ..TP.- Types: NEWS General News. ..IX.- P6211, P6221, P9651. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6ABSFT ..HL.- 930713FT 930713 Names struggle to meet submissions deadline (386) ..BL.- By RICHARD LAPPER ..TX.- NEW EFFORTS to find an out-of-court settlement to legal disputes at Lloyd's of London are running into difficulties, casting a shadow over efforts to restore profitability at the insurance market. ..TX.- Seventy one groups of loss-making Names - the individuals backing underwriting at Lloyd's - were invited last week to submit statements to Sir Michael Kerr, the former High Court judge who is chairing a panel set up to assess Names' claims of negligence against their agents. ..TX.- Names claim that a deadline of July 23 is unrealistic and will not allow them to consult legal counsel. Mr David Tiplady, a solicitor representing four groups of Names, said: 'It is impossible.' ..TX.- Mr Tiplady is pressing the panel to put back its deadline to mid-August. But Mr Bill Knight, of solicitors Simmons & Simmons, which is working with the panel, stressed that the deadline was a 'hard' one. He said the panel would be unable to report to Lloyd's by the autumn unless it stuck to this deadline. ..TX.- Lloyd's, which last month reported its third successive year of record losses, is keen to settle litigation with Names in order to restore confidence as it seeks to attract fresh capital. ..TX.- Separately, Mr Michael Deeny, chairman of the Gooda Walker Names Action group, the biggest group of loss-making Names, said his group would meet the deadline but 'smaller less well-financed groups' would be disadvantaged. ..TX.- Mr Deeny, who is also on a second panel which is examining the potential financial resources available for a settlement, said he was 'sceptical' about its chances of success. ..TX.- He said the errors and omissions insurers - which cover Lloyd's agencies against awards for negligence - were only prepared to consider a settlement which would not 'trigger their own reinsurance protections'. Since errors and omissions insurers - themselves Lloyd's syndicates - usually buy reinsurance, the amount available to settle claims would be limited. ..TX.- Mr Deeny said: 'At the end of the day all the arm-twisting by the Lloyd's management hasn't got anywhere. The only solution is to get a court judgment and put 30 to 40 agencies into liquidation.' ..CO.- Companies: Lloyd's of London. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6411 Insurance Agents, Brokers, and Service. ..TP.- Types: COMP Company News. ..IX.- P6411. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6ABRFT ..HL.- 930713FT 930713 Daily Mirror spikes The Sun's guns (401) ..BL.- By RAYMOND SNODDY ..TX.- THE first day of the tabloid circulation war saw the Daily Mirror, priced at 10p, selling out; The Sun, down 5p to 20p, having a rise in sales; while the Daily Star, unchanged at 25p, was seriously squeezed. ..TX.- Wholesalers said the price cuts and the attendant publicity increased yesterday's overall sale of mass-market newspapers. ..TX.- The Sun's promotional campaign was clearly hit by the Daily Mirror's spoiler of charging 10p for one day's issue. ..TX.- The Daily Mirror, which normally sells about 2.7m papers, claimed victory, saying it had sold about 500,000 extra copies - a rise of about 20 per cent. It is due to return to its usual 27p cover price today, while The Sun intends to stick at 20p for the rest of the summer. ..TX.- The Sun, which dismissed the Daily Mirror's move as a 'one-day gimmick', said it had sold between 275,000 and 280,000 extra copies - it usually sells about 3.5m copies a day. ..TX.- News International, which owns The Sun, said it was happy with the results so far and added that the picture would be clearer by the middle of the week. ..TX.- The Daily Star is estimated to have lost as much as 10 per cent of its normal daily sale of about 800,000. ..TX.- As the circulation battle raged, Mr Kelvin MacKenzie, editor of The Sun, and Mr David Banks, his counterpart at the Daily Mirror, traded insults. ..TX.- Mr Banks ridiculed The Sun's claim that the price cut was designed to beat the recession. He suggested that The Sun had contributed to the recession by 'single-handedly' ensuring four Conservative election wins. ..TX.- Mr MacKenzie replied the only reason the Mirror was not cutting its price was that its senior executives had such enormous share options they didn't want to see the share price go down. ..TX.- Mirror Group Newspapers share price closed 14p down yesterday at 153p and News International shares closed down 1p at 215p. ..TX.- There was scepticism in the newspaper industry about the wisdom of the move. 'Midsummer madness,' said one specialist. 'The real question is how many of the extra sales will be retained when the price goes up again.' ..TX.- Lex, Page 16 ..CO.- Companies: News International. Mirror Group Newspapers. United Newspapers. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2711 Newspapers. ..TP.- Types: COSTS Product costs & Product prices. MKTS Sales. ..IX.- P2711. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6ABQFT ..HL.- 930713FT 930713 Manchester buses to be privatised (215) ..BL.- By IAN HAMILTON FAZEY, Northern Correspondent ..TX.- GM BUSES, the biggest of the seven English metropolitan passenger transport companies formed in 1986 as part of bus deregulation, is to be split into two businesses, each of which will be sold. ..TX.- The company is owned by 10 local authorities through the Greater Manchester Passenger Transport Authority and covers a conurbation of about 2.5m people with a fleet of more than 1,600 buses. Annual revenue exceeds Pounds 110m. ..TX.- The split and sale is one of the biggest bus privatisations attempted so far and will attract interest because of the planned privatisation of London Buses' 10 operating subsidiaries later this year. ..TX.- GM Buses says it has about 70 competitors in Greater Manchester. After mergers and takeovers involving other bus companies, it is the UK's fourth largest bus company outside London. ..TX.- One GM business will have more than 900 buses and its routes are expected to bring in an operating revenue of about Pounds 60m a year. The other business will have 700 buses and should earn about Pounds 50m annually. ..CO.- Companies: GM Buses. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4111 Local and Suburban Transit. P9611 Administration of General Economic Programs. ..TP.- Types: COMP Company News. ..IX.- P4111, P9611. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6ABPFT ..HL.- 930713FT 930713 Rural folk step warily into computer future: Kington, a small town on the Welsh border, has become the focus of a communications project (879) ..BL.- By PAUL CHEESERIGHT ..TX.- KINGTON, folded into the hills along the border of Wales and Herefordshire, is trying for the third time to become a significant communications centre. ..TX.- Once it was a servicing stop for sheep and shepherds en route from the Welsh hills to Birmingham. Later it was touted as a rail hub, the Crewe of the west, when trains seemed the answer to all transport problems. Now its future is tied, experimentally at least, to a computer and telecommunications network called the Kington Connected Community Project. ..TX.- Apple Computer provides the machines. British Telecommunications links them to each other and the outside world. The Department of Trade and Industry and the Rural Development Commission, anxious about economic development, give helping hands. A happy confluence of mixed motives gives Kington access to Pounds 250,000 worth of equipment and technical expertise. ..TX.- Local residents have drawn up a shopping list of computer applications which, if they work, would make Kington both an economic model for other rural communities and a commercial pilot for Apple and BT. ..TX.- But the provision of computers is only half the story. Mr Craig Sears-Black, the Apple manager in charge of the project, said: 'The merging of computers and the communications business is at the centre of all this, integrating telecoms with our products. We see our application of this (in Kington) as a testbed.' ..TX.- The project is based on four schemes. A communications telecentre will act as the technological and social focus for the project. A computerised stock control system based on three sports shops will act as a model of cost-saving and enhanced efficiency for retailers. Local primary schools will seek to computerise some of their administration, again in a bid to cut costs and ensure survival. A further plan is to computerise tourist information so that, for example, it will be available to visitors 24 hours a day at the touch of a button. ..TX.- Other schemes are being discussed. The local historical society wants to computerise its card index. There is the suggestion of offering a computerised marketing service for professional language translators. ..TX.- Two broad issues are at play. First is the search by Apple and BT for new markets. Second is the extent to which computers and telecommunications might strengthen economic diversification in rural communities where farm incomes are falling. ..TX.- Apple Computer has been alert to the commercial possibilities in rural communities since it made computers available to the community of Jacksonville, Oregon in 1990 and monitored their impact on local business. It says those results were promising. ..TX.- But the Kington experiment is more elaborate. The local residents are deciding what they want to do with the computers and Apple is providing staff on the ground to tell the residents how to do it. ..TX.- Kington is convenient for experimentation. 'We needed quite a controlled and self-contained environment,' Mr Sears-Black said. The town's population is 2,200, or 4,500 if five nearby villages are included. ..TX.- But the figures suggest this is a town where vigour is slowly ebbing. Analysis of the 1991 census by CACI Information Services shows that in the 1980s there was a 25 per cent fall in residents aged between 15 and 19, and that the town has 51 per cent more retired people than the British average. ..TX.- Of the working population, 45 per cent are either self-employed or part-time. Although officially the level of unemployment is low, residents point to considerable under-employment as the rural economy, here as elsewhere, weakens. ..TX.- Certainly the community is not an electronic crusader. Although larger companies in the area have used computers for years, there is a degree of caution among individuals and in the small business sector. ..TX.- Mr Miles Swinburne, the project's community manager, accepts this as natural. 'The reason why business is strong is that they move with the times but they don't jump on the bandwagon,' he suggested. ..TX.- One factor behind the slow take-up of computers in the past, he added, 'is that technical assistance is at least half an hour away. ..TX.- Mr Terry James, a Kington farmer and district councillor, said: 'Another reason for reluctance is that the advice people have had is prejudicial - the advice has usually come from someone trying to sell a specific item.' ..TX.- With the project there is the chance to overcome the prejudice, quieten the techno-fear and try out ideas at no cost. ..TX.- Mr Keith Harris, the computer specialist Apple has put into the town to make the project work, said: 'The great thing for Kington is that they've got me for nothing.' ..TX.- But there cannot be a technological holiday for long. The kit comes free but not the running costs. 'Our primary concern is that the initial projects should start to make some money fairly quickly,' Mr Harris warned. ..TX.- Apple and BT are there for a year, and the Rural Development Commission and the district council for three. After that Kington will be on its own again. ..CO.- Companies: Apple Computer Inc. British Telecommunications. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4813 Telephone Communications, Ex Radio. P7379 Computer Related Services, NEC. ..TP.- Types: NEWS General News. ..IX.- P4813, P7379. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6ABOFT ..HL.- 930713FT 930713 Overseas building orders increase (102) ..TX.- OVERSEAS orders won by British construction companies rose by 29 per cent last year to Pounds 2.9bn, figures published yesterday by the Department of the Environment show. ..TX.- The increase was due mainly to additional work in North America and Hong Kong, the department said. ..TX.- Mr John Gummer, environment secretary, said the rise in orders from the Far East, one of the world's growth regions for construction, was particularly encouraging. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1542 Nonresidential Construction, NEC. P1611 Highway and Street Construction. ..TP.- Types: MKTS Foreign trade. ..IX.- P1542, P1611. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6ABNFT ..HL.- 930713FT 930713 Insurance company alters flexitime (292) ..BL.- By DAVID GOODHART ..TX.- CLERICAL MEDICAL, the insurer, has abandoned its system of flexitime, reports the latest bulletin from Industrial Relations Services, the independent pay analysts, David Goodhart writes. ..TX.- Flexitime allows employees to decide their own hours of work around a core time specified by the company. Clerical and Medical said it had moved to a system of paying people to do a job rather than to sit at a desk for a fixed number of hours. This new culture clashed with the notion of 'counting hours and minutes' inherent in pure flexitime systems. ..TX.- It has run a flexitime system since 1975 for 1,200 of its 1,600 staff, but said it had had to change as a result of growing competitive pressures. ..TX.- The bulletin also reports on a study of the use of fixed-term contracts, based on a survey of 123 organisations. This found that on average only 2.5 per cent of staff were employed on such contracts. ..TX.- Nearly two-thirds of the survey respondents said they did not use them and their use is concentrated in the public sector - eight out of 10 public-sector employers said they used them. ..TX.- The most common group covered by fixed-term contracts was found to be 'professionals' followed by clerical workers. There was also evidence of an extension of their use to managerial occupations. ..TX.- The main reason employers gave for the use of fixed-term contracts was to provide cover for short-term projects. More than half the organisations surveyed give employees the same terms and conditions as permanent employees. ..CO.- Companies: Clerical Medical and General Life Assurance. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6331 Fire, Marine, and Casualty Insurance. P6311 Life Insurance. ..TP.- Types: PEOP Labour. ..IX.- P6331, P6311. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGMB6ABMFT ..HL.- 930713FT 930713 Pay rises well above inflation reported (476) ..BL.- By DAVID GOODHART and IAN HAMILTON FAZEY ..TX.- SOME EMPLOYERS are continuing to offer pay rises more than three times the 1.3 per cent rate of inflation according to the latest pay bulletin from Incomes Data Services. ..TX.- The most dramatic increase in recent weeks was at the Halifax Building Society where performance rises ranged between zero and 8.25 per cent for 18,000 staff. ..TX.- The society said a 'tiny minority' of staff would receive 8.25 per cent. An average performer at mid-point in the salary range would receive a 3 per cent rise, compared with 5.5 per cent last year. ..TX.- Other substantial rises include: 5.5 per cent for 430 workers at Pilkington Insulation's fibreglass works in St Helens, Merseyside, after a 12 month freeze; an increase of 5.5 per cent at electronics company National Semiconductor in Greenock, Strathclyde; and a 4 per cent rise after a pay freeze at Manchester bus company GM Buses. ..TX.- According to the Engineering Employers' Federation, however, engineering industry pay settlements are continuing to fall to an average of 2.09 per cent in the three months from April to June. ..TX.- Meanwhile the Yorkshire and Humberside regional council of the Trades Union Congress said yesterday that low pay settlements were slowing recovery and reducing living standards. ..TX.- Mr Paul Jagger, TUC regional secretary, told a meeting with members of the Confederation of British Industry in Leeds: 'A successful economy must be based on equal sharing of the benefits of growth. Any attempt at creating growth on the back of low wages is doomed to failure in the long run.' ..TX.- Yorkshire and Humberside region has reported a series of low pay settlements in the private sector this year, particularly among engineering employers in South Yorkshire, where most recent awards have been under 2 per cent, and one in five workforces have accepted pay freezes. ..TX.- In March about 20,000 people employed by Sheffield City Council voted for a 3.25 per cent pay cut to avert 1,400 redundancies and balance the city's budget. ..TX.- Mr Jagger said: 'The general view that low wages equal a successful economy is a policy we reject, as it simply produces not only low pay but also low-skilled jobs in the longer run.' ..TX.- The TUC is also worried that training is suffering. Mr Jagger called on the government to stimulate recovery with tax incentives, particularly to encourage training. ..TX.- British Nuclear Fuels is offering staff up to four years' pay to leave the company by June next year, according to the latest issue of the magazine Personnel Today. BNFL hopes to tempt large numbers of its 8,000 white-collar workers. ..TX.- Pay bulletin details from: Incomes Data Services, 193 St John Street, London EC1V 4LS. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8741 Management Services. P2819 Industrial Inorganic Chemicals, NEC. ..TP.- Types: PEOP Labour. ..IX.- P8741, P2819. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGMB6ABLFT ..HL.- 930713FT 930713 Treasury unit to boost private investment drive (381) ..BL.- By DAVID OWEN and JOHN WILLMAN ..TX.- THE TREASURY has formed a special unit to stimulate progress on the government's initiative to involve private-sector capital in public-sector projects. ..TX.- With scores of such proposed projects stuck at various stages in the approval process, there is mounting scepticism in the private sector and some spending departments about the level of the Treasury's commitment. ..TX.- Mr Kenneth Clarke, the chancellor, is understood to be enthusiastic about the initiative, although the need for him to master his new brief may have slowed its progress and frustrated those in spending ministries. ..TX.- Eight months after last year's Autumn Statement, when sweeping changes to the rules governing the use of private finance for public expenditure were announced, the government has yet to unveil a single significant new project which takes advantage of the changes. ..TX.- This has led to disenchantment among industrialists and financiers. Mr Howard Davies, director-general of the Confederation of British Industry, said: 'There is a danger that the whole government private finance initiative will be discredited unless real holes can be dug in the ground pretty soon.' ..TX.- Ministers in a number of spending departments are similarly despondent, with some questioning the Treasury's preparedness to relax its grip. ..TX.- Some ministers accuse the Treasury of continuing to insist on unrealistic conditions that prospective partners in the private sector could not accept. ..TX.- Some major projects, such as the Pounds 2bn CrossRail scheme for an east-west rail link across London, appear to have been delayed by the decision to seek private capital for part of the cost. ..TX.- Talks about involving private finance in building the Pounds 2.5bn Channel tunnel rail link are also taking longer than expected, dashing hopes that conclusions would be reached by early July. ..TX.- The Treasury insists it is keen for the initiative to be successful. The private finance unit has been created to monitor progress and make sure inventive ideas are circulated around spending departments. ..TX.- The chancellor is expected to make a speech about the initiative before the autumn party conference season. Its proponents hope this will give the idea fresh impetus. ..TX.- No takers, Page 15 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGMB6ABKFT ..HL.- 930713FT 930713 Unease at review of Arts Council (178) ..BL.- By ANTONY THORNCROFT ..TX.- THE Arts Council yesterday gave a guarded response to a review of its working practices by accountancy firm Price Waterhouse commissioned by the National Heritage Department. ..TX.- Price Waterhouse made three suggestions for savings, the first of which it says would save Pounds 429,000 a year from a total Arts Council budget of Pounds 225m. The second would save Pounds 829,000. A third, more radical option, would save Pounds 2.2m but mean, in effect, the end of an independent Arts Council. ..TX.- Mr Peter Brooke, the national heritage secretary, has indicated that he favours the second option, but the Arts Council said proper checks would have shown that the option would save about Pounds 390,000 - not Pounds 829,000 as suggested by Price Waterhouse. ..TX.- The council is also unhappy with calculations that its administration costs are 10p in the pound. It estimates them at less than 5p. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8699 Membership Organizations, NEC. ..TP.- Types: MGMT Management & Marketing. ..IX.- P8699. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGMB6ABJFT ..HL.- 930713FT 930713 Employee share scheme 'failed' (359) ..BL.- By DIANE SUMMERS, Labour Staff ..TX.- A GOVERNMENT scheme to boost share ownership among ordinary employees by allowing executives to buy share options at a discount has failed to achieve its objective, Incomes Data Services, the independent pay group, said yesterday. ..TX.- Almost all the companies examined which had taken advantage of the discount for their executives had schemes for other groups of employees in place before the discount became available, IDS found. ..TX.- Under a measure in the 1991 Budget, executives became eligible from January 1 last year to buy shares at up to 15 per cent below the market price. Until then, to qualify with the Inland Revenue, the price paid when the option was exercised had to be no less than the market value of the shares when the option was granted. ..TX.- The new discounts were conditional on the setting up of company-wide employee share schemes. IDS said: 'The introduction of this substantial tax benefit was explicitly linked to a need to provide top executives with an incentive to spread share ownership to the shopfloor.' ..TX.- The research shows that only two of 28 companies that had issued discounted executive share options needed to set up a new all-employee scheme - 26 already had share schemes covering all employees. ..TX.- A total of 108 separate options had been issued by the 28 companies, 41 of them by seven FT-SE 100 companies. The average value of the discounted options was Pounds 17,930, calculated as the difference between the market price on the day of grant and the option price. ..TX.- IDS concludes that, while few companies have issued discounted executive options, many more have amended the rules of their schemes to allow for them, most of which already have all-employee share schemes. ..TX.- 'For this reason, the growing use of discounted options is unlikely to further the government's stated aim of spreading share ownership to the shopfloor.' ..TX.- Management Pay Review 149. IDS, 193 St John St, London EC1V 4LS. By subscription. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8741 Management Services. P9651 Regulation of Miscellaneous Commercial Sectors. ..TP.- Types: NEWS General News. ..IX.- P8741, P9651. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGMB6ABIFT ..HL.- 930713FT 930713 Repairs at Tower Bridge (59) ..TX.- Mind the gap: a workman repairs a corroded beam above the drive shafts which lift the centre section of the 100-year-old Tower Bridge. The road surface has been lifted until September ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4785 Inspection and Fixed Facilities. ..TP.- Types: NEWS General News. ..IX.- P4785. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGMB6ABHFT ..HL.- 930713FT 930713 Threat of strike by post staff recedes (189) ..BL.- By DIANE SUMMERS ..TX.- A STRIKE by postal workers in London over the closure of five sorting offices and the loss of up to 6,000 jobs looks unlikely, following talks between Royal Mail management and the Union of Communication Workers. ..TX.- Royal Mail has agreed to seek volunteers for redundancy and transfers between offices, and will cushion any loss of earnings for up to a year for those transferring. ..TX.- The deal has been agreed by union leaders but postal workers in London will be balloted this week before the threat of a strike is finally withdrawn. The union had warned of the 'devastating effect' there could have been on postal deliveries in the capital without an agreement. ..TX.- Mr Mike Hogan, union negotiator, said the deal was 'an entirely satisfactory settlement which contains elements which the union has been seeking for some time'. He added that it had always been the union's intention to reach agreement without disruption of services. ..CO.- Companies: Royal Mail. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4311 U.S. Postal Service. ..TP.- Types: PEOP Labour. ..IX.- P4311. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGMB6ABGFT ..HL.- 930713FT 930713 World Trade News: Bulgarian trade pact delayed (189) ..BL.- By ANTHONY ROBINSON ..TX.- BULGARIA has been hit by the failure of the EC Council of Ministers to approve the interim trade agreement signed on March 8 as part of Bulgaria's proposed Association Agreement with the EC, Anthony Robinson writes. ..TX.- Bulgaria has already suffered most from the EC and UN sanctions on Serbia and the closure of trade routes through that country. The EC's failure also puts in jeopardy its trade agreement with European Free Trade Association countries, whose timetable depends on completing all stages of EC internal Association Agreement procedures. ..TX.- Bulgarian officials believe the delay stems from stonewalling by Italian officials seeking to strengthen the safeguard clauses protecting EC members from cheap eastern Europe imports generally. ..TX.- The Sofia government has just survived an opposition attempt to force a dissolution of parliament and early elections, and hopes the Council of Ministers will finally approve the trade agreement at its next session in Brussels on July 19. ..CN.- Countries: QR European Economic Community (EC). BG Bulgaria, East Europe. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGMB6ABFFT ..HL.- 930713FT 930713 World Trade News: Brittan seeks bigger world trade accord - Tokyo deal on tariff cuts just 'down payment' (657) ..BL.- By FRANCES WILLIAMS and NANCY DUNNE ..DL.- GENEVA, WASHINGTON ..TX.- THE four-way tariff-cutting deal struck at the Tokyo summit last week was merely a 'down payment' on a much larger prospective trade liberalisation accord, Sir Leon Brittan, EC trade commissioner, said yesterday. ..TX.- Sir Leon, in Geneva to brief trading partners on the outcome of the summit, told a news conference the European Community and the other Quad countries - the US, Japan and Canada - were prepared to go further if other nations in the Uruguay Round of global trade talks responded with new market access concessions of their own. ..TX.- 'We have more to offer if others have more to offer,' he said, singling out as EC targets bigger cuts in US textiles tariffs and better access to financial services markets in east Asian economies. ..TX.- The agreement by the Quad countries to eliminate tariffs in eight sectors, cut other duties by up to 50 per cent and push for liberalisation of financial and other services markets will form the basis for intensive bilateral and multilateral negotiations on market-opening measures between Uruguay Round participants over the next three to four weeks. ..TX.- These talks will be launched formally tomorrow morning when the top-level Trade Negotiations Committee, chaired by Mr Peter Sutherland, director-general of the General Agreement on Tariffs and Trade, meets to agree a work programme to conclude the 116-nation talks by December 15. ..TX.- Negotiations will restart in Geneva in September on the remaining outstanding issues in the round. ..TX.- These include disagreements over anti-dumping and subsidies rules, dispute settlement and the creation of a Multilateral Trade Organisation. ..TX.- Sir Leon said yesterday the draft rules package should be subject to limited changes only, and reaffirmed EC backing for an MTO which would curb use of unilateral trade measures to solve disputes. ..TX.- Yesterday evening, Sir Leon was due to host a dinner for members of Eurofer, the European steelmakers' association, and his fellow commissioners, Mr Karel Van Miert and Mr Martin Bangemann. ..TX.- EC officials said the object was an 'exchange of views' on the planned restructuring of the European steel industry, competition from eastern European steel producers, and the stalemate in negotiations on a Multilateral Steel Agreement. ..TX.- Nancy Dunne in Washington adds: Mr Mickey Kantor, the US trade representative, said yesterday he would meet Mr Sutherland in Washington next Monday as part of the drive to 'multilaterise' the tariff cut deals reached by the industrialised countries in Tokyo. ..TX.- Last week's agreement had created an atmosphere of confidence among the negotiators of leading industrialised countries, he said, but there would still be tough negotiations ahead. There are agreements in 18 products areas and these 'may or may not change' depending on the offers of the other Gatt members. ..TX.- For example, the US may not be willing to cut its textile tariffs further than agreed. Not only has it moved back from a proposal for 50 per cent cuts on all tariffs above 15 per cent, but it also is insisting on taking 10 years for the tariff cuts, rather than the earlier proposal for six years. ..TX.- US movement on both textile tariffs and quotas will depend on the willingness of the large developing countries to open their markets to US textiles. ..TX.- Meanwhile, the US and Japan have cleared the way for intensive Gatt negotiations by agreeing to delay negotiations on bilateral trade pacts for at least six months. Under their new trade 'framework' they are to negotiate market access arrangements on government procurement, the insurance market, automotive industries and other high priority sectors, by the time the heads of government first meet in 1994 or within the next six months. ..CN.- Countries: QR European Economic Community (EC). US United States of America. JP Japan, Asia. CA Canada. ..IN.- Industry: P9611 Administration of General Economic Programs. ..TP.- Types: NEWS General News. ..IX.- P9611. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGMB6ABEFT ..HL.- 930713FT 930713 Break in the US rains: Worst may be over as some floodwaters start to recede (515) ..BL.- By GEORGE GRAHAM ..DL.- WASHINGTON ..TX.- BRIGHT sunshine and a break in the rains yesterday gave some hope that the worst might be over for the drenched farmers and townspeople of the Upper Mississippi basin. ..TX.- Although weather forecasters continued to warn that the chance of renewed rain had not gone away, some tributary rivers seemed to have stabilised and floodwaters began to recede in a few areas of the six-state region devastated by weeks of flooding. ..TX.- The federal government was also looking on the bright side. As Vice-President Al Gore flew to St Louis to inspect the flood damage, Mr Robert Reich, the labour secretary, suggested that the flooding might actually improve the employment outlook in the short term. ..TX.- 'You're going to have so many state dollars and federal dollars, so much rebuilding of the area, that a lot of people are going to have to be put to work to rebuild,' Mr Reich said. ..TX.- Mr Gore's visit yesterday appeared designed to head off criticism of the administration for not taking a close enough interest in the disaster areas. Although President Bill Clinton visited the region a week ago on his way to the Tokyo summit, his stopover for a holiday in Hawaii on the way back had given ammunition to those who wished to attack him. ..TX.- However, the river began battering an area south of St Louis after floodwaters forced thousands of people to flee the Des Moines, Iowa, area, where the Des Moines and Raccoon rivers merge in the Mississippi watershed. Officials said that about 7,000 residents had been evacuated from their homes and an estimated 300,000 people left without drinking water and an estimated 35,000 without electricity. ..TX.- Federal officials have declined to give an overall estimate of the cost of the flood damage, but federal disaster relief has been promised, and an emergency spending bill is expected to be required to provide the money. ..TX.- Even if the rains stop, it may take some time for flooding to subside, because many up- stream dams, built to provide flood containment capacity, are overflowing and will have to continue to release water. ..TX.- At the same time, earth and sand levees built along the riverbanks remain saturated and could continue to give way long after the floodwaters have crested. ..TX.- Meanwhile the heatwave that has baked areas of the US east coast eased yesterday. ..TX.- A storm that caused showers in the northern Rockies early yesterday was moving east, bringing hope that it would break the heat in the east by midweek. ..TX.- A second front, pushing down from Canada and the Great Lakes, is also expected to bring cooler weather. ..TX.- Philadelphia saw one of the worst death tolls from the hot spell, with 24 people declared dead of heat-related causes, raising the city's death toll to 41 by Sunday, according to Dr Robert K. Ross, the city's health commissioner. ..CN.- Countries: US United States of America. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: RES Natural resources. ..IX.- P9229. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGMB6ABDFT ..HL.- 930713FT 930713 Markets unfazed by crop losses (560) ..BL.- By LISA BRANTSEN and LAURIE MORSE ..DL.- WASHINGTON, LONDON ..TX.- CROP losses from the high rainfall and flooding in the US Midwest have so far been around Dollars 2bn (Pounds 1.3bn), according to estimates from Iowa State University, with nearly half the losses in flooded Iowa farm country. ..TX.- Some counties in Iowa have had three times the normal amount of rainfall this month, deluging the richest corn-growing area in the US. ..TX.- Nearly 4m acres of prime midwestern farmland have either been too wet to plant spring crops or flooded by the swollen rivers. ..TX.- While that may mean disaster for many individual farmers, the impact on world cereal prices is expected to be very small. 'This is not a significant event,' said Mr Dennis Starleaf, head of the economics department at Iowa State University. 'It is way too early to tell if we won't actually get a boost in yields because of the excess moisture.' ..TX.- There is an old market axiom that 'rain makes grain'. Although farm country on either side of the Mississippi river is under water, and floods are occurring in other parts of Iowa and Missouri, crops in the eastern US corn belt, in the states of Ohio, Indiana, and eastern Illinois, are in excellent condition. ..TX.- Also, farmers still have over 2bn bushels of maize in store from last year's crop. The feedgrain supply is more than adequate, with few prospects for long-term food price inflation, Mr Starleaf said. ..TX.- At the Chicago Board of Trade yesterday, traders sent soyabean prices sharply lower as flood-related panic buying ebbed. Prices for harvest-time delivery are up over 20 per cent since mid-June, to more than Dollars 7 a bushel. ..TX.- However, yesterday's setback was predictable after such a big rise. Crop analysts now fear that if high prices are sustained through the summer, it will encourage Brazilian farmers to plant record acreage with soyabeans. ..TX.- A loss of 4m acres to the floods is small when compared to the 56m that were planted with maize and soyabeans in the US last year, when record yields resulted in a bumper 240.8m metric tonne maize crop and a respectable 60m tonne soyabean harvest. ..TX.- Soyabean prices will increase sharply and US exports will fall because of the midwestern flooding, according to a US Department of Agriculture economist, Dr Scott Sanford. ..TX.- Weekly crop projections published yesterday show the price of soyabeans will increase an average of 50c a bushel. ..TX.- Damage to soyabean crops comes on the heels of several years of bumper crops. 'We've been in a spate of record crops because production has been moving out of lower yielding areas such as the south-east and delta and into the corn belt,' said Dr Sanford. ..TX.- The price increase, he said, would make US exports less competitive on the world market. The higher prices might also hit livestock prices. The USDA reduced projected yields from 2.04bn bushels to 1.97bn. ..TX.- Projected maize yields were also reduced, by 650m bushels to 7.85bn bushels, by the flooding. Price rises are expected to be low, however, because of large stocks of corn - up an average 15c a bushel to Dollars 2.20. ..CN.- Countries: US United States of America. ..IN.- Industry: P0191 General Farms, Primarily Crop. P0291 General Farms, Primarily Animal. P0116 Soybeans. ..TP.- Types: RES Natural resources. COSTS Commodity prices. ..IX.- P0191, P0291, P0116. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGMB6ABCFT ..HL.- 930713FT 930713 Washington to foot the bill: Number of claims will rise as the waters fall (353) ..BL.- By NIKKI TAIT ..TX.- MOST OF the insurance cost resulting from the Mississippi floods will be picked up by the federal government, under the National Flood Insurance Programme and a separate federally-run crop insurance scheme. ..TX.- The Federal Insurance Administration, which runs the National Flood Insurance Programme, said yesterday it could not yet put a figure on the cost of the disaster in insurance terms. ..TX.- By Friday, it had received 41 claims in Illinois, where it has around 3,600 policyholders, about 29 claims in Missouri, where there are more than 7,300 policyholders, and smaller numbers of claims from Wisconsin, Iowa and Minnesota. ..TX.- However, these numbers are expected to increase once the waters have receded and the extent of the damage becomes clearer. ..TX.- The National Flood Insurance Programme, which began life about 25 years ago, is administered by private sector insurers, who pay out claims and are then reimbursed by the federal authorities. Over the past eight years, the programme has been self-funding, according to the American Insurance Association - with premiums collected from policyholders meeting the claims submitted. ..TX.- Both the Federal Insurance Administration and the AIA acknowledge that there may be substantial under-insurance - or non-insurance - in flood-affected areas. ..TX.- The AIA estimates that there are about 10m buildings in the nation's flood plains, and that only about 2.5m are covered by federal insurance. ..TX.- There is virtually no private-sector flood insurance written, although some supplementary coverage is sometimes purchased to top up the federal scheme. ..TX.- As a result, a number of the largest US property-casualty insurers, who suffered multi-billion-dollar losses from Hurricane Andrew in August last year and Hurricane Hugo in 1989, said the Mississippi situation should cause them little problem. ..TX.- 'Much of the flooding situation is covered by federal government, and we're a relatively small player on the commercial side,' said Allstate, the large Chicago-based property-casualty insurer. ..CN.- Countries: US United States of America. ..IN.- Industry: P6331 Fire, Marine, and Casualty Insurance. P9229 Public Order and Safety, NEC. ..TP.- Types: RES Natural resources. ..IX.- P6331, P9229. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGMB6ABBFT ..HL.- 930713FT 930713 Action plan for World Bank (315) ..BL.- By GEORGE GRAHAM ..DL.- WASHINGTON ..TX.- THE World Bank has increased its budget for supervision activities by 12 per cent for the current year as part of its efforts to improve the effectiveness of its lending. ..TX.- Mr Ernest Stern, a World Bank managing director and acting president while Mr Lewis Preston, the president, is recovering from surgery, said yesterday the new action plan agreed at a board meeting last week would accelerate a cultural change within the bank and should help to improve the management of the 1,850 projects in its portfolio. ..TX.- 'Central to the plan is the commitment to make the management of projects under implementation as important as making new loans. Only sound, on-the-ground results - the development impact of projects - are true measures of the bank's contribution to sustainable development,' Mr Stern said. ..TX.- The new action plan comes in response to last year's report by a taskforce which identified a sharp decline in the quality of the bank's portfolio, with particular problems in Africa and in the agricultural sector. ..TX.- At the heart of the plan is a determination to manage the bank's portfolio of projects within each country as a unit, instead of project by project. ..TX.- Mr Stern said country reviews would in future be conducted annually for big borrower countries, and on a regular basis for smaller borrowers. ..TX.- Over half of the bank's biggest country portfolios, however, have already undergone review, and as a result a number of projects have been cancelled or redesigned. ..TX.- In India, a review led to the cancellation of projects totalling Dollars 1.3bn (Pounds 866m). ..TX.- Mr Stern insisted, however, that the basic responsibility for ensuring that projects were properly implemented lay with the borrower, not the bank. ..CN.- Countries: US United States of America. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGMB6ABAFT ..HL.- 930713FT 930713 World Trade News: Taipei near to Dollars 11bn fighter deal (183) ..BL.- By DENNIS ENGBARTH ..DL.- TAIPEI ..TX.- TAIPEI's plans to buy 210 advanced fighters from the US and France came a step closer yesterday when a joint legislative committee approved NTDollars 318.7bn (Dollars 11.4bn) in funds for the purchases, reports Dennis Engbarth from Taipei. ..TX.- Formal approval by parliament to purchase 150 F-16 Falcons from the US and 60 Mirage 2000 fighters from Franceis expected later this week, even though the lack of clear provisions for technology transfers to Taiwan will attract widespread criticism from lawmakers in both the ruling Kuomintang and the opposition Democratic Progressive party. ..TX.- Mr Sun Chen, minister of national defence, said the 210 advanced aircraft would join 130 IDF (indigenous developed fighters) now in production and 90 remaining F-5E fighters in the island's revamped air defence force. ..TX.- The 430 jet fighters are expected to meet all Taiwan's air defence needs until the year 2000 without more purchases from foreign suppliers, Mr Sun said. ..CN.- Countries: TW Taiwan, Asia. ..IN.- Industry: P9711 National Security. ..TP.- Types: RES Facilities. ..IX.- P9711. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGMB6AA9FT ..HL.- 930713FT 930713 World Trade News: Tough talking taints EC-Russian 'partnership' accord - Trade across Europe / Moscow's interpretation of Gatt rulebook is central to the trade negotiations (902) ..BL.- By LIONEL BARBER ..TX.- SIR Leon Brittan, the EC's chief trade negotiator, will not forget his trip to Moscow last month in a hurry. During tense bargaining, Sir Leon professed astonishment that his Russian hosts were proving so obstinate. ..TX.- After all, the Community had made similar proposals to Guatemala regarding the new EC banana regime, without a murmur of protest. ..TX.- 'Russia,' thundered Mr Boris Yeltsin, president of the Russian federation, 'is not Guatemala.' ..TX.- EC officials stress that Sir Leon had no intention of suggesting that Russia had become a banana republic; but last month's exchange with Mr Yeltsin confirms that the EC's effort to forge a new trade and political agreement with Russia has run into difficulty. ..TX.- The EC's offer of a 'partnership agreement' goes back to 1989 when the Twelve wanted to encourage economic and political reform in the former Soviet Union. Today, the idea is to strengthen democracy in Russia with the main incentive being the 'long-term goal' of a free trade area with the Community. ..TX.- In Russian eyes, the EC is a more important trading partner than the US or Japan. Last year, Russia accounted for an estimated 70 per cent of the former Soviet Union's Dollars 4.8bn trade surplus with the Community. ..TX.- Yet despite the steady two-way trade flow, the EC remains unsure of how to deal with Russia's transition to a market economy and how to fit a new approach into a comprehensive policy toward the former Soviet Union, where central authority in Moscow is declining and new republics are clamouring for attention. ..TX.- The central difficulty in the EC-Russia talks stems from Russian demands for the same treatment which the Community gives members of the General Agreement on Tariffs and Trade. ..TX.- In concrete terms, Mr Yeltsin wants free movement of goods, services, capital (with some reservations), and persons. But the EC says 'Gatt treatment' is out of the question until it establishes a market economy. ..TX.- As Sir Leon explained, Russia still has a long way to go. Its domestic energy prices are artificially low because of state subsidies; Russian enterprises still do not know what their costs are; and Russia's recent application to join Gatt, while welcomed in Brussels, will take a long time to process. ..TX.- The result is that the EC is insisting on a special 'safeguard' clause which would apply until Russia fully complies with Gatt rules. This would allow Brussels wide discretion to block imports it considered to fall in the category of 'dumping', particularly in sensitive sectors such as aluminium, steel and textiles. ..TX.- The Russians argue that this clause is much harsher than the retaliation allowed under Gatt rules - and likely to deter foreign investment in potential hard-currency earning export industries. ..TX.- In short, Mr Yeltsin feels the EC is treating Russia as a 'state trading' country such as China and North Korea, without recognition of its democratic reforms. As Brussels has discovered, the Russians have not been shy about saying 'Nyet', nor has the fall of communism blunted their negotiating skills. ..TX.- The debate over 'Gatt treatment' touches on Russian pride; but a good deal of self-interest is also at stake. EC officials say Russia is pressing for greater market access for its exports of low-price uranium and it wants provisions for greater freedom of movement of people so that businessmen do not have to waste time on visa applications. ..TX.- In the field of human rights, the Community remains hopeful it can obtain satisfactory guarantees on human rights before signing a partnership agreement. But an early suggestion for a 'suspension' clause under which the pact might be put on ice in the event of human rights abuses, has apparently been dropped after Russian objections. ..TX.- Earlier this year, when Mr Yeltsin appeared to be in danger of losing a popular referendum, the EC sent a delegation to Moscow offering, for the first time, the prospect of a free trade area. 'They just pocketed a major concession,' says an EC official. ..TX.- Nor has the EC always presented a united front. Two months ago, the Queen of Denmark issued an invitation to Mr Yeltsin to come to Copenhagen, ostensibly to celebrate 500 years of friendship between the Baltic near-neighbours. ..TX.- The Danish Presidency of the EC described it as a 'Danish initiative'; but EC officials believe the timing of the invitation was a less-than-subtle effort to accelerate the pace of negotiations and secure a deal for the June 21-22 summit. In the event, Mr Yeltsin did not turn up. With hindsight, some EC officials believe Sir Leon's tough stance in Moscow was intended to sink any chance of Mr Yeltsin 'hijacking' the summit. ..TX.- The challenge in the next few months will be to put the negotiations back on track and resolve the conundrum on Gatt treatment. One option is to insert an 'evolutionary' clause holding out the prospect of free trade if the Russia successfully follows Gatt discipline. ..TX.- In this respect, Sir Leon's encounter may have helped both sides by removing false expectations about the size and scope of a future bilateral trade agreement. ..CN.- Countries: RU Russia, East Europe. QR European Economic Community (EC). ..IN.- Industry: P9721 International Affairs. P9611 Administration of General Economic Programs. ..TP.- Types: CMMT Comment & Analysis. ECON Balance of trade. ..IX.- P9721, P9611. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGMB6AA8FT ..HL.- 930713FT 930713 Action plan for World Bank: Moves to improve project supervision (434) ..BL.- By GEORGE GRAHAM ..TX.- THE World Bank has increased its budget for supervision activities by 12 per cent for the current year as part of its efforts to improve the effectiveness of its lending. ..TX.- Mr Ernest Stern, a World Bank managing director and acting president while Mr Lewis Preston, the president, is recovering from surgery, said yesterday that the new action plan agreed at a board meeting last week would accelerate a cultural change within the bank and should help to improve the management of the 1,850 projects in its portfolio. ..TX.- 'Central to the plan is the commitment to make the management of projects under implementation as important as making new loans. Only sound, on-the-ground results - the development impact of projects - are true measures of the bank's contribution to sustainable development,' Mr Stern said. ..TX.- The new action plan comes in response to last year's report by a taskforce headed by Mr Willi Wapenhans, a World Bank veteran, which identified a sharp decline in the quality of the bank's portfolio, with particular problems in Africa and in the agricultural sector. ..TX.- At the heart of the plan is a new determination to manage the bank's entire portfolio of projects within each country as a unit, instead of project by project. ..TX.- Mr Stern said country reviews would in future be conducted annually for big borrower countries, and on a regular basis for smaller borrowers. ..TX.- Over half of the bank's biggest country portfolios, however, have already undergone review, and as a result a number of projects have been cancelled or redesigned. ..TX.- In India, a review led to the cancellation of projects totalling Dollars 1.3bn (Pounds 866m), while a similar review in Brazil brought the cancellation of five big projects worth Dollars 800m, substantial redesign of 14 more projects, mostly in the agricultural sector, and lesser changes to 14 others. ..TX.- Mr Stern insisted, however, that the fundamental responsibility for ensuring that projects were properly implemented lay with the borrower, not the bank. ..TX.- 'The bank's efforts to improve the development impact of its work, ultimately, can only be as successful as the efforts taken by our borrowers to help themselves,' Mr Stern said. ..TX.- The action plan also sets out new criteria for climbing up the World Bank career ladder, with staff winning promotion less for their ability to push through new loans and more for their ability to follow through on existing projects. ..CN.- Countries: US United States of America. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGMB6AA7FT ..HL.- 930713FT 930713 World Trade News: City office space boost for Macao (209) ..BL.- By SIMON HOLBERTON ..DL.- MACAO ..TX.- MR Stanley Ho, Macao's casino tycoon, has unveiled a Dollars 1.4bn (Pounds 930m) plan to develop the Portuguese colony's central business district which will increase the size of Macao city by 20 per cent, reports Simon Holberton from Macao. ..TX.- The three-stage Nam Van Lakes development will cover an area of 130 hectares and provide 46 development sites for offices, housing and hotels, as well as two fresh water lakes. It is due to be completed by 1999, the year in which Macao reverts to Chinese sovereignty. ..TX.- Work on the project's first stage, worth Patacas 3bn (Pounds 248m), is due to be completed in 1995 and will provide fully serviced reclaimed land suitable for eight office towers, three residential developments and a luxury hotel. ..TX.- The project is owned by Nam Van Development, 60 per cent controlled by mainland Chinese interests. Mr Ho's Sociedade de Turismo e Diversoes de Macau (STDM) owns 25 per cent of the company, which is capitalised at Patacas 800m. ..CO.- Companies: Nam Van Development. Sociedade de Turismo e Diversoes de Macau. ..CN.- Countries: MO Macao, Asia. ..IN.- Industry: P6552 Subdividers and Developers, Ex Cemeteries. ..TP.- Types: RES Facilities. ..IX.- P6552. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGMB6AA6FT ..HL.- 930713FT 930713 UN arms expert heads for Baghdad (521) ..BL.- By MARK NICHOLSON ..TX.- MR ROLF EKEUS, head of the United Nations special commission into Iraq's weapons of mass destruction, said he would leave today for Baghdad in a further attempt to resolve peacefully the latest stand-off between Iraqi officials and UN weapons inspectors. ..TX.- Mr Ekeus made the announcement in New York last night after briefing the UN Security Council. The impasse follows the departure from Iraq on Sunday of a UN weapons inspection team after it failed to win Iraq's agreement to seal monitoring equipment at two missile testing sites. ..TX.- Mr Ekeus, who said he wanted to talk to Iraqi officials at the 'highest level',has visited Iraq before to defuse similar stand-offs. He expects to arrive in Baghdad on Thursday. ..TX.- One UN diplomat said a trip this week would enable the Security Council 'not to act precipitately, but show that it was serious' about forcing Iraqi compliance with Gulf war ceasefire resolutions. ..TX.- Iraqi newspapers yesterday suggested Mr Ekeus would find little warmth in Baghdad. The official al-Jumhuriya decried attempts to monitor the test sites as 'evidence of the wicked and malicious intentions of Ekeus and the criminal designs of those standing behind him'. ..TX.- The Security Council has already warned in a June 18 statement of 'serious consequences' should Iraq continue to resist UN attempts to monitor the sites at al-Rafah and Yam al-Azim, respectively 70km west and south-west of Baghdad. An earlier UN team failed to persuade Iraqi authorities to install video monitors to prevent testing of missiles with a range of more than 150km, prohibited under ceasefire resolutions. ..TX.- Diplomats in New York consider that no further warning to Iraq or UN resolution would formally be required before a strike on the two sites, but last night they were playing down any prospect of immediate action. ..TX.- China, one of the five permanent members of the Security Council, yesterday distanced itself from talk of a strike, with Foreign Ministry officials in Beijing saying the confrontation should be resolved 'through consultation and dialogue'. Some officials in New York said they were inclined to apply more pressure, but wait and see if Iraq would back down. ..TX.- Nevertheless, an attack remains a clear option, one which was raised immediately by Mr Al Gore, the US vice-president, who warned Iraq not to 'trifle' with the world community. ..TX.- The two sites are understood to be in industrial zones where there would be far less risk of 'collateral' damage and civilian casualties than in last month's US cruise missile raid on Iraqi intelligence headquarters in central Baghdad. ..TX.- Each site comprises a small cluster of buildings, with a test stand at each to allow the monitored firing of missile engines - with liquid fuel at al-Rafah and solid fuel at Yam al-Azim. The housing for these stands would offer a natural target in any raid. It was at these that UN teams sought to install cameras and later to seal and lock monitoring sensors. ..TX.- Editorial comment, Page 15 ..CN.- Countries: IQ Iraq, Middle East. ..IN.- Industry: P9711 National Security. P9721 International Affairs. ..TP.- Types: RES Facilities. ..IX.- P9711, P9721. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGMB6AA5FT ..HL.- 930713FT 930713 Big quake strikes N Japan (190) ..BL.- By AGENCIES ..DL.- TOKYO ..TX.- A POWERFUL earthquake in northern Japan, measured at 7.8 on the Richter scale, wrecked a small hotel, set hundreds of houses on fire and swept dozens more away with tidal waves last night, agencies report from Tokyo. ..TX.- Police said that 18 people had been killed and 60 injured, while more than 40 were missing. The casualty figures were expected to rise. ..TX.- The quake was followed by several aftershocks in the same area, off the west coast of the northern island of Hokkaido. ..TX.- Among the casualties at least five people were reported killed and about 20 said to be missing after the hotel collapsed on Okushiri Island. ..TX.- NHK television and Kyodo News Service said about 300 houses were burning on another part of the island of 4,600 people, about 50km south of the quake's centre. A number of houses also were washed away by tidal waves. Three hundred troops of Japan's self-defence forces helped rescue efforts on the island. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: RES Natural resources. ..IX.- P9229. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGMB6AA4FT ..HL.- 930713FT 930713 Indians storm US factory (187) ..BL.- By SHIRAZ SIDHVA ..DL.- NEW DELHI ..TX.- FARMERS yesterday tore down the administrative block of the Cargill Seeds factory at Siravara in the southern Indian state of Karnataka because they believe the US multinational's operations in India are depriving them of their livelihood, ..TX.- Police arrested 50 activists of the powerful Karnataka Farmers' Association after they attacked the Cargill building. ..TX.- Mr M D Nanjundaswamy, member of the Karnataka legislative assembly and president of the association, said similar attacks would be launched on multinationals trying to patent seeds and plants used by Indians for centuries. ..TX.- The farmers plan to step up their campaign to protect the interests of small farmers who feel threatened by efforts to tighten patent laws in developing countries as part of a move to conclude the Uruguay Round of the General Agreement on Tariffs and Trade. ..CO.- Companies: Cargill Seeds. Cargill South East Asia. ..CN.- Countries: IN India, Asia. ..IN.- Industry: P9229 Public Order and Safety, NEC. P0181 Ornamental Nursery Products. P1479 Chemical and Fertilizer Mining, NEC. ..TP.- Types: TECH Patents & Licences. RES Natural resources. ..IX.- P9229, P0181, P1479. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGMB6AA3FT ..HL.- 930713FT 930713 PLO chief backtracks on claim of 'secret talks' (610) ..BL.- By MARK NICHOLSON, JULIAN OZANNE and REUTERS ..DL.- CAIRO, JERUSALEM, TUNIS ..TX.- PLO CHAIRMAN Yassir Arafat last night backtracked on an earlier claim that Israeli and PLO officials held secret and direct discussions on two occasions during last month's Middle East peace talks in Washington. ..TX.- The conflicting signals from the PLO leader, however, are unlikely to end speculation that direct contacts have been taking place between the PLO and Israeli officials or politicians. ..TX.- Mr Arafat set off a flurry of speculation and denials when he told Reuters news agency in Tunis: 'There were two meetings last month in Washington' aimed at breaking the deadlock in the Middle East peace talks, but they were 'unsuccessful'. ..TX.- But hours later, Mr Arafat told the news agency that what he meant was that 'there were Palestinian attempts to meet the Israelis in Washington but that these attempts failed and the meetings did not took place'. ..TX.- His backtracking came after the offices of Mr Yitzhak Rabin, the Israeli prime minister, and of Mr Shimon Peres, the foreign minister, denied there had been government-backed contacts. ..TX.- Mr Arafat's earlier claim prompted an apparent confirmation from Mr Nabil Shaath, a political adviser to the PLO leader. He asserted in Cairo that such contacts had taken place, but refused to say who had participated or when. 'These contacts exist, existed and should become the norm of negotiations,' he said. ..TX.- The later backtracking suggested that the PLO may have had second thoughts about the wisdom of pursuing this line publicly. ..TX.- Direct dialogue with the PLO was expressly proscribed by Israel in its conditions for entering the peace process, on the grounds that it is a terrorist organisation dedicated to the destruction of the Jewish state. ..TX.- But the Israeli parliament in January repealed the law banning contacts between individual Israelis and PLO members. It is clear a growing number of top Israeli politicians favour abandoning the taboo. ..TX.- Last week a Labour MP named 11 members of Mr Rabin's 18-strong cabinet who he said were in favour of opening direct talks with the PLO to break the deadlock in the peace talks. It is widely believed that Mr Haim Ramon, the health minister and a moderate, telephoned Mr Arafat last week. ..TX.- Israel Radio also said yesterday that Egyptian foreign ministry officials had said Israel had agreed in principle to change the terms of the Madrid conference which specifically excludes the PLO from peace talks. ..TX.- Mr Dan Cohen, a Labour MP, said the PLO had told him that the contacts with the Israeli government were being undertaken through members of the Labour party. The MPs, he said, were acting in the grey area between official and unofficial contacts. ..TX.- He said the talks focused on the 'Gaza first' option - a proposal to hand over the occupied Gaza strip to an autonomous Palestinian authority as soon as possible and before any transfer of authority in the occupied West Bank. The discussions also included human rights in the occupied territories and how to reach an agreement on a joint statement of principles setting out the modalities for Palestinian interim self-rule. ..TX.- He added that Israeli denials that such meetings had taken place showed that Israeli was 'not yet willing to come up with the reality that there is no way round negotiations directly with the PLO'. ..TX.- Present negotiations between the Israelis and the Palestinian delegation to the talks remain stalled after their tenth and latest round in Washington. ..CN.- Countries: TN Tunisia, Africa. IL Israel, Middle East. ..IN.- Industry: P9721 International Affairs. P9229 Public Order and Safety, NEC. ..TP.- Types: NEWS General News. ..IX.- P9721, P9229. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGMB6AA2FT ..HL.- 930713FT 930713 State banks feel the pinch in Indonesia: Concern over quality of loans (721) ..BL.- By WILLIAM KEELING ..TX.- THE Indonesian government is preparing for battle with its recalcitrant state banks amid growing concern about their loans. ..TX.- A study by the World Bank, giving an economic overview to an aid donors' conference in Paris at the end of June, said in a section on the banking system that 'loan portfolio quality has deteriorated sharply since 1990. . . maintaining stability in the banking system is now the chief objective of financial policy'. ..TX.- This was followed by a leaked local report on the finances of the state banks, which accounted for over half the banking sector's total assets of Rp123,689bn (Pounds 39.7bn) at the end of 1992. ..TX.- Details of the report began to appear in the Indonesian press last month. Government officials deny it was drawn up by the central bank and will not confirm its authenticity, but say it could be the work of 'monetary authorities'. ..TX.- The report estimates that last December 32 per cent of state banks' loan portfolio of Rp71,701bn were non-performing - usually defined as having no interest paid for more than three months. It also says that Rp21,000bn in loans were made by six state banks to just 35 companies, of which 26 were in payment arrears on loans totalling Rp6,927bn. ..TX.- The state banks are renowned for having suffered years of incompetent and corrupt management. The problem they present to the government, however, is more than just bad banking practice. Many of the 26 companies allegedly in arrears are newly emerging, politically well-connected conglomerates, including three led by relatives of President Suharto. ..TX.- In its study, the World Bank criticises such conglomerates, pointing out their formation 'may not be to take advantage of competitive opportunities'. It suggests they are seeking excess profits from monopolies granted by the government. ..TX.- It says: 'The growth of conglomerates during the 1980s appears to have been much faster than could be sustained from retained earnings. . . the implication is that debt-financing has been a major source of growth.' ..TX.- The apparent result is an array of conglomerates - whose interests range from financial services to agri-business and petrochemicals - built upon state bank loans which, despite the borrowers' often monopolistic positions, have turned sour. ..TX.- Many bankers believe the conglomerates can afford to service the loans but they doubt the government has sufficient leverage to enforce repayment. As one business executive explains, 'many of the conglomerates see themselves as shareholders in President Suharto's regime'. ..TX.- Dr Sjahrir, managing director of the Institute for Economic and Financial Research in Jakarta, says: 'The only path by which you can control their power is through a more efficient market system, so that you have more competitive pressure for each conglomerate.' ..TX.- Bankers say, however, that the government is responding to the crisis. ..TX.- The government might intervene by forcing conglomerates to sell shares to state pension funds. The finance raised could pay off the conglomerates' bad debt and give the pension funds equity in some of Indonesia's largest businesses. ..TX.- The government has also taken up a suggestion in the World Bank study that 'lower interest rates would both improve financial soundness and spur credit growth'. Bank Indonesia has cut by one-third to an average 8.5 per cent the key interest on government bonds since the beginning of May and state banks have lowered deposit and lending rates. ..TX.- A sudden increase in credit, however, could result in a surge in imports, deteriorating balance of payments and inflationary pressures. ..TX.- Economists also warn that new credit provided by banks could itself become non-performing. They point out that many private banks - also burdened by non-performing loans - are owned by the same conglomerates indebted to the state banks and which have often used their banking subsidiaries to fund intra-group activities. ..TX.- A lowering of interest rates, therefore, is unlikely to pull the banking system back into line. Instead, the long-term solution lies in withdrawing the political patronage by which conglomerates have obtained state bank credit and the confidence not to repay. ..TX.- Whether the government has the stomach fully to engage the conglomerates remains to be seen. ..CN.- Countries: ID Indonesia, Asia. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. P9651 Regulation of Miscellaneous Commercial Sectors. ..TP.- Types: NEWS General News. ..IX.- P6081, P9651. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGMB6AA1FT ..HL.- 930713FT 930713 Nigerian president orders fresh poll (298) ..BL.- By PAUL ADAMS ..TX.- NIGERIA faces another presidential election after an announcement late last night that there could, after all, be no interim government to replace the military regime on August 27. ..TX.- This latest twist to President Ibrahim Babangida's six-year transition to democracy follows his annulment of last month's presidential polls, which were the first for a decade. ..TX.- Although the polls were widely regarded as peaceful and fair, the military government claimed that the elections were flawed and that the winning candidate, Mr Moshood Abiola of the Social Democratic Party (SDP), was unfit to hold office. ..TX.- The statement read last night by Information Minister Uche Chukwumerije leaves Nigeria's political future as unclear as at any stage in the lengthy transition to democracy. The president decided to press ahead with new elections on July 31 after the country's two political parties failed to agree on his proposals to set up an interim government and to hand over power to an unelected civilian president. ..TX.- President Babangida issued his order after meeting a group of his generals and leaders of the two parties. Mr Abiola's Social Democrats stormed out of the meeting. ..TX.- The SDP has already ruled out fresh elections under the military regime, claiming that they would have no credibility and that its candidate's victory on June 12 should be officially recognised. Mr Abiola has declared himself president-elect and will oppose any movement within the SDP to take part in fresh polls. ..TX.- Mr Abiola is a member of the Yoruba tribe, and many Nigerians believe that the country's generals, dominated by the Hausa, are implacably opposed to allowing him to be sworn in as president. ..CN.- Countries: NG Nigeria, Africa. ..IN.- Industry: P9111 Executive Offices. ..TP.- Types: GOVT Government News. ..IX.- P9111. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGMB6AA0FT ..HL.- 930713FT 930713 Seoul warns on nuclear talks (456) ..BL.- By JOHN BURTON ..DL.- SEOUL ..TX.- EFFORTS to resolve the North Korean nuclear issue will take several months of 'painstaking negotiations,' Mr Han Sung-joo, the South Korean foreign minister, said yesterday. ..TX.- Mr Han cautioned that the process would be complicated because North Korea must hold separate talks with the US, South Korea and the International Atomic Energy Agency (IAEA) on allowing full nuclear inspections. ..TX.- The US will start talks with North Korea tomorrow in Geneva to persuade Pyongyang to stay within the nuclear non-proliferation treaty (NPT) and accept IAEA inspections of two nuclear waste facilities that could determine whether North Korea is processing more plutonium than it has declared. ..TX.- The US has also indicated that progress should be achieved in implementing mutual nuclear inspections between North and South Korea before it is willing to expand relations with Pyongyang. ..TX.- North Korea has recently adopted a conciliatory attitude towards the US in preparation for the talks, including toning down its anti-US rhetoric and yesterday returning the remains of 17 UN soldiers killed during the Korean War. ..TX.- Pyongyang is sending a 'signal to Washington that it is interested in improving relations,' explained Mr Han. ..TX.- In contrast, US President Bill Clinton during his weekend visit to South Korea appeared to toughen his stance against the North Korean nuclear programme. Earlier he had offered concessions including allowing high-level meetings between US and North Korean officials after Pyongyang threatened in March to withdraw from the NPT. The talks in New York eventually persuaded North Korea to suspend its NPT withdrawal last month. ..TX.- The tougher US approach has the full backing of Seoul, according to Mr Han. ..TX.- 'We recognised that North Korea may have felt insecure and we tried to take measures to allay the unnecessary fears that North Korea may have had,' he explained about the first round of US-North Korean negotiations. ..TX.- The sharper tone now being adopted was meant to emphasise to North Korea that the nuclear issue 'is a very serious matter and must be resolved'. ..TX.- The foreign minister denied there were any differences between the US and South Korea on how to deal with the North Korean issue, explaining that Seoul did not favour a more conciliatory approach than Washington. ..TX.- He was 'neither optimistic nor pessimistic about the outcome' of this week's US-North Korean talks. However Pyongyang had no choice but to accept nuclear inspections because it wanted to avoid UN economic sanctions. 'I have no doubt that sanctions are something North Korea does not want to be faced with,' Mr Han said, referring to the country's difficult economic situation. ..CN.- Countries: KR South Korea, Asia. KP North Korea, Asia. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGMB6AAZFT ..HL.- 930713FT 930713 Thai air force sees chance for power at airline (419) ..BL.- By WILLIAM BARNES ..DL.- BANGKOK ..TX.- THE THAI air force has been given an unexpected opportunity to try to reassert control over Thai International Airways, the country's flag carrier following the sudden death last week of its chairman, Mr Pandit Bunyapana. ..TX.- Thai's vice-chairman, Air Chief Marshal Gun Pimarntip, has clearly signalled that the air force which he heads should decide who replaces Mr Pandit as chairman. Air Chief Marshal Gun threatened to resign in February because the air force was being given little say in running the company. ..TX.- Thai International was an air force fiefdom until the military's fall from grace last year following its unsuccessful but bloody attempt to maintain control of the government. ..TX.- Air Chief Marshal Kaset Rojananil, who had been chairman until then, was replaced by Mr Pandit, permanent secretary at the Finance Ministry which is the majority shareholder. Mr Pandit apparently died in his sleep of a heart attack last Thursday while on a Thai International flight from London to Bangkok. ..TX.- Manoeuvring to replace Mr Pandit has been complicated by the retirement this year of Air Chief Marshal Gun himself and the airline's respected president, Mr Chatrachai Bunya-ananta. ..TX.- Joining the faction-ridden management, the Finance Ministry and the air force in the tussle for control of Thai has been an ambitious deputy transport and communications minister, Mr Thawee Kraiupti, who has led a crusade for the carrier to be brought under his ministry's jurisdiction. ..TX.- One airline analyst in Bangkok said: 'It's a four-way fight for control which - by the end of the decade - the management will have won because Thai will never be competitive in the long run without independent professional management. The question is how painful the process is going to be.' ..TX.- A minority of the airline's shares was floated in July 1993. It has struggled in recent years under the weight of previous management mistakes and over-optimism. Profits for the latest half-year were Bt568.4m (Pounds 14.85m) compared with Bt1.31bn in 1992. Many brokers say full year profits will be little more than Bt2bn - around a third of the company's original forecasts. ..TX.- Thai International's share price has risen 22 per cent over five days, hitting its 10 per cent daily limit rise over each of the last two trading sessions, to close at Bt49.75 yesterday. ..CO.- Companies: Thai International Airways. ..CN.- Countries: TH Thailand, Asia. ..IN.- Industry: P4512 Air Transportation, Scheduled. P9711 National Security. ..TP.- Types: COMP Company News. ..IX.- P4512, P9711. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGMB6AAYFT ..HL.- 930713FT 930713 Kurds fear Saddam's ire: Level of allied protection seems unclear (662) ..BL.- By GARETH SMYTH ..TX.- AS TENSION between Iraq and the west rises again, fears that Baghdad will attack the Kurds in retaliation for last month's western air strikes have compounded the daily anxieties of the 3m people of the Kurdish enclave of northern Iraq. ..TX.- Left in limbo for two years, the enclave can do little to help itself, either by attracting investment to rebuild its shattered infrastructure or by tapping oil reserves. ..TX.- President Saddam Hussein is a man of surprises. His strategy has been to wait. Economic hardship will, he believes, compel the Kurdish leadership to resume autonomy negotiations broken off in 1991. ..TX.- The Kurds are in a weak position. Kurdish leaders have no clear idea what allied protection they might get. 'We are getting confusing signals,' a senior Kurdish official said. ..TX.- All of Iraq is covered by United Nations Security Council resolution 688 which demands that Mr Saddam's regime ends internal repression. Specific additional safeguards for the Kurds date from 1991, when 15,000 allied troops entered northern Iraq to enforce the world's first 'safe haven.' This uncertain departure in international procedures persuaded over 1m Kurds to return. ..TX.- The safe haven near the Turkish border which Iraqi troops were forbidden to enter is now in effect defunct: only 18 allied soldiers - based in Zakho - remain. The wider 'no-fly zone', Iraqi aircraft north of the 36th parallel, is still in force. ..TX.- But the political geography of northern Iraq is more complex still. The Kurdish-held zone, from which Mr Saddam withdrew all administration in October 1991, is divided from the rest of Iraq by an informal 'green line.' While part of the no-fly zone is in government hands, a substantial part of the Kurdish-held zone, including the city of Sulaymaniyah, is outside the no-fly zone and so beyond any area of formal western commitment. ..TX.- No-one doubts the ability of Iraqi forces to subdue the Kurds. A recent US congressional report said Iraq had rebuilt 80 per cent of its military manufacturing capacity and returned to service 2,500 tanks and 250 aircraft. ..TX.- The Kurds do not expect support from allied ground troops. ..TX.- 'If the Iraqis launch a major offensive, the allies will intervene,' Mr Hoshyar Zebari, a Kurdish spokesman, said in Washington earlier this month. 'But it would be from the air.' ..TX.- Uncertainty over security hampers rebuilding of the Kurdish infrastructure. The Kurdish-held zone, like the rest of Iraq, is subject to UN sanctions. ..TX.- 'Electricity, telecommunications, and roads are all in ruin,' Mr Latif Rashid, another Kurdish representative, told aid workers in London recently. 'Local factories have ceased to function.' ..TX.- Early reports say this year's harvest is good, but much will find its way to Baghdad. 'The Iraqis have raised the price paid for the crops and farmers are desperate to get money,' said Mr Zebari. ..TX.- The Kurdish leadership seeks acceptance abroad, but recent regional developments are unfavourable. Both Iran and Turkey, neighbouring countries with 5m and 10m Kurds respectively, have denounced the Iraqi Kurds' plan for a federal Iraq. ..TX.- Relations between Iraqi Kurds and Iran deteriorated recently as Tehran became increasingly concerned at Kurdish unrest within its own borders, fostered, it believes, by Iraqi Kurdish TV stations. ..TX.- Since March Iranian jets and artillery have bombed guerrilla bases operated by the Kurdistan Democratic Party of Iran inside Iraq. ..TX.- The ending in June by the Kurdish Workers Party (PKK) of its two-month ceasefire with the Turkish army alarms Iraqi Kurds, whose most important trade lifeline is threatened by resumption of hostilities in south-east Turkey. ..TX.- The alternative is re-opening autonomy talks with Baghdad. ..TX.- Mr Mukarram Talabani, a former Iraqi government minister, operates as a go-between and reportedly made a recent visit to the Kurdish leadership. But the further their economic situation deteriorates, the weaker will be the Kurds' negotiating position. ..CN.- Countries: IQ Iraq, Middle East. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9229. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGMB6AAXFT ..HL.- 930713FT 930713 US seeds factory stormed in India (319) ..BL.- By SHIRAZ SIDHVA ..DL.- NEW DELHI ..TX.- FARMERS yesterday tore down the administrative block of the Cargill Seeds factory at Siravara in the southern Indian state of Karnataka to protest against the US multinational's operations in India, which it said deprived local farmers of their livelihood. ..TX.- Police arrested 50 activists of the powerful Karnataka Farmers' Association after they attacked the Cargill office building. ..TX.- Mr M D Nanjundaswamy, member of the Karnataka legislative assembly and president of the association, said similar attacks would be launched on multinationals trying to patent seeds and plants that Indians had used for centuries. ..TX.- The farmers plan to step up their campaign to protect the interests of small farmers who feel threatened by efforts to tighten patent laws in developing countries as part of a move to conclude the Uruguay Round of the General Agreement on Tariffs and Trade. 'Our targets will include WR Grace and Company of Florida, who have patented the Indian neem tree (used widely in herbal medicine and cosmetics), and Pioneer Seeds of the US, who are trying to deprive farmers of their livelihood,' said Mr Nanjundaswamy. ..TX.- Cargill South East Asia, a subsidiary of Cargill Inc, is also facing the wrath of salt farmers and environmentalists in the Kutch region in Gujarat on India's west coast after the government cleared the allotment of 15,000 acres of land near the Kandla port there to set up a salt manufacturing unit. ..TX.- Indian police yesterday arrested nearly 200 activists of the Bhartiya Janata party, the largest opposition party, averting an attempt to disrupt the first day of the Maharashtra legislative assembly's latest session. ..CO.- Companies: Cargill Seeds. Cargill South East Asia. ..CN.- Countries: IN India, Asia. ..IN.- Industry: P9229 Public Order and Safety, NEC. P0181 Ornamental Nursery Products. P1479 Chemical and Fertilizer Mining, NEC. ..TP.- Types: TECH Patents & Licences. RES Natural resources. ..IX.- P9229, P0181, P1479. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGMB6AAWFT ..HL.- 930713FT 930713 Italy seeks to calm row with US on Somalia (295) ..BL.- By ROBERT GRAHAM ..DL.- ROME ..TX.- ITALY yesterday sought to calm a growing row with the US over the handling of military operations in Somalia. ..TX.- Mr Fabio Fabbri, the defence minister, said it would be a mistake to allow mutual recriminations between the Italian contingent in Mogadishu and the US-controlled United Nations forces in Somalia (Unisom) to get out of hand. ..TX.- Italian forces in Mogadishu, who 10 days ago suffered three killed and 21 wounded, has blamed the US for failing to consult and co-ordinate. This led at the Tokyo summit of the Group of Seven leading industrial nations to an agreement between US and Italian officials that the their local diplomats in Mogadishu should form a political co-ordinating committee. ..TX.- However, Italian politicians and the press have complained that Italian troops have been placed in a highly volatile area of the Somali capital and possess equipment geared to a a humanitarian peace keeping mission - not a peace enforcement mission which it has now become. ..TX.- Yesterday Mr Fabbri said Italy had requested 'a reassessment of the aims of the mission which covers the relationship between the end - pacification, conciliation and humanitarian aid - and the means.' ..TX.- The minister went on to warn that there was a real danger that the turn of events was leading the mission towards 'a long period of combat operations.' ..TX.- Mr Fabbri's observations coincided with the approval of the budget for Italy's 2,500 troops in Somalia. ..TX.- The first six months have cost L553bn (Pounds 237m) and a further L800bn for the final half of 1993. ..CN.- Countries: SO Somalia, Africa. ..IN.- Industry: P9229 Public Order and Safety, NEC. P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9229, P9721. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGMB6AAVFT ..HL.- 930713FT 930713 Port industry over a barrel: Licences, losses and over-production (828) ..BL.- By PETER WISE ..TX.- PORT wine shippers say their centuries-old trade is facing a collapse in prices and the possibility of 30,000 grape growers being left destitute. ..TX.- The reason is not to do with the world recession but a breakdown in the balance between sales and production. ..TX.- The Association of Port Wine Shippers (AEVP) is refusing to make any commitment about quantities of wine they will buy in 1993 or how much they will pay. 'We already have millions of pounds tied up in stock,' said one shipper, 'and we simply cannot undertake to increase our stocks further without some guarantee that over-production will cease.' ..TX.- The shippers' underlying fear is that over-production and falling prices will undermine the prestige of port and its hard won reputation. ..TX.- In a harshly-worded letter to Mr Anibal Cavaco Silva, the Portuguese prime minister, the AEVP warns: 'The lowering of consumer prices is discrediting the product, which could suffer the same fate as sherry, with a swing of consumption away to competing drinks.' ..TX.- The association also queries procedures for issuing licences to growers, expressing concern about what they perceive as a lack of control over distributing licences. ..TX.- They note that the Casa do Douro (House of Douro), which controls wine production in port's demarcated zone in the upper reaches of the Douro river, has granted licences for more than 100,000 pipes of wine in excess of the government stipulated total. (A pipe equals 550 litres.) ..TX.- This means that stocks of port are now vastly in excess of forecast demand, even allowing for the 'law of the third'. This was imposed to guarantee a minimum age for port on the market and states that a company cannot sell more in a given year than one-third of stocks in December of the previous year. ..TX.- Buyers for European supermarkets that purchase large quantities of port for bottling under their own label have taken advantage of the over-production and the price of buyer's-own-brand (BOB) port has dropped 20 per cent over the past year. Over-production has also hit premium branded port. ..TX.- The pressure of over-production is now coming to a head and the hardest-hit victims will be the grape farmers of the upper Douro valley. The region was the first to be demarcated in 1756 and farmers are totally dependent on vines for their livelihoods. ..TX.- Farmers, forced by over-production to sell below cost, face real hardships and there have been angry demonstrations in the streets of Regua, the grape-growing capital. ..TX.- The amount of wine that can be produced each year is stipulated by a government body, the Port Wine Institute (IVP), on a basis of existing stocks, forecast sales and other factors. ..TX.- But the responsibility for distributing individual licences stating how much farmers can produce and of what quality, falls to the Casa do Douro. ..TX.- This is a corporate body left over from the Salazar dictatorship, to which all farmers must belong. Besides allocating growing licences, it also represents farmers in terms of prices fixed with the shippers and buys excess production from growers. ..TX.- From 1986 the Casa do Douro began issuing production licences far in excess of the overall limit set by the IVP. By 1992 the accumulated excess had reached more than 100,000 pipes. In 1992, the shippers stepped in to buy the excess production of the 1991 harvest themselves to stop the market from being flooded. ..TX.- The shippers point out that the biggest excesses came in an election year and that the votes of 30,000 farmers were clearly more important than 40 shippers. Some shippers have hinted at corruption saying 'the money for election campaigns has to come from somewhere'. ..TX.- The Casa de Douro complicated the issue even further in 1990 when it bought 40 per cent of the second largest Port shipper, Real Companhia Velha (RCV). The Italian financier Carlo De Benedetti and his Portuguese partner recently pulled out of RCV after a year of management squabbles. The Casa do Douro is burdened with debts of over Es25bn and stocks that may be worth a lot less than the market prices that body's supporting banks attribute to them. ..TX.- The solution, according to the shippers, is to wipe the Casa do Douro's massive stocks off the market by distilling them into grape brandy and to hand over production licences to a more independent body such as the IVP. The AEVP urges low production levels over the next few years to restore the balance between stocks and demand. ..TX.- 'We've just been all over Europe holding tastings to celebrate 1991 as a vintage year,' said one shipper, 'but the truth is the trade is in deep trouble and something needs to be done very quickly.' ..CN.- Countries: PT Portugal, EC. ..IN.- Industry: P2084 Wines, Brandy and Brandy Spirits. P5182 Wine and Distilled Beverages. ..TP.- Types: CMMT Comment & Analysis. COSTS Product costs & Product prices. MKTS Production. TECH Patents & Licences. ..IX.- P2084, P5182. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGMB6AAUFT ..HL.- 930713FT 930713 Serb forces tighten grip on UN 'safe area' (537) ..BL.- By LAURA SILBER and REUTER ..DL.- BELGRADE ..TX.- SERB forces yesterday seized the strategic village of Trnovo to the west of Gorazde in an effort to tighten their stranglehold on the Moslem enclave proclaimed a United Nations 'safe area'. ..TX.- Bosnian Serb fighters yesterday celebrated what they called the 'liberation' of Trnovo and the seizure of the Rogoj mountain pass and surrounding villages. Radio Belgrade said General Ratko Mladic, the nationalist Serb commander, had personally conducted the campaign for Trnovo, 18 miles south of Sarajevo. The Bosnian capital is now even more vulnerable to its Serb besiegers on the surrounding hills. ..TX.- The latest Serb advance drives a wedge between Gorazde and Sarajevo, both Moslem enclaves supposedly under UN protection. ..TX.- At least 12 people were killed and 15 wounded in the Dobrinja area of the capital when a Serb mortar exploded in a crowd queueing for water. Serb forces have cut supplies of water, electricity and fuel. The water supply is about a half litre per person each day. ..TX.- Fighting intensified in most parts of Bosnia, according to local media reports. Radio Sarajevo said the Croatian Defence Council (HVO) was deploying reinforcements to Mostar, the southwestern city. It said the Moslem-held towns of Fojnica, Jablanica and Konjic were under Croat attack. ..TX.- A British UN soldier was wounded near Gornji Vakuf, central Bosnia, when his vehicle hit a mine on an aid route. ..TX.- Serbian radio said Moslem fighters had 'retreated in panic leaving behind scores of dead and large quantities of weapons and ammunition. . . . These successful activities dealt a serious blow to the Moslem forces, smashing their dream of linking by violent means through centuries old Serbian territory.' Moslems comprised 69 per cent of the 6,900 population of Trnovo. ..TX.- As the international community tries to press the Bosnian presidency to accept the republic's ethnic partition, Serb forces are pushing to enlarge their state, which covers some 70 per cent of Bosnia. Croats, too, are consolidating territory for their ethnic mini-state. ..TX.- A Bosnian Serb army statement yesterday claimed its offensive was prompted by Moslem attempts to widen a corridor used to transport supplies to tens of thousands of Moslems trapped in Gorazde. ..TX.- Hopes for progress at the Geneva peace talks were made more remote after bilateral talks broke down between Zagreb officials and Serb rebels from Croatia. Croatia plans to set up a pontoon bridge on July 18 which Serbs have vowed to destroy raising fears of the re-ignition of the war. ..TX.- Britain said yesterday it was increasing its bilateral aid to Bosnia by more than 50 per cent, giving an extra Pounds 18.5m for food, logistical assistance and infrastructure projects, Reuter reports. Baroness Chalker, overseas development minister, made the announcement after a meeting in London with Mrs Sadako Ogata, UN High Commissioner for Refugees. ..TX.- Islamic foreign ministers meeting yesterday promised more than 7,600 troops for a UN protection force in Bosnia, a spokesman said. He declined to name which of the 16 countries at the two-day meeting in Islamabad made the offers. ..CN.- Countries: BA Bosnia-Hercegovina, East Europe. ..IN.- Industry: P9229 Public Order and Safety, NEC. P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9229, P9721. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGMB6AATFT ..HL.- 930713FT 930713 Branson's defiance pays off in France (384) ..BL.- By DAVID BUCHAN ..DL.- PARIS ..TX.- RICHARD BRANSON'S Virgin Megastore has set out to try to prove that France's 1906 Sunday trading law is an ass, and has found the new French government sympathetic to its case. ..TX.- Fined FFr500,000 (Pounds 58,000) in 1990 for trying to open its Paris, Bordeaux and Marseilles stores on Sundays, Virgin was last year given a one-year 'derogation' allowing it to open its Champs Elysees store. ..TX.- This ran out last week, when a Paris tribunal ruled that compact discs and Virgin's other wares were not essential fare for tourists, and the local prefet - or government representative - refused to renew Virgin's exemption. ..TX.- Virgin decided to pretend that last Sunday did not exist by staying open for 38 hours from 10am on Saturday until one minute past midnight on Monday morning. It attracted 100,000 people into its Champs Elysees store, sold 30,000 CDs, and landed the government with an awkward political problem. ..TX.- But given rising national unemployment, Mr Michel Giraud and Mr Alain Madelin, ministers of labour and enterprise respectively, seem ready to risk the wrath of small shopkeepers. They said they would look with favour on Sunday opening by companies which could prove they were creating jobs or, if forced to close on Sundays, would have to cut jobs. ..TX.- Mr Pierre Delmas, Virgin Stores' French director-general, said yesterday the Champs Elysees shop had done 20 per cent of its weekly turnover on Sundays in the past year. If forced to close, it would have to shed 15 per cent of its staff. 'If we get the right to open on Sundays across the country, and open four new megastores a year, then at the end of five years we could create up to 800 new jobs,' he claimed. ..TX.- France's Sunday trading law and practice is no less erratic than in other European countries, as shown by the fact that Ikea, the warehouse furniture chain, is allowed to open its shop to the north of Paris on Sundays but is forced to shut another to the south of Paris. ..CO.- Companies: Virgin Megastore. ..CN.- Countries: FR France, EC. ..IN.- Industry: P5735 Record and Prerecorded Tape Stores. P9651 Regulation of Miscellaneous Commercial Sectors. ..TP.- Types: TECH Services & Services use. ..IX.- P5735, P9651. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGMB6AASFT ..HL.- 930713FT 930713 Germany's man at EBRD not quitting (334) ..BL.- By QUENTIN PEEL and PHILIP STEPHENS, Political Editor ..DL.- BONN ..TX.- MR MANFRED ABELEIN, German vice-president on the board of the European Bank for Reconstruction and Development, yesterday denied that Bonn was about to replace him because of business dealings in east Germany. ..TX.- The German finance minister, Mr Theo Waigel, also rejected a report in Der Spiegel, that he and Chancellor Helmut Kohl had decided to replace him at the bank, whose president, Mr Jacques Attali, quit two weeks ago. ..TX.- Mr Abelein issued a statement that his activities on behalf of the east German car manufacturer, SAZ - the state enterprise which produced the Trabant - preceded his appointment as a director of the bank. He denied having had any second job while working at the bank. ..TX.- He was involved at SAZ as a legal adviser for the sale of its drive-shaft works, eventually bought by Britain's GKN. Subsequently, Mr Abelein, for 25 years a Christian Democrat MP and a close colleague of Mr Kohl, became a member, and then chairman, of the SAZ supervisory board. ..TX.- Der Spiegel claims Mr Abelein and a business partner, Mr Werner Frantz, submitted a bill for their activities on behalf of the company totalling more than DM6.5m, (Pounds 2.55m) based on an estimated value of the drive-shaft works of DM203m. It says the bill was questioned by SAZ management, and reduced by over DM2m. ..TX.- Mr Abelein said his fees had been investigated by a neutral source at his request, and an agreement reached with the Treuhand privatisation agency on an agreed sum. He gave up his position as chairman of the SAZ supervisory board at the end of 1992. ..TX.- Philip Stephens, Political Editor, adds: The British Treasury last night declined to damp speculation that Mr John Major is set to propose Lord Lawson, the former chancellor, to replace Mr Attali. ..CN.- Countries: LU Luxembourg, EC. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: PEOP People. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGMB6AARFT ..HL.- 930713FT 930713 Far-right arrests in Italy (183) ..BL.- By ROBERT GRAHAM ..DL.- ROME ..TX.- ITALIAN police yesterday arrested Mr Franco Freda, a well known right-wing extremist, on charges of organising a neo-Nazi party and of racism. At least six other people were detained in different parts of the country. ..TX.- Organising a neo-Nazi or fascist party has been a crime since 1952, but it is the first time legislation, approved last month, to clamp down on racism has been used. ..TX.- The arrests suggest the authorities are taking seriously the threat of organised attacks against immigrants and incitement to racism, especially in the light of developments in Germany. In the past year some 300 actions by right-wing extremists have been reported. ..TX.- Mr Freda recently founded the National Front, which magistrates believe is run from Verona. He was acquitted in 1985 of involvement in one of Italy's main unresolved terrorist incidents, the bombing of Milan's Piazza Fontana in 1969 when 17 people were killed and hundreds wounded. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: NEWS General News. ..IX.- P9229. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGMB6AAQFT ..HL.- 930713FT 930713 German insider traders may get 5 years: Draft law aims to enhance country's standing as a financial centre (480) ..BL.- By DAVID WALLER ..DL.- FRANKFURT ..TX.- GERMAN insider traders will face a jail term of up to five years, according to a draft law published by the German finance ministry yesterday. ..TX.- The law is designed to enhance the competitiveness of Finanzplatz Deutschland - Germany as a financial centre - by bringing the regulatory environment for the German securities industry up to international standards. ..TX.- Central to this is the criminalisation of insider dealing, a practice which is treated as a form of theft in the UK, the US and other major industrial countries, but remains legal, though increasingly frowned-upon in Germany. ..TX.- Other measures include: ..TX.- Companies will be obliged to disclose shareholdings in other companies when they reach 5 per cent, rather than at 25 per cent at present. Failure to make the disclosure will be subject to a fine of DM500,000 (Pounds 196,850) and could result in loss of the right to exercise voting control over the shares. ..TX.- It will create a German equivalent of the Securities & Exchange Commission, the centralised supervisory body for the US securities industry. ..TX.- It will set the minimal nominal value of German shares at DM5 rather than the current DM50 in a deliberate bid to make German shares more attractive to international investors who, the draft law argues, are deterred from investing in German equities because of prices ranging from DM500 to DM1000 per share. ..TX.- The law, likely to be enacted in the first half of next year, divides insider dealing into two categories. Primary violators will be those have direct access to sensitive information because of their position, for example within company management, or as a shareholder or member of a supervisory board. Secondary violators will be those who deal on sensitive information obtained from primary sources, for which the jail term will be three years. ..TX.- The law is based on draft proposals floated by the finance ministry in January of last year. The delay, which in part reflects the technical and political difficulties of devising a regulatory structure for the German markets, has more recently become an embarrassment for Germany in the wake of controversial share purchases by Mr Franz Steinkuhler, the former head of the IG Metall Union. ..TX.- Mr Steinkuhler denied dealing in insider information gained from his position on the supervisory board of Daimler when he bought shares in Mercedes Holding (MAH), a Daimler-Benz holding company, shortly before an announcement which led to a sharp rise in MAH's share price. The dealings served to expose the inadequacies of the regulatory environment in Germany and senior bankers called for an acceleration in the pace of reforms. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P9651 Regulation of Miscellaneous Commercial Sectors. P6231 Security and Commodity Exchanges. ..TP.- Types: NEWS General News. ..IX.- P9651, P6231. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGMB6AAPFT ..HL.- 930713FT 930713 Georgia peace negotiations break down (277) ..BL.- By JOHN LLOYD ..DL.- MOSCOW ..TX.- ATTEMPTS to agree a ceasefire in the violent struggle for the port of Sukhumi in the Georgian province of Abkhazia broke down yesterday in Moscow. ..TX.- At the same time, Mr Eduard Shevardnadze, the Georgian leader, warned in the Black Sea port that he was prepared to take harsher action to put down the revolt in the province, where separatists have waged an 18-month struggle to secede from Georgia and join the Russian federation. ..TX.- Mr Shevardnadze, who has twice come under shell-fire at his army headquarters in Sukhumi, said on Sunday: 'Perhaps we must look at resolving this conflict through a combination of military and peaceful means. Until now we have tried to use only peaceful means.' ..TX.- Hopes for a negotiated ceasefire through the mediation of Mr Boris Pastukhov, Russia's deputy foreign minister, faded yesterday on Abkhazian demands. These insisted that an Abkhazian parliament and other institutions be permitted to return to Sukhumi and begin work as soon as a ceasefire was agreed, a condition unacceptable to the Georgian side, which still claims authority over Abkhazia. ..TX.- Most of the province is now in secessionist hands, except for the disputed capital of Sukhumi and the town of Ochamchira. ..TX.- Russia is accused by many Georgians of supplying military and other assistance to the Abkhazian side. However, Mr Shevardnadze at the weekend said that Mr Tengiz Sigua, the prime minister, had been wrong to threaten to break off diplomatic relations with Moscow. Such a move was 'unthinkable'. ..CN.- Countries: GE Georgia, East Europe. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: NEWS General News. ..IX.- P9229. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGMB6AAOFT ..HL.- 930713FT 930713 Constitutional reform a step closer in Russia (475) ..BL.- By JOHN LLOYD and DMITRI VOLKOV ..DL.- MOSCOW ..TX.- RUSSIA nudged a little closer to its goal of becoming a law-based state yesterday when its constitutional convention approved by a large majority a draft constitution setting out the fundamentals of a democratic country based on market principles. ..TX.- Mr Boris Yeltsin, the Russian president, said that 'it's now clear that without a principled resolution of the constitutional problem further progress on economic reform is simply impossible in principle'. ..TX.- The document, which runs to 133 articles, now passes for further revision to the assemblies of the regions and republics across Russia - a sure recipe, as Mr Yeltsin tacitly acknowledged, for further delay and extensive revision. The redrafted document is unlikely to be ready by Mr Yeltsin's target date of early August for approval by the convention. ..TX.- At least a third of the representatives from the regions and the republics - who were the dominant force in the constitutional convention - did not initial the document, and even those who did made it clear that their parliaments were free to revise the document radically. ..TX.- Mr Victor Stepanov, head of the Karelia republic, said: 'We'll take at least two months to go through this properly and there are many things we don't like in it.' ..TX.- Mr Yeltsin, in his speech to the convention, said that the new phenomenon of 'republicanisation' - regions naming themselves republics in order to qualify for greater privileges under the new constitution - was a futile exercise because, under the constitution, regions and republic had equal rights. This, however, is itself a further cause of difficulty since the republics, traditionally favoured in the Soviet system, wish to preserve their differential privilege. ..TX.- The draft constitution gives a number of concessions to the regions - giving them the right to have their own 'charter' as an antidote to their complaint that republics have the right to a constitution. ..TX.- They also have the right to promulgate new laws - though, as Mr Yeltsin noted, the tax regime is still undefined between the centre and the regions and republics. ..TX.- The draft also allows regions and republics to sign separate treaties on bilateral relations with Moscow - a clause inserted at the insistence of the Tatar republic, the most powerful and independent-minded of all the subjects of the federation. ..TX.- Under the existing constitution, the draft will eventually need to cross the hurdle of being approved by the existing parliament, which is an unlikely prospect. The president's advisers now seem inclined to propose that the convention pass a law on elections - a law which would allow elections later this year to a new form of parliament which would then adopt the constitution. ..CN.- Countries: RU Russia, East Europe. ..IN.- Industry: P9121 Legislative Bodies. ..TP.- Types: NEWS General News. ..IX.- P9121. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGMB6AANFT ..HL.- 930713FT 930713 Weak economy helps drop in French inflation to 1.9% (351) ..BL.- By JOHN RIDDING ..DL.- PARIS ..TX.- SHARP falls in the price of food and crude oil and weak economic activity kept French consumer prices stable in June, Insee, the national statistics institute announced yesterday. ..TX.- The annual rate of inflation fell slightly from 2 per cent in May to 1.9 per cent, its lowest rate since last December. ..TX.- Mr Edmond Alphandery, the economics minister, said the figures showed France had managed to maintain a favourable inflation rate compared with its principal trading partners. But economists in Paris said the figures also reflected the impact of recession. ..TX.- 'With the rise in unemployment, which is expected to exceed 12 per cent by the end of the year, and with gloomy economic statistics, consumers are preferring to save rather than spend,' said an economist at one French bank. 'The government may welcome low inflation, but it is also a sign of declining activity.' ..TX.- Food prices fell by 0.7 per cent in June compared with May, while oil prices were 0.4 per cent lower. Prices of manufactured products fell by 0.1 per cent compared with May. The stability in the consumer price index in June, which was unchanged to 0.1 per cent lower, occurred despite two increases in tobacco taxes during the spring. ..TX.- The increases raised tobacco prices by 4.6 in June, compared with May. Seasonally adjusted, Insee said that retail prices in June showed a slight increase of between 0.1 and 0.2 per cent. ..TX.- They said that the reduction in inflationary pressure also reflected a reduction in import prices following currency devaluations by several of France's trading partners. ..TX.- A spokesman for the institute said that consumer prices were likely to increase again over the next few months. He said that an increase of 5.3 per cent in petrol taxes, imposed from yesterday, and a 16 per cent increase in the duty on alcoholic drinks from July 1, would feed through into a higher inflation rate. ..CN.- Countries: FR France, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Inflation. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGMB6AAMFT ..HL.- 930713FT 930713 Ciampi aims for extra revenue (140) ..BL.- By ROBERT GRAHAM ..DL.- ROME ..TX.- THE Italian government is considering raising L32,000bn-L35,000bn (Pounds 13.7bn-Pounds 15bn) in extra revenues and spending cuts in the 1994 budget, writes Robert Graham in Rome. The aim is to hold the public sector deficit next year to L150,000bn, a small reduction on the 1993 target of L155,000bn. ..TX.- The budget outlines emerged yesterday as the government indicated it hoped to have the details agreed in cabinet either by the end of this week or early next. Today, Mr Carlo Azeglio Ciampi, prime minister, will be unveiling to parliament his government's three-year macro-economic projections for 1994-96. This will in turn provide the framework for discussion of the 1994 budget. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGMB6AALFT ..HL.- 930713FT 930713 Opel leak shocks motor industry (318) ..BL.- By JOHN GRIFFITHS ..TX.- MOTOR industry executives yesterday expressed surprise at the German announcement that plans for Opel's top-secret model had been found in a flat in Wiesbaden, saying theirs was an industry that was generally free of industrial espionage. ..TX.- They said manufacturers searching for ways of increasing competitiveness normally had relatively little difficulty keeping them in-house thanks to the industry's 'confidentiality clause' contract system. ..TX.- Engineers, senior managers and others with access at an early stage to new model programmes, investment and technology strategies have these clauses written into their contracts - and few have been known to abuse them. ..TX.- 'The reason is fairly obvious in the case of anyone whose career is in the industry,' one UK motor industry executive who wished to remain anonymous said last night. ..TX.- 'There might be a short-term gain for someone moving confidential information from one company to another. But in the long-term? What does that engineer or executive do if he or she wants or needs to make another move? The word would have got around about what had happened. Put simply, there would be nowhere else in the industry for that person to go.' ..TX.- The system has also survived substantial change in the organisation and processes of the industry which have meant that many more people than even five years ago necessarily have knowledge of key projects and strategies at an early stage. ..TX.- 'The days when a car maker's board had all the good ideas and took decisions behind closed doors has gone,' said another. ..TX.- 'If it's a significant project, it will involve the use of a centralised computer database and require information and input at an early stage from people in middle management, engineers and similar.' ..CO.- Companies: Adam Opel. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P3711 Motor Vehicles and Car Bodies. ..TP.- Types: TECH Products & Product use. ..IX.- P3711. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGMB6AAKFT ..HL.- 930713FT 930713 Community ministers build on summit growth initiative (326) ..BL.- By DAVID GARDNER ..DL.- BRUSSELS ..TX.- EUROPEAN Community finance ministers yesterday provisionally approved loan facilities worth Ecu8bn (Pounds 6.18bn), to try to speed economic recovery and build on the modest 'growth initiative' agreed at last December's Edinburgh summit. ..TX.- If confirmed, after more work on the details of the loans, the move amounts to a sort of deficit-financing, in which the EC has not previously indulged. ..TX.- The facilities take the form of an Ecu5bn bridging loan for mainly infrastructure projects across the Community; Ecu2bn in European Investment Bank loans for cross-border transport and communications networks; and Ecu1bn in soft loans to small and medium-sized industries. ..TX.- The bridging loan will be repaid, by 1999, out of the structural funds, the Ecu141.5bn regional and structural aid package agreed at Edinburgh. The intention is for the EC to borrow in the markets to speed up this development spending. ..TX.- The soft loans for small to medium-sized companies will have an interest rate subsidy of about Ecu129m, part financed out of the EC budget and part paid for from the structural funds. ..TX.- Agreement on how to share out the structural funds is at the moment held up by a wrangle over how big a share should go to Ireland, one of the four poorest member states which receive favoured treatment to enable them to catch up with average EC income levels. ..TX.- Separately, the ministers failed to unblock a measure increasing EC travel allowances. Germany had blocked an agreement in principle last year, linking any go-ahead to agreement on an EC-wide road charges system and liberalisation of road haulage. ..TX.- Both these issues were the subject of a political agreement on June 19, but Germany appears anxious to see the final text on the road transport measures before surrendering its last negotiating ace. ..CN.- Countries: QR European Economic Community (EC). ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGMB6AAJFT ..HL.- 930713FT 930713 Clarke targets welfare costs (343) ..TX.- MR KENNETH CLARKE, the chancellor, yesterday gave a blunt warning of future government spending cuts to resolve the most serious deterioration in public finances since the sterling crisis of 1976. ..TX.- Mr Clarke, who spoke after the meeting of European Community finance ministers in Brussels, pledged tough action to reduce the Pounds 50bn budget deficit. He repeated his warning that he might have to increase taxes in the November budget as a way of raising revenue. He also hinted that Britain's rising social security bill would come under close scrutiny in the government's attempts to prune the deficit. ..TX.- The chancellor's warning came as a Treasury document submitted to the EC finance ministers pointed to the rising burden on the public finances of social security spending. ..TX.- Mr Clarke spoke of a 'remorseless' rise in UK public spending due to an ageing population, growing numbers of people in higher education and increasing claims in items such as invalidity benefits. He said: 'Discretionary expenditure does not come free. The reason why public spending is rising remorselessly is partly the ageing population and partly the increasing take-up of benefits.' The latter factor was a desirable thing but had to be re-examined in the light of the public borrowing, he said. ..TX.- His remarks were in response to questions raised by his EC partners about Britain's aim to reduce the budget deficit to 3 per cent of gross domestic product by 1997, in line with the Maastricht treaty's goal of economic and monetary union. The Treasury document submitted to the finance ministers' meeting is based on the March Budget and shows 'cyclical' social security spending rising dramatically from a total of Pounds 10.9bn in 1991-2 to Pounds 18.5bn in 1997-1998. ..TX.- These figures include unemployment benefit and income support for people of working age, particularly single parents whose numbers are increasing, according to Treasury officials. ..TX.- The hole in our pocket, Page 14 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGMB6AAIFT ..HL.- 930713FT 930713 EC ministers pledge tough measures to cut deficits (515) ..BL.- By LIONEL BARBER ..DL.- BRUSSELS ..TX.- EUROPEAN Community finance ministers yesterday pledged to take tough action to resolve the crisis in public finances among member states and accepted that tax rises might be required to restore budgetary stability. ..TX.- In response to a series of grim warnings from EC central bank governors from the 12 member states, ministers agreed that spending cuts alone might not be enough to reduce public borrowing, which has soared as a result of the recession. ..TX.- Latest estimates by the European Commission show that the aggregate public sector deficit as a proportion of Community gross domestic product is likely to rise to more than 6 per cent this year - the highest level in the Community's 36-year history. ..TX.- Despite mounting evidence of the fiscal crisis facing EC member states, ministers insisted they would stick to the strict targets for economic and monetary union laid down by the Maastricht treaty, including a commitment to reduce individual budget deficits to 3 per cent of gross domestic product. ..TX.- Mr Phillipe Maystadt, the Belgian finance minister who chaired the meeting, said governments had 'precious little lee-way' for relaxing budget deficits to offset the effects of the recession. Any such move would be short-sighted, he said. ..TX.- Mr Kenneth Clarke, UK chancellor, said Britain remained committed to the Maastricht targets. He left open the possibility of tax increases in the November budget to reduce the UK's Pounds 50bn deficit. During yesterday's meeting, ministers gave Mr Clarke a relatively gentle ride over the UK's 'convergence plan' - the forecasts for meeting the Maastricht criteria for Emu. They described the plan as 'ambitious' but 'based on realistic assumptions'. A more vigorous budgetary adjustment might be necessary if the pace of economic recovery proved slower than expected. ..TX.- Two weeks ago, treasury officials from member states meeting in the EC's monetary committee had asked whether the UK was over-estimating the impact of future economic growth on cutting the deficit. ..TX.- Mr Clarke said the UK's forecasts contained tougher targets on spending than convergence plans submitted by other states. He noted the UK was likely to grow faster than its main EC competitors in 1993 and 1994. ..TX.- The meeting was overshadowed by warnings from EC central bank governors and the EC's economic policy committee about the fiscal crisis in the EC. ..TX.- In a submission to the ministers, the central bankers said: 'Concern about the present state of public finances is particularly warranted since the rise in budget deficits over the last few years cannot simply be ascribed to the cyclical downturn. ..TX.- 'They also reflect to a significant extent structural factors which have been adding to imbalances since 1989.' Signalling agreement, finance ministers stressed that structural measures to correct budgetary imbalances were essential so as to return the EC to higher growth. ..TX.- Building on summit growth initiative, Page 2 G7 backs benefits restraint, says PM, Page 8 No takers for tickets, Page 15 ..CN.- Countries: QR European Economic Community (EC). ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGMB6AAHFT ..HL.- 930713FT 930713 German support fails to halt franc's decline (406) ..BL.- By JOHN RIDDING and EMMA TUCKER ..DL.- PARIS, LONDON ..TX.- THE Bundesbank intervened in international currency markets yesterday in an attempt to support the French franc which came under attack in the European exchange rate mechanism. ..TX.- Heavy selling of the franc pushed it below FFr3.41 to the D-Mark, less than two centimes above its ERM floor of FFr3.4305. The franc closed in London at FFr3.416, around its lowest level since the beginning of the year, compared with last Friday's close of FFr3.399. In late trading in New York, the French currency stood at FFr3.4145. ..TX.- As well as intervention by the German central bank, the franc's fall prompted a statement of support from Mr Theo Waigel, the German finance minister. ..TX.- He said the fundamentals of the French economy were still healthy and confirmed the strength of Franco-German co-operation in monetary policy. Speaking in Brussels at a meeting of finance ministers, Mr Waigel said further cuts in German interest rates were both possible and desirable. ..TX.- The Bundesbank council meets on Thursday, but analysts discounted the prospect of a cut in rates unless pressure on the franc became more acute. They said the franc had been weakened by pessimistic reports about the French economy. A report last week by Insee, the national statistics office, forecast that gross domestic product would fall 0.7 per cent this year and that the jobless rate would rise to 12.5 per cent by the end of December. ..TX.- Mr Edmond Alphandery, the French economics minister, said yesterday that maintaining the D-Mark-franc exchange rate was an 'absolute imperative', describing the current parity as 'the backbone of the construction of Europe'. ..TX.- But economists said they expected the weakness of the franc to continue as investors moved short and long-term funds out of the French currency. ..TX.- Nevertheless, analysts in Paris were sanguine about the franc's prospects. 'We are in for a bumpy ride,' said a currency expert at a French bank. 'But the franc has withstood several crises and the government cannot afford to retreat on its commitment to the current ERM parity.' ..TX.- A survey by Idea, the London-based financial information company, showed that 40 per cent of dealers expect the franc to be devalued before the year-end. ..TX.- French inflation falls, Page 2 ..TX.- Currencies, Page 27 ..CN.- Countries: FR France, EC. DE Germany, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGMB6AAGFT ..HL.- 930713FT 930713 UN to maintain Somali action despite bloodshed (580) ..BL.- By MICHAEL LITTLEJOHNS and LESLIE CRAWFORD ..DL.- NEW YORK, NAIROBI ..TX.- THE United Nations last night rejected an Italian government request to suspend military action in Somalia after UN helicopter gunships bombarded a command centre of Somali warlord Mohamed Farah Aideed, killing more than a dozen Somalis. ..TX.- Two foreign journalists, a Briton and a German, were killed when an angry mob took to the streets of Mogadishu seeking revenge for the UN strike. ..TX.- They were named as Mr Dan Eldon of Reuters and Mr Hansi Krauss of Associated Press. Both were photographers. Two other journalists were missing and feared dead, and a further two were injured. ..TX.- Supporters of Gen Aideed claimed that up to 73 Somalis were dead. The bodies of 16 Somalis who had died in the air raid were paraded through the streets and it was claimed more were lying in the ruins of the Aideed compound. A UN official said 13 Somalis were killed and about 11 wounded. ..TX.- In Rome, Mr Fabio Fabbri, Italy's defence minister, said he would ask the US and the UN to suspend combat operations in Somalia in an attempt to reduce tension in the former Italian colony. 'We suggest a cooling-off period to reduce tension, the suspension of combat operations and a renewed effort to restore dialogue,' he said. Italy has deployed 2,600 troops in Somalia. ..TX.- Tension has escalated since Somali gunmen ambushed and killed 23 Pakistani peacekeepers on June 5. Since then, a further 22 UN soldiers have been killed. Many more Somalis have died during night-time air raids against Gen Aideed's strongholds. But the UN military operation has failed to capture the general, who went into hiding after an arrest warrant was issued against him on June 17. ..TX.- In New York, Mr Joe Sills, a UN official, emphasised that peacekeeping operations were mandated by the UN Security Council and were not subject to decision by individual members. He told reporters that Mr Boutros Boutros Ghali, the UN secretary-general, felt 'very strongly' that in any UN operation the force commander must be in total control, while working within the council mandate. ..TX.- Mr Sills refused to single out Italy for reproach and commented that 'a number' of providers of UN contingents had sought a freer hand in Somalia. 'There have been problems in this regard,' he added. ..TX.- General Bruno Loi, the Italian commander, is said often to have failed to consult the UN force commander, General Civek Bir of Turkey. ..TX.- For example, on July 2 when three soldiers were killed and 30 wounded in an ambush of 800 Italian troops, the UN was not informed in advance of a weapons search operation in which the Italians were engaged, and learnt about it only when urgent American support was requested. ..TX.- Speaking on behalf of Mr Boutros Ghali, Mr Sills said it was unacceptable to the UN and the Security Council for any member state to instruct its national contingent and unacceptable for a contingent to seek instructions from its national capital. Gen Bir has American and Pakistani deputies, but the Italians have accused the UN of running the show and have sought a bigger role in decision making. ..TX.- Mr Sills said they were not alone in seeking senior appointments to Gen Bir's staff. ..TX.- Italy seeks to calm row, Page 3 ..CN.- Countries: SO Somalia, Africa. ..IN.- Industry: P9229 Public Order and Safety, NEC. P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9229, P9721. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGMB6AAFFT ..HL.- 930713FT 930713 Government to clamp down on West End ticket agencies (434) ..BL.- By ANTONY THORNCROFT ..TX.- TICKET agencies which exploit West End theatregoers, especially tourists, are to be curbed by the government. Some buyers have ended up paying Pounds 45 for a Pounds 7 balcony seat at Miss Saigon. ..TX.- Resellers of tickets for theatres, concerts and similar events will be forced to tell the customer the standard of the seat being offered, including its face value. ..TX.- Baroness Denton, consumer affairs minister, said yesterday: 'Unless they buy directly from the box office, consumers can often pay Pounds 50 or more for a ticket whose face value is much lower, say Pounds 6. People may not find this out until they collect the ticket just before the performance.' ..TX.- Ms Susan Whiddington, development officer of the Society of West End Theatre, said: 'This is the best news we could possibly have.' Her organisation receives up to 30 complaints a week from disgruntled tourists and has long pushed for a change in the law. ..TX.- The new legislation is not aimed specifically at ticket touts. The feeling is that someone who buys a ticket in the street does not deserve protection. ..TX.- The main problem is the 130 or so ticket agencies that have sprung up throughout the West End and which have an aura of respectability. They extract exorbitant sums from theatregoers, give them a voucher and then arrange for a low-price ticket to be collected at the theatre. ..TX.- Although most of the trade is in tickets for the handful of popular, sold-out shows such as Phantom of the Opera and Crazy for You, the agencies also take advantage of the ignorance of visitors by selling them tickets for plays that are easy to get into. One recent complaint came from an out-of-town holidaymaker who paid Pounds 25 for a Pounds 14 ticket for The Mousetrap, which has been running for more than 40 years. ..TX.- Many of the 50 theatres in the West End have tickets readily available for most weekday performances this summer. ..TX.- The recession has reduced audiences by 3 per cent on last year's level. Half-price tickets to some shows are sold from an official booth in Leicester Square, and other two-for-one schemes exist. ..TX.- Specialist agencies, such as Ticket Master, First Call and Edwards & Edwards, invariably tell their customers that they are charging a premium of up to 25 per cent on the face value of their tickets. ..TX.- Sunset Boulevard review, Page 13 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7922 Theatrical Producers and Services. ..TP.- Types: COSTS Product costs & Product prices. ..IX.- P7922. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGMB6AAEFT ..HL.- 930713FT 930713 Stock and Currency Markets (244) ..TX.- -------------------------------------------------------------- STOCK MARKET INDICES -------------------------------------------------------------- FT-SE 100: 2830.9 (-12.3) Yield 4.04 FT-SE Eurotrack 100 1232.90 (+2.34) FT-A All-Share 1406.16 (-0.4%) FT-A World Index 158.78 (+0.1%) Nikkei 19,980.00 (+102.61) New York: Dow Jones Ind Ave 3524.38 (+3.32) S&P Composite 448.98 (+0.85) -------------------------------------------------------------- US CLOSING RATES -------------------------------------------------------------- Federal Funds: 3 1/16% (2 15/16%) 3-mo Treas Bills: Yld 3.064% (3.065%) Long Bond 106 15/32 (106 9/32) Yield 6.621% (6.635%) -------------------------------------------------------------- LONDON MONEY -------------------------------------------------------------- ..TX.- 3-mo Interbank 6% (same) Liffe long gilt future: Sep 108 7/32 (Sep 107 27/32) -------------------------------------------------------------- NORTH SEA OIL (Argus) -------------------------------------------------------------- Brent 15-day (Aug) dollars 16.87 (16.51) -------------------------------------------------------------- Gold -------------------------------------------------------------- New York Comex (Aug) dollars 394.9 (392.3) London dollars 394.05 (392.75) -------------------------------------------------------------- STERLING -------------------------------------------------------------- New York: Dollars 1.477 (1.4805) London: Dollars 1.478 (1.4815) DM 2.555 (2.55) FFr 8.7275 (8.6675) SFr 2.26 (2.2675) ..TX.- Y 162 (162.5) Pound Index 80.8 (80.6) -------------------------------------------------------------- DOLLAR -------------------------------------------------------------- New York: DM 1.7298 (1.72245) FFr 5.9065 (5.858) SFr 1.52985 (1.5315) Y 109.35 (109.875) London: DM 1.7285 (1.721) FFr 5.905 (5.85) SFr 1.5285 (1.5305) Y 109.6 (109.65) Dollar Index 66.5 (66.4) Tokyo open: Y 109.15 -------------------------------------------------------------- ..CN.- Countries: US United States of America. GB United Kingdom, EC. DE Germany, EC. FR France, EC. CH Switzerland, West Europe. JP Japan, Asia. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. P1041 Gold Ores. P6231 Security and Commodity Exchanges. P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: COSTS Commodity prices. COSTS Equity prices. ..IX.- P1311, P1041, P6231, P9311. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGMB6AADFT ..HL.- 930713FT 930713 World News In Brief: Tourist murder charge (48) ..TX.- Glaswegian James Boyce, 53, appeared at Stranraer Sheriff Court accused of murdering German tourist Thomas Boedeker. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: NEWS General News. ..IX.- P9229. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGMB6AACFT ..HL.- 930713FT 930713 World News In Brief: Sams confesses, police say (67) ..TX.- Michael Sams confessed to police that it was he, not a friend, who murdered Julie Dart, West Yorkshire police said. Sams was jailed for life last week for killing Julie and abducting Stephanie Slater. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: NEWS General News. ..IX.- P9229. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGMB6AABFT ..HL.- 930713FT 930713 World News in Brief: Japan's jobless workers (72) ..TX.- Japan's real unemployment rate is nearer 6 per cent than the official 2.5 per cent, Sumitomo-Life Research Institute says. The figure was calculated by taking into account 'in-house unemployment' - people who have jobs but almost nothing to do. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P9441 Administration of Social and Manpower Programs. ..TP.- Types: ECON Employment & unemployment. ..IX.- P9441. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGMB6AAAFT ..HL.- 930713FT 930713 World News in Brief: Tidal wave alert (54) ..TX.- Japan's meteorological agency issued tidal wave warnings after a series of earthquakes measuring up to 7.8 on the Richter scale shook northern Japan. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: RES Natural resources. ..IX.- P9229. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGMB6AGOFT ..HL.- 930712FT 930713 Russian ship tied up in web of creditors' claims (685) ..BL.- By RONALD VAN DE KROL ..DL.- ROTTERDAM ..TX.- FOR 13 months, the Russian cargo ship Kapitan Kanevskiy has been chained to the quayside in Rotterdam harbour while lawyers argue in court about Dollars 4.4m in unpaid bills for the delivery of children's and women's clothing to the former Soviet Union. ..TX.- The ship, operated by the St Petersburg-based, state-owned Baltic Shipping Company, was impounded in June last year in what is believed to be the first seizure of Russian physical assets over a payments dispute with western creditors. ..TX.- The dispute is a minefield of complexities, raising difficult questions about the ownership of property and assets under the old communist system and whether they are applicable today. The details centre on the non-payment of goods in the crucial years 1990 and 1991, when the Soviet Union collapsed in chaos and gave way to the Commonwealth of Independent States. ..TX.- The case is arousing interest in the Netherlands, where at least 50 other companies without export credit insurance are waiting to be paid for Fl 350m (Dollars 185m) worth of goods supplied during this period. ..TX.- Now the fate of the Kapitan Kanevskiy is starting to win attention abroad. ..TX.- Alfred C. Toepfer, the German commodities trader, filed a petition in Rotterdam last week asking for permission to 'arrest' a ship of the Russian Federation as part of its dispute with the Russian authorities about non-payment for deliveries of cigarettes, personal care products and other western goods in 1990 and 1991. No date has yet been set for the court's ruling. ..TX.- The lawyer for the plaintiff in the Dutch case, a small Amsterdam-based trading company called Pied-Rich BV, maintains that the court battle could have implications for 'The Dutch laws on attachment are very liberal, meaning that a US company could have Russian property arrested in the Netherlands even if the claim does not involve the Netherlands,' Mr Ton Steinz, of the Amsterdam law firm Steinz and Van der Veen, said. ..TX.- Pied-Rich's dispute is not with its Russian customers or with the Russian shipping company but with the Russian state. It says the former Soviet Ministry of Merchant Marine guaranteed in 1990 it would act as the vehicle for paying the Russian customers' bills. This was agreed as part of a wider arrangement whereby the Dutch company was committed to finding cargo business for Baltic. ..TX.- When Dollars 4.4m in bills for 1990 and 1991 were not paid, the Dutch company petitioned a Rotterdam court to have the Kapitan Kanevskiy, valued at some Dollars 16m, impounded in Rotterdam harbour. The ship has been under 'protective arrest' since June 14 1992. ..TX.- In court documents, lawyers for the Russian Federation accuse the Dutch company and its lawyers of abusing Dutch laws on property seizure and of attempting to use 'blackmail' to get the Russians to settle their debts. ..TX.- They say the impounding of the ship has already cost the company Fl 1.75m in direct costs as well as at least Fl 3.5m in lost revenue. ..TX.- The 13th lawsuit associated with the main legal case was heard in a municipal court last week. The proceedings turn partly on whether the ship can be considered Russian state property, raising a host of questions about property rights and leasing under the old communist system. ..TX.- The main legal case, which centres on whether the ship can be sold at auction if the debt is not repaid, is expected to drag on into 1994. ..TX.- A parallel arbitration case is pending in Moscow. ..TX.- Although it is being watched by other Dutch companies, the case cannot necessarily be 'extrapolated' to those of other creditors, according to one industry observer who is familiar with other uninsured Dutch claims. He noted that the Pied-Rich dispute involves a particularly complicated, tripartite payment system, as does the Toepfer case. ..TX.- 'Other creditors prefer to follow the diplomatic route so that they don't harm future trading relations,' he said. ..CO.- Companies: Baltic Shipping. ..CN.- Countries: RU Russia, East Europe. NL Netherlands, EC. ..IN.- Industry: P4412 Deep Sea Foreign Transportation of Freight. ..TP.- Types: RES Facilities. ..IX.- P4412. ..DS.- The Financial Times ..XP.- International Page 2 ***************************************************************** ..AN.-00DGMB6AGNFT ..HL.- 930712FT 930713 Spanish judge again rejects KIO plea to try ex-chairman (367) ..BL.- By PETER BRUCE ..DL.- MADRID ..TX.- SPAIN'S senior financial crimes judge has for the third time this year rejected efforts by the Kuwait Investment Office to open criminal proceedings against the former chairman of the KIO, Sheikh Fahad Mohammed Al Sabah, and the former management of the KIO's troubled Spanish industrial investments. ..TX.- The KIO claims that it lost all Dollars 5bn invested in Spain in the mid-1980s because of mismanagement and that up to Dollars 500m of this was stolen. The judge, rejecting a new KIO writ on Friday, said the Kuwaitis had produced no new evidence and there was no evidence in the writ of criminal conduct. The KIO will appeal, for the second time. ..TX.- The tortuous efforts of the KIO to get an investigation opened in Spain coincide with indications that a civil writ issued against many of the same defendants in London is also likely to become bogged down in arguments over jurisdiction. While the KIO is headquartered in London, most of the allegedly criminal behaviour by former Kuwaiti and Spanish managers took place in Spain. ..TX.- The new rebuff for the KIO in Spain comes alongside publication of a Kuwaiti parliamentary investigation into the KIO's big losses in Spain, in which a senior KIO official is quoted as saying he was told in 1990 by Sheikh Fahad not to speak of a secret transfer of Dollars 300m from Spain to secret KIO accounts as the money was being used to make 'political' payments. ..TX.- The transfer occurred during the Iraqi invasion of Kuwait, when the emirate was looking for international support to help eject the invaders. While the position of the Kuwaiti government is that no funds were used to make political payments and that the money was, indeed, stolen, the parliamentary commission report says it could not find a good explanation as to why it had been decided to make criminal charges in Spain and civil ones in the UK. It recommended that the KIO drop its traditional legal advisers, Stephenson Harwood. ..CO.- Companies: Kuwait Investment Office. ..CN.- Countries: ES Spain, EC. ..IN.- Industry: P6799 Investors, NEC. ..TP.- Types: COMP Company News. ..IX.- P6799. ..DS.- The Financial Times ..XP.- International Page 2 ***************************************************************** ..AN.-00DGLB7AEBFT ..HL.- 930712FT 930712 President Clinton's economic Jeeves (889) ..BL.- By MICHAEL PROWSE ..TX.- It may seem absurd to compare Mr Robert Rubin, the director of the White House National Economic Council, with Bertie Wooster's fictional manservant Jeeves. Yet in a town over-populated with brash, assertive personalities, his self-effacing, low-key demeanour really does bring the omniscient Jeeves to mind. ..TX.- Gleefully playing up Mr Rubin's deferential style, the Washington Post recently reported his habit of prefacing his rare interjections in White House meetings with the words 'in my humble opinion.' One can almost imagine him presenting economic options to Mr Clinton on a silver platter; although he knows 10 times as much about finance as the president, he apparently hesitates to indicate a strong preference for one policy over another. ..TX.- Mr Rubin's apparent lack of ego is seen as especially puzzling given that he has spent his working life on Wall Street. One of the most successful arbitrageurs of his generation, he ended up as a co-chairman of Goldman Sachs, the investment bank. Last year he reported earnings of Dollars 26.5m (Pounds 17.6m), making him unusually wealthy, even by the standards of Mr Clinton's well-heeled Cabinet. ..TX.- During a 40-minute interview in his panelled office in the west wing of the White House, Mr Rubin stuck resolutely to his type-casting. I could not get him to express a really strong opinion about anything, even off the record. When asked for his personal views, he tended to reply by deftly outlining the president's policies on the topic in question. ..TX.- Yet as director of the NEC, Mr Rubin is potentially the most powerful economic official in Washington. He co-ordinates the activities of all the other economic agencies and enjoys daily access to the president; more than anybody else, he is the prism through which Mr Clinton views the economic world. Yet he rejects flatly any suggestion that he has a specially important role. He is certainly not Mr Clinton's economic chief of staff, he says, because that would imply the heads of other agencies report to him, which they do not. ..TX.- Does he accept the common criticism that he is too reluctant to express his own views on policy issues? ..TX.- 'People say that. I really think it's not correct. What you have to do in this job is to perform your co-ordinating function with real intellectual integrity so that everybody feels their views are laid out fully and fairly. Then, separately, you can express your own personal views. . .I don't thump tables but I don't feel any reticence about coming forward with my views.' ..TX.- Whatever he says, it is hard to believe that Mr Rubin does harbour strong personal views on economic policy. What really seems to excite him is teamwork and the process of brokering agreements. In helping devise the US's new hard-nosed trade policy towards Japan, for example, Mr Rubin got 'seven, eight, maybe 10 agencies around the table.' The marathon debate that ensued was apparently unprecedented in that policies towards Japan have usually been fashioned independently in particular agencies, such as the treasury, state or commerce departments. ..TX.- Yet it was typical of Mr Rubin's mission at the NEC, which is to bring to economic policy-making the kind of coherence and co-ordination that has long characterised foreign and diplomatic policy. The NEC is thus consciously modelled on the National Security Council and Mr Rubin regards his role as precisely analogous to that of Mr Anthony Lake, the national security adviser. ..TX.- Mr Rubin's council has undoubtedly played an important role in formulating budgetary and trade policy. But quite how far its influence will ultimately stretch remains unclear. During the election campaign, there was speculation that a Clinton administration would move beyond traditional macroeconomic policies and take an active interest in the performance of individual industries, especially in high-tech sectors. Does Mr Rubin personally have faith in 'industrial policy.' ..TX.- I expected - and got - an equivocal response. 'Industrial policy is a funny word,' he says. 'To 100 people it will mean 200 different things - everybody has at least two different definitions in mind.' However, he believes there may be 'externalities' that could justify a more active government role in some areas. He will not elaborate because he does not want to prejudge the outcome of the few sectoral studies currently under way. Characteristically, all he can promise is that a premium will be placed on inter-departmental co-operation. 'There will be Laura (Tyson), Bob Reich, Lloyd Bentsen, Leon (Panetta) and myself - and others - sitting at the table and working it out together as opposed to something happening in one agency that others don't agree with.' ..TX.- Mr Rubin is urbane, courteous and, above all, non-ideological. His self-effacing style is a breath of fresh air in Washington and has gone down well with more overtly ambitious colleagues. He deserves credit for striving to create a more rational and co-operative policy making apparatus. But whether his committee system, which gives a voice to all interested parties in the federal government, will produce effective policies remains an open question. Unless the NEC's able director provides a stronger sense of direction, some observers worry it will end up producing camels. ..CN.- Countries: US United States of America. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P9199 General Government, NEC. ..TP.- Types: NEWS General News. ..IX.- P9311, P9199. ..DS.- The Financial Times ..XP.- London Page 30 ***************************************************************** ..AN.-00DGLB7AEAFT ..HL.- 930712FT 930712 No nukes is good nukes (940) ..BL.- By IAN DAVIDSON ..TX.- David Gergen and the other news manipulators did a fine job for their political masters at the meeting of the Group of Seven leading industrial nations in Tokyo last week. They got great headlines for the 'agreement' on a Gatt deal, for the group's hypocritical words on Bosnia, for the Dollars 3bn (Pounds 2bn) aid package for Russia. Considering that the meeting had gathered amid a general consensus that the G7 was a busted flush, and the seven leaders the most discredited bunch in recent history, this was quite an achievement for the spin merchants. ..TX.- A by-product of this was that the news managers were able to downplay one of the most serious items on the G7 agenda: the prospect that the world is on the threshold of an ominous, and quite possibly dangerous, proliferation of nuclear weapons. The issue is mentioned in the final communique, but in such deadpan terms that it remained safely on the inside pages. ..TX.- The first and most immediate cause of anxiety is Ukraine, which after long debate now seems determined to hang on to at least some of the 176 strategic nuclear missiles which were part of the Soviet arsenal and happened to be based on Ukrainian territory. This could jeopardise the radical US-Russian nuclear arms reductions treaties signed only six months ago; but it could also give new and dangerous encouragement to other countries to acquire nuclear weapons. ..TX.- Then there is North Korea, which is probably engaged on building up its own nuclear weapons capability, in defiance of its commitment not to do so under the multilateral nuclear Non-Proliferation Treaty (NPT). This is a particularly disturbing break-out by a hard-line, communist and militaristic country. Last week in Tokyo, Japan made it clear that it would regard a nuclear-armed North Korea as a serious threat to its national security. Japan could probably build nuclear weapons and their delivery systems in very short order, if it decided to go down that road. So if North Korea becomes a nuclear weapons state, we should assume that Japan will, too. ..TX.- Whether anything can be done to stop North Korea is uncertain. The Americans have been trying diplomatic arm-twisting in bilateral talks, apparently with only modest success: Washington is now talking of international sanctions. ..TX.- Ukraine has not stated unambiguously its intention to become a nuclear weapons state; but that seems the direction it is heading. President Leonid Kravchuk said last week that the nuclear missiles should be declared 'national property' (whatever that means) - until they are destroyed. Prime Minister Leonid Kuchma went further, and said that Ukraine should formally proclaim itself a nuclear weapons state - until the weapons are removed and destroyed. In the meantime, US intelligence suspects that the Ukrainians are working on the electronic codes which control the missiles, and may be able to crack them in the not-too-distant future. ..TX.- Ukraine's fundamental objectives remain ambiguous, because the political class is divided. Sometimes it seems they are just using the missiles as bargaining counters, to get more financial aid from the west; such an objective can only have been reinforced by the Tokyo meeting, which offered Dollars 3bn to Russia but nothing to Ukraine. But sometimes it seems they regard the missiles as a security guarantee against possible Russian aggression; and would only give them up in exchange for a security guarantee from the west. If that is the bottom line, Ukraine will keep the missiles, because the west will not give such a guarantee. ..TX.- In the meantime, Ukrainian foot-dragging is blocking the implementation of the second Strategic Arms Reduction Treaty (Start-II) agreed only six months ago by George Bush and Boris Yeltsin. That agreement should reduce the long-range nuclear arsenals of Russia and the US by about two-thirds, from some 11,000-12,000 warheads each to about 3,500 by early next century. But this treaty cannot go into effect, because Ukraine has not ratified the previous Start-I treaty of 1991 on which Start-II is built. ..TX.- But if nuclear proliferation by Ukraine is a by-product of the disintegration of the Soviet Union, it may be part of a more general pattern. Kazakhstan is another republic with some former Soviet weapons; but whereas Kazakhstan has ratified Start-I, it has not signed the NPT as a non-nuclear weapons state. Iraq's incentive to go nuclear has been intensified by the end of the cold war, since it can no longer rely on Soviet military support against the west. Even North Korea may see the end of the cold war as a reason to build up its national 'security'. ..TX.- As a result, the official nuclear powers are urgently trying to rebuild the political credibility of the non-proliferation regime. President Bill Clinton has extended the US moratorium on nuclear testing for another 15 months, and Russia and France have both given their support to a comprehensive test ban. The UK government does not share their enthusiasm, but has enough sense not to object. ..TX.- The probable collapse of the non-proliferation dyke will have far-reaching consequences. If nuclear weapons are no longer restricted to the very few, those who used to claim to be the only legitimate members of the nuclear club will need new justifications for their political privileges, starting with permanent membership of the UN Security Council. Sooner or later, Germany and Japan must get permanent seats, and it would be better if they did so without acquiring nuclear weapons. Britain and France should make a virtue of necessity, and urge their admission. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 30 ***************************************************************** ..AN.-00DGLB7AD9FT ..HL.- 930712FT 930712 Monday Interview: Optimist's upward curve: Daniel Tully, chairman of Merrill Lynch, talks to Patrick Harverson (1430) ..BL.- By PATRICK HARVERSON ..TX.- A golf club rests against a table, pictures of his family adorn the walls, but no stock market computer screens clutter the desk of the chairman of America's most powerful financial company. ..TX.- Mr Daniel Tully, who a week ago took over the helm of Merrill Lynch, the largest securities house in the US, does not fit the popular image of Wall Street's elite. ..TX.- Instead of the intense, blue-blooded financier that people might expect to run one of the nation's largest investment banks and securities houses, Mr Tully is a big, cheerfully confident Irish New Yorker, the son of a dockside steam-fitter from the borough of Queens. ..TX.- He believes his Irish heritage has helped him to manage a big company with a large number of staff. 'The Irish have a certain empathy, compassion and a willingness to put themselves in the other person's shoes.' ..TX.- He admits that, when he started in the securities business in 1955, he knew nothing about stockbroking. Neither, it seems, did his mother. Laughing at the memory, he says: 'When I got the job that day, and went home and told my mother that I had a job with Merrill Lynch, Pierce, Fenner & Beane, she said: 'That's great son. I always knew you would do well in the advertising business.' ' ..TX.- While he might not have done well in advertising, the 61-year-old Mr Tully has thrived in stockbroking. After joining Merrill's accounting department, he worked up through the firm's broking workforce, moving to the New York head office in 1976. ..TX.- Six years later, Mr Tully was made head of the firm's private client business, and in 1985 he was appointed president and chief operating officer. From 1985, he ran Merrill with his long-time friend and partner, Mr William Schreyer, who was chairman until his retirement two weeks ago. ..TX.- During Mr Tully and Mr Schreyer's tenure, Merrill has grown from one of several dominant firms on Wall Street, to the dominant force. Today, the firm is pre-eminent in almost every area of the US capital markets - its brokers earn more commissions than any other firm, its investment bankers underwrite the most corporate stock and bond issues, and its investment managers handle more client assets than any financial institution except Fidelity, the mutual funds group. ..TX.- Despite the firm's growth, Mr Tully's stint at the top has not been problem-free. In the latter part of the 1980s, Merrill's rapid expansion left it with an average return on equity of only 10.8 per cent, well below the industry average of 15 per cent and in 1989 it made a loss of Dollars 213m (Pounds 142m). ..TX.- At the time, Mr Tully and Mr Schreyer were criticised for allowing Merrill to get badly out of shape. Critics and analysts argued that the duo were great salesmen, but lacked the modern management skills to guide a giant securities house into the 1990s. ..TX.- The two responded with a three-year cost-cutting programme, which shrank Merrill's workforce from 50,000 to just over 40,000. Mr Tully patrolled the firm's offices, slapping small red dots on equipment and furniture that he believed was surplus to Merrill's needs. ..TX.- Today, the red dots have gone but, says Mr Tully, the attention to cost control has not. Merrill employs what its chairman calls the 'burden of proof' policy, which regularly asks every unit to justify why it should remain part of Merrill Lynch. Mr Tully says: 'The burden of proof is on that organisation to come back to us and sell management on why they are critical and integral to our long-term strategy and success.' If the management is not convinced, out comes the axe. ..TX.- While retreating from some businesses, Merrill has been expanding in others - most notably asset management. In common with other big Wall Street firms, Merrill wants to build up its fee-based revenues as an insurance against the volatility of its more cyclical businesses such as trading, broking and underwriting. ..TX.- Today, Merrill's recurring revenues cover half of its fixed costs. Mr Tully wants all of the fixed costs covered by the end of the decade. If that target is reached, Merrill's earnings from broking commissions, trading and investment banking would be pure profit. ..TX.- Back in 1955, when Mr Tully joined Merrill, broking commissions represented virtually all of the firm's earnings. Twenty years later, however, the industry abandoned fixed broking commissions and Merrill, like many Wall Street firms, decided to offer a broader range of services to clients and lock them into long-term relationships. ..TX.- Consequently, the Merrill of the 1990s is much more than a broker. It is a large financial services supermarket. It offers individual and corporate clients everything from banking-type products such as cash accounts, cheque books and mortgages, to services such as insurance, business loans, stockbroking, investment management and high-tech corporate finance. ..TX.- Mr Tully thinks that the firm should follow the clients' needs, rather than the other way round. 'The logic is, if you focus on your clients, then you change along with them as they go through their life. It's a recognition that the only constant is change.' ..TX.- This attention to the client, he believes, has turned Merrill into the country's biggest securities house. In spite of the firm's size and the complexity of its business, Mr Tully has always adopted a style of management that is straightforward, upbeat and reminiscent of another Irish American, former President Ronald Reagan. ..TX.- Mr Tully says: 'I think you could liken my style, absolutely, to a Ronald Reagan; that is, someone who has vision, principles and who will not get mired down in the details. That does not mean you don't have a great knowledge and understanding of the business, but it's built on mutual respect and trust and the dignity of fellow-individuals. You've got to believe that from the bottom of your mind and heart. I believe it. I trust people.' ..TX.- He trusts his senior managers to get on with managing the firm while he travels, meeting clients and employees. Slipping into one of his many anecdotes, he says: 'At a recent conference someone said to me: 'Mr Tully, how can you manage forty-some thousand people, and Dollars 120bn of balance sheet?' I said: 'I don't. It's 11.15am and I haven't spoken to my office yet.' I said: 'Someone is managing 40,000 people, and a lot of people are managing the balance sheet.' Part of my executive responsibility is to set priorities, allocate resources and set the tone and principles which will guide us through the good times and the bad.' ..TX.- He comes down hard, however, on employees that abuse his trust. 'If you go outside the parameters,' he says, making a slicing motion across his knees with his hand, 'I'm not very tolerant.' ..TX.- Otherwise, he seems a tolerant man and, despite his avowed fondness for former President Reagan, broadly supportive of the current Democrat president. 'I applaud President Clinton's deficit-reduction goal, but would prefer it if he accomplished more through spending cuts rather than tax increases.' In particular, he is disappointed that there is little in Mr Clinton's economic policy that encourages savings and investment. ..TX.- Mr Tully is extremely positive about the US, despite the country's economic and social problems. Asked if the American dream has fizzled, he answers vehemently: 'Hell no. I don't think the future has ever been brighter. You look at all the trends in the United States, and you might see a little ripple, but the long-term trends are extremely positive. Every chart I look at starts in the lower left-hand corner and goes to the higher right-hand corner.' ..TX.- Sitting in his spacious office, with its view of the river, and those twin symbols of hope - Ellis Island and the Statue of Liberty - Mr Tully is the embodiment of the American optimist. There is nothing wrong, he says, with being an optimist. After all: 'I've never met a rich pessimist.' ..TX.- PERSONAL FILE ..TX.- 1932 Born in Queens, New York. ..TX.- 1953 Graduated from St John's University, New York. ..TX.- 1955 Started at Merrill Lynch. ..TX.- 1959 Account executive in Stamford, Connecticut. ..TX.- 1970 Manager of Stamford office. ..TX.- 1976 Individual sales director, head office. ..TX.- 1982 Executive vice-president and head of Individual Services Group. ..TX.- 1985 President and chief operating officer. ..TX.- 1992 Chief executive. ..TX.- 1993 Chairman. ..CO.- Companies: Merrill Lynch and Co Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P6211 Security Brokers and Dealers. ..TP.- Types: PEOP People. CMMT Comment & Analysis. ..PE.- People: Tully, D Chairman Merrill Lynch and Co Inc. ..IX.- P6211. ..DS.- The Financial Times ..XP.- London Page 30 ***************************************************************** ..AN.-00DGLB7AD8FT ..HL.- 930712FT 930712 Foreign Exchange and Money Markets: Franc in trouble (329) ..BL.- By JAMES BLITZ ..TX.- THE main focus of attention in currency markets this week will be on the French franc after a week which has seen heavy selling pressure on the currency in the European exchange rate mechanism, writes James Blitz. ..TX.- The last 5 trading days have seen an extraordinary fall in the franc's value against the D-Mark and, on Friday, the currency came below the FFr3.40 level against the German currency for the first time since March. ..TX.- More worryingly, the currency was at minus 71 percentage points level against its ERM divergence indicator, a point close to the one where European central banks are required to support an ailing currency. ..TX.- The franc's fortunes this week will be probably be decided by events in Frankfurt as much as in Paris. There was strong speculation late last week that the Bundesbank might lower the repo rate in its weekly money market intervention on Wednesday, currently at 7.30 per cent. ..TX.- A Bundesbank council meeting is also due on Thursday. At the start of last week, it was assumed that the German central bank would leave its interest rates unchanged at this session, and that the earliest that a cut in official rates could be expected was July 29. ..TX.- But, in the wake of recent developments, some dealers are leaning towards the view that the Bundesbank will have to lower its Lombard rate - and perhaps even its discount rate - this week if the French currency is to receive firm underpinning. ..TX.- Several German economic indicators will hint at whether the Bundesbank will be able to ease monetary policy. Wholesale prices figures for June are due out today, with the market expecting a slight rise in inflation. Producer prices for the same month are also due on Friday. ..CN.- Countries: FR France, EC. DE Germany, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: MKTS Market data. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 27 ***************************************************************** ..AN.-00DGLB7AD7FT ..HL.- 930712FT 930712 International Bonds: Swiss tranquillity disturbed by a quiet revolution (797) ..BL.- By SARA WEBB ..TX.- AMONG European bond markets, few have escaped bouts of currency-related or politically inspired turbulence over the past year. However, unlike members of the European exchange rate mechanism, Switzerland's tranquillity has been disturbed by a quieter revolution taking place in the Swiss franc bond market. ..TX.- In recent months, the changes which have taken place in this corner of Europe - regulations governing the market and the issuance of larger, more liquid issues - appear to be creating a more enticing market for borrowers of a sovereign and supranational nature. At the same time, a change in the economic background has made make it more likely to encourage investors to buy bonds and for borrowers to launch longer-dated issues. ..TX.- A recent report by Ms Caroline Shah, an analyst at Standard & Poor's, the international credit rating agency, points out that the volume of bond issuance in the Swiss franc bond market has dwindled in recent years, as the market was 'hampered by slow liberalisation' and left behind as other countries liberalised their currency markets. ..TX.- According to figures provided by Euromoney Bondware, the volume of public and private Swiss franc bonds for foreign issuers declined from a total of SFr32.7bn in 1990, to SFr 29.9bn in 1991 and SFr27.8bn in 1992. Yet in the first six months of 1993, the volume of new issues has topped SFr18.5bn, suggesting the market could be set to exceed the previous year's volume. But as Ms Shah says, 'recent moves have begun to reverse that trend and . . . may pave the way for the development of a Swiss franc Euromarket'. She points out that the Swiss franc market may have benefited from the sporadic bursts of turbulence in the European exchange rate mechanism. ..TX.- The following four recent changes should help to lift the growth of the Swiss franc market: ..TX.- the abolition of stamp duty on the issue of Swiss franc bonds by non-Swiss issuers ..TX.- the abolition of stamp duty on inter-professional trading of foreign bonds, which had aggravated the illiquidity in the Swiss franc market ..TX.- the relaxing of syndication requirements, so that banks which are not domiciled in Switzerland are able to syndicate Swiss franc bonds issued by foreign borrowers ..TX.- new issue commissions and associated fees for borrowers have been reduced and are more evenly distributed. ..TX.- According to S&P, the relaxation of the stamp duty on foreign issues should tempt more Swiss franc bond issues from foreign borrowers while the new syndication rules should help broaden the investor base outside Switzerland. ..TX.- Yet, the pace of change could be slow. A bond analyst at Pictet, the Swiss investment house, says: 'The liberalisations are bearing fruit . . . but it remains a small capital market with very few benchmark issues.' ..TX.- Some borrowers are taking note of the changing environment. Last month the Republic of Austria established the benchmark bond in the Swiss franc market with the launch of its SFr1bn bond due February 2000. The Kingdom of Sweden also tapped the market last month with a SFr500m 10-year issue, its first foray in this market since 1988. ..TX.- Austria's issue is particularly significant given that one of the most frequent complaints about the Swiss franc market is its poor liquidity. The market is dominated by Swiss retail investors who, once they have bought the bonds, tend to hold them to maturity. Small issues of about SFr100-SFr150m are placed and the liquidity dries up, forcing banks to quote wide bid-offer spreads thereafter. ..TX.- Mr Ruedi Zehnder, head of primary markets at Credit Suisse expects Swiss retail investor appetite for bonds to pick up now that inflation is coming down and short-term interest rates are declining. The Swiss bond yield curve has been inverse for the last three years, so while investors could obtain high returns on bank deposit accounts, there was less incentive to buy lower-yielding bonds. However, with the fall in short-term rates, the curve has flattened out, and that appears to be triggering investor interest in the longer end of the curve. ..TX.- Another positive factor according to one Swiss banker, is the likelihood that there will be some early redemptions of bonds with relatively high coupons this year, which should create investor demand for Swiss franc bonds. ..TX.- For borrowers, Swiss interest rates appear relatively low by European standards, and some borrowers have been able to take advantage of attractive swap rates. ..TX.- However, Mr Zehnder is less optimistic about the investor base: 'There is not a broad demand from outside Switzerland . . . we are changing but not as quickly as people thought we would change.' ..CN.- Countries: CH Switzerland, West Europe. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGLB7AD6FT ..HL.- 930712FT 930712 Risk and Reward: Derivatives industry scrambles to find some kind of infrastructure (678) ..BL.- By LAURIE MORSE ..TX.- THE debate in world banking circles over controlling systemic risk from derivative securities trading will intensify when a study group formed by the Group of 30, a Washington-based think tank, releases its report on derivatives later this month. ..TX.- Such studies are popular. Derivatives, in the span of just a few years, have become integral to corporate risk management, with a surprising array of business applications, from swapping long-term debt for short-term debt to hedging foreign exchange or commodities exposure. Regulators are just coming to terms with swaps, swaptions, and hybrid instruments, and are wondering if, and how, such banking exotica should be supervised. ..TX.- The banks which trade the markets are farther along in managing derivatives. The industry has evolved to a point where standardised contracts and other procedures are helping to mitigate credit risks. Now, with the threat of regulatory intervention pending, the derivatives industry is scrambling to adopt an infrastructure of sorts, in order to prove that participating dealers have the growing markets under control. ..TX.- Estimates of annual over-the-counter derivatives turnover range from Dollars 5,000bn to Dollars 7,000bn in terms of notional face value. However, since only the income streams from these securities are swapped, the capital at risk in each trade is smaller than the face value of the securities by at least a factor of 10. ..TX.- Ideas for managing credit exposure while at the same time allowing reasonable market access and a healthy measure of innovation range from a centralised derivatives clearing house to a more sophisticated generation of standardised bilateral swaps contracts. ..TX.- Since credit quality is an important marketing tool for exchange clearing houses, big banks, and the newly-formed AAA credit-enhanced subsidiaries of big investment houses, the debate is coloured by the self-interest. ..TX.- The central clearing house idea has attracted the support of some US banking regulators. A clearing house would guarantee both sides of a swap and limit default risk. With the credit quality of counterparties less of an issue, a central clearing house would, in theory, open up swap market participation to less highly capitalised banks. ..TX.- Chicago's two big futures exchanges would like a slice of the swaps clearing business, and are positioning themselves for a potential bonanza. 'It's something we're considering,' says Mr Jim Slenz, senior director of risk management applications for the Chicago Mercantile Exchange. ..TX.- The Chicago Board of Trade is making a bid to clear swaps. Late last month, it asked its primary regulator, the Commodity Futures Trading Commission, to exempt markets traded only by professionals from the constraints of federal oversight. Such an exemption, which has been granted to OTC swaps and off-exchange energy contracts, would allow the CBOT to compete against the OTC markets with its own non-standardised derivatives. However, it would also put the exchange in line to clear swaps and hybrid transactions. ..TX.- The CBOT is a long way from achieving such an exemption. CFTC officials have opposed mingling the derivatives risks of large institutional traders in the same clearing house that protects the investments of small retail futures and options traders. ..TX.- Mr Andrew Coleman, partner in Price Waterhouse's capital markets area, believes a separate 'mega clearing-house' for OTC derivatives could be constructed, but that it would be expensive to establish. ..TX.- He sees drawbacks: the procedures used to clear, or match, highly standardised futures trades in liquid exchange markets do not transfer easily to swaps, which are individually tailored to suit the needs of a single company and are usually difficult to re-sell. ..TX.- The handful of specialist dealers trading swaps would prefer to avoid the expense and standardisation required by a clearing house and negotiate instead a series of bilateral agreements that reduce exposure in the event a partner in a swap defaults. Bilateral agreements allow them to preserve the marketing edge they garner from their AAA credit ratings. ..CN.- Countries: US United States of America. ..IN.- Industry: P6231 Security and Commodity Exchanges. P6211 Security Brokers and Dealers. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P6231, P6211. ..DS.- The Financial Times ..XP.- London Page 21 ***************************************************************** ..AN.-00DGLB7AD5FT ..HL.- 930712FT 930712 US Money and Credit: Fears over inflation in sharp retreat (644) ..BL.- By MARTIN DICKSON ..TX.- THE US credit markets are optimistic they are to receive good news on inflation this week, and that this will underpin the current record low yields at the long end of the bond market. ..TX.- A raft of statistics to be released this week will give the markets much more to chew on than last week, when a lack of fresh economic data and holiday-shortened working week meant trading lacked a firm direction. ..TX.- On Tuesday the market brushed off the biggest one-day gain in 13 years in the widely watched Commodity Research Bureau Index of commodity prices, which is often regarded as a harbinger of inflation. ..TX.- For the rise was due mainly to flooding in the Mississippi River valley, sending grain and other agricultural commodity prices rising sharply, which economists agreed would have little inflationary consequences. ..TX.- In thin trading ahead of this week's inflation reports, the price on the benchmark 30-year long bond managed to make a little progress, with the yield ending on Friday night at around 6.64 per cent, down from 6.66 per cent a week earlier. ..TX.- Wall Street is expecting the overall producer price index for June, which will be released on Tuesday, to be flat to slightly down, while the consumer price index, due out on Wednesday, is forecast to be flat overall, with a 0.1 per cent to 0.2 per cent rise in its core rate. ..TX.- That would mean producer price inflation running roughly at a 2.8 per cent annual rate since the start of the year, with consumer price inflation at around 3 per cent - far below the worrying levels recorded in the first four months of 1993. ..TX.- Nor are there any significant inflationary clouds on the horizon. ..TX.- Retail sales figures for June, due out on Wednesday, are expected to show a modest 0.3 per cent rise, with consumers still nervous about an economic recovery which seems fragile and growing in fits and starts. ..TX.- A summary of the May meeting of the Federal Reserve's policy-making Open Market Committee, released last Friday, confirmed reports that it voted on that occasion to lean towards raising interest rates if inflation did not slow down. ..TX.- The committee met again last week and, while the outcome of its discussions will not be known for some six weeks, the recent inflation figures should have made it more sanguine, though probably not sufficiently so to eliminate its bias towards tightening. ..TX.- With inflation fears in sharp retreat, international developments may help underpin the bond market's rally. ..TX.- Ms Susan Hering, an analyst at Salomon Brothers, points out that a modest revival in the dollar should increase the attraction of assets denominated in the US currency, while last week's unexpectedly successful trade talks at the Tokyo G7 summit 'should dampen fears that increased protectionism will trigger higher inflation'. ..TX.- In spite of the bond market's generally buoyant tone, it still has to overcome an important political hurdle - efforts by the House of Representatives and the Senate to reach a compromise on their different versions of President Clinton's deficit reduction package. ..TX.- Expectations that some compromise package will pass into law have underlain the market's rally since the start of June. ..TX.- Many on Wall Street expect the measures will act as a substantial brake on the economy, and thus on inflation. ..TX.- A particularly gloomy forecast came last week from Mr Philip Braverman, chief economist at DKB Securities, who argues that there are early signs of the US relapsing into recession later this year or in the first half of 1994, and that the Clinton package will accentuate the trend. ..CN.- Countries: US United States of America. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P6231 Security and Commodity Exchanges. ..TP.- Types: CMMT Comment & Analysis. MKTS Market data. ECON Inflation. ..IX.- P9311, P6231. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGLB7AD4FT ..HL.- 930712FT 930712 Dutch Bonds: Guilder's stability paves the way for 10-year yields (563) ..BL.- By PETER JOHN ..TX.- FOR the past 10 years or so the Dutch central bank has managed to maintain the guilder at virtual parity with the German currency. This policy has gained so much credibility with the money markets that the Dutch authorities barely have to lift a finger to get their currency back in line. ..TX.- It is a situation that the Banque de France, forced to carry out large intervention at the start of the year when the franc was under heavy speculative pressure, and possibly facing the prospect again following the franc's slide last week, might envy. ..TX.- It is a situation that has enabled the yield on 10-year benchmark Dutch bonds to be the only one within the European exchange rate mechanism to fall below the German equivalent for a sustained period. ..TX.- Even after the enormous shifts of money back into Germany at the end of last week as international investors finally came to the conclusion that their pessimism over the outlook for the German economy might be overdone, the yield on Dutch government bonds of 10 years' maturity is still something like 10 basis points under the going rate in Germany. ..TX.- The Netherlands has public borrowing requirement for this year of about Fl 42.4bn, a level which most analysts concede to be in the region best described as comfortable. The capital funding has gone so well that the Treasury announced at the beginning of June that it had raised Fl 34.4bn in the market and there would be no more borrowing in the capital markets until September. ..TX.- Many investors see the Netherlands as Germany without the burden of reunification. German inflation is running at 4.2 per cent compared with 2.1 per cent in the Netherlands. ..TX.- However, the strong ties between the two countries are working to the disadvantage of the Netherlands. According to some Dutch economists, there is little likelihood of 10-year bond yields - one of the strongest indicators of long-term economic confidence - falling much further below that in Germany. ..TX.- The Netherlands needs the market credibility that the link with Germany provides and, with 30 per cent of its exports going to Germany, it is inextricably tied to its neighbour. ..TX.- Mr Arno Barens, European economist with F. Van Lanschot Bankiers, the Dutch commercial bank, believes: 'The spread will reach parity by the end of the year; not so much because of the good performance of the German economy but more because of the close link between the two and the arbitrage opportunities that provides.' ..TX.- The Dutch central bank has been paring its short-term rates in order to maintain currency parity and although its floor rate, the official advances rate, is at 6.5 per cent against the German discount rate of 6.75 per cent, the 'special advances rate', which is used as a fine tuning, mechanism is only just below at 6.7 per cent. ..TX.- As Ms Ellen van der Gulik of the new Dutch merchant bank Mees Pierson says: 'The markets realise that if you push the guilder up too much the central bank will punish them. Even if the whole ERM blew up and Germany had to get out the Netherlands would still stay with it.' ..CN.- Countries: CM Cameroon, Africa. NL Netherlands, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGLB7AD3FT ..HL.- 930712FT 930712 UK Gilts: Prices climb despite lure of German bonds (732) ..BL.- By PETER MARSH ..TX.- THE UK inflation optimists remain in the ascendancy. Gilt prices continued to climb last week in spite of the competing attractions of German government bonds which soared as investors re-appraised the outlook for the German economy and the D-Mark. ..TX.- Ten-year gilts gained nearly a quarter of a point on the week, after a half point rise the week before. ..TX.- Little happened to change the consensus view that inflationary pressures would be muted for some time. ..TX.- That sentiment could be tested this week, which sees a spate of economic data including the latest numbers for unemployment and retail price inflation. ..TX.- Even though senior officials at the Bank of England continue to sound warnings about the possibility of increased price pressures in the next few months, the balance of opinion in financial markets is shifting towards commentators such as Professor Patrick Minford of Liverpool University who are claiming that inflation is dead. ..TX.- According to Prof Minford, one of the Treasury's panel of seven outside economic advisers whose second report came out last week, recent changes in company behaviour and in the labour market have made the re-appearance of serious inflationary problems in the near future extremely unlikely. ..TX.- He says he is 'frustrated and depressed' that much of the mainstream UK economics community tends more to the official Bank line on inflation. According to Prof Minford, the UK economy is 'straining at the leash' and could be capable of strong non-inflationary growth this year if the government were to loosen economic policy. ..TX.- This could be done, he says, by a cut of 2 percentage points in interest rates by the end of the year to 4 per cent. ..TX.- He also would like the Treasury and Bank to combat the generally upward drift by sterling. ..TX.- Even though few in the gilts market are quite so sanguine about price pressures in the economy as the Liverpool professor, the broad direction of yield movements during the week lend his views some support. ..TX.- The yield of the 8 per cent Treasury bond maturing in 2003 was quoted on Friday night at 7.51 per cent, 13 basis points down on the week and 50 basis points down over the past month. ..TX.- It closed on Friday at a price of 103 5/16. ..TX.- The 10-year area of the gilt curve performed particularly well last week, with some selling at the short end as investors reckoned they might have over-reacted the week before to the possibility of a cut in UK base rates in the near future. ..TX.- In generally quiet trading due to the absence of any significant UK economic data, gilts were largely unaffected by the strong move into German bunds during the week. ..TX.- One gilts specialist said: 'It reflects the strong support for gilts, particularly from non-UK institutions which see the securities as cheap.' ..TX.- Other strong buyers of gilts in recent weeks have included UK insurance companies, unit trusts and investment groups. Pension funds have been among the least enthusiastic buyers of the bonds. ..TX.- Among the other members of the Treasury's economic panel, Mr Gavyn Davies of Goldman Sachs is less optimistic than Prof Minford about inflation. He is keen in particular to draw attention to the effects of the tax increases planned for next April which will push up prices for some goods and services. ..TX.- Mr Davies reckons the government's favoured measure of underlying inflation - the year-on-year change in the retail prices index excluding mortgage payments - will push up close to the 4 per cent Treasury ceiling by the end of 1994. ..TX.- In the year to last month, this measure of underlying inflation is thought likely to move to 3 per cent, from 2.8 per cent in the year to May. ..TX.- The exact figure will be announced by the Central Statistical Office on Wednesday. The headline inflation rate - the retail price index by itself - is thought likely to come in at 1.5 per cent, after 1.3 per cent in the previous month. ..TX.- Attention will also focus on the change in unemployment last month, which is reckoned to have shown a generally flat trend after the surprise of four successive monthly drops in the jobless figure. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: CMMT Comment & Analysis. MKTS Foreign trade. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 20 ***************************************************************** ..AN.-00DGLB7AD2FT ..HL.- 930712FT 930712 International Company News: Saudi American Bank (100) ..BL.- By AP-DJ ..TX.- Saudi American Bank, which is 30 per cent owned by Citibank of the US, improved first-half net profits by 5.3 per cent to SR470.6m (Dollars 127.2m), compared with the year-earlier period, AP-DJ reports. ..TX.- Operating income was little changed at SR465.5m. However, the bank recorded a SR5.1m surplus in debt recovery compared with a SR17m provision against bad debts a year earlier. ..CO.- Companies: Saudi American Bank. ..CN.- Countries: SA Saudi Arabia, Middle East. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: FIN Interim results. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGLB7AD1FT ..HL.- 930712FT 930712 International Company News: Woolworths (113) ..BL.- By REUTER ..TX.- An initial public offering of shares in Woolworths the Australian retailer has closed heavily oversubscribed, Reuter reports. Woolworths offered 1bn shares at ADollars 2.45 each. Investors applied for 2.67bn shares, more than 2 1/2 times the number available. ..TX.- Domestic institutions applied for 875m shares, but were allocated 153m. Overseas institutions requested 772m shares. They got 40m. ..TX.- Woolworths, which is not related to the US group Woolworth group, has allocated shares to 339,000 investors. That gives it the biggest shareholder base of any listed Australian company. ..CO.- Companies: Woolworths. ..CN.- Countries: AU Australia. ..IN.- Industry: P5331 Variety Stores. ..TP.- Types: FIN Share issues. ..IX.- P5331. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGLB7AD0FT ..HL.- 930712FT 930712 International Company News: Bank of Bermuda Group (129) ..BL.- By REUTER ..TX.- Bank of Bermuda Group has agreed to acquire the institutional trust business of Standard Chartered Bank's Equitor Group in Hong Kong and Singapore, increasing its Asia Pacific assets to about USDollars 7bn, Reuter reports. ..TX.- Standard Chartered Equitor has about USDollars 3bn of institutional assets, and Bank of Bermuda has USDollars 4bn in assets in the area, the bank said. ..TX.- The acquisition raises total funds under administration to more than USDollars 28bn from USDollars 25bn, the bank said. ..CO.- Companies: Bank of Bermuda Group. Standard Chartered Equitor. ..CN.- Countries: HK Hong Kong, Asia. SG Singapore, Asia. ..IN.- Industry: P6726 Investment Offices, NEC. P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P6726, P6081. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGLB7ADZFT ..HL.- 930712FT 930712 International Company News: Southern Union gas acquisition (123) ..BL.- By REUTER ..TX.- WESTERN Resources of the US is to sell its Missouri natural gas properties and operations to Southern Union for about Dollars 360m, Reuter reports. Southern Union will fund the purchase through a debt offering and a rights issue of common stock. ..TX.- The natural gas properties serve about 460,000 Missouri customers in areas including Kansas City, Joplin and St. Joseph. ..TX.- The deal hinges on approvals from the Missouri Public Service Commission and other regulatory agencies, Western Resources said. ..CO.- Companies: Western Resources Inc. Southern Union Co Inc. ..CN.- Countries: US United States of America. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. ..TP.- Types: COMP Disposals. COMP Mergers & acquisitions. ..IX.- P1311. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGLB7ADYFT ..HL.- 930712FT 930712 International Company News: Akai loss widens to Y941m at half-way (284) ..BL.- By MICHIYO NAKAMOTO ..DL.- TOKYO ..TX.- AKAI Electric, the Japanese maker of video and audio equipment, suffered a pre-tax loss of Y941m (Dollars 8.8m) in the half-year ended May 20, reflecting the continuing sluggish state of the consumer electronics market. ..TX.- The loss, significantly larger than the Y623m deficit of the same period a year ago, came on sales of Y25bn, an increase of 2.2 per cent on the previous first half. ..TX.- Sluggish sales of video cassette recorders, particularly in Europe where Akai has a strong foothold, the impact of the yen's rise and increased competition were blamed for the disappointing performance. Akai has an export ratio of 85 per cent and increased sales in all regions except Europe where they fell by 13 per cent. ..TX.- Video equipment suffered a 4 per cent decline in sales while audio equipment saw sales grew by 27 per cent. ..TX.- Akai forecast pre-tax losses would increase sharply in the year to November 20 because of the depressed market conditions and the yen's rise against the dollar this year. ..TX.- It expects losses of Y1.3bn, compared with the previous Y247m. This will be the second straight year of losses for Akai, which had initially expected to post a pre-tax profit of Y200m in the current year. ..TX.- The group hopes to combat the impact of the yen's rise with price rises, an increase in overseas production and in the procurement of parts from overseas. However, it believes sales of VCRs will continue to decline through the year. ..CO.- Companies: Akai Electric. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P3651 Household Audio and Video Equipment. ..TP.- Types: FIN Interim results. ..IX.- P3651. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGLB7ADXFT ..HL.- 930712FT 930712 International Company News: Alcoa drops 21% as aluminium prices decline (305) ..BL.- By MARTIN DICKSON ..DL.- NEW YORK ..TX.- ALUMINUM Company of America, the world's biggest aluminium producer, has reported a 21 per cent drop in second-quarter net income before special charges. ..TX.- The figures come against a backdrop of high world aluminium stocks and low prices, due to a a large increase of imports to the West from the former Soviet Union. ..TX.- At the end of last month, Mr Paul O'Neill, chairman of Alcoa, announced that the company was cutting its annual primary production in the US by almost 25 per cent, and laying off 750 people. ..TX.- The second-quarter figures, released on Friday, showed earnings of Dollars 44.7m, or 51 cents a share, before Dollars 9.4m of net unfavourable adjustments. Sales and operating revenues were little changed at Dollars 2.4bn. ..TX.- The adjustments included a special charge of Dollars 23.8m after tax for job cuts; a charge of Dollars 11.9m for a new three-year labour agreement; and a Dollars 26.3m Australian tax credit. ..TX.- In the second quarter of last year the company reported earnings of Dollars 56.5m, or 65 cents a share, be-fore charges of Dollars 104.7m. ..TX.- The company said prices on most products had declined from the same quarter of last year. ..TX.- Revenues were level, in spite of a 5 per cent decline in aluminium shipments, because of increased sales in non-aluminium products. ..TX.- For the first six months of the year Alcoa reported net income of Dollars 72.3m, or 82 cents a share, before adjustments, compared to Dollars 111.6m, or Dollars 1.29 a share, on the same basis in 1992. ..CO.- Companies: Aluminium Company of America. ..CN.- Countries: US United States of America. ..IN.- Industry: P1061 Ferroalloy Ores, Ex Vanadium. P3334 Primary Aluminum. P3341 Secondary Nonferrous Metals. ..TP.- Types: FIN Interim results. ..IX.- P1061, P3334, P3341. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGLB7ADWFT ..HL.- 930712FT 930712 International Company News: Argentina sells energy group in three units (250) ..BL.- By JOHN BARHAM ..DL.- BUENOS AIRES ..TX.- ARGENTINA has completed the privatisation of its principal energy companies with the sale of Hidronor, the country's principal hydroelectricity generator for Dollars 1.11bn. ..TX.- The sale follows last month's successful flotation of YPF, the national oil company, and last year's privatisation of the federally-held gas and electricity companies. In just 15 months, Argentina's energy privatisations have raised more than Dollars 6.65bn. ..TX.- The government split Hidronor into three parts, selling each as a separate unit. Three international consortia paid Dollars 474.6m in cash and took on a further Dollars 631.1m in financial liabilities from the government. Hidronor's dams have been transferred as 30-year concessions. ..TX.- The sale last week of El Chocon, the largest of the dams, for Dollars 519.3m to a consortium led by Endesa of Chile, was particularly significant. Argentina and Chile have long been fierce rivals. ..TX.- El Chocon is located close to the Chilean border in the southern Andes and is a large source of electricity for Argentina. Last year, Endesa acquired generating and distribution companies in greater Buenos Aires. ..TX.- A consortium headed by Southern Electric of the US paid Dollars 393.5m for the Alicura dam. Another consortium comprising Dominion Energy, also of the US, and Louis Dreyfus, the international commodity trader, paid Dollars 192.9m for the smaller Cerros Colorados dam. ..CO.- Companies: Hidronor. ..CN.- Countries: AR Argentina, South America. ..IN.- Industry: P4911 Electric Services. ..TP.- Types: COMP Company News. ..IX.- P4911. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGLB7ADVFT ..HL.- 930712FT 930712 International Company News: Bronfman empire makes further disposals (408) ..BL.- By BERNARD SIMON ..DL.- TORONTO ..TX.- THE troubled business empire controlled by Toronto's Bronfman family is making further disposals, selling its controlling interest in Consumers Packaging, Canada's biggest glass container maker, as well as a 50 per cent stake in a British Columbia paper mill. ..TX.- Consolidated Enfield, a Bronfman-controlled company, will receive CDollars 9.7m (USDollars 7.5m) for its 58 per cent stake in Consumers from the owners of Glenshaw Glass, a privately-held US glass maker based in Pittsburgh. Glenshaw has agreed to invest an unspecified amount in Consumers and to keep all its seven plants in operation. ..TX.- Separately, Noranda Forest, which is also controlled by the Bronfmans, has sold its 50 per cent stake in Island Paper Mills, which makes coated and uncoated papers, to EB Eddy, a Canadian forest products group. ..TX.- Eddy has bought the remaining 50 per cent from MacMillan Bloedel of Vancouver. Terms were not disclosed. ..TX.- The purchase price for Consumers of 65 cents a share is less than half the current market price, and reflects the company's fragile financial condition. ..TX.- Losses over the past five years have totalled CDollars 229m, and Consumers is in default on a considerable portion of its bank debt and debentures. It is in the middle of a financial and business restructuring, which included the sale earlier this year of its plastics packaging interests. ..TX.- Mr Brian Lawson, Enfield's president, said a fresh owner 'committed to injecting new capital and providing strategic support' greatly improves Consumers prospects. The company has a market share of roughly 70 per cent, with 1992 sales of CDollars 410m. ..TX.- Consumers and Island Paper are the latest in a string of asset disposals by companies in the Bronfman orbit. Others sold this year include controlling interests in MacMillan Bloedel, the west coast forestry group; John Labatt, the beer and entertainment group; and Royal Trust, Canada's second-biggest trust and loan company. ..TX.- The convoluted structure of the Bronfman group, which includes several private holding companies, makes it hard for outsiders to estimate the extent of its financial difficulties which led to the spate of asset sales. ..CO.- Companies: Consumers Packaging Inc. Consolidated Enfield Corp. Noranda Forest Inc. Island Paper Mills. EB Eddy Forest Products. MacMillan Bloedel. ..CN.- Countries: CA Canada. ..IN.- Industry: P3221 Glass Containers. P3211 Flat Glass. P2621 Paper Mills. P0831 Forest Products. P6719 Holding Companies, NEC. ..TP.- Types: COMP Shareholding. COMP Disposals. ..IX.- P3221, P3211, P2621, P0831, P6719. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGLB7ADUFT ..HL.- 930712FT 930712 International Company News: Swissair wins strong terms on aircraft sale (232) ..BL.- By IAN RODGER ..DL.- ZURICH ..TX.- SWISSAIR has sold six of its 23 MD-81 aircraft on very favourable terms, Mr Otto Loepfe, the Swiss national airline's chief executive, said yesterday. ..TX.- No figures were given. Swissair is frequently in the used aircraft market and aims to keep a modern fleet. In the past two years, proceeds from sales have prevented the airline from making losses. ..TX.- Mr Loepfe, speaking to the airline's annual managers' meeting in Zurich, said the Alcazar project, under which Swissair would join forces with KLM Royal Dutch Airlines, Scandinavian Airlines System and Austrian Airlines, was the best way forward for the company. It said a memorandum of agreement was expected to be signed by the airlines in September. ..TX.- If the deal goes ahead, the four carriers would shed 10 per cent of their workforces, Mr Loepfe said. This would require Swissair to make some of its 25,800 staff redundant, but the workforce was falling by 5.3 per cent annually through natural attrition. ..CO.- Companies: Swissair. KLM Royal Dutch Airlines. Scandinavian Airlines System. Austrian Airlines. ..CN.- Countries: CH Switzerland, West Europe. NL Netherlands, EC. AT Austria, West Europe. SE Sweden, West Europe. DK Denmark, EC. NO Norway, West Europe. ..IN.- Industry: P4512 Air Transportation, Scheduled. ..TP.- Types: RES Facilities. FIN Annual report. COMP Strategic links & Joint venture. ..IX.- P4512. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGLB7ADTFT ..HL.- 930712FT 930712 International Company News: Berliner Bank acquires Deutsche Spar-und Kreditbank (118) ..BL.- By REUTER ..TX.- Berliner Bank has acquired Deutsche Spar-und Kreditbank (DSK Bank) from DSK's sole shareholder, Mr August von Finck, the Munich-based investor, Reuter reports. ..TX.- No terms were provided. ..TX.- German press reports have recently estimated value on the deal at up to DM200m (Dollars 125m). DSK operations are focused on private customer business. ..TX.- The bank has 25 branches, most of them in the Munich area. ..TX.- DSK had 1992 net profits of DM7.03m. Its balance sheet total was DM2.03bn. ..CO.- Companies: Berliner Bank. Deutsche Spar-und Kreditbank. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGLB7ADSFT ..HL.- 930712FT 930712 International Company News: Swiss banks lifted by first-half improvements (426) ..BL.- By IAN RODGER ..TX.- FIRST-HALF results from three medium-sized Swiss banks underpin expectations of a banner year in prospect for the industry. ..TX.- BZ Bank, the Zurich securities house headed by Mr Martin Ebner, reports first-half net income of SFr49.9m (Dollars 35.6m), not far from the SFr59.5m earned in the whole of last year. ..TX.- It was the first time BZ, which is privately held, reported interim results and no comparative figures were given. ..TX.- Last week, Banca del Gottardo, the Lugano based bank controlled by Japan's Sumitomo Bank, said cash flow rose 22 per cent to SFr61.4m in the first half. ..TX.- While two weeks ago, Julius Baer, another Zurich banking group, said its first-half net profit was about SFr70m, slightly higher than the figure for the whole of last year. ..TX.- Lower interest rates, a buoyant local stock market, big new inflows of investment funds and controlled costs are the factors contributing to these results. ..TX.- The Swiss stock market's all-share index is up 22 per cent since the beginning of the year, enabling banks to make large gains in trading and commission income. ..TX.- Baer said its trading income more than doubled in the first half, Gottardo said stock trading and new issue commission income was up 30 per cent while BZ's securities related income, at SFr50.9m, was 28 per cent above the figure for the whole of last year. ..TX.- Baer, which specialises in asset management, said its commission income from this business was up 20 per cent. Also, clients' assets grew by about 10 per cent in the first six months and total SFr36bn. ..TX.- Analysts said funds had been pouring into Switzerland this year, partly because of continuing turbulence in exchange rates in other European countries. ..TX.- Mr Bernhard Tschanz, head of investment research at Credit Suisse, said Switzerland's decision last December to stay out of the European Economic Area helped. ..TX.- Baer's net interest income gained 10 per cent, reflecting widening spreads as interest rates fell. ..TX.- The big three Swiss universal banks, Union Bank of Switzerland, Swiss Bank Corporation and Credit Suisse, are the main beneficiaries of this trend, and they are all expected to report sharply higher first-half profits. ..TX.- Most banks are benefiting from two years of aggressive internal cost cutting. Baer's expenses in the first half were up only 6 per cent while Gottardo's declined. ..CO.- Companies: BZ Bank Zurich. Banca del Gottardo. Julius Baer. ..CN.- Countries: CH Switzerland, West Europe. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. ..TP.- Types: FIN Interim results. ..IX.- P6081. ..DS.- The Financial Times ..XP.- London Page 19 ***************************************************************** ..AN.-00DGLB7ADRFT ..HL.- 930712FT 930712 International Company News: Cross Border M&A Deals (212) ..TX.- ------------------------------------------------------------------------ CROSS BORDER M&A DEALS ------------------------------------------------------------------------ BIDDER/INVESTOR TARGET SECTOR VALUE COMMENT ------------------------------------------------------------------------ ABN Amro Cragin Banking Pounds 333m Expanding (Netherlands) Financial Chicago Corp (US) presence ------------------------------------------------------------------------ National Power (UK) Transco Power Pounds 106m Biggest Energy overseas move Ventures yet (US) ------------------------------------------------------------------------ Sidlaw (UK) Courtaulds Packaging Pounds 79m European Flexible strategy move Pckg (UK/ France/Spain/ Nethrlds) ..TX.- ------------------------------------------------------------------------ Cummins Engine (US)/ Joint Engi- Pounds 33m Investment in Telco (India) venture neering India growing ------------------------------------------------------------------------ Otra (Netherlands) SLO Electrical Pounds 15.3m Nokia Tuottajain Whole- refocussing Kone saling move (Finland) ------------------------------------------------------------------------ National Express (UK) Eurolines Transport Pounds 1.43m Cash deal Nederland (Netherlands) ------------------------------------------------------------------------ Nynex (US) Stet Hellas Telecoms n/a Italy's Stet Telecommuni- sells 20% cations stake (Greece) ------------------------------------------------------------------------ Snia Fibre (Italy)/ Joint Textiles n/a Sector Rhone Poulenc venture restrctrng (France) continues ..TX.- ------------------------------------------------------------------------ AMIC (S Africa)/ Daewoo-Amic Consumer n/a SA market Daewoo (JV) goods develpt (S Korea) venture ------------------------------------------------------------------------ BOC Group (UK) Huls Gas n/a Strategic cash (Germany) distri- deal bution ------------------------------------------------------------------------ ..CN.- Countries: GB United Kingdom, EC. NL Netherlands, EC. US United States of America. IN India, Asia. IT Italy, EC. FR France, EC. ZA South Africa, Africa. KR South Korea, Asia. ..IN.- Industry: P99 Nonclassifiable Establishments. ..TP.- Types: COMP Mergers & acquisitions. ..IX.- P99. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGLB7ADQFT ..HL.- 930712FT 930712 International Company News: 10% of ITV companies held by US institutions (343) ..BL.- By RAYMOND SNODDY ..TX.- US fund managers hold stakes totalling about 10 per cent in the ITV companies, according to a new survey of who owns what in the UK's commercial television sector. ..TX.- The biggest institutional investor is Chase Manhattan with significant stakes in Central, London Weekend Television and Scottish. ..TX.- Fidelity is the second largest US holder in ITV, owning stakes equal to more than 3 per cent of the stand-alone ITV companies. ..TX.- Another leading US investors is Warburg Pincus with an 8.31 per cent stake in LWT. ..TX.- The extent of the US involvement is detailed in Citywatch, a new sharewatch service launched by Investor Communications & Research, part of London-based consultants GAH. ..TX.- The Citywatch survey of institutional ownership in the ITV sector is the latest to be produced by GAH. The consultants have already researched areas such as the food, retailing and stores sectors. ..TX.- Among UK institutional investors, Mercury Asset Management is by far the largest with stakes equalling a total of 8.69 per cent of the stand alone companies. It is strong in the companies which would be the main takeover targets if present rules are relaxed - Central, LWT, Scottish and Anglia. ..TX.- Prudential Portfolio Managers, the sector's second largest investor, is backing a similar range of companies. ..TX.- Phillips & Drew Fund Management is also a significant player, but its largest investment is in HTV - a 23.04 per cent stake. ..TX.- The BBC pension fund is also an investor in ITV, holding a 3.83 per cent stake in Anglia Television. ..TX.- Mr James Redhead, of GAH, said he saw the research as 'a key defence tool' for ITV companies trying to ward off unwelcome predators. ..TX.- 'It is also going to be of great value to foreign predators,' he said. ..CO.- Companies: Chase Manhattan Corp. ..CN.- Countries: US United States of America. GB United Kingdom, EC. ..IN.- Industry: P6722 Management Investment, Open-End. P7812 Motion Picture and Video Production. P4833 Television Broadcasting Stations. ..TP.- Types: COMP Shareholding. ..IX.- P6722, P7812, P4833. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGLB7ADPFT ..HL.- 930712FT 930712 International Company News: Europa poised to move back into the black (313) ..BL.- By KENNETH GOODING, Mining Correspondent ..TX.- EUROPA MINERALS, the UK mining finance house which has been refinanced and restructured, broke even in the opening quarter. ..TX.- And it will return to pre-tax profit for the first time since 1989 in the half year to July 30, said Sir David Hardy, chairman, at the annual meeting. ..TX.- He would not forecast the full-year result and said Europa, which has gold and coal mining interests in Australia as well as drawing royalties from North Sea and Indonesian oil, had a long way to go before paying dividends. ..TX.- Sir David confirmed that consideration was being given to a three-sided restructuring to pull together Europa and Austmin, the small Australian mining company which is Europa's main shareholder with 19.8 per cent, and Burmine, the Australian gold producer of which Europa holds 41.8 per cent. ..TX.- This would result in a group with a market capital of about ADollars 40m, quoted and with interests primarily in Australia but also with a London listing. This would 'make it more simple for shareholders to see what they own.' ..TX.- But Sir David stressed that any restructuring would be very complex to work out, and was 'an idea being explored, no more than that.' ..TX.- An 8 per cent stake in Europa, left with Australian sub-underwriters after a poorly-received rights issue of shares a year ago, was acquired recently by Mt Edon, another small Australian gold group backed by Swiss money. ..TX.- Henry Ansbacher, the merchant bank which underwrote the issue, was left with 12.8 per cent of Europa. Mr Edward Schneider of Ansbacher said it was being treated as a long-term investment. ..CO.- Companies: Europa Minerals. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1099 Metal Ores, NEC. P6719 Holding Companies, NEC. ..TP.- Types: FIN Interim results. FIN Annual report. ..IX.- P1099, P6719. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGLB7ADOFT ..HL.- 930712FT 930712 International Company News: New outlets help Pelican rise to Pounds 908,000 (238) ..BL.- By CATHERINE MILTON ..TX.- THE PELICAN Group of restaurants doubled pre-tax profits from Pounds 453,000 to Pounds 908,000 in the year to end-March, helped by the opening of eight new outlets. ..TX.- Turnover rose to Pounds 8.08m (Pounds 6.32m), bolstered by the continued expansion of the Cafe Rouge chain, which now comprises a total of 14 open and two in development. ..TX.- The group now operated 20 restaurants. Mr Roger Myers, chairman, said: 'The Rouge concept still has great scope for expansion throughout the UK and we are actively looking for new sites.' Last year saw rapid growth, with turnover, profit and overall development all reaching record levels. ..TX.- Since the year-end Pelican had purchased the Yankee Noodle group of restaurants which brought with them Mr Robert Earl, who is behind the Planet Hollywood chain, as a non-executive director. At the same time the group raised Pounds 4m in a placing with clawback, for working capital and to clear gearing. ..TX.- The Leadenhall Wine Bar and the Cafe Pelican made a reduced contribution because of the recession. ..TX.- Interest payments fell to Pounds 345,000 (Pounds 409,000) reflecting the drop in UK interest rates. The dividend is increased to 1.1p (1p) out of earnings per share of 4p (3p). ..CO.- Companies: Pelican Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5812 Eating Places. ..TP.- Types: FIN Annual report. ..IX.- P5812. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGLB7ADNFT ..HL.- 930712FT 930712 International Company News: Gieves placing and open offer to raise Pounds 1.8m (332) ..TX.- HAVING BREACHED covenants on convertible loan stock and borrowing restrictions, Gieves Group is raising Pounds 1.8m net in a placing and open offer to remedy the situation. ..TX.- The group, now operating as retailers and licensors and publishers, is placing 8.2m shares with USI Holdings group, which speaks for 5.1 per cent of the capital and all of the loan stock, and with Thistle Nominees on behalf of Mr George Ljutikov, a private investor holding 9.9 per cent of the capital. ..TX.- Shareholders can claw back on the basis of 3-for-5 at 25p per share. USI will not request the immediate repayment of the loan stock in return for certain adjustments to the terms. ..TX.- At the end of the year to January 31 1993 the loss retained in the business had risen from Pounds 3.8m to Pounds 4.75m. For the 12 months pre-tax deficit came to Pounds 1.41m (Pounds 1.51m), including exceptional charges of Pounds 1.34m (Pounds 1.71m). ..TX.- The exceptionals were made up of Pounds 810,000 for the closure of the Gieves & Hawkes operation in Milan and two retail outlets in the UK, Pounds 471,000 for restructuring and reorganisation costs for Chivers' publishing divisions in the UK and US, and Pounds 63,000 for net property liabilities. ..TX.- On top of that were extraordinary charges of Pounds 3.47m (Pounds 2.28m). These comprised Pounds 1.78m adjustment for goodwill previously written off against reserves, Pounds 998,000 provisions and asset write-offs principally for the Milan stores, Pounds 815,000 profit on the sale of Bookpoint, and Pounds 1.5m in respect of the crystallisation of contingent liabilities relating to Redwood Press. ..TX.- In respect of the latter, the principal guaranteed parties have conditionally agreed to subscribe for 900,000 shares at 25p in part settlement of the amounts owed. ..CO.- Companies: Gleves Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6794 Patent Owners and Lessors. P5942 Book Stores. ..TP.- Types: FIN Share issues. ..IX.- P6794, P5942. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGLB7ADMFT ..HL.- 930712FT 930712 International Company News: Final Cray bonus tranche likely (349) ..BL.- By PAUL TAYLOR ..TX.- THE FINAL tranche of a share-option based incentive bonus package, worth in total between Pounds 25m and Pounds 35m, for the former chairman and three senior directors of Cray Electronics, is likely to be triggered tomorrow when the group announces its 1992-93 results. ..TX.- The complex three-part bonus package was approved by Cray shareholders in December 1989 when a new management team led by Sir Peter Michael, the former chairman of UEI, was installed after the company was widely criticised for its accounting policies and forced to revise its profits downwards. ..TX.- The four beneficiaries of the scheme are Sir Peter, who stepped down as chairman at the start of last month, his successor, Mr Roger Holland, Mr Jeff Harrison, finance director, and Mr Jon Richards, group managing director. ..TX.- Under the terms of the scheme, devised by SG Warburg, Cray's financial adviser, the four executives were entitled to subscribe for cut-price deferred convertible shares and deferred redeemable shares, depending on the group's share price and its financial performance measured by earnings per share. ..TX.- The share price has risen sharply over 12 months, closing at 161p on Friday, and results, boosted by disposals and timely acquisitions, have bounced back from a Pounds 2.79m pre-tax loss in 1989-90 to pre-tax profit of Pounds 3.5m in 1991-92. ..TX.- As a result the pre-conditions triggering the first two tranches of the incentive scheme have already been met. The size and value of the third tranche of share options depends upon the level of earnings in the year to April 30, and the share price at the time of conversion. ..TX.- The potential value of the share option incentive scheme raised some eyebrows at the time - one analyst said he was staggered by its size. However it was defended by Sir Peter who said the incentive was 'fair for a very difficult job,' given the risks. ..CO.- Companies: Cray Electronics Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3571 Electronic Computers. ..TP.- Types: FIN Share issues. CMMT Comment & Analysis. ..IX.- P3571. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGLB7ADLFT ..HL.- 930712FT 930712 International Company News: Banner Homes to buy BES companies (180) ..TX.- BANNER HOMES, the USM-quoted property trading and development group, is acquiring two BES housebuilding companies, Housebuilding Portfolio One and Housebuilding Portfolio Two, which it launched in 1990. Banner owns 10.7 per cent of their share capital and has managed them from inception. ..TX.- Banner has also announced pre-tax profits of Pounds 255,000 for the year to March 31, compared with losses of Pounds 688,000. Turnover was slightly lower at Pounds 6.63m (Pounds 6.83m). ..TX.- Had the two companies been part of the group as at March 31, they would have increased turnover by about 30 per cent. Their combined sales for the year were Pounds 1.81m and pre-tax profits Pounds 33,000. Net assets at March 31 amounted to Pounds 739,000. ..TX.- Earnings per share came through at 2p (losses 3.9p). ..CO.- Companies: Banner Homes Group. Housebuilding Portfolio One. Housebuilding Portfolio Two. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6552 Subdividers and Developers, Ex Cemeteries. P1521 Single-Family Housing Construction. ..TP.- Types: COMP Mergers & acquisitions. FIN Annual report. ..IX.- P6552, P1521. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGLB7ADKFT ..HL.- 930712FT 930712 International Company News: Cliveden to seek public listing (169) ..TX.- THE CLIVEDEN Group, which runs the Buckinghamshire country house as a hotel, (pictured above), is to seek a public listing after reversing into Ifico, a former insurance broker. The house and gardens were donated by the Astor family to the National Trust in 1942. Granted an 80-year lease by the NT, the Cliveden Group have spent some Pounds 12m refurbishing the house. The company achieved a 66.8 per cent occupancy rate and Pounds 207 a night average charge on the 31 bedrooms in the financial year to last October. It made an operating profit of Pounds 427,000 on turnover of Pounds 3.83m but reported a retained loss of Pounds 456,000. Ifico, which became a shell company after selling its insurance broking businesses in 1991, hopes to regain its listing once the transaction has been completed. ..CO.- Companies: Cliveden Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7011 Hotels and Motels. ..TP.- Types: FIN Share issues. ..IX.- P7011. ..DS.- The Financial Times ..XP.- London Page 18 ***************************************************************** ..AN.-00DGLB7ADJFT ..HL.- 930712FT 930712 Companies in this issue (88) ..TX.- -------------------------------------- Companies in this issue -------------------------------------- Akai Electric 19 Alcoa 19 BZ Bank 19 Bank of Bermuda 19 Banner Homes 18 Berliner Bank 19 Cliveden Group 18 Cray Electronics 18 Europa Minerals 18 Gieves Group 18 Hidronor 19 Merck 17 Olympia & York 17 Pelican 18 Saudi American Bank 19 Siemens 17 Smith New Court 17 Swissair 19 Western Resources 19 Woolworths 19 -------------------------------------- ..CN.- Countries: XA World. ..IN.- Industry: P99 Nonclassifiable Establishments. ..TP.- Types: COMP Company News. ..IX.- P99. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGLB7ADIFT ..HL.- 930712FT 930712 German duo dances to different tunes: Christopher Parkes and Alan Cane examine the reasons for Siemens' tribulations in computers (1010) ..BL.- By CHRISTOPHER PARKES and ALAN CANE ..TX.- When giants learn to dance, a little flat-footedness is to be expected. But Siemens, Germany's leading electrical and electronics group, seems not to be an especially apt pupil. ..TX.- It fell over its own feet with the 1989 acquisition of Rolm from IBM. It took almost four years to integrate it with its private telecommunications business because someone underestimated the fundamental differences between US and German telephone systems. ..TX.- The judges are waiting watchfully to see how it copes with another transatlantic two-step. Siemens, seeking a partner for its Osram lighting subsidiary, paid GTE DM1bn last year for its North American Sylvania operation. Since Osram is Europe's number two lamp maker after Philips, buying continental Sylvania was ruled out on competition grounds. ..TX.- Although no calamities are expected, critics wonder how fitting a pair the businesses make when, for example, vehicle lamp specifications vary so greatly between Europe and the US. ..TX.- For the moment, however, the main problem preoccupying Mr Heinrich von Pierer, the new Siemens chairman, is the lumbering performance of Siemens Nixdorf Informationssysteme (SNI), an ill-matched merger arranged by Deutsche Bank in 1990. ..TX.- The industrial logic appeared plain enough. Steady, tradition-based Siemens had 20 per cent of the German market for mainframe machines and made modest profits on equipment supplied mostly by Fujitsu of Japan. Live-wire, entrepreneurial Nixdorf had flourished in the 1980s, winning 25 per cent of the home market for its mini-computers. It also came equipped with a strong software business. ..TX.- Together, according to Deutsche Bank thinking, Germany had its own DM8bn-a-year internationally competitive computer industry combining the best of old and new, safe in the arms of one of the country's most stable industrial concerns. ..TX.- Last week, almost three years after the merger, Mr von Pierer said he expected SNI's losses this year to match last year's deficit of DM513m (Pounds 202m). This will bring the cumulative loss since the company was formed to almost DM2bn. Unit personal computer sales had increased 50 per cent, he said, but price wars and currency losses had cost an estimated DM1bn. ..TX.- The roots of SNI's difficulties lie in its dependence on hardware sales and the changed relationship between costs and revenues. ..TX.- The gross profit on a mainframe used to be as much as 90 per cent, ample to pay for expensive sales forces and elaborate customer support, and still yield a worthwhile profit. Today the gross return is 60 per cent and falling. The comparable figure for mini-computers may be less than 40 per cent and below 20 per cent for PCs. Meanwhile, customers are turning away from mainframes and minis in favour of networks of PCs, which are more flexible and cheaper. ..TX.- The first indications of these problems were apparent when SNI came into being. In its last year of independence, Nixdorf, having built up its workforce to almost 30,000 in the expectation of continued growth, lost DM1bn on sales of DM5.6bn as the boom petered out. ..TX.- Recession, striking hard at mainframe sales, together with structural change in the industry and its markets, further compounded SNI's difficulties ..TX.- It was only later, when orders went unbooked, sales went unbilled and losses grew, that Siemens came to appreciate that the new partners were dancing different steps to different tunes. The Siemens side chose to lead. The Nixdorf team, unaccustomed to sluggish bureaucracies, found its entrepreneurial spirit being squeezed out. ..TX.- The fledgling SNI, already trying to adapt to change in the industry and to recession, was being riven internally by a clash of cultures. ..TX.- Morale suffered as the parent applied rough and ready remedies to staunch the profits drain. Already cut to around 47,000 from 52,000 at the time of the merger, the workforce is scheduled to drop to less than 40,000 by the end of 1995. ..TX.- Only latterly has internal structural change come to the fore. Last October, for example, the PC business was split, according to the current fashion, into three business units. PCs, high performance printers and systems integration are now separate profit centres. In April the process of subdivision was extended throughout the concern with the creation of four units responsible for products, and six more in charge of internal and external services - from procurement to maintenance. ..TX.- 'When I look at what has been achieved in the last few months alone, I am convinced we'll bring about a turnaround,' said a confident Mr von Pierer. ..TX.- Changes at SNI embody his view of the main sources of future strength for the group. His predecessor, Mr Karl-Heinz Kaske, who enlarged Siemens by acquisition, finally broke the monolith into 17 operating divisions encompassing 300 activities. Within this frame, Mr von Pierer aims to create a network of individual profit centres, fostering the entrepreneurial spirit as he goes. ..TX.- He expects SNI to be profitable within three years, when it will be ready for its next important development: a partner. His computer business may be relatively strong in Germany, but it has less than 2 per cent of the DM14bn-a-year European PC market, only marginally more of the DM7.5bn systems integration business and around 13 per cent of the DM6bn medium-sized Unix computer market. ..TX.- Long-term supplier Fujitsu, the Japanese mainframe specialist, with which SNI recently extended its links, is the name which crops up most often. ..TX.- Since Mr von Pierer insists that any relationship should be on equal terms, much depends on the success of the restructuring - and the speed at which recession unwinds - in restoring SNI to profit. Although he repeats with rising fervour that computers and information technology have a core role in the group, if the return to the black is too long delayed, even he may come to agree with the critics who say Siemens would dance far better with one less leg. ..CO.- Companies: Siemens. ..CN.- Countries: DE Germany, EC. ..IN.- Industry: P3571 Electronic Computers. P3679 Electronic Components, NEC. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P3571, P3679. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGLB7ADHFT ..HL.- 930712FT 930712 Debt talks set to resume at O&Y USA (387) ..BL.- By BERNARD SIMON ..DL.- TORONTO ..TX.- OLYMPIA & York USA is close to resuming debt-relief talks with creditors after reaching agreement on a number of disputes relating to it's board of directors and other issues of corporate governance. ..TX.- Negotiations to restructure O&Y USA's USDollars 5.3bn debt have been at a standstill since March following disagreements between the company and its Canadian parent, Olympia & York Developments (OYDL). ..TX.- The Reichmann family, which retained a 20 per cent interest in O&Y USA in the restructuring of OYDL earlier this year, also raised concerns about the possible dilution of their stake. ..TX.- According to a lawyer involved in the case, some minor points of disagreement remain between the Reichmanns and O&Y USA. But these are expected to be cleared up early this week in time for a New York bankruptcy court judge to grant an order next Thursday approving the new arrangements. ..TX.- The debt-restructuring talks are expected to drag on for at least six months,and perhaps much longer. But the corporate-governance pact has raised hopes the talks will succeed without O&Y USA following its parent into bankruptcy protection. ..TX.- The agreement, which was hammered out under the auspices of former US secretary of state Mr Cyrus Vance, gives O&Y USA substantial autonomy from OYDL, which is now under the control of a court-appointed administrator. ..TX.- A new nine-person board will include a group of seven independent directors, whose stature would be the envy of most companies. They include Mr Willard Butcher, former president of Chase Manhattan Bank; Mr John Whitehead, co-chairman of Goldman Sachs and a former US deputy-secretary of state; Mr Richard Ravitch, a prominent New Yorker who once headed the city's transportation authority; and Mr William Davis, former premier of Ontario. ..TX.- A source close to O&Y said that most of the new directors have accepted their position as a public service in the interests of the New York real estate market. O&Y USA is the city's biggest office landlord and the single largest contributor of commercial property taxes. Its collapse would have a chilling effect on the entire market. ..CO.- Companies: Olympia and York USA. Olympia and York Developments. ..CN.- Countries: US United States of America. CA Canada. ..IN.- Industry: P6552 Subdividers and Developers, Ex Cemeteries. ..TP.- Types: COMP Shareholding. ..IX.- P6552. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGLB7ADGFT ..HL.- 930712FT 930712 Merck president resigns unexpectedly (410) ..BL.- By MARTIN DICKSON ..DL.- NEW YORK ..TX.- MR Richard Markham, president of Merck & Company, the world's largest prescription drugs group, has resigned unexpectedly after seven months in the post. ..TX.- The 42-year-old Mr Markham, who was also Merck's chief operating officer, was widely viewed as heir apparent to the company's chairman, Mr Roy Vagelos. ..TX.- Merck said Mr Markham had left for 'personal reasons' which he did not wish to spell out. ..TX.- Mr Vagelos said: 'While Mr Markham's departure is disappointing, one of Merck's strengths is the quality and depth of its management team.' Those executives who reported directly to Mr Markham will now report to Mr Vagelos. ..TX.- The upheaval at Merck follows the ousting in March of Dr Ernest Mario as chief executive and deputy chairman of Glaxo, Europe's largest drugs company, after apparent disagreements over management style and strategy. ..TX.- The Merck announcement surprised Wall Street analysts who suggested there was nothing in the company's recent financial performance to account for Mr Markham's departure. ..TX.- Mr Markham had spent more than two decades at Merck, becoming senior vice-president for Europe in 1989 and taking charge of the company's human health business worldwide in 1991. ..TX.- The New Jersey-based company's share price has fallen sharply this year from the high Dollars 40s to close unchanged at Dollars 34 3/4 last Friday. The resignation announcement came after the market's close and Merck shares may drop in reaction to the news this morning. ..TX.- Analysts have been cutting their earnings forecasts for the company in recent weeks amid concern that it will be unable to sustain its strong growth record. ..TX.- The concerns are due partly to pressures from the Clinton administration for the drug industry to cut prices and partly to doubts about the market potential of one of its new products, Proscar, a treatment for enlarged prostates. ..TX.- Merck, best known for anti-hypertensive and cardiovascular drugs, reported net profits of Dollars 1.98bn, (Pounds 1.32bn) or Dollars 2.12 a share for 1992, on sales of Dollars 9.7bn. Fourth quarter earnings rose 17 per cent on sales up 12 per cent. ..TX.- Mr Markham is the second top executive of a major US drugs company to quit in the past few weeks. In late June, Mr Vaughn Bryson resigned as head of Eli Lilly after boardroom disputes. ..CO.- Companies: Mereck and Co. ..CN.- Countries: US United States of America. ..IN.- Industry: P2834 Pharmaceutical Preparations. ..TP.- Types: PEOP People. CMMT Comment & Analysis. ..IX.- P2834. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGLB7ADFFT ..HL.- 930712FT 930712 Institutions bullish on outlook for UK equities (269) ..BL.- By CHRISTOPHER PRICE ..TX.- A LARGE majority of institutional investors are more positive on UK equities over the next 12 months than on any other market, according to a survey published today. ..TX.- The monthly Smith New Court/Gallup poll of fund managers found 84 per cent were bullish over the outlook for UK equities compared with 67 per cent for Japan, 55 per cent for continental Europe and only 9 per cent for the US. ..TX.- The finding reinforces other recent reports and comes on top of a gathering momentum for a reduction in domestic interest rates. The London stock market firmed on Friday as rumours of an imminent cut were boosted by four of the City's leading broking firms' reducing their year-end forecasts. BZW, James Capel and SG Warburg moved from 6 to 5 per cent, with SG Strauss Turnbull also trimming its figures. ..TX.- However, market strategists did strike one note of caution last week as suspicions grew that some of the big institutions were beginning to move funds out of London and into Germany in anticipation of a cut in German rates as part of a support package for the Franc. ..TX.- However, many fund managers remain nervous about the pace of recovery in the UK economy, with only 17 per cent of respondents believing the general economic situation would improve over the next 12 months, down from 24 per cent in June and 35 per cent in May. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGLB7ADEFT ..HL.- 930712FT 930712 Economics Notebook: A test of faith in the UK's recovery creed (1046) ..BL.- By EMMA TUCKER ..TX.- In the last few weeks a malaise has settled over the UK financial markets. Anxiety is growing that even the cautious faith in a sustainable recovery expressed by Mr Kenneth Clarke, the new Chancellor, may be too optimistic. ..TX.- The fear among a number of economists and investors is that the promising indicators of the first quarter reflected a one-off boost from sterling's devaluation and lower interest rates rather than a sustained improvement in the economy. ..TX.- Even if the UK does not drift back into recession, expectations are mounting that once the optimism of the spring dies down, there will be little recovery left to speak of. ..TX.- The unease has been picked up in the UK money markets. The December sterling futures contract is pricing in another base rate cut by the end of the year, and it is harder to find City economists supporting the view that interest rates have hit bottom at 6 per cent than it was a few months ago. ..TX.- Last week, SG Warburg Securities, which for some time has been relatively bullish about growth, joined the crowd in forecasting that the Chancellor was likely to cut rates to 5 per cent by the end of the year. ..TX.- Mr Peter Warburton, chief economist at Robert Fleming, sums up the general concern: 'The buoyancy of consumer purchases of cars, household goods and leisure items in the first quarter bears the hallmarks of a temporary spending binge rather than the beginning of a sustained trend.' ..TX.- What, then, lay behind the strong growth of the first three months of the year if it did not reflect a solid, underlying improvement? Mr Bill Martin, economist at UBS, says there was a one-off surge in consumption provoked by keen high street pricing and better terms on hire purchase agreements after the interest rate cut. Stock-building may also have provided a short-term boost to output and there was an upsurge in confidence after the rate cut. ..TX.- But these factors will not be enough to sustain the sparkle of the first quarter through the rest of the year, say the gloomier economists. ..TX.- In a recent report, Professor Wynne Godley, one of the Treasury's outside advisers known as the seven wise men, says: 'With a severe recession developing in Europe and with inadequate capacity in tradeable goods and services, the growth of net export demand over the next few years will not, on present policies, be any faster in the future than in the past.' The upshot, he says, is that 'it will not be possible to achieve sustainable growth fast enough to reduce unemployment by any significant amount over the next four or five years.' ..TX.- The worries of Prof Godley and economists such as Mr Martin focus on: ..TX.- The overhang of debt. Professor Godley believes that with household debt still around 100 per cent of the annual flow of disposable income, personal saving is likely to stay very high. ..TX.- Survey evidence backs up the fear that consumer spending remains constrained by deteriorating personal finances. Last week, the consultancy Business Strategies Limited reported a rise in the proportion of people falling into debt, particularly in the south-east. ..TX.- On the corporate side, the big overhang of excess capacity in many sectors, together with weakened balance sheets, is checking investment. Tax increases next year and a squeeze on real disposable income. Even the more bullish economists fear that next April's tax increases will sharply reduce consumer spending. ..TX.- Mr David Smith, economist at Williams de Broe, expects growth to be buoyant this year, but warns: 'I am much more concerned that next year will be very disappointing because of the tax increases.' He adds that the prospect of further tax rises will dwell at the back of people's minds so long as the budget deficit remains as high as it is. ..TX.- Meanwhile, consumers face a squeeze on real incomes as the rise in average earnings continues to slow. ..TX.- European recession. Sluggish growth in Europe has been singled out by the Organisation for Co-operation and Development as a significant drag on growth in the UK. Even the competitive gains of devaluation may not be enough to sustain exports as the UK's main markets slide into recession. ..TX.- Credit controls. Professor Godley points out that in previous recoveries there has been some sort of relaxation of credit regulations which has given an underlying boost to demand. This recovery will not benefit from such a move and caution among banks will act as a further hindrance to recovery. ..TX.- Not everyone is as gloomy about medium-term prospects. Mr Tim Congdon, another of the seven wise men, says in the Treasury report: 'It is already clear that the main macroeconomic figures for this year will be the best since the late 1980s.' ..TX.- He says bright economic prospects can be explained by the large amount of excess capacity as a result of reduced output during the recession. This, he argues, will allow for strong non-inflationary growth. ..TX.- Other City economists take a similarly bullish view. 'A lot of the negative factors can be off-set by the lower exchange rate and lower interest rates and there is a feeling that we are near the trough in Europe anyway,' says Mr Paul Turnbull, at Smith New Court. ..TX.- The economy is now poised between sliding back into unspectacular growth or continuing with the gains already made this year. ..TX.- If the economic figures expected over the next two weeks are bad, the chancellor may be tempted to cut interest rates again. But he will need to keep an eye on the level of the pound. Since its recent rise partly reflects optimism about the UK recovery, a run of weaker figures may push the currency back down. In this case, Mr Clarke will have to decide whether to cut interest rates while the pound is weak, or whether to cling to base rates of 6 per cent in the hope that conditions for a strong upturn really are already in place. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. P9311 Finance, Taxation, and Monetary Policy. P6141 Personal Credit Institutions. ..TP.- Types: CMMT Comment & Analysis. ECON Inflation. GOVT Taxes. ..IX.- P6231, P9311, P6141. ..DS.- The Financial Times ..XP.- London Page 17 ***************************************************************** ..AN.-00DGLB7ADDFT ..HL.- 930712FT 930712 EC funds may pave way for farm deal (335) ..BL.- By PETER NORMAN, Economics Editor ..TX.- GERMANY has suggested chan-nelling European Community funds to French farmers to win France's support for an agreement cutting farm subsidies in the Uruguay Round of trade liberalisation talks. ..TX.- The suggestion came ahead of today's resumption of the long dormant Uruguay Round talks in Geneva, at which negotiators from the Quad countries - the US, the EC, Japan and Canada - will brief trading partners on their tariff-cutting deal reached at last week's Group of Seven summit in Tokyo. ..TX.- Mr Gunter Rexrodt, the German economics minister, said at the Tokyo meeting that financial concessions could play an important role in winning 'one European Community partner' for an agreement on agricultural trade. ..TX.- The German minister did not name France in his remarks to journalists. However, French objections are holding up an EC-US agreement on reducing subsidies in agricultural trade that could form the basis of further international negotiations under the auspices of the General Agreement on Tariffs and Trade. ..TX.- Mr Rexrodt said he considered that farm trade problems would prove to be the 'sticking point' in reaching a final pact on global trade liberalisation. ..TX.- He believed that problems of agricultural trade could be dealt with through a financial agreement that would enable 'an EC partner country' to overcome structural and regional problems more easily than at present. ..TX.- He admitted there would be less money available for other EC countries if Community funds were used to compensate farmers in one state for losses arising from a deal on farm trade. ..TX.- Mr Rexrodt stressed that he was close to the Gatt talks, partly because Mr Mickey Kantor, the US trade representative, had several times approached Germany to mediate in disputes between the US and France. ..TX.- US-Japan trade deal, Page 4 ..TX.- Samuel Brittan, Page 15 ..CN.- Countries: FR France, EC. DE Germany, EC. ..IN.- Industry: P9721 International Affairs. P01 Agricultural Production-Crops. P02 Agricultural Production-Livestock. ..TP.- Types: NEWS General News. ..IX.- P9721, P01, P02. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGLB7ADCFT ..HL.- 930712FT 930712 Lilley welcomes proposal on pension privatisation: Labour MP says state should abandon basic provision (506) ..BL.- By RALPH ATKINS ..TX.- THE POLITICAL debate over Britain's welfare state broadened yesterday when Mr Peter Lilley, social security secretary, welcomed a Labour MP's proposals for privatising state pensions. ..TX.- Mr Lilley said that the paper by Mr Frank Field, Labour MP for Birkenhead, would be considered by the government as part of its long-term review of public spending. His comments seemed calculated to embarrass the Labour leadership, which has been trying to capitalise on the controversy over the government's long-term review of public spending and its impact on less well-off pensioners. ..TX.- Mr Lilley said he was keen to encourage greater private provision of pensions - but stopped short of endorsing Mr Field's suggestion that the basic state pension should be privatised. The basic pension would remain 'the building block on which people can build their own additional provision,' Mr Lilley said. ..TX.- Ministers are committed to manifesto pledges to protect the basic state pension, but Mr Lilley wants to encourage debate on proposals which could be included in the Conservatives' next election manifesto. ..TX.- In a separate part of the social security department's spending review, Mr Lilley is studying UK rules on paying unemployment benefit to citizens of other European Community countries to see if they can be tightened without breaking EC regulations on the free movement of labour. ..TX.- Mr Lilley's success in promoting debate on pensions, however, could backfire as the Tory party struggles to win the Christchurch by-election, where a third of the population are pensioners. The Conservatives are defending a majority of 23,000. ..TX.- Adding to the government's difficulties this week are the prospect of another intervention in the debate on Maastricht by Baroness Thatcher when the House of Lords debates a referendum on the treaty on Wednesday. There is also the threat of a government defeat on the treaty's social chapter when it is debated in the Commons and Lords on July 26. ..TX.- In his pamphlet published today, Mr Field, chairman of the cross-party Commons social security committee, proposes the imposition of a statutory duty on employers to contribute six per cent of gross earnings to private schemes on their employees' behalf. He says the basic state pension scheme could eventually be abandoned. ..TX.- Among Labour leaders, Mr David Blunkett, health spokesman, described Mr Field as a 'maverick' and said he wanted a welfare state 'which we will all contribute to and which we all draw on'. He rejected '1930s' ideas of a system with only a safety net for the worse off. ..TX.- Mr Donald Dewar, social security spokesman, said: 'No one in the Labour Party wants a two-tier system with those who can afford it opting out and the basic pension relegated to a fall-back safety net provision.' ..TX.- Field's pension switch, Page 6 ..TX.- Tory jitters on treaty, Page 6 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6371 Pension, Health, and Welfare Funds. P9611 Administration of General Economic Programs. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P6371, P9611. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGLB7ADBFT ..HL.- 930712FT 930712 The Lex Column: Scottish Water (305) ..TX.- The government's proposals for Scottish water suggest it has come round to the view that the sledge hammer of privatisation is not required to crack the public spending nut. Scotland's three new water authorities will remain in public sector control, but with powers to attract private capital. That will conveniently remove up to Pounds 5bn from the public sector borrowing requirement over the next decade with less risk of opprobrium from voters north of the border. Since only 1 per cent of respondents to last year's consultation paper were in favour of privatisation, a compromise was always on the cards. ..TX.- On what terms private sector capital will be invited to participate remains an open question. The new authorities might offer three big, long-term operating contracts - on the French model - or a series of smaller contracts for building and operating individual plants. Either way, the private sector will be responsible for providing capital as well as manpower. The bigger water companies may thus enjoy some competitive advantage by dint of their lower average cost of funds. The French giants Lyonnaise and Generale des Eaux will doubtless jostle for position near the front of the queue. ..TX.- Since English water companies are anxious for unregulated earnings, the likes of North West and Thames cannot be ruled out of the running. Building a water treatment plant in Strathclyde may be viewed in much the same light as processing sewage in Kuala Lumpur, only rather less risky. The return they are prepared to accept under such competitive conditions will be a telling pointer to whether the English regulator has kept them on a tight enough rein. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4941 Water Supply. P4952 Sewerage Systems. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P4941, P4952. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGLB7ADAFT ..HL.- 930712FT 930712 The Lex Column: French privatisation (502) ..TX.- With western European governments vying to raise up to Dollars 150bn (Pounds 101.4bn) by selling corporate assets over the next five years, France seems well placed to steal the biggest slice of the privatisation gateau. The French government may realise FFr360bn (Pounds 41.5bn) from selling off 21 companies on its initial list. This will help tame its budget deficit. It will also have wider economic significance: expanding the Paris stock market by as much as one-fifth; swelling the ranks of private shareholders; and sharpening the competitiveness of corporate France. ..TX.- Some companies on the list, such as Elf Aquitaine, are well known quoted businesses which should easily attract investors. The Paris market has been starved of good quality industrial stocks. The government, though, may face a stiffer challenge in selling others, such as Air France and Bull, which require extensive restructuring. Moreover, recent opinion polls suggest the public is lukewarm about the programme. This is hardly surprising after the unhappy experiences surrounding the first wave of privatisation. Having been seduced into buying shares in 1986, investors grimly watched the market crash the following year. Since then, most have reverted to high interest money market funds. ..TX.- The government, though, has been devising schemes to rekindle enthusiasm for equities. Tax breaks, free shares and higher dividends for loyal shareholders are some of the latest wheezes. The FFr40bn Balladur bond, convertible into shares in privatised stocks, provides a further ingenious enticement. ..TX.- The critical determinant of privatisation's success, however, may be the scale of foreign involvement. Despite the irritations of French companies' shareholding structures, international investors seem tempted. This largely reflects the belief that the government cannot afford privatisation to fail. The hope is that the best assets will be sold first at attractive prices. The conservative government certainly needs tangible successes before the presidential elections in 1995. Hemmed in by the big budget deficit, the strong franc and a commitment to fiscal austerity, the government will rely heavily on privatisation proceeds to help stimulate the fast fading economy. The need to tackle unemployment is a political imperative. Ironically, unemployment may worsen as companies heading for privatisation cut their workforces. ..TX.- The precarious state of the economy will remain the greatest worry. Sanguine investors may believe recession will enable them to invest at the bottom of the cycle. The majority, though, will surely be deterred by the dismal outlook for corporate earnings. Given the pressures, the French government must be sorely tempted to sell its soul and permit the franc's devaluation. Such a Faustian compact would be the balm for almost all its short-term ills. Falling interest rates, a surging stock market and renascent industrial competitiveness would provide the perfect backdrop for the flotation of privatisation issues. If last week's market pressures develop, the government's resolve may be fiercely tested once again. ..CN.- Countries: FR France, EC. ..IN.- Industry: P9611 Administration of General Economic Programs. P6231 Security and Commodity Exchanges. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9611, P6231. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGLB7AC9FT ..HL.- 930712FT 930712 The Lex Column: Prudential regulation (290) ..TX.- Mr Mick Newmarch of the Prudential has made no secret of his implacable opposition to the Personal Investment Authority, the proposed self-regulatory body for retail financial services. The freedom of investment firms to choose their regulator is enshrined in the Financial Services Act, so the threat of a boycott is by no means idle. Without the willing participation of the country's biggest life insurer, the PIA would lack credibility. Since Mr Andrew Large of the Securities and Investments Board has made the PIA's success a cornerstone of his crusade to make the two-tier regulatory system work, the stakes are high. ..TX.- Others in the industry have chosen a more pragmatic approach: since the government is unwilling to introduce new legislation, the best chance of avoiding an embarrassing public row is to make the best of the existing system by signing up with the PIA. But it remains uncertain whether the PIA will deliver an adequate standard of regulation. Even full transparency on sales commissions for life assurance might not weed out sharp practice. Mr Newmarch is surely correct to say that a regulator capable of banning inadequate savings products and over-enthusiastic sales methods may yet be required. ..TX.- It is unlikely that the PIA - even with the participation of all comers - could fulfil such a role. Without statutory backing and an independent cast, the conflicts of interest would be great. It is a gamble, but if Mr Newmarch's opposition forces the government to look again at the question of legislation he will be doing the financial community a service. ..CO.- Companies: Prudential Corp. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6311 Life Insurance. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P6311. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGLB7AC8FT ..HL.- 930712FT 930712 Clarke plans defence against EC charges on budget deficit (512) ..BL.- By LIONEL BARBER ..DL.- BRUSSELS ..TX.- MR Kenneth Clarke, the chancellor, will today mount a defence against charges from his European Community partners that the British government is overestimating the impact economic growth will have in curbing its Pounds 50bn budget deficit. ..TX.- The charges are likely to surface at a meeting of EC finance ministers in Brussels today, where Mr Clarke is due to present Britain's plans for bringing its economy into line with the criteria for economic and monetary union set out in the Maastricht treaty. ..TX.- However, some ministers may wish to avoid further disharmony given renewed tensions in the European exchange rate mechanism and the weakness of the French franc. ..TX.- The franc could face more pressure in the foreign exchanges this week as traders try to test the strength of Franco-German monetary co-operation. ..TX.- Last week the Bank of France intervened to support the franc, but the operation failed to stop the French currency falling below FFr3.40 to the D-Mark, little more than 3 centimes above its ERM floor of FFr3.433. The fall came as French short-term interest rates rose sharply. On Friday they were above German money market rates for the first time in nearly two months. ..TX.- If the franc's decline continues, the markets will be watching to see if the Bundesbank comes to its rescue, allowing German monetary policy to be swayed by speculators, or whether it ignores the French currency's plight. ..TX.- The European Commission makes no secret of its desire for the British pound and Italian lira to return to the ERM. Britain's floating exchange rate policy and the fact that it can expect higher economic growth in 1993 and 1994 compared to its EC partners may have coloured debate over its 'convergence' plan. ..TX.- During a recent meeting of the EC's secretive monetary committee, composed of senior Treasury and central bank officials from the 12 member states, several members challenged the UK government's contention that over two-thirds of the budget deficit was due to cyclical economic factors, and would therefore recede with economic recovery. ..TX.- Others complained that UK forecasts of a cut in the deficit from 8 per cent of gross domestic product this year to 3.75 per cent in 1997-98 still left the deficit above the Maastricht target of no more than 3 per cent. This underlined that the UK was 'not serious' about Emu, one EC official said. ..TX.- Mr Clarke is expected to argue that it is very difficult to measure how far the deficit is cyclical and how much it represents a structural increase in spending. He will also say the UK convergence plan is more realistic that some programmes put forward by other member states. ..TX.- The Ecofin meeting is also expected to discuss plans to improve multilateral surveillance of member states' economies. ..TX.- Editorial Comment, Page 15 ..TX.- Currencies, Page 27 ..CN.- Countries: GB United Kingdom, EC. FR France, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Inflation. ECON Gross domestic product. CMMT Comment & Analysis. ECON National income. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 16 ***************************************************************** ..AN.-00DGLB7AC7FT ..HL.- 930712FT 930712 Observer: Bargain issue (86) ..TX.- Somewhat misunderstanding the recent reports that people wanting to adopt children may be charged Pounds 1,500 a time, a reader has called offering his five sons for instant sale. ..TX.- Although they're a snip at the official going-rate, he says, anyone preferring a bulk deal could have them as a job lot for Pounds 7,000. ..TX.- What's more, the youngest is only 27. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P99 Nonclassifiable Establishments. ..TP.- Types: NEWS General News. ..IX.- P99. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGLB7AC6FT ..HL.- 930712FT 930712 Observer: Team effort (271) ..TX.- Meanwhile, even if the New York Post is bound for the breakers, perhaps Murdoch could at least prevent the Big Apple's favourite baseball club from transferring its flag to another city. ..TX.- That is the fate being threatened for the New York Yankees by their tempestuous owner George Steinbrenner. And though he has mouthed menaces before, this time he seems deadly serious. ..TX.- The Yankees' successes haven't stopped attendances from falling by more than a third these past five years, which Steinbrenner blames partly on the rundown stadium, nicknamed the Bronx zoo after its site in one of the poorest districts around. Put bluntly, his ultimatum is that either New York helps to rebuild the stadium, or the team will leave for financially friendlier climes. ..TX.- Understandably, being desperate to revive the impoverished South Bronx, New York's governor Mario Cuomo wants the Yankees to stay put. But if Steinbrenner insists on moving when his lease expires, then Cuomo would like to set up the club up on a 30-acre site west of midtown Manhattan. ..TX.- In which case, it is hoped, Murdoch might be tempted to finance the building of a new home for the Yankees as part of a huge new entertainment complex. After all, while the plan sounds mightily expensive, it is of a scale to match his far from under-developed ego, not to mention those of Cuomo and Steinbrenner to boot. ..TX.- The three of them have already had a preliminary discussion, Observer hears. ..CN.- Countries: US United States of America. ..IN.- Industry: P7941 Sports Clubs, Managers, and Promoters. ..TP.- Types: NEWS General News. ..IX.- P7941. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGLB7AC5FT ..HL.- 930712FT 930712 Observer: Flotation (179) ..TX.- As the New York Post sinks in the west, Rupert Murdoch is evidently preparing a new launch in the Pacific. Although he gave up keeping a yacht after moving from Australia to London, his move to sunny Los Angeles has set sea fever burning again. ..TX.- The result is a custom-built sailing boat which, if it successfully completes its trials in the Mediterranean later in the summer, will set course for California and the South Seas. ..TX.- A sign that the News Corporation boss is beginning to wind down for retirement? On the contrary, the buzz round the fleet is that it more probably portends his intention to establish new business beach-heads in Asia. ..TX.- Accordingly - and even though, at 100ft-plus overall, the vessel is modest compared with the flagships of other media moguls - it would be more fitting to address him as Admiral than Cap'n. ..CO.- Companies: New York Post. News Corp. ..CN.- Countries: GB United Kingdom, EC. US United States of America. ..IN.- Industry: P2711 Newspapers. ..TP.- Types: COMP Company News. ..IX.- P2711. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGLB7AC4FT ..HL.- 930712FT 930712 Observer: Pint taken (98) ..TX.- Even if Manchester's bid to host the Olympics fails owing to lack of sun, the local nightlife is clearly bidding for intellectual acclaim. ..TX.- In September, Manchester's Institute for Popular Culture is hosting two days of egg-head discussions on the economic impact of the evening economy of cities, in which the star attraction will be a chance to 'experience Manchester's night-time economy at first hand'. ..TX.- Do they mean a pub crawl, by any chance? ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P99 Nonclassifiable Establishments. ..TP.- Types: NEWS General News. ..IX.- P99. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGLB7AC3FT ..HL.- 930712FT 930712 Observer: High merit, low hope (388) ..TX.- What price a Brit as next president of the European Commission in the wake of last week's successful trade negotiations? ..TX.- With Jacques Delors due to go at the start of 1995, there's little doubt who'd be the UK's ideal choice: EC trade commissioner and former cabinet minister, Sir Leon Brittan. Whitehall has been impressed by his skill in guiding the market opening negotiations of the 'quad' group of countries to fruition, as well as by his performance at the G7 summit in Tokyo. ..TX.- While national political leaders were quick to claim credit for progress towards a global tariff-cutting agreement, Brittan could fairly reflect that it was he who started the talks on the way to breakthrough. ..TX.- He broached the idea of a market-access deal with the outgoing US administration in January, and later took it up with Bill Clinton's special US trade representative, Mickey Kantor. It was only after the two of them had gained useful ground together that Japan and Canada joined the EC-US discussions to make up the 'quad' group. ..TX.- Alas, whatever Brittan's merits, his home country would look to have little hope of securing the EC commission presidency for him, even if further trade talks in Geneva bring a successful end to the long-stalled Uruguay Round. ..TX.- For one thing, it isn't all that long since the UK supplied the president: Roy - now Lord - Jenkins held the post in the late 1970s. For another, regardless of Premier Major's rhetoric about Britain being at the heart of Europe, London would find it hard, if not impossible, to win support for a Brit from 'federalist' EC member states. ..TX.- So the UK will probably concentrate on blocking any overtly 'federal' candidate for the post. Hence former Belgian prime minister Wilfried Martens could expect a veto from London, as likewise might Felipe Gonzalez if he decides to abandon the Spanish premiership for Brussels. ..TX.- From a UK viewpoint, the Netherlands premier Ruud Lubbers would be a more desirable candidate to replace the departing Delors. True, like most Dutch politicians, Lubbers believes in a federal future for Europe. But he is a free marketeer and, as such, stands well in John Major's esteem. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGLB7AC2FT ..HL.- 930712FT 930712 Trade and macroeconomics (743) ..BL.- By SAMUEL BRITTAN ..TX.- The Tokyo trade package is likely to help growth, jobs and output, even though some of the estimates given by summit participants are highly misleading. The main reason growth should benefit is given by that unsatisfactory, but occasionally unavoidable, word 'confidence'. News that increases the chances of a successful conclusion of the Uruguay Round should raise what Keynes called the 'animal spirits' of businessmen when they consider whether to invest, increase stocks or take on workers. ..TX.- Although this effect is probable, I am much more certain of a negative statement. A breakdown of the Gatt talks and the associated risk of trade wars, would have dealt a severe blow to confidence at a time when it is fragile and would have risked turning prolonged recession into depression. ..TX.- It is, however, noticeable that neither academic macroeconomists nor economic commentators have been in the forefront of the trade debate. One of the reasons is the pressure of specialisation. Trade negotiations are detailed, commodity-by-commodity affairs which only full-time experts can follow properly. ..TX.- There is a more interesting reason for the lack of contact between the two worlds. This is the difficulty of making true intellectual contact, which goes back a very long time. In most popular histories of the Great Depression, the savage increase in the US tariffs under the Smoot-Hawley Act of 1930 is given a large role in converting the recession of the early 1930s into the Great Depression. Yet it receives hardly a mention in many monetarist and Keynesian accounts. I can find no reference to it or anything related to it in either Friedman's Monetary History or Galbraith's Great Crash. ..TX.- In contemporary debates, macroeconomists have used the threat of 'increased protection' (please not 'protectionism', which adds a redundant extra syllable and should be used only to describe the belief, not the phenomenon) to browbeat their opponents about what would happen if their own favourite nostrums failed to be accepted. ..TX.- There is a real difficulty in translating from the world of trade negotiations into that of conjunctural issues. The frequent citations of the number of jobs supposed to be created are based on the Gatt estimate of a Dollars 200bn (Pounds 133bn) per annum increase in world trade from a successful conclusion of the whole Uruguay Round. But this usage is a cheat. The Gatt estimate is of the increase in trade between countries, not of output, not of welfare and still less of employment. Freer trade reallocates jobs more efficiently inside each country but does not directly destroy or create new jobs. ..TX.- There are yet further reasons for the embarrassment of economists on trade issues. They can be summed up by Friedman's saying, 'Protection is better in theory; free trade is better in practice.' There have been recurrent complicated theories over the centuries trying to show that there are benefits to individual countries from certain carefully chosen kinds of protection. The May issue of the American Economic Review is partly devoted to professional disquiet on what the public and their students should therefore be told. ..TX.- Professor Paul Krugman, who has invented many of the supposed exceptions to free trade theory, now believes that the likely benefits are small; that any exceptions will be wrongly chosen; and that undergraduates will benefit more from a thorough exposure to the mainline case for free trade. ..TX.- Most popular support for protection has nothing to do with esoteric trade theories. 'How can we compete,' it is asked, 'with Czech workers being paid a tenth of ours and south-east Asian workers being paid one hundredth?' The most effective refutation is to be found not in trade theory but in the elementary macroeconomic exposition of the circular flow of funds. ..TX.- An excellent example is in Friedman's Free To Choose, where he shows step by step how the proceeds from Japanese exports (the bogey when he was writing) are used either directly to purchase goods from other countries or contribute indirectly by capital exports. The plague of popular economic discussion is the fear of what Mill called a general glut; and there is no more important task than to explain why a glut is extremely unlikely given a background of moderately sensible fiscal, monetary and exchange rate policies. ..CN.- Countries: JP Japan, Asia. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P9721 International Affairs. ..TP.- Types: ECON Employment & unemployment. ECON Industrial production. ECON Employment & unemployment. ..IX.- P9311, P9721. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGLB7AC1FT ..HL.- 930712FT 930712 Leading Article: Defining the fiscal deficit (761) ..TX.- THE DEBATE over the UK budget deficit is taking place in a fog of spurious assertions about how much of it is 'cyclical' and how much is 'structural'. It is a crucial question, but the truth is that no-one will know the answer for a number of years, if ever. In the meantime, the government should focus more on reducing the deficit and rather less on defining it. ..TX.- At a meeting of European Community finance ministers Kenneth Clarke will today be defending the British government's economic plans against the charge that they betray undue optimism about the Pounds 50bn budget deficit. The criticism is partly based on John Major's claim that 70 per cent of the gap is cyclical, and will therefore fall as the economy picks up. EC officials consider this dangerously complacent, citing OECD estimates that less than half of the deficit, now 8 per cent of GDP, can be so summarily dismissed. The rest, they say, is a structural increase in spending that requires further attention. Which is right? ..TX.- The sheer size of the gap between deficit 'cyclists' and 'structuralists' is a good clue that the desire for precision is misplaced. Both sides could make things clearer, however, if they bothered to separate two distinct issues. First, what part of the rise in public borrowing has occurred as a result of the recession? And second, how much of that will go away as the economy picks up again? The first question can be answered relatively easily. Unfortunately, it is not the one upon which the sustainability of the British public finances depends. ..TX.- Lower tax revenues ..TX.- The automatic effects on the budget of the recent decline in UK output are quite well understood. If, in 1990, the British economy had continued to grow at a steady pace, output would now be around 7 per cent higher. Losing that output to the recession led to higher public spending and lower tax revenues which between them left the Public Sector Borrowing Requirement 4.75 per cent higher as a percentage of GDP than it would otherwise have been. ..TX.- Where Britain is headed depends on how much of that lost 7 per cent of total output is still on offer, and how fast the economy can make it up. On the first, most accept that the length of the recession has taken its toll on industrial capacity and skill levels. Reasonable estimates suggest that the amount of usable spare capacity - or 'output gap' - is closer to 3 per cent. In theory, the economy could safely grow faster than its trend growth rate of 2.25-2.50 per cent per annum, until at least this degree of slack was used up. But whether the UK is soon in a position to achieve faster than trend growth may depend less on the output gap than on the speed of world recovery, domestic consumption patterns and the state of the labour market, all of which consistently defy forecasters' predictions. ..TX.- Accelerating debt ..TX.- The size of the UK Public Sector Borrowing Requirement sets a clock ticking on Britain's uncertain growth prospects, because of the cumulative effect on the national debt. If British GDP were to grow 3 per cent on average over the next three years, the PSBR should fall to around 4 per cent of GDP in 1997. By then, consistently high levels of public borrowing would have increased the national debt to 55 percent of GDP compared with 42 per cent in 1992. If, however, yearly growth averaged only 1.5 per cent, the PSBR would be almost unchanged and the debt ratio would be rising towards 75 percent. This kind of accelerating debt would have too many of the traits of the 1976 crisis. ..TX.- Mr Clarke may be unable to control either the degree of spare capacity in the economy or the rate at which it grows over the next few years. He can, however, determine how much any given rate of growth goes towards reducing the PSBR. Considering the stakes involved, he should commit himself to tightening fiscal policy further, as a hedge against disappointing growth. If this turns out to be over-cautious, he could always compensate by lowering interest rates. Better that he lose the prize for labelling the deficit correctly than risk the horrors of an old-fashioned public debt crisis. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Gross domestic product. ECON Inflation. CMMT Comment & Analysis. GOVT Taxes. ECON National income. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGLB7AC0FT ..HL.- 930712FT 930712 In search of the urban idyll: There is a new spirit of civic entrepreneurship in Europe's cities (1320) ..BL.- By IAN HAMILTON FAZEY ..TX.- Just before the International Olympic Committee meets in Monte Carlo in September to choose where to stage the 2000 games, a trade mission from north-west England plans to fly to Paris. ..TX.- The idea is to take advantage of the publicity surrounding Manchester's Olympic bid. Members of the mission, put together by Manchester Chamber of Commerce and Industry and the accountants, lawyers, bankers and business advisers who make up the city's Financial and Professional Forum, will be talking to their opposite numbers in the Paris chamber about doing more business together. ..TX.- Such marketing is part of a new age of civic entrepreneurship in Europe, according to Professor Michael Parkinson, director of the European Institute for Urban Affairs at Liverpool John Moores University. He says it started less than 10 years ago, with several of Europe's old cities fighting back against what was widely seen as terminal decline. ..TX.- Public and private sectors have banded together, sometimes informally, sometimes through organisations formed to promote the cities they depend on for a living. All have pushed cities rather than regions, and broad economic development rather than solutions to specific urban social problems. ..TX.- Parkinson's institute - which used to be the Centre for Urban Studies at Liverpool University, but negotiated a transfer to the more entrepreneurial 'Liverpool John' last year - has recently completed a three-year study of 24 cities for the European Commission*. ..TX.- One of the most telling examples is Hamburg. In 1985 its chamber of commerce and 10 leading banks set up the Hamburg Business Development Corporation to attract new companies and improve support for existing ones. Target sectors were the media, information technology, electronics, aviation, medicine, biotechnology, harbour services and environmental technologies. ..TX.- Urda Martens-Jeebe, the corporation's director, says its first five years brought in 387 new companies: 81 from Germany, the rest from Scandinavia, Taiwan, China, the UK, Japan, Korea and the US. The corporation acted as consultant to 769 businesses. She says an estimated 16,000 jobs were created and capital investment of DM3.7bn (Pounds 1.45bn) boosted construction. ..TX.- Other cities have used particular events as a focus for team-building. Manchester's Olympic bid is an example. According to KPMG Peat Marwick, the accountant, Manchester's bid will be worth Pounds 200m to the city even if the bid fails. ..TX.- Last week, Ogden, a leading US entertainment management group, signed a 20-year contract to run the Manchester arena from its opening in 1995. The group will create more than 700 jobs in the city. ..TX.- Other cities behaving in an entrepreneurial manner include: ..TX.- Rotterdam's development board, Rotor, a joint venture of the municipality and the chamber of commerce. It works as a think-tank, helping to balance social concerns such as poor housing with economic solutions. ..TX.- The city's publicly owned port authority modernised the docks and improved the local transport infrastructure. Parallel investment in office space by the private sector during the 1980s has been justified by annual growth of up to 10 per cent in the numbers employed in professional services. A 'brainpark' for small, high-technology companies was set up near a university. ..TX.- Dortmund's civic leaders developed closer ties with the private sector after a large factory closure in 1981. As a result, the emphasis switched from social to economic priorities. ..TX.- Research and development centres for transport technology and robotics were attracted, and a technology transfer system set up between university, polytechnic and the chamber of commerce. Montpellier evolved what it called a 'technopole' strategy in 1985 - a development agency supported by all sectors of the community to focus growth on medicine, computer technology, agronomics, communications and leisure. ..TX.- 'Cities are back on the agenda, not as basket cases but as economic leaders,' Parkinson says. 'Cities have to be re-evaluated. They need to be recognised again as the wealth of nations. They are great sources of added value. In Europe, there is an emerging network of cities with similar entrepreneurial outlooks.' ..TX.- He suggests the most successful entrepreneurial cities are those which have defined themselves as European, rather than by their regional or national role. Glasgow, Manchester, Birmingham, Rotterdam, Hamburg, Barcelona, Lyons, Lille, Dortmund, Stuttgart, Frankfurt and Milan are all examples. ..TX.- Many have started forming trans-European networks. For example, Rotterdam Port Promotions Council, backed by most Netherlands businesses dependent on trade through the Maas estuary, has been touring Europe this year to build contacts and seek out business. It stresses Rotterdam's 'gateway' role to Europe's road, rail and inland waterway freight networks. ..TX.- Another example is Manchester, which has joined an association of similar regional capitals that have developed as financial centres in their own right, shaking off the domination of their countries' capital cities. Manchester boasts more than 50 banks from around the world and a 50-strong venture capital community. There is also a group of 100 corporate finance advisers that offers 'mini merchant banking' for medium-sized companies, acting in mergers, acquisitions and disposals. Their fee income is running at more than Pounds 20m a year. Other cities in the group include Barcelona, Bilbao, Turin, Stuttgart, Lyons and Edinburgh. ..TX.- A network of successful cities, therefore, seems to be emerging across Europe, with each a focus for growth and regional economic hegemony. Even the urban population decline of the 1970s and 1980s is slowing as old cities bounce back. ..TX.- Parkinson says: 'After 15 years of decline, at some point in the mid-1980s, big cities started to grow again, or at the very least, they started stabilising. The trend is solid and is reversing the former outward drift of population. We are developing a Europe of the cities, not a Europe of the regions.' ..TX.- One problem of such patchwork economic development is that benefits are not evenly distributed between cities, within them, or between cities and the regions around them. In some cases, inequalities are emerging between neighbours. Marseilles, for example, has not developed a coherent strategy like Montpellier and, Parkinson says, lags in economic development. ..TX.- Liverpool similarly lags behind Manchester, only 35 miles away. This is partly because it is smaller, with a less diverse economic base. One in six men traditionally earns a living through manual work. Male unemployment rates of about 25 per cent have fuelled internal divisions in the city and - for 10 years to 1991 - caused image-damaging political strife. Only this year have public and private sectors set up an office to work together - seven or eight years behind comparable cities. ..TX.- Even within successful cities, individual beneficiaries are mainly educated, qualified or trained people. Parkinson warns: 'You have a polarised labour market, overlaid with the problems of ethnic minorities and immigrants. Some people are being excluded. We found that Hamburg has more millionaires than anywhere else in Europe, but more people on welfare. One of the key challenges of the next couple of decades will be how to include the excluded. Another will be how to improve a city's competitiveness without increasing the social cost.' ..TX.- One problem for the European Community is that it allocates funds for economic development on the basis of reducing regional imbalances. But this means two cities with similar problems are treated differently because of their geographical location. ..TX.- If the Europe of the cities thesis proves correct, it may require some shift in the way the EC targets its regional aid. But the bigger implication is that, as cities compete in the way that corporations do, the case for better urban government, capable of taking a long view about investment in infrastructure and human resources, will become ever more irresistible. ..TX.- *Urbanisation and the Functions of Cities in the European Community, EC, Luxembourg, Ecu13. ..CN.- Countries: NL Netherlands, EC. GB United Kingdom, EC. XG Europe. ..IN.- Industry: P7999 Amusement and Recreation, NEC. P7997 Membership Sports and Recreation Clubs. P9532 Urban and Community Development. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P7999, P7997, P9532. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGLB7ACZFT ..HL.- 930712FT 930712 Leading Article: Mr Yeltsin's dwindling power (751) ..TX.- RUSSIA'S President Boris Yeltsin insisted that he went to last week's summit of the Group of Seven industrial nations in Tokyo as leader of a great power. But at home, the state he represents is looking weaker by the day. Government remains gripped by debilitating, and overlapping, power struggles between president and parliament, centre and regions. Mr Yeltsin battles to gain acceptance of a complex new constitution, and in the process hands away an increasing array of powers and rights from the centre. And one by one, Russia's regions appear to be seizing their own destiny: in the past 10 days alone, the parliaments of the Far Eastern region and of Sverdlovsk in the Urals have claimed the status of republics within Russia, thus asserting greater economic independence an escalating battle between the regions and the centre for control over resources. ..TX.- In theory, the outcome of this process could be violent anarchy, as ever-smaller units of population or territory dispute the legitimacy or effectiveness of rule from Moscow and take matters into their own hands. In practice, it has not yet come to that. But to prevent the current mess turning into something a great deal worse, Russia obviously needs greater clarity in the relations between its multifarious centres of power. Ideally, this would be provided by a new constitution setting out in brief, general but unequivocal terms the respective rights and duties of the Russian state and its subjects. Unfortunately, this is far from what seems to be emerging from the constitutional debate which is now reaching a climax. ..TX.- Empty rights ..TX.- Russia cannot continue with its present, Soviet-era, constitution, patched up with liberal additions. Its main flaw, graphically demonstrated at succeeding Congresses of People's Deputies over the past year, is that it gave ample but empty rights to the Supreme Soviet (legislature) and made little provision for an executive president. Despite the popular mandate with which he was elected in 1991, Mr Yeltsin's attempts to run a democratic presidential republic with a communist 'parliamentary' constitution were doomed to end in confrontation. ..TX.- The problem is that this struggle cannot begin to be decisively resolved without adoption of a new, more legitimate constitution - and that such a constitution cannot legally be adopted without the agreement of the Supreme Soviet, a body which would thus be voting itself out of existence. Though Mr Yeltsin's hand has strengthened, especially since the endorsement of the April referendum, he is still in the position of having to act unconstitutionally in order to put the state on a democratic base - a move he has seemed prepared to make several times but from which he has always backed away. ..TX.- Structural problems ..TX.- The important question is whether the constitution as it is emerging is the right one for Russia and will stand the test of time. It is admirably dedicated to human and civil rights; underpins the right to private property; and pledges allegiance to independent judiciary and media. But it is too long on detail, some of it contradictory. It gives citizens too many economic rights like free medical care, employment and minimum wages which Russia cannot fulfil. ..TX.- Worst of all, it does not address the deep structural problems left behind by the Soviet state, simply accepting the Lenin-Stalin territorial division of the country into regions and 'ethno-territorial' republics and granting the latter more rights than the former. Small wonder that the regions are now seeking to redress the imbalance by declaring themselves as republics too, and that Russia's most numerically important minorities - the Caucasians, Central Asians, Balts and Ukrainians - complain they have been left without guarantees of their linguistic and other cultural rights. ..TX.- All this may not prevent Mr Yeltsin from forcing through his constitution in something resembling its present form. But it is hard to see such a document settling Russia's chronic constitutional uncertainties once and for all. As they promise yet more money to assist the country's political and economic transformation - and to shore up Mr Yeltsin's centre - G7 leaders would do well to remember that on both fronts, the evolution is going to be both protracted and messy. It is in no one's interest that Russia should disintegrate, but in the end no one may be able to stop it doing so. ..CN.- Countries: RU Russia, East Europe. ..IN.- Industry: P9721 International Affairs. P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9721, P9311. ..DS.- The Financial Times ..XP.- London Page 15 ***************************************************************** ..AN.-00DGLB7ACYFT ..HL.- 930712FT 930712 Letter: Cadbury should concentrate on working capital not profit (446) ..BL.- From Mr A H WALLIS ..TX.- Sir, I was disappointed, but not entirely surprised, to read that implementation of the 'going concern' requirement of the Cadbury Code is to be deferred ('Cadbury guidelines face delay', July 5). ..TX.- Perhaps the reason may be seen in the approach of the working party which produced the draft guidelines. In a worthy endeavour to make them comprehensive, it has fallen into the trap of making them over-prescriptive, introducing a number of factors which are either obvious or irrelevant. The result is a suggested procedure which is far more complicated than, in the majority of cases, it need be. ..TX.- The working party rejected the normal approach to profit forecasts, on the grounds that the work involved was excessive and it was not part of the reporting accountant's brief to comment on the assumptions. Both objections could be surmounted if it could be agreed that the objective is for the directors to be able to say, and the auditors to confirm, that 'the company has adequate working capital for its needs, and the accounts have therefore been prepared on a going concern basis'. Such a statement could be incorporated in the statement of directors' responsibilities. ..TX.- The advantage of a working capital statement is that the procedures are well understood by most boards and practitioners, and are less onerous than those relating to a profit forecast. It should normally be possible to obtain from bankers a statement to the effect that they see no reason why the company's committed facilities should not be extended beyond the review date, thus allowing the board to look to a date 18 months beyond the balance sheet date. It is then a matter of judgment whether the requirement can be satisfied by a relatively simple desk job, or whether a more rigorous 'bottom-up' exercise is needed. ..TX.- Such a task, which my company has carried out in recent years, to the satisfaction of the board and the auditors, has not proved unduly onerous or expensive. Of course, where the exercise shows a company is operating near the margin, it will need to be followed up by a more rigorous examination. However, the majority of companies do not operate close to the margin and, given a proper exercise of judgment by the auditors, attention could be concentrated on the smaller percentage of companies which have given rise to the concerns addressed by the Cadbury report. ..TX.- A L Wallis, ..TX.- group finance director, ..TX.- AAH Holdings, ..TX.- 76 South Park, Lincoln ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: NEWS General News. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGLB7ACXFT ..HL.- 930712FT 930712 Danger of the simple route: The Royal Commission on Criminal Justice (952) ..BL.- By GEORGE STAPLE ..TX.- Fraud is a crime which leaves chaos in its wake. In many cases, investors suffer substantial loss. Often savings built up over a lifetime's work disappear. Those charged with responsibility for investigating and prosecuting serious fraud will find much to welcome in the report of the Royal Commission on Criminal Justice. The commission has carefully addressed the issues and given a firm pointer for the future. ..TX.- Although lessons from a small number of high-profile cases were learnt long ago, the Serious Fraud Office continues to be criticised for the way in which those cases were handled. It is the SFO's policy to narrow the investigation, as far as possible, and then to charge only the principal participants in the fraud with a reasonable number of offences. ..TX.- However, there is a point beyond which it is dangerous to simplify. We must not sacrifice thoroughness for brevity and run the risk of prosecutions collapsing at a later stage. The SFO has always worked to a target of one year for an investigation and one year for the prosecution. Now the Royal Commission has proposed that targets should be set for the amount of time to be taken up by each stage of the trial. It has also proposed that written skeleton arguments be submitted in advance and that time limits be imposed on oral argument. These would be valuable new disciplines. ..TX.- An extended debate has taken place while the Commission has been sitting. Many of the ideas canvassed have found a place in its report. For instance, much has been said on whether certain City offences should be dealt with in the criminal courts or by the regulatory bodies. While the criminal justice system cannot abdicate responsibility for prosecuting serious fraudulent conduct, there may well be cases where regulatory action would be more appropriate. ..TX.- The SFO continually keeps possible reference to a regulator under review in the course of its investigations and prosecutions. The commission has endorsed this approach, provided regulatory action is capable of ensuring that a person found guilty by the appropriate regulatory tribunal can be banned from the market and ordered to compensate the victims. ..TX.- The SFO is currently in discussion with the regulators about mechanisms which might lead to more cases being handled by the regulators - with its agreement. ..TX.- The SFO supports the commission's desire to see a system which would mean that a decision on whether or not to prosecute, and the choice of charge, could take into account a defendant's readiness to accept a regulatory penalty of sufficient severity to justify dropping the prosecution or reducing the charge. It would require the defendant's agreement to the regulatory penalty, and, if prosecuted on a lesser charge, to pleading guilty to that charge. ..TX.- Under Section 2 of the Criminal Justice Act 1987, the director of the SFO can compel a person to answer questions or produce documents on pain of prosecution and up to six months' imprisonment if he refuses to answer. It must be remembered that fraud is uniquely a document-based crime. Without a means of getting at the underlying material, it would be impossible to find out what happened. Section 2 is mainly used for that purpose. ..TX.- Banks and professional firms are usually happy to co-operate when they receive a notice under the Section. It is also used to interview suspects, but the safeguard is that the power is only investigatory. A transcript of an interview under the Section cannot be admitted in evidence unless the witness changes his story. Also the legal professional privilege applies. ..TX.- The commission has concluded that it is necessary and right that investigators in serious fraud cases should retain the section 2 power. That is welcome news to those who face the task of unravelling these immensely complex cases. ..TX.- Contrary to the belief of some of the SFO's critics, the commission found that this power had worked in the interests of justice. Moreover, it considered the section had not been unfair to those questioned, who were likely to be persons in responsible positions with ready access to legal advice charged with sophisticated offences which might otherwise go not merely unpunished but undetected. ..TX.- The commission would also like to see section 2 being used to help investigations conducted in the UK on behalf of foreign investigating authorities and, significantly, in support of many investigations at present undertaken with guidance from the fraud investigation group of the Crown Prosecution Service. ..TX.- A feasibility study is recommended into the possibility of merging the two fraud authorities. ..TX.- The commission has, however, gone further. It considers that section 2 should, on the authority of the director, be extended to the police. That is not, in fact, something for which the SFO has pressed, but it clearly deserves careful consideration. ..TX.- Some change is also recommended to the culture of the criminal justice system. Currently, the prosecution lays bare its store of knowledge and evidence to the defence at an early stage, while the defence can keep its case up its sleeve until the trial. ..TX.- The system dates back to the days when defendants were inarticulate, uneducated and lacked the resources to defend themselves. It is, however, quite inappropriate to serious fraud trials. Hence, the recommendation for more advanced disclosure from the defence in such cases will reduce the number of issues for the jury and vastly improve the management of cases. ..TX.- The author is director of the Serious Fraud Office. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9222 Legal Counsel and Prosecution. P9211 Courts. P9229 Public Order and Safety, NEC. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9222, P9211, P9229. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGLB7ACWFT ..HL.- 930712FT 930712 Letter: FO busy in Shanghai (239) ..BL.- From Mr ALASTAIR GOODLAD MP ..TX.- Sir, Ms Spence's letter ('Poor UK show in Shanghai', July 2) asked why the Foreign Office does not stop being archaic and get down to business. It has, long ago, and it does, every day. She has clearly not had enough contact with us to know this. If she has any complaints about the quality of our post in Shanghai, she would give us details and we will investigate them. We have had no other complaints about it. Our exports to China for the first four months of this year show a 75 per cent increase over the same period last year. ..TX.- One of the FCO's main tasks is to help British business. Nearly 25 per cent of our resources are devoted to it directly. Indirectly, much more. Our customers tell us that we are providing them with the service that they want. We wrote more than 6,000 market information reports for them last year. Ninety per cent said they would use our services again. ..TX.- The opportunities for British business in the Far East are enormous. The FCO can help firms win that business. Let us all work together to improve Britain's performance there even more. ..TX.- Alastair Goodlad, ..TX.- minister of state, ..TX.- Foreign & Commonwealth Office, ..TX.- London SW1A 2AH ..CN.- Countries: CN China, Asia. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGLB7ACVFT ..HL.- 930712FT 930712 Letter: Why Commission deserves two cheers on EC car pricing (485) ..BL.- From Mr STEPHEN LOCKE ..TX.- Sir, It is hard to avoid the conclusion that John Griffiths ('Exchange rates main factor in European car price comparisons,' July 5) is looking through the wrong end of the telescope in assessing the reasons for differences in car prices between EC member states. Exchange rates in themselves are no more responsible for price differences than the Retail Price Index is a cause of inflation: they are merely a means of translating one country's prices into a form which can be compared with another's. Short-term fluctuations - especially dramatic ones such as those associated with the exit of sterling, the lira, the Spanish peseta and the Portuguese escudo from the Exchange Rate Mechanism last September - may upset long-established comparisons, but they do not invalidate them. ..TX.- The fact is that pre-tax car prices in the UK were well above those in most other EC countries throughout the 1980s and early 1990s; even the substantial fall in sterling against the D-Mark, Belgian franc, French franc and Dutch guilder within the last year has done no more than shift the general level of UK prices to roughly the EC average, with some models still costing 20 to 30 per cent more than in other countries. Whether even this state of affairs remains depends heavily on the car manufacturers' pricing policies in the UK, and on the manufacturers' ability to resist the temptation to return to their old view of this country as a high-price, high-profit market where consumer interests come a long way down the list of corporate priorities. ..TX.- What underlying factors should guide car pricing in different EC countries is an interesting issue for debate, as John Griffiths identifies. It may well be that in a completely unrestrained market subject to differing tax treatments in different areas, manufacturers would be justified in varying their pre-tax prices in a way that maximises their investment returns. But we don't have an unrestrained market - EC limits on price differences were introduced as part of the 'deal' on selective and exclusive distribution reached between the Commission and the manufacturers. Also, the Commission, rightly, wanted to demonstrate the benefits that could flow directly to consumers from a single, barrier-free market in the crucially important cars sector. ..TX.- For its efforts so far the Commission deserves at least two cheers from the consumer corner - and the new data that will be generated by these twice-yearly car price comparisons will start to give us a clear, authoritative picture of whether the EC single market for cars is a myth or, at last, a reality. ..TX.- Stephen Locke, ..TX.- director of policy, ..TX.- Consumers Association, ..TX.- 2 Marylebone Road, ..TX.- London NW1 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3711 Motor Vehicles and Car Bodies. P5511 New and Used Car Dealers. ..TP.- Types: NEWS General News. ..IX.- P3711, P5511. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGLB7ACUFT ..HL.- 930712FT 930712 Letter: Lack of commitment that leaves Gatt in doubt (173) ..BL.- From Mr JAMES ROBERTSON ..TX.- Sir, Your editorial, 'Full speed ahead on Gatt' (July 9) suggests that trade negotiators 'are condemned to succeed' in a world trade agreement under the Gatt. I beg to differ. Even after several years of negotiations, a Gatt agreement is by no means assured. As you said, final agreement in agriculture has not been reached; given the politically sensitive nature of agriculture and the unwillingness of any of the G7 leaders to stand up to special interest groups, agreement may not even be possible. ..TX.- When they start to pay much more than lip service to a world trade agreement, then the Uruguay Round could be completed in days. Given the lack of western leadership in others areas such as Bosnia, I for one will not be holding my breath. ..TX.- James Robertson, ..TX.- 11 Fairbridge Road, ..TX.- Archway, London N19 3EW ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGLB7ACTFT ..HL.- 930712FT 930712 Wrong crimes, wrong remedy: The Royal Commission on Criminal Justice (950) ..BL.- By MONTY RAPHAEL ..TX.- Runciman is clearly not the last word on reforming the investigation, prosecution and trial of serious fraud. Indeed, a half decade after the changes inspired by the Roskill report, why was serious fraud even on the agenda? ..TX.- The answer lies in the curious way we have of responding to perceived shortcomings in the criminal justice system. When our confidence in it is punctured, we resort to a quick-fix patch of reform without first asking whether it might not be better to replace the whole inner tube. ..TX.- It was just such a response in the mid-1980s that led to the setting up of the Roskill committee to reconsider the prosecution of fraud. It also explains how its recommendations, or at least some of them, came to be implemented. Before turning to Runciman's gloss on Roskill, the following questions should be considered. ..TX.- Why, when it now handles only a handful of cases, was it necessary to set up the Serious Fraud Office as a separate high-profile agency at all? The Crown Prosecution Service could have been better resourced nationally, with access to accounting and other assistance, and have dealt with all fraud. ..TX.- Where is the evidence that the Crown Prosecution Service, Customs or the Inland Revenue are hampered by the fact that they lack the SFO's Section 2 powers removing the right to silence? ..TX.- How is it that the whole of the US manages to prosecute white-collar crime effectively while still preserving the Fifth Amendment right to silence and without requiring advanced defence disclosure? ..TX.- How is the performance of the SFO to be judged? Surely not by either media campaigns or its conviction rate. Judged by convictions, it is doing well. Only the tabloids suggest the SFO should ensure all suspects remain in jail on remand and that it should deliver a 100 per cent conviction rate. ..TX.- The best way to monitor the SFO would be to set up a Fraud Commission, one of Lord Roskill's recommendations which was not implemented. ..TX.- It is regrettable that Lord Runciman and his colleagues should not have not thought fit to make this essential recommendation, so that in future we would not have to appoint Royal Commissions to discover what is wrong in this area. ..TX.- What needs to be stressed about the Royal Commission's proposals is that much caution should be shown before the SFO's powers are enhanced. ..TX.- The commission recommends that the Section 2 powers of questioning and evidence gathering should be given to the police as well as the SFO's lawyers and accountants. The argument for this recommendation in the commission's report is that it finds the present situation anomalous. The commission does not say how the anomaly arises. ..TX.- It arose after the Roskill Committee had recommended that the police should, indeed, have these powers. But the government concluded those powers would sit uncomfortably with what were then the recently introduced safeguards of the Police and Criminal Evidence Act. ..TX.- One may ask now what has occurred in the past seven years which makes this judgment invalid? ..TX.- If the commission's recommendations are introduced, what is to prevent the same police officer interviewing a suspect under Section 2 and then subsequently interviewing that suspect under caution? How is one to safeguard the suspect then? ..TX.- Indeed, if the SFO and CPS are merged we are looking at Section 2 powers being delegated to possibly thousands of police officers nation-wide. ..TX.- One of the commission's recommendations which appears to have received wide public support is that proposing greater pre-trial disclosure by the defence. Put that way, it seems a perfectly sensible, unobjectionable proposal. ..TX.- However, one has to consider to what extent the Crown is no longer to bear the burden of proving an accused guilty and to what extent an accused is now being asked to provide as much evidence as possible for his own personal damnation. ..TX.- Consider a situation where an accused, having fully met in a defence case statement the prosecution's case, finds that the prosecution decides, quite oppressively and on the basis of the accused's own disclosures, to change tack and confront him with a completely new allegation. ..TX.- One could envisage an absurd situation where the accused and the prosecution are engaged in some co-operative effort whose object is not to achieve fairness and justice, but to make certain that no person accused of serious fraud is ever acquitted. ..TX.- Perhaps even more worrying, however, is the recommendation that, just when the Judith Ward case and others have secured for the defence access to all the material in the prosecution's hands so that future miscarriages of justice resulting from non-disclosure might be avoided, there is a recommendation that this right be severely curtailed. ..TX.- The commission recommends that the prosecution need disclose only that material which it deems relevant following the revelation of the defence. What about those cases, and I have experienced several, where hidden away in the unused material there is a defence of which the accused knows nothing? ..TX.- Are we now going further down the totally irrational path of saying that our civil liberties must be preserved, if not enhanced, for those accused of crime, but the one exception being made is for those accused of white-collar crime? ..TX.- Does society really believe they pose a greater threat than is posed by those accused of murder, terrorism, robbery or rape? ..TX.- The author is the senior partner of the criminal law firm Peters & Peters ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9222 Legal Counsel and Prosecution. P9211 Courts. P9229 Public Order and Safety, NEC. P9223 Correctional Institutions. ..TP.- Types: CMMT Comment & Analysis. ..IX.- P9222, P9211, P9229, P9223. ..DS.- The Financial Times ..XP.- London Page 14 ***************************************************************** ..AN.-00DGLB7ACSFT ..HL.- 930712FT 930712 Arts: Rope ensures a reputation - Theatre (556) ..BL.- By ANDREW ST GEORGE ..TX.- Few plays now can afford an actor the chance to say 'You swine, you filthy swine' without causing a ripple of mirth in the theatre. But those closing lines of Patrick Hamilton's taut psychological thriller, Rope, ring like a tocsin round the Minerva Theatre, Chichester, where Keith Baxter has successfully revived the 1929 classic. ..TX.- Rope shows how two Oxford undergraduates, Brandon and Granillo, murder their friend Ronald. They conceal the body in a chest, and invite Ronald's father, aunt and assorted friends to dine off the same chest. But one of the guests, a louche poet called Rupert Cadell, discovers their perfect and motiveless crime. ..TX.- Stage time and theatre time are identical. After two hours, the dinner service is cleared, and the questions from Rupert become more probing. Before Brandon and Granillo can make off with the body, Rupert returns, confronts them, and wrings a confession. ..TX.- Hamilton's writing is everywhere detailed, the stage directions punctilious: 'He responds vaguely, as one who has only half understood'. Yet it is also powerful, making psychological sense of the 'foul, lewd and infamous jest', fashioning a drama of Jacobean scope and Jonsonian bravado. The play moves the thriller genre into drama, but does so by avoiding the whodunnit formula. ..TX.- The direction (Keith Baxter) serves the purpose exactly. Each time new information arrives, the situation and the characters change. The opening, completely dark except for the two actors' glowing cigarettes which identify them, is all tension and uncertainty: 'Do you think we'll get away with it?' The dinner-party performance which follows manages to maintain the sense that Brandon and Granillo are both acting and reacting as circumstances change. The action sprawls over the false-perspective set, a thunder storm worrying at the murderers throughout. ..TX.- The acting of the three principals keeps pace with the subtleties of Hamilton's plot. Brandon (John Barrowman) differentiates himself neatly from the less expansive and much surlier Granillo (Alexis Denisof). Throughout the party, both indulge the thrill of a healthy crime and the sprezzatura of its execution. Both characters drink heavily, and at times stagger round the stage like bleary bachelors at a stag party. But their interchanges have an excitement and breathlessness born naturally out of their situation. ..TX.- Rupert (Anthony Head) is all fastidiousness and frolic, a cultured creature already world-weary and bored, but witty enough to know it: 'Of course I honour my parents. I send them a telegram of congratulations each year on my birthday.' Whether the killers will hang depends on his attitude, a kind of late nineteenth-century decadence which finds its own moral standards when pressed. Head has the character down, fiddling at a cigarette, twitching at his cloak. ..TX.- Elsewhere Simon Chadwick and Debra Beaumont are perfect as the hooray guests, while Richard Warwick adds commendatorial weight as the victim's father, Sir Johnstone Kentley. ..TX.- Hitchcock adapted Hamilton's play in 1948, and it has remained a classic for exactly the reasons which mark its success here: it is, like Hamilton's other plays, tense, uneasy and psychologically acute. Hamilton died at 58 in 1962. His neglected fame should hang on more than just Rope. ..TX.- Minerva Theatre, Chichester, until 7 August ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7922 Theatrical Producers and Services. ..TP.- Types: NEWS General News. ..IX.- P7922. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGLB7ACRFT ..HL.- 930712FT 930712 Arts: Dubious voice of Satan - Theatre (507) ..BL.- By MALCOLM RUTHERFORD ..TX.- Not everything at the Royal Court is wonderful. While David Mamet's Oleanna is playing to packed audiences in the main house, a much more dubious production, though also well-attended, is taking place in the Theatre Upstairs. Gregory Motton's The Terrible Voice of Satan is an example of a talented playwright losing his way, and one can't help thinking that it was the Royal Court influence that led him beyond temptation. ..TX.- Motton was a specialist in the obscure to begin with, as anyone who saw the recent revival of his A Message for the Broken Hearted at the Battersea Arts will testify. He can write beautifully, but it is not always clear what he means nor who or even where his characters are. By the standards of The Terrible Voice, A Message was a model of clarity. The new play is all over the place, including under the Irish Sea. ..TX.- The Court must have some responsibility. Most of its best productions in the last year or two have been either Irish or American. Yet it can be dangerous to point indigenous playwrights in foreign directions. ..TX.- The Court sent the once promising Martin Crimp to New York to learn about America. He then wrote The Treatment, which showed not a hint of American subtleties or the American talent for self-parody. In The Terrible Voice Motton has gone very Irish, but to no great avail. ..TX.- Irishness apart, the main literary influences on the piece seem to be Marlowe's Dr Faustus and, even more blatantly, Coleridge's The Ancient Mariner: modest titles for big works - a practice stood on its head by Motton. A few lines from Mephistopheles in Dr Faustus say it all: 'Why this is Hell, nor am I out of it. Thinkst thou that I, who saw the face of God, And tasted the eternal joys of Heaven, Am not tormented with ten thousand Hells?' I suppose that's roughly what The Terrible Voice is about. Motton adds priests, sex, the IRA and a whole lot of gimmicks without moving forwards. The Ancient Mariner comes in with the albatross, in this case a magic bird initially huge and finally slung dead, and much diminished, around the waist of the principal character, Tom, as the boat in the Irish Sea runs into a storm. Don't forget that the word 'bird' nowadays has more than one meaning. ..TX.- The play is very well directed by James Macdonald. There are catching scenes of miniature cars along a track in a funeral cortege in the background, and a full-size bicycle in the foreground with strip-tease and simulated sex somewhere in the middle. Some of the staging draws on the National Theatre's Carousel. ..TX.- I wouldn't fault the performances, especially Sean Murray as Tom, but the play is a terrible fall from grace: Paradise Lost. ..TX.- Royal Court Theatre Upstairs. (071) 730 2554 ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7922 Theatrical Producers and Services. ..TP.- Types: NEWS General News. ..IX.- P7922. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGLB7ACQFT ..HL.- 930712FT 930712 Arts: Today's Television (230) ..BL.- By CHRISTOPHER DUNKLEY ..TX.- How jolly nice of BBC1 to donate a 30-minute commercial to the makers of 'Jurassic Park'. Not that they actually need it, by all accounts, having already taken tens of millions of dollars at American box offices, but without the sort of promotion provided by Spielberg And The Dinosaurs (7.00, just right to catch the primary school audience) how could they be sure of equal success in Britain? ..TX.- Subject of Birthrights is the staff of the Chinese restaurants which you now find in even the most remote corners of Britain, in country town and seaside resort as well as metropolis. Behind the scenes, we are told, life is not always easy for the British Chinese. Is your life always easy? (7.40 BBC2) ..TX.- World In Action is also about food preparation. It asks whether the British are too reliant on fast food and junk food and whether basic cooking skills are being forgotten. The answer in each case is 'Yes', so do we really need to watch? (8.30 ITV). ..TX.- Timothy Spall plays the title role in ITV's Frank Stubbs Promotes, playing a Soho ticket tout progressing (9.00). ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4832 Radio Broadcasting Stations. P4833 Television Broadcasting Stations. P4841 Cable and Other Pay Television Services. ..TP.- Types: TECH Services & Services use. ..IX.- P4832, P4833, P4841. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGLB7ACPFT ..HL.- 930712FT 930712 Arts: Miller's Secret Marriage - Cheltenham Festival (462) ..BL.- By ANDREW CLEMENTS ..TX.- The Secret Marriage is the well-made 18th-century opera par excellence, which established its own niche in operatic history from the very start when it was encored in its entirety at its first performance. There may be nothing remarkable in Cimarosa's music, especially for a work six years' younger than The Marriage of Figaro, or intricate about the development of the plot. But set up its comic mechanism convincingly and the two acts unwind with a succession of surefire jokes and persistent good humour. ..TX.- Opera North's new production, put before the public for the first time at Cheltenham last Thursday, applies effective enough lubricant to that comic clockwork. The staging is Jonathan Miller's, and marks the beginning of his rehabilitation in British operatic life after more than five years of self-imposed exile since he directed Candide for Scottish Opera in 1988. After Cheltenham the show repairs to the Buxton Festival, where it will form one element in a Miller package alongside his production of Donizetti's Maria Stuarda that opened in Monte Carlo earlier in the year. ..TX.- With designs by John Conklin (a tastefully marbled, duck-egg blue interior) and purposeful conducting by Roy Laughlin this Secret Marriage makes a pleasant, likeable show. ..TX.- The concept is straightforward enough; the action is transplanted from 18th-century Bologna back to Regency England, to the world in which Colamn and Garrick set the play from which Cimarosa's libretto was taken. ..TX.- The opera is sung in very clearly comprehensible English (a new plain translation by Simon Rees, not without some seemingly unintentional double entendres); Geronimo takes on a Yorkshire accent you could cut with a knife ' a self-made man from the burgeoning industrial age if ever you saw one ' and Count Robinson becomes another dim example of the English aristocracy, doubtlessly inbred. It's a sensible, untroubling piece of theatre, carefully worked out by Miller and perkily rendered by his cast. ..TX.- Andrew Shore's Geronimo is the latest of his portrayals of bourgeois bumptiousness, a bumbling cousin to his Don Pasquale; he handles the accent splendidly, times his entrances and exits perfectly, delivers all his gags with perfect deadpan. He's well matched against Jonathan Best's guileless Robinson and Tamsin Dives' bustling Fidalma. ..TX.- The young people are spiritedly taken. The Elisetta, the American Kate Egan, was making her British debut; she sings cleanly and cultivates a good mode of visible disdain. Anne Dawson is a wholesome, perky Carolina and Mark Curtis a diligent Paolino. All of them are stylish, attentive performers; the pace is never allowed to falter. ..TX.- Everyman Theatre, Cheltenham; sponsored by Cray Research (UK) Ltd ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7999 Amusement and Recreation, NEC. ..TP.- Types: NEWS General News. ..IX.- P7999. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGLB7ACOFT ..HL.- 930712FT 930712 Arts: The country house as time machine - Architecture (904) ..BL.- By COLIN AMERY ..TX.- This is the time of year for the country house visit. International tourists and eager National Trust members are paying to glimpse the especially English ensemble of the great house with its collections and grounds. Throughout the land a quiet procession threads its way through silent rooms - carefully keeping on the right side of the ropes and speaking in awed whispers. How much do we really see on the country house tour, and how much do we really understand about what is spread before us ? ..TX.- The great moment aesthetically in the English house is the eighteenth century. To assist us with the understanding of this period a valuable new book has been published - Eighteenth Century Decoration: Design and the Domestic Interior in England by Charles Saumerez Smith, (Weidenfeld and Nicolson, Pounds 50). It is the latest volume in the very comprehensive series that looks at the way interiors are depicted, by collecting together as much contemporary illustrative material as possible. In the case of the eighteenth century there are plenty of architects' drawings, pattern books, paintings and prints that do, when they are analysed, present a clear picture of life indoors at the time. A careful reading of Mr Saumerez Smith's book will open the eyes of visitors to country houses and give them a head start in understanding why the rooms look the way they do and how they were designed for use. ..TX.- There is relatively little published in this country that is serious on the subject of historic interior decoration. Mr Peter Thornton has done a lot to rectify this and his pioneering book on the seventeenth century interior in England and Holland set a very high standard. He went on to write the badly titled but rewarding book, Authentic Decor which updates to an extent the work of the master, Mario Praz, who gave us the gospel of interior decoration and its history. Anyone writing about interior design in the eighteenth century in England has to match the work of John Fowler and John Cornforth who published the key work in 1974 - English Decoration in the eighteenth century. Peter Thornton and John Cornforth have tried hard to show that our aesthetic response to eighteenth century rooms may well be a response that is conditioned by the current look of rooms and houses that were all substantially reorganised in 1910. ..TX.- The author of this important new book uses as his visual sources, paintings, prints and architects' drawings. The book is a rich visual feast but one of those books where the reader is really helped by being taken by the hand by the author and gently guided into new ways of interpreting old visual sources. When Mr Saumerez Smith is confronted by a painting by Zoffany or one of Arthur Devis's wooden compositions, he helps us to see them as documentary sources that reveal a lot about the look of the period. They also reveal a set of social relationships that need to be carefully interpreted. ..TX.- The author must have found it difficult to select from the quantity of material that exists for the period. He has brilliantly found a great deal of unpublished material, and his commentary also reveals hidden elements in familiar images. He is right to comment upon the growth in importance of the spread of possessions amongst all classes as the eighteenth century progressed. The developing range of manufactured products enabled a wide range of people to see their immediate surroundings as expressions of themselves. The fine arts express this to a degree - especially architecture which began to organise domestic interiors in terms of display. ..TX.- One of the best sections of this enthralling book for me was the one devoted to the impact of the great architect Robert Adam. Adam's career defines the second half of the eighteenth century. He went on the Grand Tour in the 1750's and met the influential Charles-Louis Clerisseau in Florence from whom he learned how to study the antique and how to draw. This book shows us some of the perfect results of this study at Kedleston, Syon, Kenwood and Home House. Adam understood the complete nature of a room - how to design walls, floor and ceiling as well as the furniture. Johann Zoffany as a leading artist and contemporary of Adam also understood the total domestic realm in his paintings and the examples shown here reveal not just family life but also the totality of the design of rooms and furniture. ..TX.- The role of the craftsmen and the pattern books of the period is clearly explored in a way that rightly emphasises the importance of the skilled artisan and demonstrates how printed books and engravings helped the spread of stylistic knowledge from France and Italy to London, and from London to the provinces. ..TX.- Above all this book took me into a world of refinement and taste leavened by satire and the perceptions of Hogarth. I felt by the end that I had lived briefly in the eighteenth century. I admired Mr Saumerez Smith's learning and visual sense and I coveted the architectural wallpaper shown in an interior of 1780 to the extent that I might well consider copying it. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8412 Museums and Art Galleries. ..TP.- Types: NEWS General News. ..IX.- P8412. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGLB7ACNFT ..HL.- 930712FT 930712 Arts: Fool Moon - New York (400) ..BL.- By KAREN FRICKER ..TX.- Fool Moon is one of the most aggressively insubstantial productions to open on Broadway recently. It consists of its two multitalented performers, David Shiner and Bill Irwin, goofing around for two hilarious hours, backed by the lively 5-piece urban hillbilly band the Red Clay Ramblers. ..TX.- Irwin, the personality familiar from his tv, film and stage appearances, is in good-hearted, rubber-bodied form; Shiner, the gangly clown from Cirque du Soleil's Nouvelle Experience, dominates the evening and is its revelation. ..TX.- In the spirit of classic vaudeville, there's no semblance of a traditional plot linking the bits that Shiner and Irwin play out alone and with each other, the band, and the audience. What almost holds the show together - are the personae the performers adopt, which signal to the audience that we are in a clown-land. ..TX.- Irwin's persona is sweet-faced and bemused, the innocent victim of external forces, like the weird magnetic pull always threatening to suck him offstage, and the unseen prankster who yanks the cord every time Irwin tries to speak into a microphone (neither performer utters a word during the show.) ..TX.- Shiner spends most of his time poking fun at audience members. He climbs over rows of seats to find the marauder in 'his' chair, borrows someone's camera and then destroys it (not really) and in the evening's funniest segment, brings people on stage to help him pretend-make a silent movie. ..TX.- If Fool Moon is 'about' anything, it's how willing people are to follow Shiner's charismatic lead. Everyone mimes, understanding instantly that his is a silent world; New Yorkers never seen without hands on their pocketbooks surrender fur coats and wallets to him; reticent folks end up rolling around the stage in a passionate mock embrace. Watching others abandon inhibition is a guilty pleasure. ..TX.- While Fool Moon's lack of structure lends it a wonderful freshness and simplicity, the show does feel slightly underconceived and underrehearsed. Perhaps an outside eye - no director or writer are credited in the programme, so presumably Shiner and Irwin filled all creative roles themselves - could have given the show the edge that it needed to become something more than the charming diversion it is now. ..TX.- Richard Rogers Theatre, Broadway ..CN.- Countries: US United States of America. ..IN.- Industry: P7922 Theatrical Producers and Services. ..TP.- Types: NEWS General News. ..IX.- P7922. ..DS.- The Financial Times ..XP.- London Page 13 ***************************************************************** ..AN.-00DGLB7ACMFT ..HL.- 930712FT 930712 Construction Contracts: University computing facility (230) ..TX.- The Leeds office of MOWLEM NORTHERN, a division of John Mowlem Construction, has been awarded contracts together worth Pounds 8.6m. The largest, worth approximately Pounds 4m, is to convert a listed mill into a school of computing and mathematics for the University of Huddersfield. ..TX.- The nineteenth century mill, a six-storey building which remained in working order until 1988, will be completely stripped and refurbished, together with an adjacent single-storey weaving shed. ..TX.- Scheduled for completion in August 1994, the refurbishment will preserve the character of the mill by cleaning and exposing original features such as cast iron columns, roof trusses, brick arched floors and solid masonry walls. It will allow students from the school of computing and mathematics to relocate under one roof with new facilities such as computer laboratories, seminar rooms and lecture theatres, including a sunken theatre for 270 people in the weaving shed. ..TX.- Other work won by Mowlem includes three design and build projects: a Pounds 1.2m contract from English Industrial Estates for a factory at Hellaby lane, Rotherham, a Pounds 1.5m contract for a two-storey office development which will incorporate Hull Housing Action Trust's new headquarters and a production facility extension for Arco Coatings, both in Hull. ..CO.- Companies: Mowlem Northern. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1542 Nonresidential Construction, NEC. ..TP.- Types: MKTS Contracts. ..IX.- P1542. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGLB7ACLFT ..HL.- 930712FT 930712 Construction Contracts: Alfred McAlpine garners orders (234) ..TX.- ALFRED McALPINE BUILDING has been awarded contracts worth Pounds 30m since the end of March. ..TX.- In the north, the company continues its success in securing stadium redevelopment work with the award of Phase ll of Blackburn Rovers Football Club's stadium improvements at Ewood Park, with a value of Pounds 4.9m. ..TX.- Alfred McAlpine Building North is also set to start work on the Pounds 5.3m Conway Park Swimming Centre for Wirral Borough Council and has already begun work on a Strathclyde social housing contract worth almost Pounds 1m. ..TX.- The Midlands region has won a Pounds 5.4m contract for Safeway to erect a store and petrol filling station in Liskeard, Cornwall. The company has been appointed to carry out the re-roofing of the north stand at Coventry City Football Club, together with construction of a new east stand and associated works worth in excess of Pounds 3m. ..TX.- Alfred McAlpine Building Midlands also commenced work in April on the development and refurbishment of listed buildings in Edgbaston to provide a three-storey office development with a value of Pounds 3m. Finally, Alfred McAlpine Management has been awarded a design and build contract for Tesco at New Milton valued at Pounds 4.6m. ..CO.- Companies: Alfred McAlpine Building. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1629 Heavy Construction, NEC. P1542 Nonresidential Construction, NEC. ..TP.- Types: MKTS Contracts. ..IX.- P1629, P1542. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGLB7ACKFT ..HL.- 930712FT 930712 People: North West Water (41) ..TX.- Archibald Ramsay is retiring from NORTH WEST WATER. ..CO.- Companies: North West Water. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4941 Water Supply. P4952 Sewerage Systems. ..TP.- Types: PEOP People. ..IX.- P4941, P4952. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGLB7ACJFT ..HL.- 930712FT 930712 People: GWR boosts its board (257) ..TX.- Great Western Resources, the UK-quoted oil, gas and coal company which last year suffered an unwelcome torrent of publicity over its flamboyant former chairman Dan Pena, has named two non-executive directors to its already 10-strong board. Donald Clayton and Joseph Reid will be among a team of eight non-executive and four executive directors. ..TX.- Howard Wolf, the company doctor who replaced Pena as chairman in 1991 following a shareholder rebellion, says the appointments mark GWR's move from 'the whisky and society columns to the business pages'. ..TX.- Clayton, 56, is better known to observers as the driving force behind the development of Meridian Oil, owned by Burlington Resources of the US, since 1987. In February, Wall Street was taken aback by Clayton's abrupt and unexplained departure from Burlington, just eight months after being promoted to president of Meridian's parent company. ..TX.- Reid, an oil and gas consultant in his early 60s, was Clayton's predecessor as chief executive of Meridian Oil. He was also president and chief executive of the natural gas company Superior Oil, taken over by Mobil Oil in 1984. ..TX.- GWR, which had been in dispute with one of its largest customers, recently came out of Chapter 11, a form of protection from creditors supervised by the courts. The group reported an interim loss of Dollars 2.03m in May, against Dollars 13.6m the previous year. ..CO.- Companies: Great Western Resources Inc. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1311 Crude Petroleum and Natural Gas. ..TP.- Types: PEOP Appointments. ..IX.- P1311. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGLB7ACIFT ..HL.- 930712FT 930712 Construction Contracts: Hozelock plant for Birmingham (383) ..TX.- HOZELOCK has announced plans for a factory in Birmingham. ..TX.- Work on the 10 acre site is due to start in August and the new manufacturing facility - representing an investment of Pounds 8.5m - is expected to be operational by the autumn of 1994. ..TX.- It will house all the manufacturing and assembly lines for Hozelock's ranges of watering equipment, sprayers, garden electrical and housewares products. ..TX.- The new plant is expected to provide for the planned expansion of the company into the 21st century. Some 65 new jobs will be created, increasing Hozelock's Birmingham workforce to 550. ..TX.- The single-storey building will initially afford 175,000 sq ft of factory space and has been designed to facilitate easy expansion up to 235,000 sq ft and for the addition of a mezzanine floor. ..TX.- 'This is a major undertaking which will ensure that we have the facility to increase our manufacturing capacity to support the company s planned growth both in the UK and, particularly, the rest of Europe,' said managing director, David Codling. ..TX.- Situated at Birmingham's showpiece industrial estate, Midpoint Park on the A38 trunk road five miles to the north-east of the city, the new factory is also sited for easy access from the M6 and M42 motorways. ..TX.- It is also less than a mile from Hozelock's computerised national distribution centre at Minworth which will further speed deliveries of finished products to the retail trade. ..TX.- Work on the 10 acre site is due to start in August and the new manufacturing facility - representing a total investment of Pounds 8.5m - is expected to be operational by the autumn of 1994. ..TX.- Housing all the manufacturing and assembly lines for Hozelock's ranges of watering equipment, sprayers, garden electrical and housewares products, the new plant is expected to provide for the planned expansion of the company well into the 21st century. ..TX.- Some 65 new jobs will be created, increasing Hozelock's Birmingham workforce to 550. ..TX.- The single-storey building will initially afford 175,000 sq ft of factory space and has been designed to facilitate easy expansion up to 235,000 sq ft and for the addition of a mezzanine floor. ..CO.- Companies: Hozelock. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3524 Lawn and Garden Equipment. ..TP.- Types: RES Facilities. ..IX.- P3524. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGLB7ACHFT ..HL.- 930712FT 930712 People: Sun Alliance (115) ..TX.- Mike Jones, 49, who steps down as chief executive of the Association of British Insurers on August 10, has been appointed to a newly created post of head of corporate affairs at Sun Alliance, the composite insurance company. ..TX.- Jones, who has worked for insurance trade associations for 25 years, decided to leave the ABI some months ago after it was announced that Mark Boleat, the director-general of the Building Societies Asso-ciation, was being brought in above Jones' head to be the ABI's first director-general. ..CO.- Companies: Sun Alliance Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6331 Fire, Marine, and Casualty Insurance. ..TP.- Types: PEOP Appointments. ..IX.- P6331. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGLB7ACGFT ..HL.- 930712FT 930712 Management: Spot the tricks of the trade - It pays to be wary of consultants (664) ..BL.- By CHRISTOPHER LORENZ ..TX.- Have you ever employed a consultant who turned out to be an organ-grinder, a Swiss cheese, or a Mercedes? Did he or she 'fake it', use perpetual motion, indulge in role reversal, or employ the 'CIA approach'? ..TX.- You may not know it - even less admit it - but you have almost certainly suffered at the hands of at least one of these phenomena. For they are all variants of the tricks which management consultants have pulled on their clients from time to time. ..TX.- This information comes courtesy of an insider, Michael Grunberg, managing director of Stoy Hayward Consulting, a medium-sized British firm. Though one of the slickest talkers around, Grunberg denies that he or his firm use such tricks of the trade. But he is not ignorant of them. ..TX.- At a meeting last month of the Strand Group, an informal association of in-house consultants for large companies in the UK, Grunberg was invited to give an external perspective of the way consultancy work is bought and used. In an otherwise serious presentation about the ways in which different consultancies operate, he threw in two slides which listed 'the stunts they pull' (with the emphasis on the 'they'). To distance Stoy Hayward further from such practices, he omitted its logo from the slides. ..TX.- The first list covered the 'sales cycle' (selling to clients), and described 13 types of misbehaviour. First came the 'organ grinder' - where the team which does the selling is far more high-powered than the one which actually carries out the assignment. As most clients would confirm, this is far from uncommon. ..TX.- Then there is 'smoke and mirrors': a consultancy claims that its proposed approach, or course of action, is 'structured, sophisticated and proven', but in fact it has yet to be tested. ..TX.- Next come 'gold-plating' (a methodology or activity which is not essential), and the 'trojan horse': a low-cost exercise calculated to 'front-end' further work out of the client. Both are more widespread than Grunberg implied. ..TX.- Leaping a bevy of other intriguing practices, from 'surgical bypass' to 'barrow boy', one arrives at the Mercedes stunt, where the client receives only the basic model and everything else is extra. In the Swiss cheese, consultants leave deliberate gaps in the work they tender, in order to 'facilitate extensions' from the client, as Grunberg put it. ..TX.- Turning to tricks used when a consultant has bid successfully - by whatever means - and is executing an assignment, Grunberg defined 'faking it' as relying on the client's inexperience and lack of knowledge; 'perpetual motion' as staying on forever; role reversal as training on-the-job at the client's expense (which is far from uncommon); and the 'CIA approach' as Consulting in Absentia - sub-contracting the work to others in covert fashion. ..TX.- Then there's 'hidden talent' (the exaggeration of per diem work); 'car service' (the allocation of general overheads as job-specific expenses); and 'carbon copy' - using previous client work without adjusting it. This is one of the most regular (mal)practices of all, too many clients have learned to their cost. ..TX.- Grunberg concluded with a list of tips to clients on how to avoid being taken to the cleaners in these and other ways. They included: know what you want to achieve; write it down; identify the real experts; read their tenders very carefully; evaluate formally and on a range of criteria; and treat consultants as consultants, not 'terrorists' and negotiate with them, 'especially on the detail of the deliverables'. Above all, 'manage the consultancy' and measure its success. ..TX.- Grunberg was too polite to say so, but all that is easier said than done. You may even need a consultant to advise you how to do it. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8742 Management Consulting Services. P8748 Business Consulting, NEC. ..TP.- Types: MGMT Management & Marketing. CMMT Comment & Analysis. ..IX.- P8742, P8748. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGLB7ACFFT ..HL.- 930712FT 930712 Management: A clean break with tradition - There has been a revolution at Elida Gibbs - from the factory floor to the sales team (1324) ..BL.- By GUY DE JONQUIERES ..TX.- IN A business where brands are a company's most cherished assets, abolishing the post of brand manager may not seem a brilliant idea. Yet last October, Elida Gibbs, the UK personal products subsidiary of the Anglo-Dutch Unilever group, did just that. For good measure, it scrapped its sales department, too. ..TX.- Instead, the company's brands - which include Faberge Brut, Pears, Signal and Timotei - are now the responsibility of a new breed of executives known as brand development managers, while the former sales team has been re-born as the 'customer development process'. ..TX.- The title changes are far more than cosmetic. Behind them lies a drive to shake up traditional methods which has radically transformed the way Elida Gibbs operates, from research laboratory to supermarket shelf. It is, in effect though not in name, a thorough 're-engineering' exercise. ..TX.- Tony Burgmans, director of Unilever's worldwide personal products business, compares the upheaval with the recent revolution in organisation and working practices which Japanese competition has forced on western industries such as cars. ..TX.- In common with many manufacturers in those sectors, Elida Gibbs has eagerly embraced concepts such as teamwork, empowerment and total quality. But unlike them, it has been unable to find inspiration from other companies in the same business. ..TX.- The experience has turned it into a testbed for new techniques within the Unilever group. ..TX.- The most potent external force for change was not competition from Japan, but pressure from Britain's big retailers, through which most of Elida Gibbs' products are sold. By the late 1980s, several felt the company, though still UK market leader, was failing to keep up with the times. ..TX.- 'Two or three years ago, Elida Gibbs' delivery standards were dire and their ordering systems archaic,' says Michael Rosen, director of non-foods at J. Sainsbury, Britain's biggest supermarket group. 'The whole thing was shambolic. They were nearing the point of losing a lot of business.' Now, he says, the company is one of Sainsbury's most efficient suppliers. ..TX.- The route to recovery began on the factory floor. With backing from Mike Perry, Burgmans' predecessor and now joint chairman of Unilever, Elida Gibbs introduced team-working at its plant at Seacroft, near Leeds in 1988. ..TX.- Responsibility for each production line has been transferred to those working on it, who are encouraged to co-operate continuously to solve problems and improve efficiency. They are also given fuller information about the company's performance and overall strategy. ..TX.- Initially, the switch faced scepticism from trades union officials and older middle managers. To win acceptance, the company put its 1,000 employees through three-day courses on total quality, run by teachers selected from the workforce. ..TX.- 'The changes would have been absolutely impossible to implement without training - it opened people's minds,' says Jon Riches, personnel director, who has overseen an increase in the company's training budget from 0.5 per cent to 1.3 per cent of sales since the late 1980s. This year, he aims to give every employee 10 days' training. ..TX.- The new approach has produced some big gains. In the past three years, change-over time on one production line has been reduced to less than four hours, from a day and a half, while annual lost-time accidents at Seacroft have been cut by three quarters. ..TX.- In parallel, a drive to improve customer service has increased from 72 per cent to more than 90 per cent the proportion of orders correctly completed. In the past year, 'right first time' performance at the plant has risen six percentage points to more than 90 per cent. ..TX.- The bottom line has benefited, too. Between 1989 and 1991, pre-tax profits rose by 73 per cent and margins widened from 6.5 per cent to 10 per cent. Though recession checked the improvement last year, sales grew by 9 per cent. (see table). ..TX.- But as experience with the new approach grew, managers became aware it needed to go still further. They realised that efforts to boost production efficiency were tackling only one link in a chain which connected every part of the business. ..TX.- One result was a new policy towards suppliers. In three years, their numbers have been cut by more than a third and they have been given more responsibility for quality control, testing and development. But, the biggest breakthrough has been the recognition that the traditional division of the company into separate functions, such as research or distribution, had become a serious handicap. By compartmentalising management, it was frustrating efforts to speed up innovation and increase flexibility. ..TX.- Last autumn, management was re-structured into teams and managers' roles re-defined on the basis of core business 'processes', such as the supply chain (manufacturing and logistics) and commercial affairs. These 'seamless teams', as Burgmans calls them, are intended to involve all parts of the business in decisions at every stage. ..TX.- According to Helmut Ganser, Elida Gibbs' chairman, the new brand development managers are the linchpins of the system. They are the prime movers behind product innovation and have wide authority to pull together the technical and management resources they need to see projects through. ..TX.- To enable them to concentrate on the longer-term business of building brands, many of the day-to-day dealings with retailers which absorbed much of the former brand managers' time have been entrusted to the customer development managers. Their priority is to satisfy growing demands from large retailers that suppliers work with them to increase the sales and profits of entire product categories, rather than just push their own brands. ..TX.- The teams are said already to have broken down barriers and encouraged wider participation across the company. Burgmans says group decision-making has reached the point where 'you often don't know who made a suggestion first'. ..TX.- In April, Elida Gibbs launched the first product of the new system. An aerosol deodorant - named Brut Aquatonic - was developed in less than six months, half as long as would have been needed previously. ..TX.- Burgmans reckons the development time today could be as little as three months. But he stresses the biggest advantage of the reorganisation is that it enables the company to undertake more ambitious projects, rather than just to keep doing the same things more quickly. ..TX.- Top managers should get a more precise picture of how the reorganisation is working when they review it this week. But the real test of its success will lie in the market - and in the reaction of retailers. ..TX.- Boots, Britain's largest chemists' chain, says Elida Gibbs now takes a more co-operative attitude towards developing new product markets: 'We have a much more satisfactory dialogue than in the past. They now recognise that retailers are far closer to the consumer than they can possibly be.' ..TX.- Sainsbury's Michael Rosen praises Elida Gibbs for 'great strides' to improve distribution and service, but says its sales are still spread across too many brands, some of which - such as Pears - it has failed to develop fully. ..TX.- Ganser at least partly accepts the criticism, saying he plans to focus more support behind fewer brands in future. ..TX.- But the challenges go beyond the UK. As Unilever integrates its European operations, Elida Gibbs will need to work more closely with sister companies on the continent. It already has Europe-wide responsibility for developing deodorants and a growing share of production is for other European markets. ..TX.- Not surprisingly, Elida Gibbs' managers are keeping an open mind about the results of the reorganisation. Says Riches: 'Ask us again at the end of next year. It is still too early to say we have got it right.' ..TX.- Previous articles in the series have appeared on May 24, June 2, 11, 18, 24 and July 5. ..CO.- Companies: Elida Gibbs. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2844 Toilet Preparations. ..TP.- Types: CMMT Comment & Analysis. MGMT Management & Marketing. ..IX.- P2844. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGLB7ACEFT ..HL.- 930712FT 930712 People: Barry Maiden moves over to Queens Moat (134) ..TX.- Andrew Coppel, who last week took over as chief executive of Queens Moat Houses, has made his first important appointment. Barry Maiden is to become finance director of the UK hotel division. ..TX.- The appointment comes after Coppel decided that the UK part of the business should be run as a separate company, rather than directed from group headquarters. The UK business, whose shares were suspended last March, is in urgent need of new financial and management controls, Coppel says. ..TX.- Maiden, 43, was finance director of Hilton UK for three years and before that finance director at Threshers, the drinks retailer. ..CO.- Companies: Queens Moat Houses. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7011 Hotels and Motels. ..TP.- Types: PEOP Appointments. ..IX.- P7011. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGLB7ACDFT ..HL.- 930712FT 930712 People: Meehan moves to Mothercare (211) ..TX.- Mothercare, the children's and babywear retailer that is part of the Storehouse group, is replacing its finance director. ..TX.- Mothercare says Paul Ryan, finance director since joining from Budgens, the supermarket chain, in 1989, has resigned from the group to pursue other interests nearer to his Leicestershire home. ..TX.- His replacement is Andrew Meehan, 38, who joins from Sears, where he has been finance director of the sports and leisurewear division. ..TX.- Meehan trained as an accountant with Coopers & Lybrand and spent time at Chase Manhattan and Air Products before joining the Burton Group, where he held senior financial posts in the Top Man, Principles and Burtons chains. He joined Sears in 1987 and was finance director of Selfridges department store before moving to sports and leisurewear. ..TX.- Mothercare's performance has already started to improve thanks to the reform programme begun by former Storehouse chief executive David Dworkin, and being continued by his appointee Ann Iverson, Mothercare's chief executive, but the programme is less advanced than that at sister chain BHS. Meehan is expected to work closely with Iverson on strategic planning. ..CO.- Companies: Mothercare UK. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5641 Children's and Infants' Wear Stores. ..TP.- Types: PEOP Appointments. ..IX.- P5641. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGLB7ACCFT ..HL.- 930712FT 930712 People: Imperial Chemical Industries (137) ..TX.- Imperial Chemical Industries paints division has appointed John Hirst as the first ever chief executive of ICI Auto-colour, the world's largest car repair business outside the US. The unit was recently designated by Ronnie Hampel, chief executive, as a core business, indicating that it is an area in which the company plans to achieve world leadership. ..TX.- Hirst's appointment follows a restructuring of the business. All Autocolour around the world will report to him rather than the regional heads. ..TX.- Hirst, 40, is a former finance director of ICI Paints' French subsidary who became general manager of ICI Autocolour Europe in 1990. He speaks French, German and Portuguese. ..CO.- Companies: ICI Autocolour. ..CN.- Countries: US United States of America. ..IN.- Industry: P7538 General Automotive Repair Shops. ..TP.- Types: PEOP Appointments. ..IX.- P7538. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGLB7ACBFT ..HL.- 930712FT 930712 Construction Contracts: New headquarters in Cardiff (260) ..TX.- OSPREY PROJECT MANAGEMENT, the project management company of the Franklin & Andrews group, has been appointed by NCM Credit Insurance (formerly ECGD), to project manage its relocation to a new headquarters building in Cardiff. ..TX.- Osprey's Cardiff office was originally appointed in February 1992 to find suitable development sites for the building. A site was selected within the waterside location of Cardiff Bay. ..TX.- The headquarters, which will be built by developer Grosvenor Waterside, will cost in the region of Pounds 12m, with a further Pounds 4m being spent by NCM on the fit-out. ..TX.- The building, which has been designed by Holder Mathias Alcock, is to be constructed to an unusual and innovative design which will have a nautical look to it. ..TX.- It will employ an environmentally friendly air-conditioning system which is similar to those used in Scandinavia: it involves displacement ventilation and chilled beams and this is believed to be the first of its type to be used in the UK. ..TX.- The building will be developed by Grosvenor Waterside to house NCM Credit, who are moving out of the Welsh Office since they became a commercial organisation in November 1991. ..TX.- Osprey will provide full project management services: quantity surveying services on the fit-out contract will be carried out by Franklin & Andrews. Construction works will commence shortly and completion is set for December 1994 . ..CO.- Companies: Osparey Project Management. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8748 Business Consulting, NEC. P8713 Surveying Services. ..TP.- Types: MKTS Contracts. ..IX.- P8748, P8713. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGLB7ACAFT ..HL.- 930712FT 930712 Construction Contracts: Foundation work for Cementation (159) ..TX.- CEMENTATION PILING & FOUNDATIONS, part of Trafalgar House Construction, has recently commenced work on new projects valued at Pounds 4.3m. ..TX.- The company has won the enabling works contract for the Royal Mail's Bournemouth mechanised letter office. Work on the site includes constructing 803 driven cast in situ piles to support the main structure and ground improvement using Cementation's patented Cemcol process to create 1,000 stone columns. ..TX.- In Manchester a Soilmec rig is being used to construct CFA piles to a depth of 12 metres and loadbearing capacity of between 1350kN and 3200kN for an indoor gymnastic arena. ..TX.- The project is part of the first phase of a Pounds 200m redevelopment of the Victoria Station site, as part of the city's bid to host the 2000 Olympic games. ..CO.- Companies: Cementation Piling and Foundations. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P1771 Concrete Work. ..TP.- Types: MKTS Contracts. ..IX.- P1771. ..DS.- The Financial Times ..XP.- London Page 12 ***************************************************************** ..AN.-00DGLB7AB9FT ..HL.- 930712FT 930712 Survey of Belgium (6): Symphony of joyful expectations - David Gardner watches the government tune up for the EC presidency (1196) ..BL.- By DAVID GARDNER ..TX.- WILLY CLAES, the Belgian foreign minister, brings a rare skill to his presidency of the European Community's Council of Ministers, which Belgium took over at the beginning of July for six months. He is a conductor of some repute. ..TX.- He took up his orchestral baton at an eve-of-presidency concert, kicking off the Belgian mandate by conducting a rendition of Beethoven's Ode to Joy, the anthem of the EC. He will no doubt be hoping for its joyful reverberations over the next six months, as he tries to keep the 12 member states in unison at a fractious and difficult time in the community's development. ..TX.- The Belgians are thoroughgoing federalists, at home and on the larger stage of Europe, where they have always been in the vanguard of the 'ever closer union' to which the Maastricht treaty commits the Community. But they take over the EC's rotating management in the wake of two Euro-sceptical presidencies run by the UK and Denmark, which were strongly marked by these countries' difficulties in obtaining national assent to Maastricht. The Belgian presidency's unofficial slogan, reiterated in recent interviews by prime minister Jean-Luc Dehaene, is 'nothing more, but nothing less' than the full application of the European Union treaty. ..TX.- That majority of member states in favour of greater European integration are looking expectantly to Belgium to relaunch the Europe of Maastricht and propel it towards what have recently seemed ever more distant goals of monetary and political union. ..TX.- Amid a flurry of pre-presidency surmise on how Belgium would try to tilt the EC balance back towards federalism, the government has dismissed suggestions that it will seek an early revision of the strict fiscal and monetary convergence criteria for economic and monetary union (Emu), and flatly denied that it will push for federalist reforms of EC decision-making ahead of the constitutional review foreseen by Maastricht for 1996. ..TX.- By then, up to four new member states should be inside the EC, if enough Austrians, Swedes, Finns and Norwegians can be persuaded by their governments that this is worthwhile. Most of the crunch points in the negotiations with the applicant countries will be reached on Belgium's watch - and it will be judged in large part on how it handles them. ..TX.- More streamlined decision-making, implying less room for national vetoes, is seen as the inevitable consequence of the EC enlarging to take in new members. But the present accession negotiations are supposed to get the applicants in by January 1995 - last month's EC summit in Copenhagen decided - with only minor adjustments to EC decision-making. ..TX.- Mr Claes told the FT it would be 'logical, democratic and fair play' to wait until the new members were in before discussing more far-reaching reforms. But he added that the goal of the Community 'is not an economic one but a political one. We need an open debate and a sincere debate in Scandinavia and in Austria on this target'. 'Maastricht,' he emphasises firmly, 'is not an ending point.' ..TX.- But Mr Claes, a Flemish Socialist in Mr Dehaene's Christian Democrat-dominated coalition, says his priorities are to speed up the EC enlargement talks, the fight against recession and unemployment, and implementing the Maastricht treaty, which should become fully ratified - Belgium hopes - by September at the latest. ..TX.- He is seeking to lay modest but solid foundations for the two new 'pillars' in Maastricht: agreement on two to three areas of its Common Foreign and Security Policy, and the embryo of a common stance on emigration and asylum policy as part of the 'third pillar' of co-operation in justice and home affairs. 'I should think that is more than enough for six months,' he says with sobriety but clear relish. ..TX.- EC federalists have been chastened by the backlash against the Community and the speed of European integration set off by Denmark's initial rejection of Maastricht just over a year ago. But it is, in any case, fair to say that EC partners who do not share its longer-term ambitions had always expected Belgium to run a pragmatic presidency. ..TX.- 'You can take it from me,' says a senior British official intimately involved in the UK's presidency last year, 'that they will be completely fair; unlike us, there will be no spin on the ball.' ..TX.- 'It is not wise to exaggerate the possibilities and power of a presidency,' Mr Claes says. 'We know you need consensus to make progress, and that we are just the go-betweens.' But while it is only natural after a year of EC drift for Belgium to discourage high expectations, its presidency faces a series of challenges going beyond its stated priorities. ..TX.- Money. Its first task will be to preside over the share-out of Ecu157bn in EC regional and structural development spending for 1994-99, when all its partners except tiny, rich Luxembourg are unhappy with Commission plans for spending it. ..TX.- Gatt. The Uruguay Round world trade reform talks will come to a head under the Belgian presidency. Belgium will have to contain growing tensions between France and its partners over the EC's stance, at a time when the Belgian government is increasingly sympathetic to the Paris hard line on farm trade. Mr Dehaene called last November's EC-US breakthrough on cutting farm subsidies 'a tactical blunder' in a recent interview, saying it had to be 'corrected'. ..TX.- EC monetary policy. It falls to Belgium to kick-start the second phase of Emu, due to start in January with the creation of the European Monetary Institute, precursor of the European Central Bank foreseen at the third stage later in the decade. The presidency will have to arbitrate amid continuing tensions arising from high German interest rates. It will also have to resolve the competition to host the EMI/ECB, as part of a complex package locating other EC institutions. ..TX.- Bosnia. The EC's increasingly bad conscience about not doing enough to resolve the Bosnian conflict led Chancellor Helmut Kohl of Germany to champion lifting the arms embargo on ex-Yugoslavia to allow the Bosnian Moslems to defend themselves. At Copenhagen, the EC instead said it would send more troops to defend the Moslem 'safe areas'. Mr Dehaene has acknowledged that if not enough troops are sent, the embargo issue will come back. ..TX.- Beyond this lies a minefield of more mainstream EC business and concerns. On the environment, for instance, the Belgian presidency will have to arbitrate in the increasingly ill-tempered row over German waste exports for recycling, partly by pushing hard to get the stalled EC directive on packaging waste through. Having introduced its own eco-taxes (green tax) Belgium is also committed to the planned EC energy tax to combat global warming. But Britain is flatly opposed to this. ..TX.- The Belgians will be scrutinised closely, too, to see how well they conform to the EC's new pledge to be more open in its decision-making. ..CN.- Countries: BE Belgium, EC. ..IN.- Industry: P9199 General Government, NEC. P9311 Finance, Taxation, and Monetary Policy. P8651 Political Organizations. P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9199, P9311, P8651, P9721. ..DS.- The Financial Times ..XP.- London Page 11 ***************************************************************** ..AN.-00DGLB7AB8FT ..HL.- 930712FT 930712 Survey of Belgium (8): Mr Wallonia pulls the strings / Profile of Guy Spitaels (616) ..BL.- By DICK LEONARD ..TX.- GUY SPITAELS, who led the French-speaking Socialist Party (PS) for 10 years until early last year, can claim to be the most successful leader the party has ever had. He rescued it from a seven-year spell in opposition, and in 1987 boosted its share of the vote in Wallonia to 44 per cent, the highest proportion of any Socialist Party in the EC, as he was quick to point out to any inquirers. ..TX.- Along the way, he had effectively absorbed the predominantly left-wing separatist Rassemblement Wallon and eliminated the Belgian Communist Party as a parliamentary force, in spite of its very moderate programme. His reward was to be asked to form a government by King Baudouin after the 1987 election, from which his party had emerged as the dominant force, not only in Wallonia but in the national parliament. ..TX.- It did not take Mr Spitaels long to discover that the Flemish parties would not accept him as prime minister. The ostensible reason was that he could not speak fluent Dutch. Yet Mr Spitaels does not believe that this was the whole story. 'Even if I had spoken perfect Dutch', he says, 'it would have made no difference. It is not the fact of not being able to speak their language that the Flemish object to, it is that, as the majority group, they feel the job belongs to them.' ..TX.- He is probably right. Each of the last 11 governments has been led by a Fleming, and the few post-war administrations led by French-speakers have been short-lived. Mr Spitaels settled for being the country's chief power broker, staying outside the government as leader of the PS, but being consulted by the then prime minister, Wilfried Martens, on important points. He also chose and effectively controlled the Socialist-led coalitions that rule the Walloon and Brussels regions and the executive of the French-speaking community. ..TX.- Mr Spitaels, 61, had a strict Catholic upbringing, but lost his faith while studying law and political science at the Catholic University of Louvain. He subsequently became a professor at Brussels University. He joined the PS at the age of 29 and became a full-time politician at 42. ..TX.- There was general astonishment when, shortly after the last general election, he effectively appointed himself as minister-president of Wallonia. It was, he later said, a move he had long pondered. After 10 years of pulling the strings from outside government it was time, he felt, to assume direct executive authority. Although at an earlier period he had been a vice-premier and budget and communications minister, it was a sign of the times that he should choose to head a regional administration rather than joining the national government. ..TX.- In the region, as earlier in his party, his easy dominance is universally acknowledged. His intellectual power and shrewd political judgment give him a head-start over all possible rivals. The Flemish parties have publicly lamented that they could find nobody of comparable stature to head the Flemish regional government. ..TX.- Wallonia is the poorest of the three Belgian regions, but its standard of living is more than 90 per cent of the EC average, and it did not qualify for special assistance from the community. Mr Spitaels's proudest achievement so far has been to squeeze funds out of the EC for the poorest of Wallonia's five provinces, Mainaut. ..TX.- Mr Spitaels may never have quite made it as Mr Belgium, but nobody now disputes his status as Mr Wallonia. ..CN.- Countries: BE Belgium, EC. ..IN.- Industry: P8651 Political Organizations. ..TP.- Types: PEOP People. ..PE.- People: Spitaels, G Socialist Party Leader. ..IX.- P8651. ..DS.- The Financial Times ..XP.- London Page 11 ***************************************************************** ..AN.-00DGLB7AB7FT ..HL.- 930712FT 930712 Survey of Belgium (7): Capital of EC is flying high / A look at plans to modernise Brussels' airport (937) ..BL.- By ANDREW HILL ..TX.- BRUSSELS has a state-of-the-art airport. Unfortunately for the thousands of businesspeople and politicians who use it, the art is late-1950s. ..TX.- Between 1958, when the terminal buildings were built for the World's Fair, and 1988, no substantial work was done on the site, apart from the construction of a small satellite terminal in the late 1970s. ..TX.- But over the same period the city of Brussels has become the institutional capital of the European Community and a magnet for international business travellers and politicians. For these customers - who represent two-thirds of the 9m or so passengers using the airport annually - the 1958 terminal is a disappointment: cramped, shabby, and slow. ..TX.- Perhaps Brussels airport's only advantage over its competitors is its proximity to the city centre. It can take only 15 minutes to travel by car from central Brussels to the north-eastern suburb of Zaventem where the airport is built - but that is more a geographical stroke of luck than a triumph of airport management, and it is let down by an out-of-date 'City Express' train link. ..TX.- Professor Pierre Klees, chief operating officer of the Brussels Airport Terminal Company since January, admits that the airport's owners - a combination of the Belgian state and private investors, including the country's largest holding companies - should have done more to keep the principal airport of the self-styled capital of Europe up to date. ..TX.- Now, at last, the long-awaited improvements are being carried out. From the window of Mr Klees's office, the finger of a long, new pier points out towards the runways. Once complete, the extensions should allow Brussels to handle an extra 21m passengers a year - more than tripling the present capacity of 9.3m, to take account of estimated passenger growth forecasts of between 4 and 7 per cent a year. ..TX.- Posters on the approach road to the airport proclaim a completion date of 1993. In fact, following wrangles with contractors, consultants, the government and the airlines, BATC is now estimating the new terminal, with 23 additional gates, will be open sometime in the second half of 1994. The company says it will set a formal completion date in September. ..TX.- The building of the new pier - to be followed, eventually, by a second parallel pier linked by a tunnel - is the most obvious element of the work under way, and the one which is creating the most headaches for users of the airport. But BATC is simultaneously hoping to improve the efficiency of the existing terminal so that when the wraps come off the new buildings next year, the entire system will be quicker and easier to use. Automatic signalling systems will guide drivers to spaces in the airport's car parks, for example; a new integrated computer network, linking all airport services in collaboration with the airlines, should speed check-in, border and security controls; and BATC is also trying to persuade Belgian railways to upgrade the airport's rail links with Brussels and Antwerp. ..TX.- The improvements do not come cheap. BATC announced a net consolidated profit of BFr283m in 1991, after tax, but it has had to raise BFr21bn, several billion francs more than the original estimates for the improvements, through a bond issue, to cover the cost of the new work. ..TX.- Further cash will be needed to bring the new airport into line with the requirements of the Schengen free-travel agreement, which plans to abolish passport checks for travellers between nine continental EC countries from December 1. BATC will be given longer to carry out the work necessary to segregate intra-European passengers from international passengers, but Professor Klees still estimates the cost at some BFr1bn. ..TX.- Despite that, he says there is no way that the airport will rest on its laurels once the improvements have been made. 'It's very damaging that we didn't start work like Schiphol (Amsterdam's airport) or Paris 20 years ago. I think all airports should have work in progress every day,' he says. ..TX.- The airport's managers are still cautious about what the future holds. In March, Mr Eric Kirsch, chairman of BATC and chief executive of the state authority which owns 48 per cent of the group's shares, said that the analysis of trends in aircraft movements, passenger and freight traffic in 1992 gave reason for 'moderate but definite optimism'. ..TX.- But he also pointed out that Brussels was just one of a cluster of highly competitive airports, all attempting to be the hub of international and intra-European aircraft operations. ..TX.- Brussels airport is certain to retain its head start over competitors as the only airport serving the EC institutions, not to mention Nato and a host of multinational company headquarters sited around Brussels. But an improvement in Europe's high-speed rail network could draw passengers to other modes of transport, and even entice them to use other hub airports as a way into Europe. That would increase the pressure on the new terminal, and could chip away at BATC's income, based on retail operations (40 per cent), airport taxes and charges for use of pier facilities (60 per cent). ..TX.- Eurotunnel, operator of the Channel tunnel, claims a combination of high-speed train and tunnel will reduce the journey between Brussels and central London to three and a quarter hours, possibly making the train an attractive alternative to flying for some travellers. ..CO.- Companies: Brussels Airport Terminal. ..CN.- Countries: BE Belgium, EC. ..IN.- Industry: P4581 Airports, Flying Fields, and Services. ..TP.- Types: RES Facilities. CMMT Comment & Analysis. ..IX.- P4581. ..DS.- The Financial Times ..XP.- London Page 11 ***************************************************************** ..AN.-00DGLB7AB6FT ..HL.- 930712FT 930712 Survey of Belgium (5): Fashioning federalism - Dick Leonard discusses the constitutional reforms (643) ..BL.- By DICK LEONARD ..TX.- IT TOOK 30 years of campaigning and the painful assembling of a seven-party agreement to obtain the necessary two-thirds majority, but in May the Belgian parliament approved the final steps to turn the country into a federal state. From now on the national government will be confined to carefully delineated powers. ..TX.- These will be largely restricted to foreign affairs, defence, justice, internal security, taxation and social security. All the remaining responsibilities, including economic affairs, the environment, education, cultural affairs, transport, housing, planning, research, agriculture and foreign trade, will be devolved, or already have been, to three regions (Flanders, Wallonia and Brussels) and three language communities - Dutch, French and German. ..TX.- It has been a step by step process, starting in 1980 when the regions of Flanders and Wallonia were established. A third self-governing region - for Brussels - was set up in 1987, when education was transferred from the national government to the language communities. The constitutional changes approved in May, which will not take effect until after the next parliamentary elections, are intended to complete the picture. ..TX.- The changes foreshadow a considerable overhaul of the national parliament, which until now has been an unwieldy and not very influential body, with an almost complete overlap between the powers of the two chambers. Henceforth, the lower house - the Chamber of Representatives - which will be reduced from 212 members to 150, will be the main legislative body. ..TX.- The Senate, the membership of which drops from 174 to 71, will essentially be a revising chamber. Separate parliaments for Flanders and Wallonia will be directly elected, as the parliament for Brussels has been since 1987. The minister-presidents of the three regions will in future be known as prime ministers. The province of Brabent, the only one which has previously been bilingual, will be split into two, leaving Belgium with five French- and five Dutch-speaking provinces. ..TX.- The main inspirer of the constitutional changes was Wilfred Martens, who was prime minister almost continuously from 1979 to 1992. Yet it fell to his successor, Jean-Luc Dehaene, also a Flemish Christian Democrat, to steer the main changes through parliament, a tricky exercise as his left-centre coalition fell far short of the necessary two-thirds majority in both houses. ..TX.- He managed to get the measures through by a judicious mixture of stick and carrot. The stick was applied to the four governing parties - two Christian and two Socialist - who were aware of their unpopularity in the country. A government defeat would have precipitated an early general election. ..TX.- The carrots were offered to three opposition parties, each of whose support was needed. The support of the two Green parties - one for each of the main language groups - was obtained in return for new ecological taxes. The moderate Flemish Nationalists were won over by the introduction of a clause ensuring that residual powers not specifically mentioned in the constitution should revert to the regions. ..TX.- Will the new changes stick or do they merely mark a stage in a process leading inevitably to separation, as in the case of Czechoslovakia? There are some warning signs, notably the press interview given in May by the Flemish minister-president, Luc Van den Brande. He foreshadowed a much more complete autonomy for Flanders, setting a target date of 2002. ..TX.- Mr Van den Brande is a member of Dehaene's own party, and his interview, which was applauded by the bulk of the Flemish press, was embarrassing to the government. Yet the excitement soon died down, and a spontaneous march in Brussels a few weeks later, in opposition to separatism, drew a vast crowd. ..CN.- Countries: BE Belgium, EC. ..IN.- Industry: P8651 Political Organizations. P9199 General Government, NEC. ..TP.- Types: GOVT Government News. ..IX.- P8651, P9199. ..DS.- The Financial Times ..XP.- London Page 10 ***************************************************************** ..AN.-00DGLB7AB5FT ..HL.- 930712FT 930712 Survey of Belgium (2): Export fall fuels recession - Economy hit hard by general EC climate (1299) ..BL.- By DAVID GARDNER ..TX.- BELGIUM'S high productivity and export-oriented economy is suffering from recession among its partners, a sharp downturn at home, and the unsustainable expense of a huge government debt equivalent to about 125 per cent of its national output. ..TX.- Yet it is also well positioned to reap rewards from its franc fort policy, linking the Belgian franc to the D-Mark. This tie, tenaciously maintained for the past three years, makes the Belgian government even more determined to link up in monetary union with its neighbours, especially after the European currency chaos of last autumn. ..TX.- From 1988, Belgium enjoyed three years of high, non-inflationary growth, peak private investment and good corporate profitability, along with big increases in disposable income. But the more than 4 per cent of gross domestic product average growth of 1988-90 slowed to 1.9 per cent in 1991 and just 0.8 per cent last year. This year is likely to see a contraction of about 0.7 per cent, and only a slow pick-up of around 1 per cent of GDP is foreseen for 1994. ..TX.- At home, demand has fallen; new car registrations for the first three months of this year, for instance, were down 19.4 per cent on the same period last year. But this is more due to the general climate of EC-wide recession and rising unemployment. In Belgium, there is no 'debt deflation' brake holding back a rise in consumption as there is in the UK and Scandinavia. On the contrary, the size and rate of household and corporate savings is high. ..TX.- The determining factor in Belgium's recession is the slowdown in its export markets. Its exports are equivalent to about two thirds of its GDP, and nearly two thirds of its sales abroad are to its neighbours in Germany, France and the Netherlands, all in recession. In addition, Belgium's relative dependence on what it earns in the international marketplace is far greater than any of these main partners; per capita it exports nearly twice the amount Germany does. ..TX.- Export success had fuelled high growth, particularly following German reunification. But the extent of German economic contraction has hit Belgium hard. Germany 'delayed the recession for Belgium', says Mr Alfons Verplaetse, the central bank governor. ..TX.- The poor outlook for exports has led to annual investment growth coming down from more than 15 per cent three years ago to perhaps minus 2 per cent this year. Company bankruptcies in the first six months this year reached a record 3,079, 35 per cent up on the same period in 1991, when the first signs of a slowdown appeared. ..TX.- Last year also saw the first volume fall in exports since 1975, and a 1.4 per cent drop in foreign sales at current prices. All this has fed through into lost jobs, with unemployment rising from 9.3 per cent in 1991, to an expected 11.9 per cent this year. ..TX.- With the franc pegged to the D-Mark, a collateral and dangerous problem has been the higher rate of wage increases in Belgium over the past three years, creating a 4 per cent wage gap with its three main trading partners. Belgium is the last EC country (aside from Luxembourg with which it has an economic union) to retain automatic wage indexation, leading over the past three years to nominal wage rises nearly twice the rate of inflation, now at around 2.8 per cent. While wage settlements have generaly been around or below German levels, the OECD reckons that in 1988-1994, Belgian wages will have risen by 38 per cent, against 30 per cent in France, and 28 per cent in the Netherlands. ..TX.- 'The government has been very slow to recognise that problem,' says Mr Peter Praet, chief economist at Generale de Banque, the leading commercial bank. 'It is very clear that in Belgium we have a very deep crisis, in industrial employment, not in services,' acknowledges Mr Verplaetse. ..TX.- A vain attempt to end wage indexation nearly brought Mr Jean-Luc Dehaene's Centre-Left government down in March. Instead, BFr10bn revenue from fuel taxes on non-industrial users are to be mobilised to lighten the high social security charges on employers in the traded goods sector of the economy. This redistribution of the tax burden - the so-called Maribel plan - should close about 40 per cent of the wage gap, according to Mr Verplaetse, provided it can be repeated next year and in 1995. ..TX.- The other vital ingredients to retain Belgium's competitive edge are wage moderation and a concerted effort to bring the budget deficit and government debt under control. ..TX.- Recent signs that wage settlements were easing are already looking ephemeral. Most unions at national level had agreed not to seek real wage increases in 1993-94. But subsequent negotiations at sectoral level have secured rises - after inflation which is automatically added in - of between 1.4 and 3.4 per cent in 14 industries. ..TX.- Moreover, the higher fuel charges in the Maribel plan will also go into the retail price index and therefore back into wages. The plan may not have as much effect as the authorities foresee in closing the wage gap with Belgium's competitors. ..TX.- Public finances have also suffered some drift. The Dehaene government is vigorously trying to get the deficit under control, through a mix of new taxes and spending cuts. The near collapse of the government in March over a BFr110bn budget-cutting package underlined the political sensitivity of the task. ..TX.- The turnaround in government finances between 1981 and 1991 was impressive. Spending was cut from 59.6 per cent to 51.7 per cent of GDP, with revenues falling modestly from 46.4 per cent to 45.4 per cent. The deficit was thereby only cut from 13.3 per cent of GDP to 6.3 per cent. The balance of the budget after interest paid on debt is taken out, however, moved from a deficit of 5.5 per cent to a 'surplus' of 4.1 per cent. Nevertheless, the deficit with interest crept up to 6.9 per cent last year - well wide of the 3 per cent target set by the Maastricht treaty for 1996 for member states such as Belgium determined to be in the first wave of European economic and monetary union (Emu). ..TX.- Yet in the coming months the government can call in short-term debt, and refinance it long term, and in Belgian francs. 'I hope we will see in '94 the real reward for the strong franc policy,' says Mr Praet, who foresees a saving on the government's interest bill equivalent to 1 to 1.5 per cent of GDP. ..TX.- If interest rates in Germany, and therefore Belgium, ease down further, Belgium should be on target for a deficit of around 5.3-5.5 per cent of GDP next year. ..TX.- The authorities have little doubt that they can and must make it into the first wave of Emu. They point out that the franc became a refuge currency during last September's chaos in the exchange rate mechanism of the European Monetary System - with short-term inflows of BFr122bn, or 1.7 per cent of GDP. ..TX.- Speculators, they said, ignored the fact that Belgium's current account has had a surplus of around 2 per cent of GDP since 1985, and that in spite of the deficit in its public finances, it is a net creditor country through its high private savings. The brief rise in domestic interest rates during the March budget cuts and wage indexation crisis was quickly reversed. ..TX.- In the future, however, the franc could still come under pressure if wage indexation continues to erode Belgian competitiveness. ..CN.- Countries: BE Belgium, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Inflation. CMMT Comment & Analysis. ECON Gross domestic product. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 10 ***************************************************************** ..AN.-00DGLB7AB4FT ..HL.- 930712FT 930712 Survey of Belgium (4): Green light likely for eco-tax - Hilary Clarke discusses legislation designed to protect the environment (900) ..BL.- By HILARY CLARKE ..TX.- BELGIUM is set to become the first European country to introduce a green tax to force consumers to switch to products that have a less damaging effect on the environment. The so-called eco-tax, at present being debated in the Belgian upper house, has put the government of Prime Minister Jean-Luc Dehaene at odds with a range of different industries from plastics and chemicals to French mineral water producers. If, as seems likely, the tax is agreed by the senate, it will become operational next year. ..TX.- The eco-tax was born out of Belgium's constitutional reforms, the bulk of which were agreed last February. To obtain a necessary two-thirds majority in parliament for its sweeping constitutional changes which will federalise the country, the government needed the support of opposition Flemish Agalev and French-speaking Ecolo parties. The ecologists, who between them have 18 members of parliament, seized the opportunity and said they would back the government's plans only if it agreed to the eco-tax. ..TX.- Industry claims the eco-tax will put up new barriers to trade and is out of step with environmental legislation designed to cut domestic packaging waste in the European Community. Belgium's trade unions, which originally backed the tax, have now joined the employers' protest because they fear it could result in huge job losses. ..TX.- The experimental tax will be applied to a selected group of consumer items including disposable cameras and razors, paper with less than a certain amount of recycled fibre and domestic chemical products such as weed killers, pesticides and glue. Beer and wine bottles, soft drink cans and water bottles will also be taxed a maximum of 15 francs a litre. Batteries and throw-away razors will have a levy of 10 and 20 francs respectively. ..TX.- Leading the battle against the tax are the plastics and chemicals industries. PVC bottles are the only product which will automatically be taxed the maximum 15 francs a litre in a bid to gradually abolish PVC production altogether. 'PVC is the most recycled material in Belgium today. It is clear there is a prima facie discrimination against PVC,' said Jean-Marie Chandelle, head of corporation communications with Belgium's largest PVC manufacturer, Solvay. ..TX.- French water manufacturers have joined the Belgian plastic industry in their protest as the majority of plastic-bottled water in Belgium is imported from France. The French government has lodged an official complaint against the tax with the Belgium authorities. For its part, the plastics industry has complained to the European Commission that the tax discriminates against PVC. ..TX.- But the tax has also angered a broad range of Belgian industry. 'We are not against the principle of imposing a levy on a product to correct damage done to the environment, but we are against an arbitrary and general taxation the proceeds of which will not be used for cleaning up the damage the product has done,' said Georges Jacobs, head of the Belgian Industry Federation. Belgium's eco-tax differs from packaging waste schemes already introduced in other EC countries because it will be high enough to change consumer habits and influence distributors' choice in packaging, rather than raising revenue for waste management investment. ..TX.- Environment has been the responsibility of Belgium's regional governments since 1980. Revenue from the eco-tax will be distributed to the Brussels, Flanders and Walloon authorities who will have control over its spending. The Belgian employers' organisation says there is no guarantee that money raised, an estimated BFr22.5bn on plastic bottles alone, is used for waste management and environment corrective projects. Doubts have also been raised over how the tax will be collected, although the Greens say the additional administration will be worth it because of the knowledge to be gained on consumer behaviour with regard to the environment. ..TX.- Following the outcry from industry against the proposals, it was agreed to establish a follow-up commission to examine the impact of the tax, part of a last-minute trade-off between the government and the Greens during their negotiations over the eco-tax. The government-appointed body will have considerable power to modify the law, including waiting until June 1994 before setting final tax levels. ..TX.- Resigned to the fact that the eco-tax will be introduced in Belgium in some form or other, Belgian packaging users, manufacturers and raw material producers are developing their own alternative packaging waste reduction programme, Fost-Plus, which will be based on Germany's Dual-System scheme. Under the Fost-Plus plans, distributors will pay a levy into a government fund which will be pumped back into industry-run waste management schemes. Industry hopes to persuade the Greens to adopt this system. ..TX.- Whether the ecologists can be persuaded to do this is uncertain. 'An essential element of green thinking is product policy, not just the production process. What's the point of a clean factory that makes polluting products?' asks Agalev member Chris Vermeeren, who helped draft the eco-tax legislation. ..TX.- Industry's other plan of attack is via the European Community. 'We hope the European Commission will at least object to the discriminatory clause against PVC,' said Nancy Rusotto of the Association of Plastic Manufacturers in Europe. ..CN.- Countries: BE Belgium, EC. ..IN.- Industry: P9511 Air, Water, and Solid Waste Management. P2899 Chemical Preparations, NEC. P3089 Plastics Products, NEC. ..TP.- Types: RES Pollution. CMMT Comment & Analysis. GOVT Taxes. ..IX.- P9511, P2899, P3089. ..DS.- The Financial Times ..XP.- London Page 10 ***************************************************************** ..AN.-00DGLB7AB3FT ..HL.- 930712FT 930712 Survey of Belgium (3): Key facts (197) ..TX.- --------------------------------------------------------------------- KEY FACTS --------------------------------------------------------------------- Area 30,520 sq km Population 9.98m (1992 est) Head of state: King Baudouin Currency Belgian franc Average exchange rate 1991 Dollars 1 = BFr34.15 1992 Dollars 1 = BFr32.15 --------------------------------------------------------------------- ECONOMY --------------------------------------------------------------------- 1992 Latest* --------------------------------------------------------------------- Total GDP (Dollars bn) 218.7 na Real GDP growth (%) 0.8 0.0 Consumer prices (% chng pa) 2.4 2.4 Unemployment (% of lab force) 11.3 12.1 Benchmark bond yield (% pa, avg) 8.63 7.04 Public debt as % of GDP (year end) 121.0 na Current account balance (Dollars bn) 4.7 na Trade balance (Dollars bn) -2.5 na Main trading partners --------------------------------------------------------------------- (1992, % by value) EXPORTS IMPORTS --------------------------------------------------------------------- Germany 23.0 23.9 France 19.1 16.3 Netherlands 13.8 17.4 EC 75.3 73.6 --------------------------------------------------------------------- Trade figures refer to Belgium-Luxembourg Economic Union; * 1993 figures (GDP growth - year forecast; CPI, unemployment - June; bond yield - 5/7/93) --------------------------------------------------------------------- Source: IMF, World Bank, Datastream, EIU --------------------------------------------------------------------- ..CN.- Countries: BE Belgium, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Gross domestic product. ECON Employment & unemployment. ECON Balance of trade. MKTS Market data. ECON Balance of payments. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 10 ***************************************************************** ..AN.-00DGLB7AB2FT ..HL.- 930712FT 930712 Survey of Belgium (1): Euro-devotee calls the tune - As it assumes the presidency of the European Community this month, Belgium is embarked on a course towards a more federalist structure at home. It sees Europe as an anchor for its own political and economic restructuring (1371) ..BL.- By DAVID GARDNER ..TX.- IT IS HARD to imagine any European Community country other than Belgium decreeing a reduction in jail sentences for convicted prisoners to mark its assumption this month of the EC's presidency. Idiosyncratic though the gesture seems, it illustrates the importance Belgium attaches to Europe, and to its place in it. ..TX.- Belgium, always in the vanguard of Euro-federalism and in the throes of settling down to a more federalist structure at home, takes over management of the Community after a year which has seen a backlash against the Maastricht treaty on political, economic and monetary union, in a number of European countries. ..TX.- It intends to set a new tone, banking on ratification of the treaty in the UK and Germany by around September. Mr Jean-Luc Dehaene, the burly Flemish Christian Democrat who heads Belgium's four-party Centre-Left coalition, repeated in several eve-of-presidency interviews that over the next six months he is setting the EC's compass to go 'not a step further than Maastricht, but towards all of Maastricht'. ..TX.- Mr Dehaene, is quite likely to call a special autumn summit after treaty ratification, with Franco-German backing. The intention would be to relaunch the EC: the practical goal would be to agree the rules, management and location for the European Monetary Institute. This is the precursor to the European Central Bank envisaged for later this decade under the plans for economic and monetary union (Emu) which lie at the heart of Maastricht. It must be in place by next January to launch the second stage of Emu. ..TX.- Mr Dehaene and his colleagues remain convinced of the need for Maastricht and the viability of Emu. They are determined to use their presidency to raise the EC flag from political half-mast, where it has scarcely fluttered for the past year, as first the British and then the Danes held the Community presidency. ..TX.- They see Europe as an anchor for Belgium's own federalism and as offering a pretext for re-ordering its economy, especially to put its public finances right. Mr Dehaene told the Spanish daily, El Pais, recently that Belgium's European and domestic federalisms 'are complementary and indissolubly linked'. Yet, Belgian politicians often give the impression that they believe their linguistically fragmented country - divided between French-speaking Wallonia, Dutch-speaking Flanders and polyglot Brussels - can only survive as a nation-state within firm supranational structures provided by growing EC integration. ..TX.- That is 'taking it a step too far,' counters Mr Willy Claes, foreign minister and a Flemish Socialist, but he happily acknowledges that, 'we have always been in favour of transfers of national sovereignty towards a supranational body,' and that 'there is a link going in the other direction'. ..TX.- Under a seven-party deal in May, Belgium devolved national sovereignty downwards to an extent that will make it one of the most completely federalised states in the EC after its next elections. The state will retain control of foreign policy and defence, justice, taxation and social security, but other matters, from the environment to education, and from trade to transport, will be the responsibility of the three regional executives and their directly elected parliaments. ..TX.- Securing decisions in Belgium will then become almost as arduous as getting the EC 12 to agree, but, local politicians emphasise, they will have a firm consensus underpinning them, and a comfortable EC umbrella above. It will, moreover, by then have an advisory committee of the regions, an arrangement which Belgium is convinced is the embryo of a 'Europe des regions'. ..TX.- That is one reason why widespread predictions in May that Belgium was heading for a Czech/Slovak-style divorce appear alarmist. A provocative statement at the time by Mr Luc Van den Brande, Christian Democrat chief of the Flemish executive, predicted that federalisation would lead to complete autonomy for Flanders within the decade. Recent opinion polls, however, make it clear that only 6 per cent of Belgians, and even only 9 per cent of Flemings, favour separation. The majority backs a federalist solution. ..TX.- So-called Belgo-Belge scraps between Dutch and French-speakers are increasingly less melodramatic, partly because of this, partly because politicians from all parties are deeply unpopular - and want to stave off elections as long as possible - and also because Belgium has moved into recession. ..TX.- In the view of leading economists, such as Mr Peter Praet of Generale de Banque, the separatism debate has the merit of focusing attention on Belgium's structural shortcomings, such as its fast-rising social security bill, in both Flanders and Wallonia. ..TX.- The government is struggling against a serious imbalance in public finances, with a budget deficit of 6.9 per cent last year and a government debt overhang equivalent to nearly 125 per cent of national output. Excluding interest on the debt, the budget is in surplus. The government is poised to stem part of the interest payment haemorrhage by refinancing short-term foreign borrowings into long-term debt denominated in Belgian francs. ..TX.- That should produce a sizeable reward - perhaps a 1.5 percentage points of gross domestic product saving on the interest bill - for its three-year old franc fort policy of tying the franc to the D-Mark. ..TX.- Convinced it can reach the 3 per cent of GDP target budget deficit for Emu laid down by Maastricht, Mr Dehaene pushed through a BFr110bn tax and cuts package in March, at the cost of the near-collapse of his government. The government also expects BFr25bn this year and next from a four-year privatisation drive which is expected to net BFr70bn. This will put up for sale assets ranging from the CGER/ASLK banking and insurance group, to Belgacom, the state telecommunications company. ..TX.- Though Belgium is as much out of step with the Emu criteria as the UK, Italy or Spain, the Belgian franc became a refuge currency, in the currency mayhem of last autumn, and did not have to leave the exchange rate mechanism, the EC's currency grid, or devalue. This was a tribute to the credibility of its monetary policy, and Belgium's perceived status as part of the hard core EC currency zone, encompassing Germany, France and the Benelux countries. ..TX.- With other partners gaining competitive advantage through devaluation, Belgium has to stay within this hard core, to which it sells three fifths of its exports, but it is failing to bear down on indexed and inflationary wage settlements which are blunting its competitive edge. It has opted instead to use revenue from new taxes on non-industrial fuel users to cut employers' social security payments in the exports sector. This will not be enough, however, to close a widening wage gap with its main partners. ..TX.- In Belgium, these strains strengthen the attraction of Emu's goal of a single currency, and even of an earlier locking of parities between the hard core countries, once Maastricht is ratified. The latter idea, canvassed by Euro-federalists, is that a fuite en avant by the stronger economies would establish a target at which weaker partners could aim later. ..TX.- 'I'm in favour of that,' says Mr Alfons Verplaetse, the respected governor of Belgium's central bank, 'but I don't think it will happen. This recession could be longer than we think.' ..TX.- Mr Praet says locking parities would be dangerous while there was uncertainty about what was going to happen in a year's time in Germany. 'When growth resumes, maybe we can try something more audacious,' he adds. ..TX.- But the longer-term goal of full EC monetary union still looks like a haven to Belgium. As Mr Claes expresses it: 'When there are monetary changes in Washington we feel it across the European continent. Are we still not ready to face up to the lessons of the monetary instability of last year, which not one member state was able to resist by itself?' ..CN.- Countries: BE Belgium, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P9199 General Government, NEC. P9611 Administration of General Economic Programs. ..TP.- Types: CMMT Comment & Analysis. ECON Economic Indicators. MKTS Foreign trade. ..IX.- P9311, P9199, P9611. ..DS.- The Financial Times ..XP.- London Page 9 ***************************************************************** ..AN.-00DGLB7AB1FT ..HL.- 930712FT 930712 Economics: Further drop likely in inflation (756) ..TX.- This is a busy week for economic indicators, particularly in the UK where data relating to May and June are due out. ..TX.- The figures are likely to show that inflationary pressures remain light, with further falls in average earnings and underlying inflation. Special attention will be paid to Thursday's unemployment figures which may record their fifth successive monthly decline although even after four month-on-month drops, economists are not convinced that the jobless total has peaked. ..TX.- Further gains in UK manufacturing output are expected for May, but they are likely to be more modest than in April, when output rose a strong 0.7 per cent month-on-month. ..TX.- In the US, analysts are expecting encouraging reports on inflation. Sharp falls in crude oil, heating oil and tobacco prices are expected to push the overall level of producer prices downwards. ..TX.- The following are some of the week's other economic highlights and events. The figures in brackets are the median of economists' forecasts from MMS International, a financial information company. ..TX.- Today: UK, June producer prices index - input (flat on month, up 7.3 per cent on year), output (up 0.2 per cent on month, up 4 per cent on year), excluding food, drink and tobacco (up 2.6 per cent on year). France, June CPI (up 0.1 per cent on month, up 2 per cent on year). Spain, June unemployment rate (16.4 per cent). Belgium, EC finance ministers meet in Brussels to discuss Maastricht convergence criteria. Switzerland, Bank of Japan chief attending BIS meetings until Wednesday. Canada, May department store sales (down 1.5 per cent on year). ..TX.- Tomorrow: UK, May manufacturing output (up 0.2 per cent on month, up 3.1 per cent on year), industrial production (up 0.4 per cent on month). Spain, June CPI (up 0.2 per cent on month, up 4.8 per cent on year). Norway, June trade excluding ships and oil platforms (NKr7.1bn). Germany, cabinet meeting in Bonn to pass 1994 budget draft. US, June PPI (down 0.2 per cent), excluding food and energy (unchanged), June Atlanta Fed Index; Johnson Redbook, week ended June 10. Japan, May machine orders excluding electrical and ships (up 3 per cent on year); June trade balance (Dollars 10.3bn surplus). ..TX.- Wednesday: UK, June RPI (up 0.2 per cent on month, up 1.5 per cent on year), excluding mortgage interest payments (up 3 per cent on year). France, national holiday, all markets closed. US, June retail sales (up 0.4 per cent), excluding cars (up 0.4 per cent), CPI (up 0.1 per cent), excluding food and energy (up 0.2 per cent), real earnings; car and truck sales July 1-10. Canada, June lead indicators (down 0.2 per cent on month). New Zealand, Q2 CPI. ..TX.- Thursday: UK, June unemployment (unchanged on month); May average earnings (up 4 per cent on year), unit wages (down 2.8 per cent in latest three months). Germany, Bundesbank council meeting in Frankfurt for the annual M3 review. Sweden, June CPI (down 0.2 per cent on month, up 4.8 per cent on year). Finland, June CPI (up 2.6 per cent on year). US, initial claims week ended July 10 (335,000); state benefits week ended July 3; May business inventories (up 0.3 per cent); July Philadelphia Fed Index; money supply for week ended July 5; June M1, M2, M3. Canada, June CPI (up 0.1 per cent on month, up 1.7 per cent on year), excluding food and energy (up 1.7 per cent on year). Japan, June WPI (down 0.5 per cent on month, down 3.2 per cent on year); May industrial production, shipments. Australia, May housing finance. New Zealand, April retail trade. ..TX.- Friday: UK, June PSBR (Pounds 5.25bn). US, May merchandise trade (Dollars 9.2bn deficit), merchandise exports (Dollars 38.4bn), merchandise imports (Dollars 47.4bn); June industrial production (down 0.1 per cent), capacity utilisation (81.4 per cent); July Michigan sentiment preliminary. Canada, May merchandise exports (up 0.7 per cent on month), merchandise imports (unchanged), merchandise surplus (CDollars 1.2bn surplus), manufacturing new orders (down 0.2 per cent on month). ..TX.- During the week: Germany, March trade balance (DM1.7bn surplus), current account (DM4bn deficit). June WPI (flat on month). Spain, June M4 (up 6 per cent on year), May PPI. Netherlands, May PPI; June unemployment rate (5.1 per cent). Switzerland, June trade balance (SFr500m surplus). Australia, Dun & Bradstreet business expectations survey released. Reserve Bank of Australia release July bulletin. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Inflation. ECON Industrial production. ECON Gross domestic product. ECON National income. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGLB7AB0FT ..HL.- 930712FT 930712 The Week Ahead: US growth expected to boost Tomkin (2322) ..TX.- RESULTS DUE ..TX.- Tomkins, the UK conglomerate, is expected to report profits of Pounds 174m and earnings of 13.5p in the year to May today. This compares with Pounds 132.1m and 12.7p a year earlier. Growth is expected to have been driven by a stronger performance in the US and for the first time will include profits from Ranks Hovis McDougall, the milling and baking group it bought last year. ..TX.- MFI, the furniture group, is expected to report a fall in pre-tax profits today to about Pounds 43m, from Pounds 66.1m last year. Analysts downgraded their profits forecasts at the half-year results in January, when MFI said trading had declined sharply after Black Wednesday damaged consumer confidence. ..TX.- It also said sales had been down year-on-year in the first five weeks of its 10-week new year sale, which usually accounts for about 30 per cent of annual turnover. ..TX.- The Rank Organisation announces half-year results on Thursday, with pre-tax profits expected to be at or below last year's Pounds 94m. Some forecasts are as low as Pounds 82m, based on a poorer performance from Rank Xerox. ..TX.- The first half is not a good guide to the performance of Rank's directly-managed businesses - such as holidays, video duplication and bingo - where profits tend to come in the second six months. More eagerly awaited will be statements on current trading. Few expect anything definitive on the group's future relationship with Rank Xerox. ..TX.- Great Universal Stores, the UK's largest mail order company, which reports on Thursday, is forecast to lift pre-tax profits from Pounds 441.5m to between Pounds 465m and Pounds 470m. The dividend is expected to rise from 40p to 43p. ..TX.- Analysts believe the company will have benefited from a increase in mail-order buying, while its market share continues to rise. ..TX.- UK COMPANIES ..TX.- TODAY ..TX.- COMPANY MEETINGS: ..TX.- Govett American Endeavour Fund, Minden House, 6 Minden Place, St. Helier, Jersey, Channel Islands, 11.30 ..TX.- Lep Group, The London Press Centre, Johnson Room, New Street Square, EC., 11.30 ..TX.- Norcros, Insurance Hall, 20 Aldermanbury, EC., 12.00 ..TX.- BOARD MEETINGS: ..TX.- Finals: ..TX.- Aitken Hume ..TX.- Border TV ..TX.- Colorvision ..TX.- Cray Electronics ..TX.- Daejan ..TX.- Dalepak Foods ..TX.- Ellis & Everard ..TX.- Ensor ..TX.- MFI Furniture ..TX.- Menzies (John) ..TX.- Optometrics ..TX.- Reject Shop ..TX.- Savills ..TX.- Tomkins ..TX.- Interims: ..TX.- Barr (AG) ..TX.- Low & Bonar ..TX.- TOMORROW ..TX.- COMPANY MEETINGS: ..TX.- Aegis, 2 Eaton Gate, SW., 8.30 ..TX.- Albrighton, 135 Allport Street, Cannock, Staffordshire, 12.00 ..TX.- Brazilian Inv. Trust, Exchange House, Primrose Street, EC., 12.15 ..TX.- British Airways, Barbican Centre, EC., ..TX.- 11.00 ..TX.- Dart Group, 36 St. Andrew's Hill, EC., ..TX.- 10.00 ..TX.- Friendly Hotels, Connaught Rooms, 61-65 Great Queen Street, WC., 11.00 ..TX.- Great Portland Estates, Cafe Royal, 68 Regent Street, W, 12.00 ..TX.- Henderson Administration, 3 Finsbury Avenue, EC., 12.30 ..TX.- Johnson Matthey, National Gallery, Trafalgar Square, WC., 12.00 ..TX.- Salvesen (Christian), Sheraton Hotel, Festival Square, Edinburgh, 11.00 ..TX.- Ticketing Group, 22 Tudor Street, EC., 11.00 ..TX.- Young & Co's Brewery, Earl's Court Park Inn Intl., Lillie Road, Fulham, SW., 4.00 ..TX.- BOARD MEETINGS: ..TX.- Finals: ..TX.- Adam & Harvey ..TX.- Birse ..TX.- Bogod ..TX.- Bulmer (HP) ..TX.- Electron House ..TX.- Heiton ..TX.- Jacques Vert ..TX.- Prism Leisure ..TX.- Real Time Control ..TX.- Triplex Lloyd ..TX.- Wyko ..TX.- WEDNESDAY JULY 14 ..TX.- COMPANY MEETINGS: ..TX.- Albany Inv. Trust, Port of Liverpool Bldg., Peir Head, Liverpool, 2.30 ..TX.- Baris Hldgs., Baris House, Nunn Brook Road, Huthwaite, 12.00 ..TX.- Dawson Intl., Caledonian Hotel, Princes Street, Edinburgh, 12.00 ..TX.- Drayton English & Intl. Trust, 11 Devonshire Square, EC., 12.00 ..TX.- Finsbury Trust, The Imperial Hotel, Russell Square, WC., 12.00 ..TX.- Fleming High Inc. Inv. Trust, The Chartered Accountants' Hall, Moorgate Place, EC., 2.30 ..TX.- Kleinwort Endowment Policy Trust, 10 Fenchurch Street, EC., 12.30 ..TX.- RIT Capital Partners, The Royal Automobile Club, 89 Pall Mall, SW., 12.00 ..TX.- Riva, Crompton House, Barrs Fold Road, Wingates Industrial Park, Westhoughton, Bolton, 12.00 ..TX.- Storehouse, Royal Lancaster Hotel, Lancaster Terrace, W, 12.00 ..TX.- BOARD MEETINGS: ..TX.- Finals: ..TX.- Armitage Brothers ..TX.- Batleys ..TX.- Nobo ..TX.- Scantronic ..TX.- Stanley Leisure ..TX.- Tiphook ..TX.- Interims: ..TX.- BWD Securities ..TX.- Leslie Wise ..TX.- M & G Dual Tst. ..TX.- Olim Convertible Tst. ..TX.- THURSDAY JULY 15 ..TX.- COMPANY MEETINGS: ..TX.- Airflow Streamlines, Northampton Moat House, Silver Street, Northampton, 12.00 ..TX.- British Inv. Trust, Donaldson House, 97 Haymarket Terrace, Edinburgh, 11.00 ..TX.- Fleming European Fledgling Inv. Trust, 25 Copthall Avenue, EC., 12.00 ..TX.- Gartmore Value Invs., 16-18 Monument Street, EC., 10.00 ..TX.- Hay (Norman), Surface Technology, Lower Ford Street, Coventry, 11.00 ..TX.- Hi-Tec Sports, The Moat House, Aviation Way, Southend-on-Sea, Essex, 10.00 ..TX.- Marks & Spencer, Grosvenor House Hotel, Park Lane, W, 11.00 ..TX.- Meyer Intl., Strand Palace Hotel, Strand, WC., 12.00 ..TX.- Oceana Consolidated, 25 Luke Street, EC., 10.30 ..TX.- Penna, Orion House, 5 Upper St. Martin's Lane, WC., 10.00 ..TX.- Plysu, The Brewery Conference Centre, Chiswell Street, EC., 12.15 ..TX.- BOARD MEETINGS: ..TX.- Finals: ..TX.- Druck ..TX.- Gt. Universal Stores ..TX.- Hampson Inds. ..TX.- Jones Stroud ..TX.- Jurys Hotel ..TX.- Moorgate Inv. Tst. ..TX.- Multitone Elect. ..TX.- Verson Intl. ..TX.- Welsh Water ..TX.- Wood (John D) ..TX.- Interims: ..TX.- Aberforth Smaller Co's. ..TX.- Automated Security ..TX.- Fleming Fledgeling Inv. ..TX.- General Cons. Inv. Tst. ..TX.- Rank Org. ..TX.- FRIDAY JULY 16 ..TX.- COMPANY MEETINGS: ..TX.- Alexon Group, Kent House, Market Place, W, 10.00 ..TX.- Drummond, Norfolk Gardens Hotel, Bradford, 11.00 ..TX.- Flextech, The Halkin Hotel, 5 Halkin Street, SW., 12.00 ..TX.- Ivory & Sime, Caledonian Hotel, Princes Street, Edinburgh, 12.30 ..TX.- Property Partnership, County Suite, Hotel Norwich, Boundary Road, Norwich, 11.30 ..TX.- Protean, 135 Bishopsgate, EC., 12.00 ..TX.- Seton Healthcare, Periquito Hotel, Manchester Street, Oldham, 11.00 ..TX.- Thorn EMI, Marriott Hotel, Duke Street, Grosvenor Square, W, 11.30 ..TX.- BOARD MEETINGS: ..TX.- Interims: ..TX.- Alexanders Hldgs. ..TX.- Greenfriar Inv. ..TX.- Sycamore ..TX.- Company meetings are annual general meetings unless otherwise stated. ..TX.- Please note: Reports and accounts are not normally available until approximately six weeks after the board meeting to approve the preliminary results. ..TX.- DIVIDEND & INTEREST PAYMENTS ..TX.- TODAY ..TX.- Apollo Metals 1.2p ..TX.- Austr. & New Zealand Bkg. ADollars 0.1 ..TX.- Brown & Jackson 0.1p ..TX.- Caisse Francaise de Dev. 12 1/4 % Gtd. Ln. 2013 Pounds 306.25 ..TX.- CNA Gallo R0.54 ..TX.- Conversion 9% Ln 2011 Pounds 4.5 ..TX.- Do. 9 1/2 % Ln. 2001 Pounds 4.75 ..TX.- Daicel Chem. Inds. 6.1% Bds. 1997 Y610000 ..TX.- EI Du Pont de Nemours 12 3/8 % Nts. 1994 Lira247500 ..TX.- Guinness Fin. BV 8% Gtd. Nts. 1994 Dollars 80 ..TX.- Jackson 1.5p ..TX.- Land Securities 16.55p ..TX.- Lasmo 9 1/2 % Bds. 1996 Dollars 95 ..TX.- Do. 10% Nts. 1994 Dollars 100 ..TX.- Lucas Inds. 10 7/8 % Bds. 2020 Pounds 1087.5 ..TX.- Mitsui Fxd. & Fltg. Rate Nts. 1996 Y560000 ..TX.- Northern Indl Improvemt Tst 9p ..TX.- Pacific Dunlop 7% Sub. Cnv. Bds. 1996 Dollars 70 ..TX.- Pokphand (CP) (Bermuda Reg.) Dollars 0.00769 ..TX.- Do. (Hong Kong Reg.) Dollars 0.06 ..TX.- Do. (UK Reg.) Dollars 0.00769 ..TX.- Reed Publishing (USA) 9% Gtd. Bds. 1996 Dollars 900 ..TX.- Riverview Rubber Ests. MDollars 0.15 ..TX.- Severn Trent 11 1/2 % Bds 1999 Pounds 575 ..TX.- Smart (J) 2.3p ..TX.- Standard Chartered Und. Prim. Cap. Fltg. Rate Nts. Dollars 317.53 ..TX.- Do. Und. Prim. Cap. Fltg. Rate Nts. (Sers. 4) Dollars 187.69 ..TX.- Warner Estate 3.65p ..TX.- TOMORROW ..TX.- Bradford & Bingley Bldg. Soc. Fltg. Rate Nts. 1997 Pounds 149.51 ..TX.- Do. Fltg. Rate Nts. 1998 Pounds 151.15 ..TX.- Britannia Bldg. Soc. Pounds 149.59 ..TX.- Commonwealth Bank of Australia Und. Fltg. Rate Nts. (Exch. into dtd. Fltg. Rate Nts.) (Feb 1989 Iss.) Dollars 186.66 ..TX.- Marine Midland Fin. NV Gtd. Fltg. Rate Nts. 1994 Dollars 13.27 ..TX.- MBE Finance NV Sers. A Gtd. Dual Basis Bds. 2001 Dollars 209.91 ..TX.- Do. Sers. B Gtd. Dual Basis Bds. 2001 Dollars 204.88 ..TX.- Natl. Westminster Bank Prim. Cap. Fltg. Rate Nts. Sers. A Dollars 188.54 ..TX.- Tiger Oats 5 1/2 % Prf. R0.055 ..TX.- Unitas Var. Rate Sub. Nts. 2000 Dollars 94.79 ..TX.- Young & Co's Brew. NV 7.5p ..TX.- WEDNESDAY JULY 14 ..TX.- BZW Convertible Inv Tst 1.5p ..TX.- Finsbury Trust 2p ..TX.- Do. A NV 2p ..TX.- Funding 3 1/2 % 1999/2004 Pounds 1.75 ..TX.- Great Portland Ests. 6.6p ..TX.- Harrisons & Crosfield 7 1/2 % Sub. Cnv. Bds. 2003 Pounds 75 ..TX.- Hewden-Stuart 2.365p ..TX.- Treasury 12 1/2 % Ln. 1993 Pounds 6.25 ..TX.- Do. 13 1/2 % 2000 Pounds 6.5 ..TX.- THURSDAY JULY 15 ..TX.- Agricultural Credit Corp. 9% 2001 IRPounds 4.5 ..TX.- Agricultural Mortgage Corp. 5 1/2 % Deb. 1993/95 Pounds 2.75 ..TX.- Do. 6 1/4 % Deb. 1992/94 Pounds 3.125 ..TX.- Albany Inv. Tst. 2.75p ..TX.- Amer. Medical Intl. 9 7/8 % Uns. Ln. 2011 Pounds 4.9375 ..TX.- Bank of Scotland 2.8p ..TX.- Barclays Bank 12% Uns. Cap. Ln. 2010 Pounds 6 ..TX.- Barcom 1.25p ..TX.- Bradford & Bingley Bldg. Soc. Fltg. Rate Nts. 1999 Pounds 152.71 ..TX.- Carnaud Metalbox 5 1/8 % Bds. 1993 Dollars 51.25 ..TX.- Chrysler Corp. Dollars 0.15 ..TX.- Churchbury Ests. 4.2% Prf. 2.1p ..TX.- Dares Ests. 10 1/4 % 1st Mtg. Deb. 2012 Pounds 5.125 ..TX.- Drayton English & Intl. Tst. 0.6p ..TX.- Edinburgh Inv. Tst. 3 3/4 % Deb. 1998 Pounds 1.875 ..TX.- Finlay (James) 2.15p ..TX.- Fisher (Albert) 1.85p ..TX.- Govett Strategic Inv. Tst. 10 3/8 % Deb. 2016 Pounds 5.1875 ..TX.- Halifax Bldg. Soc. Fltg. Rate Nts. 1995 Pounds 152.71 ..TX.- Helical Bar 5 1/4 % Cnv. Red. Prf. 2012 2.625p ..TX.- Henderson Admin. 29.5p ..TX.- Intl. Business Comms. Uns. Sub. Deb. 1996 Pounds 2 ..TX.- Republic of Ireland 9% Gov. Bds. 2001 IRPounds 4.5 ..TX.- Lasmo 9 5/8 % Red. Prf. 1996 4.8125p ..TX.- McKechnie 5p ..TX.- Morgan (JP) Dollars 0.6 ..TX.- Murray Intl. Tst. 3.9% Prf. 1.95p ..TX.- North Surrey Water 4% Deb. Pounds 2 ..TX.- Do. 4 1/4 % Deb. Pounds 2.125 ..TX.- Do. 5 1/4 % Deb. Pounds 2.625 ..TX.- Occidental Petroleum Dollars 0.25 ..TX.- Oriel 3p ..TX.- Pacific Gas & Electric Dollars 0.47 ..TX.- Perkins Foods Cnv Red Prf 4p ..TX.- Prudential Fdg. Corp. 8 3/4 % Nts. ..TX.- 1994 Dollars 87.5 ..TX.- Quaker Oats Dollars 0.48 ..TX.- Quebec Central Railway Pounds 2.5 ..TX.- Ross 0.45p ..TX.- Royal Tst. Gov. Securities Fd. Inc. Ptg. Red. Prf. 1.1p ..TX.- Horace Small Apparel 2p ..TX.- SmithKline Beecham A 2.533p ..TX.- SmithKline Beecham/SmKline Beckman Equity Units Dollars 0.04896 ..TX.- SmithKline Beecham/SmKline Beckman ADR Dollars 0.2448 ..TX.- Stratagem 1.5p ..TX.- Kingdom of Sweden 11% Ln. 2012 Pounds 550 ..TX.- Treasury 9 1/2 % Ln. 1999 Pounds 4.75 ..TX.- Witan Inv. 3.4% Prf. 1.7p ..TX.- FRIDAY JULY 16 ..TX.- Abtrust New European Inv 0.3p ..TX.- Anglo & O'seas Tst. 4 1/2 % (3.15% net) Prf. 1.575p ..TX.- Avon Rubber 5p ..TX.- Barlow Rand R0.54 ..TX.- Body Shop Intl. 1.02p ..TX.- BPM Amer. Inc. 9 1/4 % Gtd. Nts. 1999 Dollars 92.5 ..TX.- British Inv. Tst. 2.6p ..TX.- Caffyns 6.5p ..TX.- Craig & Rose 12.5p ..TX.- Daily Mail & Genl. Tst. 36p ..TX.- Do. A NV 36p ..TX.- Devenish (JA) 1.625p ..TX.- East Surrey Hldgs. 7.36p ..TX.- Echlin Dollars 0.175 ..TX.- Euro. Inv Bk 9% Ln. 2001 Pounds 225 ..TX.- Evered Bardon 1.2p ..TX.- Jos Hldgs. 2.875p ..TX.- Kelsey Inds. 3p ..TX.- McLeod Russel 2.75p ..TX.- Motorola Dollars 0.11 ..TX.- Natl. Westminster Bank Prf. Sers. A Dollars 0.532 ..TX.- RIT Cap. Partners 1.15p ..TX.- Sidlaw 4.25p ..TX.- Spandex 4.6p ..TX.- Suzuki Motor Corp. 6% Bds. 1996 Y600000 ..TX.- Tiger Oats R0.28 ..TX.- United Drug IR2.2p ..TX.- Treasury 8 1/2 % Ln 2007 Pounds 4.25 ..TX.- Westbury 3.25p ..TX.- Whessoe 2.3p ..TX.- Young (H) Hldgs. 2p ..TX.- SATURDAY JULY 17 ..TX.- Treasury 2 1/2 % IL 2024 Pounds 1.7879 ..TX.- PARLIAMENTARY DIARY ..TX.- TODAY ..TX.- Commons: Questions to National Heritage ministers, Attorney General and the Overseas Development Administration. Finance Bill, report. International Development Association (Tenth Replenishment) Order. ..TX.- Lords: Road Traffic (Driving Instruction by Disabled Persons) Bill, committee. European Communities (Amendment) Bill, report. Food Protection (Emergency Prohibitions) (Paralytic Shellfish Poisoning) orders. Criminal Justice (International Cooperation) Act (Enforcement of Overseas Forfeiture Orders) (Scotland) Amendment Order. Confiscation of the Proceeds of Drug Trafficking (Designated Countries and Territories) (Scotland) Amendment Order. ..TX.- Select committees: Defence. Subject: The Dockyards. Witnesses: Mr Malcolm Rifkind, defence secretary, and Ministry of Defence Officials. 4.15pm. ..TX.- Information. Subject: Parliamentary data and video network. Witnesses: Mr Jim Rodda, director of finance and administration, Mr Richard Morgan, computer officer, and Mr Andy Makepeace, parliamentary works directorate. 5pm. ..TX.- TUESDAY ..TX.- Commons: Education questions. 3.15pm questions to the prime minister. Finance Bill, remaining stages. Education (Assisted Places) (Amendment) Regulations. Partnerships and Unlimited Companies (Accounts) Regulations. ..TX.- Lords: European Communities (Amendment) Bill, report. Noise and Statutory Nuisance Bill, second reading. ..TX.- Select committees: National Heritage. Subject: the future of the BBC. Witnesses: BBC finance and information technology; BBC network television. 10.30am. Treasury and Civil service. Subject: the role of the civil service. Witness: Mr Stephen Dorrell, financial secretary to the Treasury. 11am. Opposed Bill Committee. British Waterways Bill (Lords) ..TX.- WEDNESDAY ..TX.- Commons: Foreign Office questions. Debates opened by Opposition on Scottish local government and water and debt and trade development after G7 summit. ..TX.- Lords: European Communities (Amendment) Bill, report. ..TX.- Select committees: Environment. Subject: Energy efficiency in buildings. Witnesses: AH Emstar, Energy Systems Trade Association. 9.15am. ..TX.- Parliamentary commissioner for admin-istration. Subject: powers, work and jurisdiction of the Ombudsman. Witness: Mr William Waldegrave, chancellor of the Duchy of Lancaster. 10.15am. ..TX.- Foreign Affairs. Subject: relations between the UK and China. Witness: Mr Alastair Goodlad, foreign office minister. 10.30am. ..TX.- Trade and Industry. Subject: competitiveness of UK manufacturing industry. Witnesses: officials from the competitiveness unit of DTI; Professor Voss and Mr P Hanson. 10.30am. ..TX.- Employment. Subject: the work of the Commission for Racial Equality. Witness: Mr Herman Ouseley, chairman of Commission for Racial Equality. 4.15pm. ..TX.- Health. Subject: London's health service. Witnesses: London Implementation Group. 4.15pm. ..TX.- Parliamentary Commissioner for administration. Subject: the powers, work and jurisdiction of the Ombudsman. Witness: Mr William Reid, parliamentary commissioner for administration. 4.15pm. ..TX.- Treasury and civil service. Subject: the role of the Bank of England. Witnesses: Lord Young of Graffham and Mr Peter Morgan, director general, Institute of Directors. 4.15pm. ..TX.- European legislation. Subject: fisheries. Witnesses: Mr Michael Jack, Agriculture minister and Sir Hector Monro, Scottish Office minister. 4.30pm. ..TX.- Home affairs. Subject: Racial attacks and harassment. Witness: Mr Peter Lloyd, home office minister. 4.45pm. ..TX.- Science and technology. Subject: the routes through which the science base is translated into innovative and competitive technology. Witnesses: to be confirmed. 4.45pm. ..TX.- THURSDAY ..TX.- Commons: Treasury questions. 3.15pm questions to the prime minister. Welsh Language Bill, remaining stages. Appropriation (Northern Ireland) Order. ..TX.- Lords: Crofters (Scotland) Bill, third reading. Scottish Land Court Bill, third reading. Railways Bill, committee. Sexual Offences Bill, third reading. British Nationality (Hong Kong) (Selection Scheme) (Amendment) Order. Hong Kong (British Nationality) (Amendment) Order. ..TX.- Select committees: Opposed bill committee. British Waterways Bill (Lords) 10.30am. Crossrail 11am. ..TX.- FRIDAY ..TX.- Commons: Debate on tackling fraud and abuse in social security. ..TX.- Lords: Health Service Commissioners Bill, committee. Probation Service Bill, committee. Pension Schemes Bill, committee. Pension Schemes (N Ireland) Bill, committee. Road Traffic (Driving Instruction by Disabled Persons) Bill, third reading. National Lottery Bill, report. Incumbents (Vacation of Benefices) (Amendment) Measure. ..CO.- Companies: Tomkins. MFI Furniture Group. Rank Organisation. Great Universal Stores. ..CN.- Countries: GB United Kingdom, EC. US United States of America. HK Hong Kong, Asia. ..IN.- Industry: P99 Nonclassifiable Establishments. P91 Executive, Legislative and General Government. ..TP.- Types: CMMT Comment & Analysis. GOVT Government News. COMP Company News. ..IX.- P99, P91. ..DS.- The Financial Times ..XP.- London Page 8 ***************************************************************** ..AN.-00DGLB7ABZFT ..HL.- 930712FT 930712 Ex-BA adviser fights back (404) ..BL.- By ROBERT PESTON, Banking Editor ..TX.- MR BRIAN BASHAM, who was sacked at the start of the year as public relations adviser to British Airways for his part in the alleged dirty tricks campaign against Virgin Airways, has launched a campaign to clear his own name and embarrass Sir Colin Marshall, BA's chairman. ..TX.- His campaign brings him into conflict with one of his oldest rivals, Sir Tim Bell, who succeeded him as BA's PR adviser and is best known for his close relationship with Lady Thatcher. ..TX.- Mr Basham has submitted four questions to be answered at BA's annual meeting, which he has reproduced in a letter to Sir Colin. Mr Basham believes that BA's account of Sir Colin's role in the dirty tricks campaign has been misleading and he is demanding an independent inquiry into the affair. ..TX.- He admits that he commissioned research into Virgin and spoke to journalists about Mr Richard Branson's airline but he denies that this was improper. He was not, however, involved in BA's use of computer data about Virgin passengers, which BA has admitted was wrong and has caused greatest concern to Mr Branson. ..TX.- The BA board has also denied involvement in this misuse of Virgin passenger information, which was said to have been carried out by junior BA staff. ..TX.- Mr Basham says in his letter to Sir Colin that 'it remains entirely implausible to me . . . that you could not have known' of the misuse of computer data. ..TX.- He also alleges that Mrs Gail Redwood, the company secretary, offered her resignation after directors signed a disclaimer denying all knowledge of the alleged dirty tricks campaign. ..TX.- Mrs Redwood yesterday refused to comment, but BA said that Mr Basham had misunderstood what had happened. BA said that Mrs Redwood offered to resign because she wanted to work part-time but felt the company might not agree to this change. ..TX.- Her resignation offer was in no way connected to the signing of the dirty tricks disclaimer, BA said. ..TX.- In the event, Mrs Redwood was persuaded to continue working for the company full time. ..TX.- BA's annual meeting will be held tomorrow at London's Barbican theatre. The company has received questions from 2,000 shareholders, a third of which relate to the Virgin affair. ..CO.- Companies: British Airways. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4512 Air Transportation, Scheduled. ..TP.- Types: COMP Company News. ..IX.- P4512. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABYFT ..HL.- 930712FT 930712 Field calls for pensions switch (384) ..BL.- By JOHN AUTHERS ..TX.- LABOUR MP Mr Frank Field says the government should abandon the basic state pension and instead make employers contribute 6 per cent of gross earnings to private schemes on their employees' behalf. ..TX.- Mr Field, chairman of the Commons social services committee, presents his views in a Fabian Society pamphlet published today, in which he suggests that in turn, employees would have a duty to make contributions of 4 per cent of gross salary. ..TX.- Mr Field described the paper as 'an attempt to break out of the Beveridge mould which has controlled the left's debate on welfare reform for the entire post-war period'. ..TX.- The paper proposes that pension administration and fund management would be taken over by the companies which now provide personal pensions, such as life assurance companies, as well as banks, building societies and friendly societ-ies. ..TX.- Government involvement would be limited to making contributions to the private pensions of four groups receiving little or no income - full-time and part-time carers, parents caring for their young children, the disabled and the unemployed. These contributions would be linked to average earnings. ..TX.- The private providers would undertake to give a 'guaranteed minimum pension', 20 per cent above the current level. This could be clawed back from wealthier pensioners, according to a sliding scale, if their additional contributions enabled them to add significantly to the guaranteed minimum. ..TX.- Significant tax changes would be made, with both employers' and employees' national insurance contributions reduced. Pension lump sums, currently tax-free, would be taxed to bring them in line with income paid to pensioners while in the long term, pension funds would lose their tax privileges (including grossed-up premiums) to create a 'level playing field' with other long-term savings products such as unit and investment trust saving schemes. ..TX.- Mr Field would also strengthen regulation of the pensions industry by requiring companies to produce a standard card showing how much customers would pay in fees each year, and by moving to a fixed-fee system for brokers. ..TX.- Private Pensions For All: Squaring the Circle. Frank Field and Matthew Owen. 11 Dartmouth St, London SW1H 9BN. Pounds 10.00. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6371 Pension, Health, and Welfare Funds. ..TP.- Types: PEOP Labour. NEWS General News. ..IX.- P6371. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABXFT ..HL.- 930712FT 930712 Nadir set to meet president of northern Cyprus (421) ..BL.- By JOHN MURRAY BROWN ..DL.- ISTANBUL ..TX.- MR ASIL NADIR, the fugitive businessman, was due to meet Mr Rauf Denktash, president of northern Cyprus, last night for the first time since he fled the UK in May. Their meeting comes amid further signs that the regime of the Turkish-occupied part of the island is co-operating to block the efforts of UK administrators to Polly Peck International. ..TX.- On Friday, the finance ministry announced that a pharmaceutical plant belonging to Polly Peck International, Mr Nadir's former company, would be auctioned to settle debts owed to the north Cypriot regime, which says it is owed a total of TL43bn (Pounds 2.6m) in unpaid debts to the local social security agency. ..TX.- The administrators were earlier close to concluding the sale of ICP, the drug company, and had convened a shareholders meeting for July 27 in a step to replace Mr Nadir as a director. ..TX.- Local lawyers say the regime's latest move is seen as further collusion with Mr Nadir to frustrate the sales of the assets in northern Cyprus - one of the last hopes of raising cash for the 23,000 PPI creditors, who are owed a total of Pounds 1.3bn. ..TX.- In London last week, in a move aimed at winning over the northern Cyprus authorities, Mr Christopher Morris of Touche Ross, one of the three UK administrators, formally apologised to the Turkish Cypriot Central Bank over allegations of fraud and money-laundering made in a suit against the bank and other plaintiffs in October 1991. ..TX.- The administrators last week met finance ministry officials in Nicosia, northern Cyprus, hoping to win a breakthrough in efforts to gain access to the local companies. ..TX.- Mr Nadir was expected to meet both Mr Denktash and Mr Dervis Eroglu, prime minister, at a party last night to celebrate the fifth anniversary of Kibris, Mr Nadir's Turkish-language newspaper. ..TX.- Local company officials say the regime had earlier discussed a plan with the administrators whereby the administrators would repay the social security debts in return for limited access to the local companies to prepare a sales prospectus. However, since Mr Nadir fled to the island in May, all talk of disposals has been put on hold. ..TX.- Since PPI went into administration in October 1990, local officials have won 23 separate court actions to block the administrators. ..CO.- Companies: Polly Peck International. ..CN.- Countries: CY Cyprus, Middle East. ..IN.- Industry: P6719 Holding Companies, NEC. P7389 Business Services, NEC. ..TP.- Types: PEOP People. ..IX.- P6719, P7389. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABWFT ..HL.- 930712FT 930712 BP mothballs Baglan Bay ethylene production line (278) ..BL.- By PAUL ABRAHAMS ..TX.- BP CHEMICALS intends to shut down nearly half its ethylene capacity at Baglan Bay, near Port Talbot in South Wales. ..TX.- It plans to close the smaller of its two production lines at the site indefinitely. ..TX.- The decision will remove about 150,000 tonnes a year of ethylene from a European market which, according to BP Chemicals, is suffering from significant over-capacity and poor demand and prices. Ethylene is the raw material for most plastics. ..TX.- The line will not be restarted in October, after the two - with a combined capacity of 330,000 tonnes a year - are shut down for maintenance in September. ..TX.- BP says there will be no implications for its 900 staff at the complex, which is one of the largest employers in the region. The closed line will be kept operable in case demand and prices improve. ..TX.- Mr Stephen Pettit, chief executive for petrochemicals at BP Chemicals, has admitted the site is the division's most marginal. But it is reluctant to close the complex completely. ..TX.- The remaining production line, with a capacity of about 180,000 tonnes, will continue to provide ethylene for downstream activities including ethanol, vinyl acetate, styrene and isopropanol. ..TX.- Most European ethylene manufacturers are not covering their cash costs because of poor prices. Two new complexes - BP's 350,000 tonnes a year expansion at Grangemouth and EniChem's 360,000 tonnes a year plant at Brindisi - have taken European capacity to 18.5m tonnes a year, aggravating the supply position further. ..CO.- Companies: BP Chemicals. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2899 Chemical Preparations, NEC. ..TP.- Types: RES Facilities. ..IX.- P2899. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABVFT ..HL.- 930712FT 930712 Rail line delay (55) ..TX.- THE re-opening of London's Waterloo & City Line after a Pounds 23m modernisation has been postponed by a week to next Monday because of problems in commissioning new signalling. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4111 Local and Suburban Transit. ..TP.- Types: RES Facilities. ..IX.- P4111. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABUFT ..HL.- 930712FT 930712 Warning over Church finances (92) ..TX.- THE Church of England will today be warned about the increasing financial difficulties it faces. ..TX.- The Church Commissioners report to the Church's general synod in York will tell parishes that they must prepare to meet a far bigger proportion of clergy stipends. The commissioners now finance an average of 41 per cent of stipends but this is likely to fall below 30 per cent by 1996. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8661 Religious Organizations. ..TP.- Types: NEWS General News. ..IX.- P8661. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABTFT ..HL.- 930712FT 930712 Exchange considers code compliance (96) ..TX.- considering publicising companies which fail adequately to explain reasons for divergence from the Cadbury code on corporate governance. ..TX.- It has all but ruled out the ultimate sanction of de-listing any companies that do not provide a statement of compliance with the code, which was published in December. But it may circulate lists of companies which have not complied and highlight individual accounts which do not include a statement. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: NEWS General News. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABSFT ..HL.- 930712FT 930712 Forecast of Pounds 3bn rise in personal tax (168) ..TX.- THE GOVERNMENT is expected to raise an additional Pounds 3bn from direct personal taxation in November's Budget, according to the Ernst & Young Independent Treasury Economic Model. ..TX.- Item says the tax increase could be achieved by a rise in the ceiling for national insurance contributions but it believes Mr Kenneth Clarke, the chancellor, will rule out further indirect tax rises or increased company taxation for fear of damaging the UK's competitive economic position. ..TX.- Its study published today says the biggest problem facing Mr Clarke over the next few years is the transformation of the country's net overseas assets, worth Pounds 110bn in 1987, into net debts by next year. ..TX.- Mr Brian Pearce, Item chief economist, said the UK's overseas assets had been steadily eroded by large deficits on the current account of the balance of payments. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: GOVT Taxes. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABRFT ..HL.- 930712FT 930712 Activity rises in financial services (204) ..BL.- By EMMA TUCKER ..TX.- BUSINESS IN the financial services sector strengthened during the last three months with insurance brokers, securities traders and fund managers enjoying the sharpest increases in activity, Emma Tucker writes. ..TX.- A survey by the Confederation of British Industry and Coopers & Lybrand, the chartered accountants, found that increases in profitability had led to a rise in optimism for the third successive quarter. ..TX.- About 300 companies took part in the survey. Only life insurers and venture capitalIsts reported declines in business volume, although business levels remained below normal for banks and building societies. ..TX.- A survey from the Finance and Leasing Association today shows that leasing rose by 26 per cent in the three months to May, compared with the same three months a year ago, and that hire purchase was up 8 per cent. ..TX.- Financial Services Survey, June 1993. CBI, Coopers & Lybrand. CBI Economic Trends Department, Centre Point, 103 New Oxford Street, London WC1A 1DU. Pounds 53. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6411 Insurance Agents, Brokers, and Service. P6211 Security Brokers and Dealers. P6722 Management Investment, Open-End. P6799 Investors, NEC. ..TP.- Types: NEWS General News. ..IX.- P6411, P6211, P6722, P6799. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABQFT ..HL.- 930712FT 930712 Thatcher renews attack on Maastricht (382) ..BL.- By RALPH ATKINS ..TX.- TORY arguments over Europe resurfaced last night as Lady Thatcher said she would back moves in the Lords to win a referendum on Maastricht, and the government's difficulties in a Commons vote later this month appeared to deepen. ..TX.- Lady (formerly Mrs Margaret) Thatcher, the former prime minister, intends to speak when the House of Lords debates the referendum amendment on Wednesday. But yesterday she denied her intervention would amount to an attack on Mr John Major. ..TX.- 'It will be a furtherance of what I have believed in for a very long time,' she said, adding that she had 'never' sought to damage her successor as prime minister. 'That is the interpretation put on every time I speak. That is why I speak very rarely.' ..TX.- Government business managers are confident that her call for a referendum will be comfortably defeated by peers. But there is more nervousness about debates in the Commons and the Lords on Maastricht's social chapter, expected to be held on July 26. ..TX.- Mr Bill Cash, Tory MP for Stafford and a prominent opponent of Maastricht, indicated yesterday that he might vote for the social chapter in the hope of it wrecking the treaty legislation. ..TX.- The government, which fiercely opposes the social chapter, agreed to hold the debates as a concession during the bill's passage through the Commons. Technically the government could ignore the result if the Commons voted for the social chapter, but Labour would claim a moral victory if ministers went ahead with ratifying the treaty without the social chapter. ..TX.- Although he also opposes the social chapter, Mr Cash said it was 'certainly on the cards' that he would join Labour MPs on July 26. 'It would not be voting for Labour. It would be voting against a cosmetic exercise which is going to happen anyway,' Mr Cash said. ..TX.- Business managers believe that many Euro-sceptics will be under pressure from constituency associations not to vote for the social chapter. They are also hoping that the support, or abstention, of the nine Ulster Unionist MPs will avert an embarrassing government defeat. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P9199 General Government, NEC. ..TP.- Types: NEWS General News. ..IX.- P9311, P9199. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABPFT ..HL.- 930712FT 930712 MPs go shopping among rival plans for Sunday trade: Neil Buckley explains why the issue has prompted a highly unusual move by the government this week (684) ..BL.- By NEIL BUCKLEY ..TX.- THE BATTLE over Sunday trading in England and Wales will enter a new phase this week when the government publishes its long-awaited options bill on Tuesday. ..TX.- About 145,000 shops already flout the 1950 Shops Act by opening on Sunday. Many councils have long since given up trying to prosecute them, even though a European court ruling in December upheld their right to enforce the law. ..TX.- The government's determination to sort out the issue is demonstrated by its decision to take the highly unusual step of giving MPs four choices. They will be allowed a free vote in the autumn session of parliament to decide which of the options forms the basis of new legislation. ..TX.- The issue has caused deep rifts among retailers, as large sums of money are at stake. The John Lewis Partnership says upholding the law and refusing to open on Sundays costs its Waitrose grocery chain Pounds 1m a week in lost sales. ..TX.- Many retailers do not want to be forced by competition to open on Sundays, as they say the extra costs are not compensated for by sales. ..TX.- The options that will be presented to MPs are already well known, as they are largely based on proposals from different lobby groups. They are: ..TX.- Total deregulation, allowing all shops to open on Sundays, as in Scotland. ..TX.- Partial deregulation, based on the proposals of the Shopping Hours Reform Council. This would allow shops below 3,000 sq ft unrestricted opening, but larger shops could open for only limited hours, say from 10am to 4pm. This option is supported by the big supermarket chains including Sainsbury and Tesco, and retail group Kingfisher, which includes the Woolworths, Comet, B&Q and Superdrug chains. ..TX.- Limited opening, based on the proposals of the Retailers for Shops Act Reform (RSAR). Food and convenience shops of less than 3,000 sq ft, as well as DIY shops and garden centres, would be allowed to open on Sunday. Banks, building societies, estate agents and travel agents could also open. Other shops would be barred from opening except for the last four Sundays before Christmas. The option is supported by some of the UK's largest retailers, including Marks and Spencer, Burton, Gateway and House of Fraser. ..TX.- Limited opening, based on proposals of the Keep Sunday Special campaign (KSS). This is the same as the RSAR option, except that it would not allow all retailers to open for the last four Sundays before Christmas, nor would banks, building societies, estate agents and travel agents be permitted to open. This option is supported by many smaller retailers. ..TX.- The publication of the bill is likely to be only the start of an intense round of lobbying and dispute among retailers. The large food retailers have already attacked the RSAR proposals for ignoring the wishes of consumers. The KSS is also angry at the late entry of the RSAR into the debate, with proposals which are similar to its own. It fears the move may split the vote among MPs who support limited opening. ..TX.- One area of continuing debate is likely to be worker protection. ..TX.- The bill is expected to give the right to refuse to work on Sundays, whatever option is chosen, to existing employees. But the KSS is demanding this should be extended to all future retail employees. ..TX.- It is also calling for double-time payments for Sunday working. The Shopping Hours Reform Council has also called for unspecified 'premium' payments for Sunday working, but the bill is expected to make no reference to this. ..TX.- Intense debate is also likely to surround the voting system, which is yet to be determined, with retailers and campaign groups anxious to see a system that gives each option a fair chance of being adopted. ..CO.- Companies: John Lewis Partnership. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P5411 Grocery Stores. P5311 Department Stores. P5999 Miscellaneous Retail Stores, NEC. ..TP.- Types: NEWS General News. ..IX.- P5411, P5311, P5999. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABOFT ..HL.- 930712FT 930712 Smith concedes point on voting (339) ..BL.- By RALPH ATKINS ..TX.- MR JOHN SMITH, the Labour leader, yesterday confirmed that he is prepared to accept individual trade union members continuing to have a say in the election of future party leaders. ..TX.- However, in spite of a fresh attack from Mr John Edmonds, leader of the GMB union, Mr Smith refused to back down on the central point of his confrontation with union leaders - that Labour parliamentary candidates should be selected on the principle of one member one vote. ..TX.- Mr Smith rebuffed suggestions that his concession on the election of the leader and deputy leader amounted to a climbdown. He said on BBC television: 'It is not a case of giving way on anything, it is a case of finding the best system for doing it.' ..TX.- Labour party officials also played down the importance of Mr Smith's comments, saying any Labour leadership contest was a long way off. But by agreeing to union members voting for the party leader Mr Smith risked encouraging union leaders to believe he would also make concessions on the selection of parliamentary candidates. ..TX.- With his stand against the unions regarded in the Labour movement as an increasingly important test of leadership credentials, Mr Smith argued that the dispute over candidate selection was different because union members would be 'part of a team' in a local constituency association. ..TX.- Labour's national executive will decide next Monday on proposals to reform the party's links with unions which will be presented to the Labour conference in the autumn. On Wednesday the party's union links committee will consider the results of consultation on the planned reforms. ..TX.- To the irritation of the Labour leader's aides, Mr Edmonds said that Mr Smith was taking bad advice from members of the shadow cabinet and complained about 'patronising' letters sent to constituency parties by senior Labour MPs about the future of the block vote. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8651 Political Organizations. ..TP.- Types: NEWS General News. ..IX.- P8651. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABNFT ..HL.- 930712FT 930712 Ministers act to head off BR defeat (194) ..BL.- By RALPH ATKINS ..TX.- THE GOVERNMENT sought yesterday to avert another possible defeat over British Rail privatisation in the Lords by saying that an opposition attempt to challenge the legislative procedures being used would not delay the sell-off. ..TX.- Department of Transport officials said the Liberal Democrat amendment would only create uncertainty for BR pensioners. ..TX.- Labour and Liberal Democrats have seized on the amendment as a fresh chance to wreck the sell-off following the government's defeat last week on a proposal to allow BR to bid for franchises. ..TX.- The amendment's effect would be to force ministers to adopt rules for 'hybrid' bills - bills combining changes in public policy with changes affecting private individuals - when BR pension provisions are altered. ..TX.- That would mean a lengthy consultation process before changes to the pension schemes could be implemented. Lord Tordoff, the Liberal Democrats' spokesman in the Lords, said the amendment could attract the support of some Tory peers. ..CO.- Companies: British Rail. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4011 Railroads, Line-Haul Operating. P4111 Local and Suburban Transit. ..TP.- Types: COMP Company News. ..IX.- P4011, P4111. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABMFT ..HL.- 930712FT 930712 Jaguar move played down (288) ..BL.- By JOHN GRIFFITHS ..TX.- SPECULATION that Ford intends to switch production of Jaguar cars to plants in North America was played down by the US motor manufacturer at the weekend, in spite of visits by Jaguar executives to Ford plants in Ohio and Michigan. ..TX.- Executives at Ford's Dearborn headquarters are trying to dampen reports in the US that the company has decided to build the new 'small' Jaguar, the X200, on the same body platform as new US Ford and Mercury models. Jaguar, a Ford subsidiary since 1989, is due to start production of its new model in 1998 - at the same time as the new US cars. ..TX.- Officials in Britain and the US said no decision had been made about whether to base the Jaguar on a Ford body platform or to develop one specifically for the Jaguar. They said visits by Jaguar engineers to US plants were aimed at developing further co-operation between Ford's luxury car plants and Jaguar's in the UK. ..TX.- Mr David Boole, Jaguar's public affairs director, said a decision on where to build the new Jaguar 'is at least 18 months away'. ..TX.- Jaguar engineering and production teams have been relatively frequent visitors to Ford's plants at Lorain, Ohio, which makes the sporting up-market Thunderbird model, and at Wixom, Michigan, where the Lincoln luxury car range is produced. ..TX.- Jaguar executives in the UK readily acknowledge that production and management systems at Jaguar's Browns Lane manufacturing plant have already benefited from the liaison with the US plants. ..CO.- Companies: Jaguar. ..CN.- Countries: US United States of America. ..IN.- Industry: P3714 Motor Vehicle Parts and Accessories. P3711 Motor Vehicles and Car Bodies. ..TP.- Types: RES Facilities. ..IX.- P3714, P3711. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABLFT ..HL.- 930712FT 930712 Call to suspend Pounds 620m aid funds (76) ..TX.- BRITAIN should suspend its Pounds 620m contribution to the International Development Association of the World Bank until the association has improved its poor record on aid, says Friends of the Earth, the environmental group. ..TX.- The association's funding is to be debated in parliament today. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: NEWS General News. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABKFT ..HL.- 930712FT 930712 Warning over Church finances (117) ..TX.- THE Church of England will today be warned about the increasing financial difficulties it faces. ..TX.- The Church Commissioners will tell parishes that they must prepare to meet a far bigger proportion of clergy stipends. The commissioners now finance an average of 41 per cent of stipends but this is likely to fall below 30 per cent by 1996. ..TX.- The commission's report to the church's general synod meeting in York will be the first presented by Sir Michael Colman, chairman of Reckitt & Colman and the recently appointed first church estates commissioner. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8661 Religious Organizations. ..TP.- Types: NEWS General News. ..IX.- P8661. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABJFT ..HL.- 930712FT 930712 Exchange considers code compliance (147) ..TX.- THE STOCK EXCHANGE is considering publicising companies which fail adequately to explain reasons for divergence from the Cadbury code on corporate governance. ..TX.- It has all but ruled out the ultimate sanction of de-listing any companies that do not provide a statement of compliance with the code, which was published in December. But it may circulate lists of companies which have not complied and highlight individual accounts which do not include a statement. ..TX.- In a separate move it has written to quoted companies to modify the implementation date for compliance with the code. ..TX.- Companies will only be required to comment on compliance with the code from the period between June 30 - the Cadbury implementation date - and their year-ends. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6231 Security and Commodity Exchanges. ..TP.- Types: NEWS General News. ..IX.- P6231. ..DS.- The Financial Times ..XP.- London Page 6 ***************************************************************** ..AN.-00DGLB7ABIFT ..HL.- 930712FT 930712 Brooke hesitant over ITV ownership rule changes (514) ..BL.- By RAYMOND SNODDY ..TX.- MR PETER BROOKE, the national heritage secretary, will tell the Commons today that he has yet to make up his mind on whether ITV ownership rules should be relaxed. ..TX.- There are growing signs, however, that the government is unenthusiastic. ..TX.- Speculation that the government might allow the nine largest ITV companies to take each other over - at present forbidden by the 1990 Broadcasting Act - has led to rocketing ITV share prices. ..TX.- The expection of change lay behind Granada's recent decision to spend about Pounds 84m acquiring a 20 per cent stake in London Weekend Television. ..TX.- Mr Brooke will make it clear today during national heritage questions that he is being very cautious. A formal decision is unlikely before September. ..TX.- The National Heritage Department is reluctant to make fundamental changes to the rules covering ITV just seven months after the new 10-year licences took effect. ..TX.- Mr Brooke is conscious that the ITV companies are split on the issue, with Anglia, Meridian and HTV resolutely opposed to such a change. The row over the botched attempt to move News at Ten has also tended to make parliamentary opinion more negative on relaxing the takeover rules. ..TX.- MPs believe the government will decide against taking early action partly because of legislative difficulties. ..TX.- Meanwhile the ITV companies may have given the Commons national heritage committee potentially misleading information on their finances and the net amount of money they must now pay the government. ..TX.- The committee was told that this year the ITV system will pay the government about Pounds 367m in addition to normal company taxation, consisting of the bids for new franchises plus a slice of advertising revenue. The figure would have been Pounds 150m under the old levy system, ITV said. ..TX.- Yet when the Independent Television Commission announced the franchise winners in 1991 it estimated that overall the ITV companies would end up paying only Pounds 40m a year more over the life of the franchises. ..TX.- The apparent disparity is largely a result of the ITV companies comparing this year with 1992, the last year of the old franchises. Last year the government announced a one-off reduction in levy designed, partly at least, to give ITV a breathing space to prepare for the new system. As a result the ITV companies benefited by about Pounds 105m last year. The underlying rate of levy payments was considerably higher. ..TX.- The ITV companies have also saved Pounds 66m a year because they no longer have to fund the Welsh fourth channel, as well as saving about Pounds 20m in the transmission costs of Channel 4 and a further Pounds 11m because schools programmes have moved to Channel 4. ..TX.- Overall the ITV companies would appear to be in a better relative financial position than they indicated to the national heritage committee. ..TX.- US stakes, Page 18 ..CO.- Companies: Granada Group. LWT Holdings. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7812 Motion Picture and Video Production. P4833 Television Broadcasting Stations. ..TP.- Types: COMP Company News. ..IX.- P7812, P4833. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGLB7ABHFT ..HL.- 930712FT 930712 Agency's work may split 12 ways (305) ..BL.- By ANDREW JACK ..TX.- THE WORK of Companies House, the government's corporate information agency, may be divided up between as many as 12 private-sector businesses under proposals from the Department of Trade and Industry. ..TX.- Responsibility for fining companies which do not file accounts on time and for selling the information they provide would be split between a series of competing registrars. ..TX.- The plan has been drawn up by SRU, the management consultancy hired by the DTI last October to consider a range of options, from no change through to full privatisation. ..TX.- The plan suggests that companies should be able to file their accounts to a private-sector registrar of their choice. A central index owned by all the registrars would collect the information. ..TX.- It is likely that the power to prosecute companies which fail to file accounts, and some other important registration decisions, would remain under the control of a much smaller government unit. ..TX.- A memorandum circulating in Companies House from Mr David Durham, chief executive and registrar, says that no decision has been taken on the future of the agency and that various options remain open. ..TX.- Mr Kieron Hill, regional officer for Wales for the National Union of Civil and Public Servants, said: 'We want to protect our members' jobs and feel the proposals are slanted towards privatisation and a move away from headquarters in Cardiff. ..TX.- 'But we are also concerned that the users of Companies House services will be subject to the whims of private-sector registrars who may neglect compliance and legal obligations.' ..TX.- SRU is canvassing the views of Companies House staff, Chambers of Commerce and companies likely to be affected by the proposals. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9651 Regulation of Miscellaneous Commercial Sectors. ..TP.- Types: NEWS General News. ..IX.- P9651. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGLB7ABGFT ..HL.- 930712FT 930712 Maverick MD steps in at crucial time (385) ..BL.- By DEBORAH HARGREAVES ..TX.- MR HARRY MOULSON is the closest thing to a new broom sweeping through the corridors of British Gas's pipelines division. He joins a small group of maverick directors gathered round Mr Cedric Brown, who took over as chief executive a year ago with a mandate to change the company culture. ..TX.- Mr Moulson has been pitched into one of the highest-profile jobs in the gas business at a crucial time in its history. He could end up running his own company with assets of Pounds 15bn if the Monopolies and Mergers Commission recommends splitting pipelines from the rest of the business. ..TX.- Although the 49-year-old Mr Moulson is a qualified gas engineer - in the time-honoured tradition of British Gas managers - the bulk of his experience has been in the marketing side of the business. ..TX.- He has brought a new approach to the transport division. He is determined to refer to the company's competitors which send gas through its pipeline network as 'customers' rather than 'shippers'. A fresh approach is being welcomed by most shippers: 'I do detect a genuine desire to look at things another way,' said Mr Peter Bryant, deputy chairman of United Gas. ..TX.- But Mr Moulson inherits a department which is frustrated at being forced to give up market share to rivals in an effort to encourage competition, and may face an uphill struggle in convincing some of his colleagues to regard the shippers as worthy customers rather than an inconvenience. Also, some of the shippers feel they are being thwarted by pipeline operators eager to retain British Gas's upper hand. ..TX.- Mr Moulson believes his job is to sell space in British Gas's pipelines - it does not matter whose gas fills that space. Although he does not have a place on the British Gas main board, his initiative has Mr Brown's full backing. ..TX.- Mr Moulson spent a year at Harvard Business School and worked in the US for the company's Global Gas division. The US business style is detectable in his direct approach - an attribute not common among British Gas's managers. ..CO.- Companies: British Gas. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4923 Gas Transmission and Distribution. ..TP.- Types: PEOP People. CMMT Comment & Analysis. ..IX.- P4923. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGLB7ABFFT ..HL.- 930712FT 930712 Police face up to being measured: The implications of service contracts for constables (598) ..BL.- By ALAN PIKE ..TX.- AS LAST week's Association of Chief Police Officers conference considered a potential new world of short-term contracts and performance-related pay, a single chief constable spoke from experience. ..TX.- He was Mr Desmond O'Brien, chief of the British Transport Police, which already has all its senior officers on fixed-term contracts with performance review related to pay. ..TX.- It is the only force in the country to be operating a procedure which the government-appointed Sheehy committee has recommended should apply throughout the police service. ..TX.- Mr O'Brien, his deputy and assistant chiefs transferred voluntarily to the system three years ago. Mr O'Brien said it had proved that measurable performance indicators could be set for the police. He told his fellow senior officers at the conference: 'In dealing with under-performing constables, we should also cater for under-performing chief constables.' ..TX.- British Transport Police provides police services for British Rail and London Underground. ..TX.- Under the performance review system, Mr O'Brien agrees personal objectives with his deputy and four assistant chief constables annually, and each May gives them performance ratings that are reflected in their pay awards. Mr O'Brien's own personal objectives are agreed with the chairman of the police committee. ..TX.- Individual objectives relate to police management issues. But, Mr O'Brien said, the force had to ensure that it met its customers' expectations. ..TX.- To help achieve this a budget group, consisting of the managing directors of the rail businesses and the chief constable, produces a contract setting out operational objectives and priorities - the current objectives relate to crimes of violence, obstruction of railways, actions which endanger customers and staff, graffiti and disruptions to services by suspect packages. ..TX.- The contract is used by the police committee, railway businesses and customers as a means of measuring the force's performance. Mr O'Brien believes that the establishment of a clear means of focusing on specific objectives has contributed to a reduction in crime levels and an increase in detection rates over the past three years. ..TX.- When British Transport Police advertises for senior officers it makes clear that - unlike the rest of the police service - successful applicants will be on fixed-term contracts and performance-related pay. 'There is no shortage of applicants willing to accept posts on these terms,' Mr O'Brien said. 'It is surely wrong that an officer should be appointed to a senior post at the age of 40 and remain in it for the next 20 years without any specific assessment of performance.' ..TX.- This is certainly the view of Sir Patrick Sheehy, chairman of BAT Industries and of the committee of inquiry into police pay and responsibilities whose report is being considered by Mr Michael Howard, home secretary. ..TX.- Sir Patrick believes the pay of senior officers, in particular, should be performance related, and this is unlikely to meet serious resistance in the police service. ..TX.- Chief constables are, however, much more apprehensive about the implications of extending some of the same principles - particularly fixed-term contracts - to lower ranks. ..TX.- The Sheehy committee recommends that police officers should serve on initial 10-year contracts, subsequently renewed each five years. ..TX.- Some senior officers believe their ability to attract sufficient high-quality recruits, both graduates and non-graduates, would be undermined by the fear of possible dismissal after 10 years. ..TX.- They say all that is needed is a procedure making it easier for the service to shed under-performing individuals. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P9221 Police Protection. P9222 Legal Counsel and Prosecution. ..TP.- Types: NEWS General News. ..IX.- P9221, P9222. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGLB7ABEFT ..HL.- 930712FT 930712 British Gas rejects price claim (431) ..BL.- By DEBORAH HARGREAVES ..TX.- BRITISH GAS has rejected allegations that the price increases for competitors using its pipeline, which it withdrew last week, would be reinstated after the Monopolies and Mergers Commission report on the gas industry due in three weeks' time. But it has not ruled out putting prices back up after a review. ..TX.- British Gas said: 'Nothing is ready to go on the table; the price rises may be too high, too low or just right, but we will review that.' ..TX.- Some of British Gas's competitors regard the company's decision last week to withdraw price increases of up to 30 per cent as a cynical delaying tactic to remove an area of potential controversy before the MMC report. ..TX.- Mr Norman Ellis, managing director of Kinetica, a rival supplier, said: 'I don't think they have any intention of changing these price increases, they're just trying to impose them in a more palatable manner.' ..TX.- British Gas has said it will delay price rises of between 2 per cent and 30 per cent until October next year. In the meantime it will review the charges levied on users of its pipeline system. ..TX.- Another shipper said: 'I'm worried they will try again (with the price rises) and, of course, they are making business difficult for us because we need some stability to plan our own charges to customers.' ..TX.- Mr Harry Moulson, who takes over as managing director of British Gas's National Transmission business tomorrow, has said he will not impose the price increases until he has made a thorough examination of the company's cost base. He also wants British Gas's marketing operations to be charged the same for sending gas through the pipelines as is paid by rivals. ..TX.- Ofgas, the industry regulator, believes that when British Gas proposed putting up prices for gas transport, it was trying to shift its profit base from the household supply market into pipelines. ..TX.- Profits in domestic gas supply are being squeezed by a tough pricing formula. To compensate for this, the company was trying to make its pipelines more profitable. Ofgas says that for every Pounds 1 spent directly on the pipeline system, British Gas had allocated another Pounds 7 of costs to it. ..TX.- This is the area which Mr Moulson will examine when satisfying himself that the increases are justified. He also intends to hold more consultations with rivals. ..CO.- Companies: British Gas. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P4923 Gas Transmission and Distribution. ..TP.- Types: COSTS Product costs & Product prices. COMP Company News. ..IX.- P4923. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGLB7ABDFT ..HL.- 930712FT 930712 Teachers divided on NUT boycott (438) ..BL.- By JOHN AUTHERS ..TX.- THE NATIONAL Union of Teachers, the biggest teaching union, is launching a boycott of appraisal arrangements which could be linked to performance-related pay. ..TX.- The move opens another front in its dispute with the government, which has already led to the boycott by the three largest teaching unions of this year's national curriculum tests. ..TX.- But the move splits the unions, which have been united so far in their opposition to the tests. Neither the National Association of Schoolmasters/Union of Women Teachers, nor the Association of Teachers and Lecturers, the other two large unions, will follow the NUT's lead. ..TX.- Mr Doug McAvoy, the NUT general secretary, said that teacher-appraisal interviews were being used to introduce performance-related pay. ..TX.- The union will ask local education authorities and the governors of grant-maintained schools to advise their schools not to link appraisal to pay, or to award points for 'excellence'. ..TX.- If local NUT representatives do not receive these assurances, they will decide on further action - probably a boycott of appraisal interviews. ..TX.- Mr McAvoy said: 'Performance-related pay will generate competition and rivalry, destroying teamwork in schools. It is a device to divide and destabilise the teaching profession dressed up in the guise of promoting educational excellence.' ..TX.- However, he said the NUT had no objection to appraisal interviews if they were not related to pay. ..TX.- The Department for Education said: 'We are disappointed that the NUT is taking this stand. We are sure that all teachers will be in favour of appraisal as a valuable way of developing professional expertise. All other professionals are appraised in some way.' ..TX.- The department added that appraisal has been in force since September 1990 and was carried out on a two-yearly cycle, which would make it an inappropriate scheme to be linked with pay. ..TX.- Mr David Hart, general secretary of the National Association of Head Teachers, said the NUT was in danger of 'throwing out the baby with the bath water'. ..TX.- He said: 'The vast majority of schools would not want to use appraisal for those purposes, and if they want to go down the performance-related pay route in future, they will not do so unless there is a national scheme in place. We are a long way from that.' ..TX.- Mr Eamonn O'Kane, deputy general secretary of the NASUWT, said: 'There's no point in firing off at too many targets. We certainly would not support the campaign NUT are starting, mostly because of the multitude of other issues facing teachers.' ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8631 Labor Organizations. ..TP.- Types: PEOP Labour. ..IX.- P8631. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGLB7ABCFT ..HL.- 930712FT 930712 Spending on IT 'may be running out of control' (367) ..BL.- By ANDREW BAXTER ..DL.- SPENDING on information technology ..TX.- telecommunications, computers and software - rose 9 per cent last year to about Pounds 4.5bn and may be running out of control, Price Waterhouse Management Consultants says today. ..TX.- Its annual IT Review, based on a survey of 1,000 executives in the private and public sectors, found that budgets had over-run for the third year in succession. The increase contrasts with a rise of just 1 per cent forecast by the same executives at the start of last year. ..TX.- It brings the spending increase over the last three years to nearly 50 per cent and underlines the difficulties of controlling costs. ..TX.- Salaries for IT staff rose an average 6 per cent last year - double the rate of inflation - and the average number of systems development staff rose by about 25 per cent, according to the review. ..TX.- Professor Kit Grindley, a Price Waterhouse consultant and professor of systems automation at the London School of Economics, said: 'The problem of how to make the computer work in the best interests of the company is no longer as important as how to make it work more cheaply. Unfortunately, this is a problem that British managers have yet to tackle effectively.' ..TX.- The review found that one of the main responses to past overspending - a move to 'open systems' or non-proprietary standards - had increased costs for most organisations. ..TX.- It also found wide variations in spending by different industries. Heading the list was the relatively recession-proof utilities sector, where spending rose 36 per cent last year as large projects ordered after privatisation reached their expensive final phases. ..TX.- In contrast, the struggling retail sector's spending rose just 0.5 per cent, which represents a cut in real terms. Next lowest was the manufacturing sector, where IT spending increased by 2 per cent. ..TX.- Overall, the review is forecasting an increase of only 0.2 per cent in IT spending this year. But it says this may also prove too conservative. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P3571 Electronic Computers. P7372 Prepackaged Software. ..TP.- Types: PEOP Labour. RES R&D spending. ..IX.- P3571, P7372. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGLB7ABBFT ..HL.- 930712FT 930712 Strategy urged for south-east engineering (158) ..BL.- By ANDREW BAXTER ..TX.- LOCAL and regional agencies need to work together to maintainengineering skills in the south-east, a study sponsored by local authorities and Training and Enterprise Councils has found, Andrew Baxter writes. ..TX.- The study recommends a regional policy forum to develop a strategy for the sector. ..TX.- It argues that the role of local and regional public agencies in economic and industrial policy development in the UK - and particularly in the south-east - is relatively undeveloped compared with other parts of Europe. ..TX.- The study was produced by the Local Government Centre at Warwick Business School and Warwick University's Institute for Employment Research. ..TX.- Towards a Regional Strategy. Seeds Administration Centre, Latton Bush Centre, Southern Way, Harlow, Essex. Pounds 75 (Pounds 25 for voluntary groups). ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P8711 Engineering Services. P8331 Job Training and Related Services. ..TP.- Types: NEWS General News. ..IX.- P8711, P8331. ..DS.- The Financial Times ..XP.- London Page 5 ***************************************************************** ..AN.-00DGLB7ABAFT ..HL.- 930712FT 930712 Washington keeps up the pressure / Examining the differing perceptions in the US and Japan on the future of the framework trade deal (845) ..BL.- By JUREK MARTIN ..DL.- SEOUL ..TX.- 'THIS is the rules of the game, not the game itself,' insisted Mr Bowman Cutter, deputy head of the White House's national economic council. Reading from the same book, Mr Roger Altman, deputy Treasury secretary, pronounced: 'It's an agreement about the rules, now we get to play the game.' ..TX.- The rules referred to are the new US-Japan negotiating framework to resolve bilateral issues announced with some fanfare, after all-night bargaining, in Tokyo on Saturday morning. ..TX.- Both men, along with other US officials speaking privately, contend that the agreement, stamping the seal on President Bill Clinton's performance at the Tokyo Group of Seven summit, marks a new dawn in US-Japan relations in which the economic and commercial components assume, as the president wanted, a far more important dimension. ..TX.- The 'framework' agreement for subsequent negotiations is precisely that. It does not establish precise goals for shifts in Japanese macro-economic policy, nor does it lay down criteria by which sectors of the Japanese economy can be made more open to US goods and services, and by extension to those of other countries. ..TX.- But in tough language it lays out a negotiating timetable for these to be achieved and it commits Japan to making what the agreement calls highly significant macro and micro economic policy changes. As such, in the US view, it places Japan under a far tougher obligation than all previous attempts to settle bilateral disputes. ..TX.- On the macro-economic side, the compact envisages mutually supportive policies whereby the US seeks to reduce its budget deficit while Japan aims to cut its global current account surplus. ..TX.- At its current level of about Dollars 130bn (Pounds 86bn), Japan's global current account surplus is equivalent to just over 3 per cent of GNP. The US envisages that this can be reduced, mostly by appropriate fiscal policies, to the target zone in 'four to five years'. ..TX.- The unstated US agenda is that Japan should accomplish this less by its traditional method of front-loading public works spending and more by income tax cuts. While it may seem ironic for an administration that is proposing one of the largest tax increases in US history at home to press the reverse course on Japan, the US view is that this is the most effective means of generating the sort of consumer-led demand in Japan that will suck in imports. ..TX.- What all this might do to the bilateral Japanese trade surplus with the US - Dollars 50bn last year and rising fast - has not been made explicit. A recent estimate by the Washington-based Institute for International Economics contends that a cut to around Dollars 40bn is the most optimistic outcome over a few years. ..TX.- Much may depend on another, more controversial, aspect of the agreement - its insistence on greater sectoral access for imported products and services. The agreement makes no mention of numerical targets as such. However, it does accept that multiple criteria should be used to accept progress in opening Japanese markets. The US will want to use these criteria to set goals for policy, something the Japanese will resist. ..TX.- Agreements in priority areas are to be reached over the next six months and ratified when the US president and the Japanese prime minister meet early next year, with the balance to be settled at a second get-together next July. ..TX.- After two years both governments will decide whether to extend this framework agreement beyond the autumn of 1995. ..TX.- The five principal components of the sectoral access deal cover: ..TX.- Japanese government procurement, particularly in relation to purchases of foreign computers, supercomputers, satellites, medical technology and telecommunications. ..TX.- Regulatory reform, covering financial services, insurance, the distribution network and competition policy. ..TX.- 'Other major sectors', particularly cars and car parts. ..TX.- Economic harmonisation, addressing issues affecting two-way foreign direct investment, including intellectual property and access to technology. ..TX.- Implementation - the monitoring of existing and future agreements. ..TX.- The US team, led by Mr Cutter and Mr Altman and with substantial contributions from other treasury and trade officials, did not necessarily expect to conclude an agreement in Tokyo, especially with the Japanese elections just over a week away. The Japanese, they report, were particularly tough on the question of exemptions from US trade laws. ..TX.- They may hang tougher still as the sectoral negotiations get serious, which is why the US reserves the right of retaliation under existing trade regulations. Mr Clinton may have made a powerful general case in Tokyo in identifying what he saw as the common cause between Japanese consumers and American workers but the appeal of that cause may fade as the two sides finally take to the field under the new 'rules of the game'. ..CN.- Countries: US United States of America. JP Japan, Asia. ..IN.- Industry: P9721 International Affairs. P9311 Finance, Taxation, and Monetary Policy. P3571 Electronic Computers. P67 Holding and Other Investment Offices. ..TP.- Types: NEWS General News. ..IX.- P9721, P9311, P3571, P67. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGLB7AA9FT ..HL.- 930712FT 930712 Saudi changes (54) ..BL.- By REUTER ..DL.- DUBAI ..TX.- Saudi Arabia's King Fahd has made two senior Moslem clerics cabinet ministers and ordered the setting up of an Islamic guidance ministry, Reuter reports from Dubai. ..CN.- Countries: SA Saudi Arabia, Middle East. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGLB7AA8FT ..HL.- 930712FT 930712 Mubarak backed for re-election (73) ..BL.- By MARK NICHOLSON ..DL.- CAIRO ..TX.- Egyptian President Hosni Mubarak yesterday won the backing of 97 per cent of the People's Assembly to run as the sole candidate in the presidential elections, clearing the way for him to take up his third six-year term, Mark Nicholson writes from Cairo. ..CN.- Countries: EG Egypt, Africa. ..IN.- Industry: P9199 General Government, NEC. ..TP.- Types: GOVT Government News. ..IX.- P9199. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGLB7AA7FT ..HL.- 930712FT 930712 Syria 'to blame for attacks' (91) ..BL.- By JULIAN OZANNE ..DL.- JERUSALEM ..TX.- ISRAEL yesterday blamed Syria for the upsurge in attacks by Arab guerrillas in southern Lebanon which last week left five Israeli soldiers dead, and said it was considering how best to retaliate, writes Julian Ozanne from Jerusalem. ..TX.- Syria, which has up to 40,000 troops in Lebanon, responded by saying Israel's self-declared security zone in southern Lebanon was an 'explosive trap'. ..CN.- Countries: IL Israel, Middle East. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGLB7AA6FT ..HL.- 930712FT 930712 Iraq's defiance increases threat of UN attack (352) ..BL.- By MARK NICHOLSON ..DL.- CAIRO ..TX.- IRAQ yesterday sustained its defiance of United Nations weapons inspectors, and brought closer the threat of a UN-backed strike against its military installations, by refusing to allow UN experts to seal equipment at two missile testing sites south of Baghdad. ..TX.- A UN team led by Mr Mark Silver, a US weapons specialist, abruptly flew out of Baghdad after failing to persuade the Iraqi authorities to allow switches at the two sites to be fixed down and sealed with wax. ..TX.- Mr Silver's three-member team spent less than 24 hours in Iraq and left the moment it decided the Iraqis would not budge. ..TX.- 'I was not allowed to do what I went in for, and that is why I came out immediately,' Mr Silver told reporters soon after arriving back at UN headquarters in Bahrain. ..TX.- The team's failure to accomplish its task is certain to prompt a renewed collision between the UN and Iraq and raise the possibility of a military strike against the two sites. ..TX.- Mr Al Gore, US vice-president, said on NBC yesterday, that as a first step Iraq would be asked to destroy the sites, if it continued to resist their monitoring. ..TX.- 'If he (Iraqi president Saddam Hussein) refuses to do that, the UN could consider a range of options - one of which could include the use of force against them'. ..TX.- Iraq called on the Security Council to prevent any punitive attack by the US. ..TX.- But at the same time Baghdad signalled continued defiance. Gen Amer Rasheed, who heads Iraq's weapons development programme, said after Mr Silver's departure that the country 'cannot accept seals of activities'. He added: 'We, as a nation, take all necessary measures to protect our people, our land and facilities.' ..TX.- The UN Special Commission had sought to seal the equipment as an interim solution to the deadlock between UN inspectors and Iraq, after Baghdad's refusal to install video monitors at the two sites. ..CN.- Countries: IQ Iraq, Middle East. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGLB7AA5FT ..HL.- 930712FT 930712 Tokyo claims advantage in numerical targets battle / Examining the differing perceptions in the US and Japan on the future of the framework trade deal (658) ..BL.- By CHARLES LEADBEATER ..DL.- TOKYO ..TX.- JAPANESE officials yesterday presented the weekend trade framework agreement with the US as a turning point, mainly because they believe it marks the first success of a more assertive Japanese approach to the US. ..TX.- Japan will claim that it came out best from the main dispute which has dogged the negotiations since they started in April: whether numerical targets should set goals for Japanese policies to open up its markets to imports and reduce its current account surplus. ..TX.- The Japanese approach on this issue marks a break with the past. In previous trade disputes, the Japanese have started by talking tough but eventually backed down. This time they started by publicly resisting numerical targets and did not back down when the US applied pressure. ..TX.- Japan will claim that because the agreement does not explicitly mention numerical targets, it has won the day. The reality is that this central dispute over targets will continue, but on a different footing. ..TX.- Tokyo has successfully resisted US demands that it should set its economic policies with the target of halving its current account surplus. ..TX.- However, this does not mean Japan's powerful Finance Ministry has had it all its own way. Mr Kiichi Miyazawa, the prime minister, in spite of his weakness in the run-up to next weekend's elections, has forced the powerful bureaucrats to concede for the sake of the agreement. ..TX.- The Finance Ministry had proposed saying that it would promote domestic growth, which would in turn 'contribute' to reducing the surplus by increasing demand for imports. The wording of the agreement is substantially tougher than Japanese bureaucrats wanted. ..TX.- The agreement says Japan will 'actively pursue' strong and sustainable demand-led growth, which is 'intended to achieve over the medium term a highly significant decrease in the current account surplus'. ..TX.- The short-term implications for Japanese fiscal and monetary policy are clear. ..TX.- The upheaval in Japan's political system means that for weeks, if not months, the politicians will not be in a strong enough position to force the Finance Ministry to consider a further shot of government spending to revive the economy. ..TX.- But the likelihood of a further pump-priming package in the autumn or early next year is now much higher. As fiscal policy is so politically constrained, in the short term the agreement will increase pressure on the Bank of Japan for a further cut in interest rates, which are at an record low of 2.5 per cent. ..TX.- Japan has also resisted numerical targets for policies to open the domestic market to imports, especially vehicle parts, high technology goods and financial services. ..TX.- The agreement says policies to open markets will be assessed using sets of 'objective criteria', a phrase introduced to the talks by the Japanese. The content and role of these 'criteria' is almost certain to be the subject of further rows between the two sides. ..TX.- The US has backed down from its earlier call for Japan to accept as a goal a 33 per cent increase in its imports of manufactured goods over the next three years. The agreement does not commit Japan to making sure a share of its domestic market in particular sectors, such as autumotive components, is taken by foreign products. ..TX.- The Japanese did not get everything they wanted. Tokyo wanted a US commitment that the 'criteria' would not be interpreted as targets. The US has resisted this demand, so it is open to Washington to try to turn the criteria into goals to guide Japanese import promotion policy. ..TX.- So the framework does not settle the central dispute about whether targets should be used, it merely puts the argument on a different footing. ..CN.- Countries: JP Japan, Asia. US United States of America. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGLB7AA4FT ..HL.- 930712FT 930712 Clinton tough towards N Korea (351) ..BL.- By JOHN BURTON ..DL.- SEOUL ..TX.- PRESIDENT Bill Clinton yesterday offered more sticks than carrots to North Korea to persuade it to accept full nuclear inspections, as he ended his visit to South Korea. ..TX.- With US and North Korean officials preparing to hold discussions on the nuclear issue in Geneva on Wednesday, Mr Clinton and Mr Warren Christopher, the US secretary of state, reaffirmed that Pyongyang must fully comply with international nuclear inspections or face UN sanctions. ..TX.- 'If we just stay strong and we stay resolute and we stay firm, we know that will work,' said Mr Clinton as he toured the demilitarised zone that separates North and South Korea. 'Eventually, we have to hope' that North Korea will take the sensible course.' ..TX.- 'When you examine the nature of the American security commitment to Korea. . . it is pointless for them to try to develop nuclear weapons because if they ever use them it would be the end of their country.' ..TX.- The president promised there would be no cuts in the number of US troops in South Korea, now totalling 37,000, until the nuclear issue was resolved. ..TX.- Mr Christopher said in a meeting with his South Korean counterpart that any improvement in US-North Korean relations would depend on the progress in inter-Korean ties, ruling out the possibility that Washington might separately recognise Pyongyang in exchange for its full acceptance of nuclear inspections. ..TX.- The US has attached other conditions to better relations with North Korea, including an improvement in human rights and renunciation of terrorism. ..TX.- The US last month persuaded North Korea to suspend its withdrawal from the nuclear non-proliferation treaty during high-level talks in New York. ..TX.- Mr Christopher said Washington would not tolerate North Korea dragging its feet endlessly during the new round of talks. If no appreciable progress was achieved within a resonable period of time, the nuclear issue would be referred to the UN Security Council for action. ..CN.- Countries: US United States of America. KP North Korea, Asia. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGLB7AA3FT ..HL.- 930712FT 930712 The looming crisis in industrial country public debt (1890) ..BL.- By MARTIN WOLF ..TX.- What cannot continue will not do so. The accumulation of public sector debt by the governments of the industrial countries will have to stop. The question is how will it be stopped and when. ..TX.- Over the past quarter century, the ratio of aggregate gross public debt to gross domestic product in OECD countries has risen from a little under 40 per cent, to 68 per cent (see chart). In only two brief periods has the ratio fallen: during the inflationary economic expansion of the early 1970s and again during the expansion of the second half of the 1980s. ..TX.- Unfortunately, the rise in the debt ratio during recessions has more than offset the paltry declines during the expansions. No wonder the June OECD Economic Outlook remarks wryly on the need to avoid 'the kind of mistake made in the late 1980s when some of the unexpected buoyancy of public revenues associated with above-average growth was used to reduce tax rates rather than to ensure greater fiscal consolidation and to reduce debt.' ..TX.- True, net public debt is not as daunting as gross public debt: for 1994 the OECD forecasts the former at 39 per cent. The net debt ratio has not risen as much either, by 9 percentage points between 1984 and 1994, against 14 percentage points for gross debt. But the trend is similarly adverse. ..TX.- Of the seven industrial countries whose heads of government met in Tokyo last week, only Japan had managed a significant improvement in its public debt postion between 1984 and 1994. Belgium and Italy already have outstanding net public debt greater than their GDPs. Particularly important, in view of the country's size, is the US deterioration, from a net public sector debt ratio of 24.9 per cent in 1984 to the 40.7 per cent forecast for next year. ..TX.- High real interest rates put all debtors, including governments, on a treadmill. Since the beginning of the 1980s, long-term real interest rates have averaged between 4 and 7 per cent, says the OECD, with short-term rates little lower. In the stable 1960s, by contrast, real interest rates were 1 to 3 per cent. Consequently, real interest rates have been well above underlying rates of economic growth for a long time. Even though estimated long-term real interest rates have recently fallen, they remain higher than rates of economic growth, inevitably so during a recession. ..TX.- The OECD explains these high real interest rates by: ..TX.- the fiscal and monetary policy mix, with fiscal deficits, in particular, averaging 3 per cent of GDP since the mid-1970s; ..TX.- investor demand for a premium against inflation risk, particularly important in the early 1980s; and ..TX.- the liberalisation and globalisation of capital markets. ..TX.- If real interest rates on public debt exceed the economy's likely growth rate, as they have recently done, governments must run a primary fiscal surplus - an excess of revenue over non-interest expenditure - if the ratio of debt to GDP is to be kept stable. Should they run large primary deficits during a recession, they must run offsetting surpluses thereafter. The task can be daunting. Mr Major's government is now running a primary deficit of 5.7 per cent of GDP. This is two percentage points larger than the surplus in 1988. ..TX.- The danger is of a vicious circle from deficits to interest rates and back again. If governments fail to run large enough primary surpluses, global real interest rates tend to rise. As public debt increases, the fear of debt crises also pushes up risk premiums in interest rates. Unsurprisingly, Italy is the only major industrial country whose estimated long-term real interest rates, at 6 per cent, are above their 1980-92 average, despite recession. ..TX.- Governments that borrow in their own currencies do not default. They inflate. At present, investors are feeling tolerant towards most OECD governments. Whether they continue to do so depends less on whether current deficits are cyclical or structural, which nobody knows, and rather more on when investors think they will end. Governments that expect creditors to be infinitely forbearing are due for a shock. ..TX.- ----------------------------------------------------------------------- INTERNATIONAL ECONOMIC INDICATORS: PRICES AND COMPETITIVENESS ----------------------------------------------------------------------- Yearly figures are shown in index form with the common base year of 1985. The real exchange rate is an index throughout; other quarterly and monthly figures show the percentage change over the corresponding period in the previous year and are positive unless otherwise stated. ----------------------------------------------------------------------- UNITED STATES ----------------------------------------------------------------------- Unit Real Consumer Producer labour exchange prices prices Earnings costs rate ----------------------------------------------------------------------- 1985 100.0 100.0 100.0 100.0 100.0 1986 101.9 98.6 102.2 99.4 83.7 1987 105.6 100.7 103.8 96.7 74.9 1988 109.9 103.2 106.9 99.1 71.4 1989 115.2 108.5 110.0 101.1 75.0 1990 121.5 113.8 113.8 104.0 71.8 1991 126.6 116.3 117.3 107.3 71.3 1992 130.4 117.7 120.2 105.8 70.6 3rd qtr. 1992 3.1 1.6 2.3 -1.1 68.1 4th qtr. 1992 3.0 1.6 2.2 -2.0 72.2 1st qtr. 1993 3.2 1.9 2.8 -1.7 74.3 2nd qtr. 1993 72.9 July 1992 3.2 1.7 1.7 -1.4 68.5 August 3.2 1.6 2.6 -1.4 67.7 September 3.0 1.6 2.5 -0.5 68.1 October 3.2 1.7 2.5 -1.6 70.3 November 3.0 1.4 1.7 -2.4 73.1 December 2.9 1.6 2.5 -2.0 73.3 January 1993 3.3 2.0 3.4 -2.1 74.4 February 3.2 1.8 2.5 -1.6 74.8 March 3.1 2.0 2.5 -1.3 74.0 April 3.2 2.4 2.5 -1.6 72.5 May 3.2 2.0 2.5 -1.6 72.6 June 73.4 ..TX.- ----------------------------------------------------------------------- JAPAN ----------------------------------------------------------------------- Unit Real Consumer Producer labour exchange prices prices Earnings costs rate ----------------------------------------------------------------------- 1985 100.0 100.0 100.0 100.0 100.0 1986 100.8 95.3 101.4 103.3 119.2 1987 101.2 92.5 103.1 100.6 123.3 1988 102.2 92.3 107.8 96.2 130.0 1989 104.9 94.2 114.0 96.1 122.1 1990 108.2 95.7 120.1 98.2 109.2 1991 111.8 96.8 124.2 101.8 116.2 1992 113.9 95.8 125.6 111.1 118.7 3rd qtr. 1992 2.0 -0.9 0.7 8.9 117.1 4th qtr. 1992 0.9 -1.2 -0.1 10.4 122.1 1st qtr. 1993 1.2 -1.1 -0.5 7.0 126.1 2nd qtr. 1993 1.0 135.5 July 1992 2.0 -0.8 2.0 8.7 116.8 August 1.8 -0.9 -1.8 11.4 115.4 September 2.2 -0.9 1.1 6.7 119.1 October 1.2 -1.1 1.2 10.5 121.8 November 0.6 -1.1 1.2 10.4 122.4 December 0.9 -1.2 -1.0 10.3 122.2 January 1993 1.0 -1.1 -3.6 10.1 122.0 February 1.3 -1.0 1.3 7.3 126.5 March 1.2 -1.2 1.0 3.6 129.4 April 0.9 -1.3 1.9 132.6 May 1.1 134.7 June 1.0 139.2 ----------------------------------------------------------------------- ..TX.- GERMANY ----------------------------------------------------------------------- Unit Real Consumer Producer labour exchange prices prices Earnings costs rate ----------------------------------------------------------------------- 1985 100.0 100.0 100.0 100.0 100.0 1986 99.9 97.5 103.8 103.7 107.0 1987 100.1 95.1 108.0 106.9 110.5 1988 101.4 96.2 113.0 106.7 109.9 1989 104.2 99.3 117.3 107.7 108.4 1990 107.0 101.0 123.8 110.2 110.3 1991 110.7 103.4 131.8 114.7 108.4 1992 115.1 104.8 121.1 110.5 3rd qtr. 1992 3.5 1.0 na 6.1 111.2 4th qtr. 1992 3.7 0.5 na 8.2 113.3 1st qtr. 1993 4.3 0.5 na 10.0 113.3 2nd qtr. 1993 4.2 na 111.8 July 1992 3.3 1.1 8.9 110.5 August 3.5 1.1 5.2 111.1 September 3.6 0.8 4.3 112.0 October 3.7 0.5 7.8 113.7 November 3.7 0.5 10.3 112.4 December 3.7 0.5 6.6 113.6 January 1993 4.4 0.8 12.1 113.4 February 4.2 0.5 12.2 113.4 March 4.2 0.3 5.9 113.2 April 4.3 0.1 113.1 May 4.2 -0.3 111.7 June 4.1 110.6 ..TX.- ----------------------------------------------------------------------- FRANCE ----------------------------------------------------------------------- Unit Real Consumer Producer labour exchange prices prices Earnings costs rate ----------------------------------------------------------------------- 1985 100.0 100.0 100.0 100.0 100.0 1986 102.5 97.2 104.5 101.5 102.9 1987 105.9 97.8 107.8 103.0 104.1 1988 108.8 102.8 111.1 104.3 101.8 1989 112.6 108.4 115.4 105.5 99.8 1990 116.5 107.1 120.6 110.0 102.9 1991 120.2 105.8 125.8 114.3 101.3 1992 123.0 104.0 130.3 104.7 3rd qtr. 1992 2.7 -0.9 na 2.6 105.0 4th qtr. 1992 2.2 -1.5 na 108.2 1st qtr. 1993 2.1 -2.3 na 109.1 2nd qtr. 1993 na 109.3 July 1992 2.9 na - na 104.4 August 2.7 na - na 104.6 September 2.6 na 3.5 na 106.2 October 2.4 na - na 108.8 November 2.1 na - na 108.0 December 2.0 na 3.6 na 107.9 January 1993 2.1 na - na 108.5 February 2.1 na - na 109.6 March 2.2 na 3.4 na 109.2 April 2.1 na - na 110.0 May 2.0 na - na 109.3 June na na 108.7 ----------------------------------------------------------------------- ITALY ..TX.- ----------------------------------------------------------------------- Unit Real Consumer Producer labour exchange prices prices Earnings costs rate ----------------------------------------------------------------------- 1985 100.0 100.0 100.0 100.0 100.0 1986 106.1 100.2 104.8 102.7 103.6 1987 111.0 103.2 111.6 105.5 104.9 1988 116.5 106.8 118.4 109.7 103.8 1989 124.2 113.1 125.6 112.3 107.4 1990 131.8 117.8 134.7 118.9 108.5 1991 140.3 121.7 147.9 131.3 107.7 1992 147.7 124.0 155.9 136.8 102.4 3rd qtr. 1992 5.2 1.9 3.7 2.7 104.4 4th qtr. 1992 4.8 2.2 2.9 6.4 93.0 1st qtr. 1993 4.3 3.1 2.8 85.9 2nd qtr. 1993 4.1 86.9 July 1992 5.4 1.9 4.0 na 106.2 August 5.2 1.9 3.5 na 106.5 September 5.1 1.9 3.7 na 100.4 October 4.9 2.0 4.1 na 92.8 November 4.8 2.2 2.1 na 94.7 December 4.6 2.5 2.4 na 91.4 January 1993 4.2 2.8 2.8 na 88.0 February 4.4 2.9 2.8 na 86.0 March 4.2 3.5 2.8 na 83.8 April 4.2 2.6 na 84.3 May 4.0 na 88.0 June 4.2 na 88.3 ----------------------------------------------------------------------- UNITED KINGDOM ..TX.- ----------------------------------------------------------------------- Unit Real Consumer Producer labour exchange prices prices Earnings costs rate ----------------------------------------------------------------------- 1985 100.0 100.0 100.0 100.0 100.0 1986 103.4 104.3 107.7 104.5 94.2 1987 107.7 108.3 116.3 105.9 94.2 1988 113.0 113.2 126.2 108.9 101.6 1989 121.8 119.0 137.2 113.6 100.9 1990 133.3 126.0 150.1 123.2 102.2 1991 141.2 133.0 162.4 130.3 105.8 1992 146.4 138.0 173.1 132.2 102.8 3rd qtr. 1992 3.6 3.5 6.2 1.9 105.7 4th qtr. 1992 3.0 3.4 5.7 -0.6 92.9 1st qtr. 1993 1.8 3.7 4.8 -2.9 92.7 2nd qtr. 1993 95.2 July 1992 3.7 3.6 6.2 2.9 107.8 August 3.6 3.4 6.5 1.8 107.0 September 3.6 3.4 5.7 1.1 102.3 October 3.5 3.3 6.3 0.1 93.8 November 3.0 3.3 5.6 -0.4 91.3 December 2.6 3.5 5.4 -1.4 93.4 January 1993 1.7 3.6 5.0 -2.9 94.9 February 1.8 3.7 5.1 -2.7 90.4 March 1.9 3.6 4.2 -3.0 92.4 April 1.3 3.8 5.2 -2.6 95.5 May 1.3 4.0 95.5 June 94.9 ----------------------------------------------------------------------- ..TX.- Statistics for Germany apply only to western Germany. Data supplied by Datastream and WEFA from national government and IMF sources, and by JP Morgan, New York. Consumer prices: not seasonally adjusted. Producer prices: not seasonally adjusted, US - finished goods, Japan - manufactured goods, Germany - industrial products, France - intermediate goods, Italy - total producer prices, UK - manufactured products. Earnings index: not seasonally adjusted, refers to earnings in manufacturing except France and Italy (wage rates in industry). Hourly except Japan (monthly) and UK (weekly). Unit labour costs: seasonally adjusted, measured in domestic currencies. Germany - mining and manufacturing, other countries - manufacturing industry. Real exchange rate: JP Morgan real effective exchange rate index versus 15 industrial country currencies, adjusted for change in relative wholesale price of domestic manufactures. A fall in the index indicates improved international competitiveness. ----------------------------------------------------------------------- ..CN.- Countries: QM Organisation for Economic Cooperation and Development. US United States of America. JP Japan, Asia. DE Germany, EC. FR France, EC. IT Italy, EC. GB United Kingdom, EC. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Gross domestic product. ECON Employment & unemployment. ECON Economic Indicators. ECON Inflation. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGLB7AA2FT ..HL.- 930712FT 930712 Clerics join Saudi cabinet (106) ..BL.- By REUTER ..DL.- DUBAI ..TX.- Saudi Arabia's King Fahd has made two senior Moslem clerics cabinet ministers and ordered the setting up of an Islamic guidance ministry, Reuter reports from Dubai. ..TX.- Sheikh Abdel Aziz Bin Abdullah Bin Baz, a member of the influential Higher Council of Ulema, was named president of the council, a position that will now carry ministerial rank. ..TX.- The decree also named Sheikh Bin Baz as the General Mufti of Saudi Arabia, the country's most senior religious post. ..CN.- Countries: SA Saudi Arabia, Middle East. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGLB7AA1FT ..HL.- 930712FT 930712 Mubarak backed for re-election (129) ..BL.- By MARK NICHOLSON ..DL.- CAIRO ..TX.- Egyptian President Hosni Mubarak yesterday won the backing of 97 per cent of the People's Assembly to run as the sole candidate in the presidential elections, clearing the way for him to take up his third six-year term, Mark Nicholson writes from Cairo. ..TX.- The petition makes the house's backing for Mr Mubarak all but certain on July 21, when it must formally endorse his candidature by a two-thirds majority. His nomination will then be put to a referendum in October, at which a simple majority will return him. He won 97.1 per cent of the votes in October 1987. ..CN.- Countries: EG Egypt, Africa. ..IN.- Industry: P9199 General Government, NEC. ..TP.- Types: GOVT Government News. ..IX.- P9199. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGLB7AA0FT ..HL.- 930712FT 930712 Attacks on Israel blamed on Syria (168) ..BL.- By JULIAN OZANNE ..DL.- JERUSALEM ..TX.- ISRAEL yesterday blamed Syria for an upsurge in attacks by Arab guerrillas based in southern Lebanon and said it was considering how best to retaliate, writes Julian Ozanne from Jerusalem. ..TX.- Mr Uri Lubrani, Israel's chief negotiator with Lebanon at the Middle East peace talks, said Syria was responsible for the latest escalation of artillery duels, which last week left five Israeli soldiers dead. 'This escalation requires different treatment than others up to now,' he said. ..TX.- Syria, which has up to 40,000 troops in Lebanon, yesterday responded by saying Israel's self-declared security zone in southern Lebanon, scene of the clashes, was an 'explosive trap'. ..TX.- Meanwhile, Mr Dennis Ross, US co-ordinator of the peace talks, is currently shuttling between Middle East capitals as part of an intense diplomatic effort to break the deadlock in the US-backed peace process. ..CN.- Countries: IL Israel, Middle East. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 4 ***************************************************************** ..AN.-00DGLB7AAZFT ..HL.- 930712FT 930712 Nigerian parties fall in line: Politicians back Babangida, though some dissent (559) ..BL.- By PAUL ADAMS ..TX.- MILITARY coups have ousted civilians from power twice in Nigeria's recent history but the annulment of last month's presidential elections may have deprived Mr Moshood Abiola of power even before he was sworn in to office. ..TX.- By co-opting both political parties, Mr Abiola's Social Democratic party (SDP) and the rival National Republican Convention (NRC), to back the idea of an interim government, President Ibrahim Babangida may succeed in overturning the mandate of the ballot box aided by civilian leaders. ..TX.- The manipulation of the June polls had provoked serious divisions in the senior ranks of the military and mass protests on the streets of Lagos. ..TX.- When Gen Babangida threatened to dissolve all democratic institutions, the instinct for self-preservation brought the civilian politicians into line. ..TX.- This is the fourth setback since 1990 to Nigeria's transition to democracy, which is unlikely to reach completion by the August 27 deadline. Gen Babangida proposes to hand over to an unelected interim government which would be approved by the military regime. ..TX.- Except for an elected head of state, Mr Babangida has created every other democratic civilian institution during his overhaul of Nigerian politics and last week they came to his aid. ..TX.- Party officials, elected leaders of local and state governments and members of the two-tier national and state assemblies enjoy the status and privileges of office while the standard of living among most Nigerians is in sharp decline. ..TX.- In a speech broadcast at the end of June, the president said the elections, in which the SDP gained a clear majority, were so flawed that if the results were upheld it would provide an unsound basis for democracy after August. The NRC argued for fresh elections, which the SDP rejected. ..TX.- Then came the ultimatum: dissolution of all democratic institutions unless the parties agreed to co-operate with the government by Friday morning. From all over Nigeria, anxious politicians converged on Abuja, the federal capital, to talk to the government which had created their positions. ..TX.- 'State governors were lobbying hard, late into Thursday night, to prevent their jobs being scrapped,' said a federal government adviser in Abuja. ..TX.- The parties agreed to form an interim government provided that 'democratic institutions remain in place' and subject to agreement on 'the composition and tenure of the proposed government'. ..TX.- However, there remain signs of dissent. Mr Abiola yesterday reiterated his opposition to the deal, ruling out his participation in an interim civilian government. In a sign of political division, meanwhile, some members of the NRC were still demanding parity with the SDP. ..TX.- Gen Babangida has summoned all his senior security service officers to Abuja before announcing his next move. ..TX.- The future of Mr Abiola is unclear. The Sultan of Sokoto, head of Islam in Nigeria, made a rare political speech last Thursday in support of him. ..TX.- The sultan is foremost traditional ruler in northern Nigeria, where Mr Abiola as a southerner was expected to lack support. In June the SDP won a majority of states in the north including Kano, home of his opponent Mr Bashir Tofa. As Gen Babangida promised six years ago, Nigerian politics produced a leader cutting across ethnic boundaries. ..CN.- Countries: NG Nigeria, Africa. ..IN.- Industry: P9721 International Affairs. P8651 Political Organizations. ..TP.- Types: NEWS General News. ..IX.- P9721, P8651. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGLB7AAYFT ..HL.- 930712FT 930712 Last-chance talks for NY Post (141) ..BL.- By MARTIN DICKSON ..DL.- NEW YORK ..TX.- NEW YORK Governor Mario Cuomo was yesterday involved in last-ditch talks to keep alive the New York Post after Mr Rupert Murdoch abandoned an attempt to buy the ailing newspaper on Friday, Martin Dickson writes from New York. ..TX.- Mr Murdoch, running the paper temporarily under a contract from the bankruptcy court, ceased publication on Friday, saying the Post's 11 unions did not give him enough cost concessions to make the paper viable. ..TX.- However, Mr Cuomo was at the centre of attempts to revive the negotiations and some officials hoped Mr Murdoch might be tempted back if the unions gave further ground. ..TX.- See Observer, Page 15 ..CO.- Companies: New York Post. ..CN.- Countries: US United States of America. ..IN.- Industry: P2711 Newspapers. ..TP.- Types: COMP Company News. ..IX.- P2711. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGLB7AAXFT ..HL.- 930712FT 930712 Search for new NY Fed chief near end (342) ..BL.- By PATRICK HARVERSON ..DL.- NEW YORK ..TX.- THE successor to Mr Gerald Corrigan as president of the Federal Reserve Bank of New York, one of the most powerful positions in international finance, is likely to emerge this week. ..TX.- Mr Corrigan, who announced his decision to step down in January, is due to leave on August 20. If the search committee fails to make a recommendation at Thursday's monthly meeting of the bank's board of directors, it will have to wait until August 19. That would not leave enough time before Mr Corrigan's departure for the confirmation of the candidate by the governors of the Federal Reserve Board in Washington. ..TX.- Three names have emerged as front-runners for the post, which is second only to the Fed chairmanship in importance in the US central bank system. But the selection process has taken longer than normal. One observer with a close knowledge of the Fed said last week: 'I heard that there was a real fight over this. Someone clearly had a rough time making up their minds.' ..TX.- The front-runners are: Mr William McDonough, Mr Corrigan's number two in New York and the official responsible for implementing Fed policy in the domestic bond market and foreign exchange markets; Mr Thomas Melzer, president of the Federal Reserve Bank of St Louis; and Mr Gary Stern, president of the Federal Reserve Bank of Minneapolis. Mr McDonough is tipped by most insiders to win the job. ..TX.- Others believed to have been considered include Ms Karen Horn, chairman of Bank One in Ohio and former president of the Federal Reserve Bank of Cleveland; Mr David Mullins, vice-chairman of the Federal Reserve; and Mr Richard Syron, president of the Federal Reserve Bank of Boston. ..TX.- In the past, the New York Fed president has played a key role in helping the financial system survive crises, including the October 1987 stock market crash. ..CN.- Countries: US United States of America. ..IN.- Industry: P6011 Federal Reserve Banks. ..TP.- Types: PEOP People. ..IX.- P6011. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGLB7AAWFT ..HL.- 930712FT 930712 US-Cuba phone links could mean softer line: Congress is starting to listen to more moderate Cuban voices (768) ..BL.- By GEORGE GRAHAM ..TX.- AT first glance, relations between Cuba and the US have rarely been icier: Cuba's devastated economy is driving more people to flee the country, leading to more shootings by Cuban border guards and a flurry of diplomatic protests from the US. ..TX.- 'Because things are so desperate in Cuba and more people think the end is at hand, there have been more incidents that could provoke tension,' comments Mr Ernest Preeg, former chief economist at the US Agency for International Development and author of a recent study on Cuba's economic prospects once the US trade embargo is lifted. ..TX.- A State Department spokesman last week criticised Cuba's 'barbaric' attacks both on US-registered boats trying to pick up refugees and on swimmers trying to reach asylum in the US Guantanamo naval base, on the island's southeastern coast. ..TX.- This drew a sharp rebuttal from Mr Roberto Robaina, Cuba's foreign minister, who called the US complaint 'an infamy, a provocation and, at the very least, a shameful lack of seriousness'. ..TX.- Telecommunications between Cuba and the US are also at one of their worst levels in years: last year's Hurricane Andrew destroyed AT&T's microwave links from south Florida and Cuba has now sharply cut the volume of US calls it will allow to be routed through Italy. ..TX.- However, the US State Department is preparing new guidelines that could greatly ease telephone links with Cuba and mark a step along what some Cuba experts believe might turn out to be a path towards warmer relations. Significantly, some AT&T officials expect the new guidelines to allow Cuba to take some of the revenue from the telephone calls, instead of freezing it all in an escrow, as happens today. ..TX.- Also indicative of a thaw has been President Fidel Castro's recent decision to allow some prominent dissidents to travel abroad, while last month, in a move that could have far-reaching economic consequences, he asked the national assembly to consider legalising use of the dollar in Cuba. ..TX.- US Cuban policy has always been dominated by an argument over whether to use threats to finish the work of the trade embargo and topple the Castro government, or incentives to bring about change more quickly. ..TX.- In political terms, the former school of thought, expounded by the Cuban-American National Foundation, a well-financed Miami exile group led by Mr Jorge Mas Canosa, has always dominated. It still commands a clear majority in Congress, but has lost some of its strongest supporters, such as Mr Dante Fascell, the Florida congressman who chaired the House of Representatives foreign affairs committee until his retirement this year. ..TX.- Members of Congress have started to listen to some of the more moderate voices in the Cuban exile community. The House recently voted to kill funding for TV Marti, the US-financed propaganda station beamed to Cuba and closely aligned with Mr Canosa. ..TX.- The new administration does not appear to have developed a clear Cuba policy yet. During the election campaign, Mr Bill Clinton took an even tougher line on Cuba than President George Bush, but his appointees include some who have in the past favoured more dialogue with Cuba. ..TX.- Telephone links are one area where the two camps agree. The Cuban-American National Foundation, which in general opposes any easing of the embargo, backs easier and cheaper telecommunications, and this measure was included in a bill passed last year which otherwise sought to tighten the economic noose on Cuba. ..TX.- Demand for phone links among the Cuban exile community is high. Even before the limited AT&T microwave link was destroyed by the hurricane, the company was able to connect only around 500,000 calls out of 60m attempted each year. ..TX.- The cost of getting through to Cuba has risen sharply. AT&T says that if it could serve the island directly, its charges would average Dollars 1.55 (Pounds 1) a minute; with the service via Italy cut to a trickle, many exiles now dial pirate services in Canada, at prices ranging from Dollars 3.50 to Dollars 7.50 a minute. ..TX.- Cuba prefers the Canadian links, because it receives a share of the revenue in the form of desperately needed hard currency. The restriction on AT&T's Italian traffic is seen as a bargaining ploy to weaken US insistance that all revenue go into the escrow account, which has an estimated Dollars 60m already. ..CN.- Countries: US United States of America. CU Cuba, Caribbean. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9311, P9721. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGLB7AAVFT ..HL.- 930712FT 930712 US flooding disaster area grows: Rain is expected to ease, but east coast heatwave adds to weather problems (410) ..BL.- By GEORGE GRAHAM ..DL.- WASHINGTON ..TX.- THE US government yesterday declared 44 more Missouri counties disaster areas, adding to the six-state area in the upper Mississippi basin that has been devastated by weeks of rain and floods. ..TX.- While weather forecasters predicted the rain would slacken over the next few days in the upper Midwest, Mr Elbert Joe Friday, director of the National Weather Service, warned there was now so much in the river basins that flooding could last for weeks. ..TX.- 'It could very well go toward the end of August,' he cautioned yesterday. ..TX.- The heavy rains have soaked acres of farmland and driven the Mississippi to levels that in many locations surpass the peaks recorded in the 1973 floods, the most devastating in recent memory. ..TX.- Flooding has also closed the water purification centre in Des Moines, Iowa, depriving 250,000 people of clean water. ..TX.- At the same time, the east coast of the US is caught by a heatwave. A week of temperatures above 95 degrees has taken more lives so far than the flooding in the Midwest. ..TX.- At St Louis, just below the Mississippi's junction with the Missouri, floods are expected to crest at 45 feet this week, higher than the 43.3 feet peak recorded in 1973. River flow at St Louis is expected to reach 1m cubic feet per second. ..TX.- The great floods of 1844 are believed to have reached a flow of 1.3m cubic feet per second, but the destruction they caused was much less. ..TX.- Some critics say developers have invited disaster by building in the flood plain, instead of up on the river bluffs as in the past. Efforts by the Army Corps of Engineers to control flooding with a programme of dams and levees may only have worsened the situation by confining the Mississippi within a narrower channel. ..TX.- 'Rivers are supposed to flood. You cannot control a river the volume and the size of the Mississippi,' comments Ms Susie Wilkins of American Rivers, a Washington-based conservation group. ..TX.- Other critics say the federal government has exacerbated the problem by not enforcing planning restrictions to divert development away from the riskiest areas as a quid pro quo for the cheap insurance it has provided since 1968. ..CN.- Countries: US United States of America. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: RES Natural resources. ..IX.- P9229. ..DS.- The Financial Times ..XP.- London Page 3 ***************************************************************** ..AN.-00DGLB7AAUFT ..HL.- 930712FT 930712 Bosnia Moslems form federal plan (406) ..BL.- By LAURA SILBER ..DL.- BELGRADE ..TX.- BOSNIA'S collective presidency said yesterday it had agreed on the outline of a plan to create a federation out of the war-torn republic, as the chief UN relief official yesterday warned that humanitarian operations in Bosnia were in jeopardy. ..TX.- 'They (presidency members) agreed the constitutional make-up of Bosnia-Hercegovina should be along the lines of a federal state in which all citizens of three nationalities will have equal rights,' said a statement, read out by Moslem vice-president Ejup Ganic after the talks in Zagreb, the Croatian capital. ..TX.- The announcement, agreed after two days of debate, is likely to be rejected by Serb and Croat leaders, who have eagerly backed the republic's ethnic partition. The Bosnian plan rejects the principle of ethnic division and says provinces would have to be worked out on economic lines. ..TX.- Serb leaders at the weekend reiterated warnings that the Moslems would be left with nothing if they rejected a three-way partition. Moslems have opposed the division of Bosnia fearing it will leave them in economically unviable reservations. ..TX.- Most of the 10-member presidency has opposed the Serbo-Croat plan to divide the republic along ethnic lines despite the urging for an agreement from international peace mediators Lord Owen and Mr Thorvald Stoltenberg or face disaster in the winter. ..TX.- Mrs Sadako Ogata, United Nations High Commissioner for Refugees (UNHCR) said the Bosnian operation was running out of money and called for a conference in Geneva on Friday to discuss the problems impeding the relief effort. ..TX.- While she did not say the UNHCR would pull out of Bosnia, she accused all sides of sabotaging the relief operation. ..TX.- Her remarks came as water supplies dipped dangerously low in Sarajevo because Serb besiegers were blocking fuel tanks from reaching the Bosnian capital. The fuel was earmarked for water pumps to supply Sarajevo. ..TX.- Doctors fear outbreaks of typhoid and dysentery in the city, which has been deprived of electricity as well as water. A UN official in Sarajevo said Bosnian defenders refuse to restore a supply grid which would also revive a Serb arms factory in the suburb of Vogosca. The official said Serbs, meanwhile, were refusing to repair a key power line from the Kakanj area in Moslem-held central Bosnia until Moslem snipers stopped targeting the Vogosca link. ..CN.- Countries: BA Bosnia-Hercegovina, East Europe. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGLB7AATFT ..HL.- 930712FT 930712 Further arrest in water inquiry (362) ..BL.- By HAIG SIMONIAN ..TX.- ITALIAN police have detained Mr Ettore Fortuna, chairman of the country's mineral water industry association, on allegations of paying illegal political contributions. ..TX.- His arrest follows similar charges on Friday against Mr Bruno Mentasti, managing director of the popular San Pellegrino brand, and Mr Giuliano De Polo, chairman of San Benedetto, and the arrest this month of Mr Carlo Violati, the former chairman of the Ferrerelle brand. Mr Violati allegedly paid L200m (Pounds 87,000) to speed Health Ministry investigations into the quality of his company's water. ..TX.- The bubble burst for all four men after magistrates began interrogating Mr Giovanni Marone, the secretary of Mr Francesco De Lorenzo, the former health minister. According to Mr Marone's testimony, which has been widely leaked, Mr Fortuna paid about L250m to facilitate the introduction of new European Community mineral water standards into Italy. ..TX.- The arrests reinforce allegations that the Health Ministry was one of the most lucrative sources of funds for Italian politicians. ..TX.- Mr De Lorenzo, who resigned in February after allegations of a jobs-for-votes scam in his native Naples, has since been told by magistrates he is under investigation for a string of alleged kickbacks and alleged illegal political contributions. ..TX.- Among those arrested so far following testimony from Mr Marone are a number of top drugs company executives and executives from some of Italy's biggest advertising and public relations companies. ..TX.- All are accused of paying kickbacks to the ministry to influence drugs policy or win business on Italy's big anti-Aids campaign. ..TX.- Mr Renato Marnetto, a former finance director of the state-owned Eni energy and chemicals group, is reported to have told magistrates that the company paid Dollars 20m (Pounds 13.3m) to the Libyan government to prevent the full nationalisation of its assets in the 1970s. ..TX.- The allegations, which come from normally reliable leaked testimony, claim the money was paid to Mr Abdessalam Jallud, second in command to Libya's leader, Colonel Muammer Gadaffi. ..CO.- Companies: Ente Nazionale Idrocarburi. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P2086 Bottled and Canned Soft Drinks. P2899 Chemical Preparations, NEC. P4911 Electric Services. ..TP.- Types: PEOP People. ..IX.- P2086, P2899, P4911. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGLB7AASFT ..HL.- 930712FT 930712 Russia lurks in the shadows of G7 feast (474) ..BL.- By LEYLA BOULTON ..DL.- TOKYO ..TX.- RUSSIA emerged at last week's Tokyo summit as an intrusive but inevitable presence at Group of Seven gatherings as it struggles to switch from frightening superpower to market-based democracy. ..TX.- The bearish figures of the two Borises - President Boris Yeltsin and his equally tall finance minister, Mr Boris Fyodorov - stood out in sharp contrast to their slight Japanese hosts in a vivid double act combining both the old and the new Russia. ..TX.- While Mr Yeltsin used his talent for plain speaking to push for better access to western markets, the younger Mr Fyodorov reassured his western counterparts they have a solid interlocuter who knows the details of what further economic reforms involve. ..TX.- Mr Yeltsin, despite joking at a final news conference that he would not be allowed back into Russia if he returned the disputed Kurile islands to Japan, did little to mend fences with Tokyo. But he said he was prepared to discuss the sovereignty issue on a long-delayed bilateral visit in October. ..TX.- Western leaders, confirming more than Dollars 43bn (Pounds 28.6bn) in aid and loans for Russia, treated the Russian leader with a mixture of tact and caution. ..TX.- Mr Yeltsin was immediately invited to next year's G7 gathering in Naples. As President Bill Clinton put it, Russia was of crucial political significance even if it did not yet qualify to become a full member. ..TX.- The problems of other former Soviet republics could not help but follow Mr Yeltsin to Tokyo. ..TX.- However, Mr Andrei Kozyrev, the foreign minister, was relaxed enough to talk, if only to comment on the various crises breaking out in the former Soviet Union. ..TX.- He announced, for instance, that Russia wanted United Nations peace monitors to help Russian troops impose a settlement on the southern republic of Georgia and separatist Abkhaz rebels accused of receiving support from Russian troops out of Moscow's control. ..TX.- This followed an appeal for humanitarian assistance sent to the G7 summit by Mr Eduard Shevardnadze, the Georgian leader, whom many G7 politicians know personally from his days as Soviet foreign minister. ..TX.- But most worrying was Ukraine, whose President Leonid Kravchuk asked the G7 on the eve of the summit not to forget economic assistance to the second most powerful republic after Russia. While Mr Yeltsin was in Tokyo, it made new threats not to give up its nuclear weapons as required by the Start 1 disarmament treaty which the US and Russia want it to ratify. ..TX.- In an attempt to make it feel less excluded, Presidents Clinton and Yeltsin said they would offer Ukraine a 'trilateral deal' to encourage it to stick to earlier plans to become a nuclear-free state. ..CN.- Countries: RU Russia, East Europe. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGLB7AARFT ..HL.- 930712FT 930712 Regional jostling ties up Yeltsin assembly / A look at new wrangling over a constitution for Russia (826) ..BL.- By JOHN LLOYD ..TX.- RUSSIA'S constitutional convention starts a new session today that seems certain to continue and deepen the fissures in the country's power structure over the future form of the state. ..TX.- A new text of the constitution has been produced in the last few days by the convention's working group, a copy of which has been obtained by the Financial Times. ..TX.- Like its predecessors, it is replete with rights and freedoms for the citizens of Russia, and is careful in many instances to emphasise the break between the formal documents of the Soviet era and the present-day intention to underpin the rights of a free people within a democracy. ..TX.- However, the contentious parts of the draft constitution are not, for most people - except the die-hard communists who have their own document proposing a return to the dictatorship of the proletariat - the promulgation of human and civil rights. Instead, they lie in the competing powers and responsibilities of the federal centres and the regions and republics within the Russian federation. ..TX.- It is the republican and regional leadership that Mr Boris Yeltsin, the Russian president, relied on when he bypassed parliament to bring together the convention - largely made up of regional representatives. However, though this has, for the moment, shifted the struggle from a forum in which he could not hope to gain assent to one better disposed towards him, he now runs up against the jealousies and fears of leaders who are trying to safeguard their own and their peoples' interests at a time when the centre seems to bring only inflation and taxes. ..TX.- The response of the republics and regions has been to demand more and more autonomy. And, because earlier drafts favoured the republics over the regions (the republics marked ethnic territorial units reflecting the imperial nature of Russia's expansion in the 19th century), the latter are now declaring themselves republics in order to claim extra rights. ..TX.- In the latest draft there has been a conscious effort to equalise the treatment of the 'subjects of the federation'. ..TX.- For example, a small insertion in one clause gives the regions and the republics the right to make 'laws', the scope of which is not defined, while another allows the possibility of accession to the federation by means of a separate treaty - thus opening the possibility of bringing in Tatarstan, the powerful republic which has always demanded special treatment. ..TX.- At the same time, the drafters believe, anomalies have been ironed out of the relationship between the president and the parliament - with the president in the superior position but with parliament having greater power than previously envisaged in initiating legislation and in deciding on the composition of the government. ..TX.- An earlier clause which appeared to suggest that the president was the highest court in the land has been clarified to read that he will seek to arbitrate in disputes between the centre and the regions, or between the regions themselves - but if he fails, the case will revert to the courts. ..TX.- However, the differences among the regions and republics appear to be too great to enable agreement today, or in the near future. The republics resent being reduced to the level of the regions: the regions will tolerate nothing less: all resent the special status of Tatarstan. Mr Sergei Shakharai, the deputy premier who has been the driving force behind the Convention on Mr Yeltsin's side, said at the weekend that 'we should adopt an interim constitutional agreement instead' - a view shared by Mr Sergei Filatov, Mr Yeltsin's chief of staff. ..TX.- The most likely timetable now appears to be that a two to three week period will elapse in which the regions and republics consider the draft and make their views felt; in the likelihood that no compromise will be possible among them, there should be an attempt to adopt an interim constitutional agreement and an election law, allowing elections to a new parliament which - unlike the old Soviet era assembly - would have the credibility and the mandate to agree the legal basis of the state. ..TX.- Mr Anatoly Sobchak, the influential mayor of St Petersburg and himself a lawyer, said in an interview with the Interfax agency that elections should be held at every level so that the system can renew itself as far as possible and so that the legislative assemblies across the Russian land mass 'reflect the true balance of forces in the country'. ..TX.- With these forces still gathering and feeling their strength, unsure of their own and others' limits, and inexperienced in the interplay of democratic struggle - the constitutional process in Russia could be prolonged, perhaps dangerously so. ..TX.- See editorial comment, P15 ..CN.- Countries: RU Russia, East Europe. ..IN.- Industry: P9721 International Affairs. P9711 National Security. ..TP.- Types: NEWS General News. ..IX.- P9721, P9711. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGLB7AAQFT ..HL.- 930712FT 930712 Segni steps up challenge to Italian party (414) ..BL.- By HAIG SIMONIAN ..DL.- MILAN ..TX.- MR Mario Segni, the popular leader of Italy's referendum movement, is expected to join forces with the cross-party Democratic Alliance movement this week in a union that could form the basis for a new, broad-based party capable of challenging the majority Christian Democrats for the political middle-ground. ..TX.- Mr Segni, who broke away from the Christian Democrats this year, has been a leading advocate of political reform and clean government. The Democratic Alliance is a loose reformist movement set up by politicians who have left their parties in recent months in protest at corruption and obstacles to political reform. Members include Mr Giorgio Ruffolo, the former Socialist environment minister, and Mr Giuseppe Ayala, previously a leading anti-Mafia judge and now a Republican MP. ..TX.- Delegates at the Alliance's national convention in Florence on Saturday were read a message from Mr Segni suggesting the movement should now move towards transforming itself into an official political party. His message came as tensions within the Christian Democrat party, which has been discredited by the corruption scandal, increased. ..TX.- Ms Rosi Bindi, a regional party leader who has spearheaded calls for reform, proposed at the weekend to make the party's Veneto region the test-bed for change. At a conference in the spa town of Abano, Ms Bindi proposed changing the party's name and adopting a reformist programme. ..TX.- Her demands come just a fortnight before a crucial Christian Democrat national convention, which may mark the party's last chance to agree changes. The party could break up if reform does not come quickly. ..TX.- Pressure on the Christian Democrats to distance themselves from the corruption scandal has been reinforced by the strength of the federalist Lombard League. At its annual meeting in Pontida, near Bergamo, Mr Umberto Bossi, the League's leader, yesterday threatened to declare a tax strike if President Oscar Luigi Scalfaro did not call a general election after parliamentary approval of the 1994 budget later this year. ..TX.- Prime minister Carlo Azeglio Ciampi met senior cabinet colleagues yesterday to discuss the government's budget plans for 1994-1996, to be put to parliament later this week. Next year's budget, usually presented in September but brought forward to July this year, is expected to reduce the estimated L180,000bn (Pounds 78bn) budget deficit by between L35,000bn and L40,000bn next year. ..CN.- Countries: IT Italy, EC. ..IN.- Industry: P8651 Political Organizations. P9199 General Government, NEC. ..TP.- Types: NEWS General News. ..IX.- P8651, P9199. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGLB7AAPFT ..HL.- 930712FT 930712 Spanish judge again rules against KIO (178) ..BL.- By PETER BRUCE ..DL.- MADRID ..TX.- SPAIN'S senior financial crimes judge has for the third time this year rejected efforts by the Kuwait Investment Office (KIO) to open criminal proceedings against the former chairman of the KIO, Sheikh Fahad Mohammed Al Sabah, and the former management of the KIO's troubled Spanish industrial investments. ..TX.- The KIO claims that it lost all Dollars 5bn (Pounds 3.3bn) invested in Spain in the mid-1980s because of mismanagement and that up to Dollars 500m of this was stolen. The judge, rejecting a new KIO writ on Friday, said the Kuwaitis had produced no new evidence and there was no evidence in the writ of criminal conduct. The KIO will appeal, for the second time. ..TX.- The KIO's efforts coincide with indications that a civil writ issued against many of the same defendants in London is also likely to become bogged down in arguments over jurisdiction. ..CO.- Companies: Kuwait Investment Office. ..CN.- Countries: ES Spain, EC. ..IN.- Industry: P6719 Holding Companies, NEC. ..TP.- Types: PEOP People. ..IX.- P6719. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGLB7AAOFT ..HL.- 930712FT 930712 Balladur bonds raise FFr110bn: Sign of confidence in government, says French PM (331) ..BL.- By DAVID BUCHAN ..DL.- PARIS ..TX.- FRENCH Prime Minister Edouard Balladur yesterday confirmed that his special bond issue, linked to privatisation and designed to promote economic recovery, had brought in FFr110bn (Pounds 12.8bn), or nearly three times its target. ..TX.- 'A few months ago, the French gave us their votes,' Mr Balladur said in reference to his March election victory, 'and today they are entrusting us with their money.' He claimed that the threefold oversubscription of the loan was 'an exceptional sign of confidence' in the government. ..TX.- But the fact that the 'Balladur bond' issue has brought in far more money than any previous state borrowing is also due to its special advantages. These give subscribers preference in buying shares in companies which are to be privatised from this autumn, and enable them to switch from money market funds into tax-free share savings plans. So, although the four-year Balladur bonds carry an interest rate of 6 per cent a year, the real cost to the state - and corresponding advantage to the bond's subscribers - is put by analysts at 7 per cent or more. ..TX.- The original target for the bond issue had been set at FFr40bn. In an interview yesterday with Journal de Dimanche, the prime minister said he would use the 'surplus' of some FFr70bn to 'support business activity and to reduce the public debt', for example by repaying companies the value added tax refund they are owed by the state more quickly. This speedier VAT refund had already been announced by the government, however. ..TX.- The prime minister said the bond issue's success and the lowering of interest rates had both safeguarded the state's welfare system and held the prospect of lower unemployment in coming months. ..CN.- Countries: FR France, EC. ..IN.- Industry: P9611 Administration of General Economic Programs. P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: ECON Employment & unemployment. ECON Inflation. ..IX.- P9611, P9311. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGLB7AANFT ..HL.- 930712FT 930712 Slav states pledge economic union (455) ..BL.- By JOHN LLOYD ..DL.- MOSCOW ..TX.- BELARUS, Russia and Ukraine, the three former Soviet republics which created the Commonwealth of Independent States, have pledged themselves to a close economic union designed to knit together once more their devastated economies. ..TX.- The agreement was announced at the weekend as waves made by the Russian parliament's decision on Friday to declare Russian ownership of the port of Sevastopol in the Ukrainian region of Crimea subsided, at least for the moment. ..TX.- Ukrainian leaders appeared pacified yesterday by comments from Mr Boris Yeltsin on his return from the Group of Seven summit in Tokyo. The Russian president said he was 'ashamed' of the decision. ..TX.- The prime ministers of the three Slav states signed a 'declaration on economic integration' which commits them to an economic treaty by September 1. This would sweep away both formal and informal barriers to trade, permit citizens of all three countries to live, work and buy property in the others and propose new institutions for developing a 'common economic space'. ..TX.- Mr Victor Chernomyrdin, the Russian premier, hinted that the agreement would go 'much further' than mere economic union - a possible reference to a clause in the declaration which says that 'the governments proceed from the fact that economic integration cannot be effective in isolation without a wider, multilateral mutual action in the political, defence and legislative areas'. ..TX.- However, the agreement faces a number of hurdles before it can be taken at face value, not least that it is one among many such declarations which have barely addressed the growing distance between the members of the CIS. ..TX.- It is only an agreement to agree - at the mercy of a worsening of relations between the states over the next few weeks, especially between Ukraine and Russia. ..TX.- The union reunites the original signatories of the CIS agreement in December 1991 but leaves out the other seven members, especially the Central Asian states of Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan, all of which have clamoured to remain in the group. ..TX.- Mr Vyacheslav Kebich, the Belarussian prime minister, denied that the non-Slav peoples had been left 'out in the cold' but the declaration itself specified 'certain conditions' which would be attendant on their joining the new 'union within a union'. ..TX.- Mr Alexander Shokhin, the Russian deputy prime minister, said that a condition of membership was that the participating states should not be members of any other such union. However, the Central Asian states have already formed their own 'common market'. ..CN.- Countries: RU Russia, East Europe. UA Ukraine, East Europe. BY Belarus, East Europe. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9311, P9721. ..DS.- The Financial Times ..XP.- London Page 2 ***************************************************************** ..AN.-00DGLB7AAMFT ..HL.- 930712FT 930712 Iraq inspection team quits (99) ..TX.- Mark Silver, leader of a team of United Nations weapons experts, during his ill-fated visit to Iraq to seal off missile testing sites. After less than 24 hours the team members left because Baghdad refused to let them do their job. US vice-president Al Gore said force was an option if Iraq continued to defy the UN. Iraq, meanwhile, called on the Security Council to prevent any attack by the US. ..TX.- Page 4 ..CN.- Countries: IQ Iraq, Middle East. ..IN.- Industry: P9721 International Affairs. ..TP.- Types: NEWS General News. ..IX.- P9721. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGLB7AALFT ..HL.- 930712FT 930712 World Bank to sharpen its focus on cutting poverty (611) ..BL.- By GEORGE GRAHAM ..DL.- WASHINGTON ..TX.- THE WORLD Bank will today unveil a strategy to overhaul its management priorities and halt an alarming decline in the quality of projects in its loan portfolio. ..TX.- The move is in response to a growing debate over the effectiveness of the world's multilateral development banks, the US in particular pressing for more effective use of its contributions. ..TX.- Executive directors representing the Bank's shareholder countries agreed last week on a programme, entitled Next Steps, to remedy some of the problems highlighted last year by an investigative taskforce chaired by Mr Willi Wapenhans, a former senior Bank official. ..TX.- Representatives from the Group of Seven leading industrial nations rejected an earlier draft of the programme as inadequate. But during three days of board meetings last week the directors agreed that the document was now 'as close as we are going to get', in the words of one official. ..TX.- The programme, coupled with moves to improve the transparency of the World Bank's operations by increasing disclosure and instituting an independent inspection panel, could have far-reaching effects on the way the Washington-based development institution does business. Next Steps attempts to shift the World Bank's focus away from how much money it lends each year towards its mission to reduce poverty in the developing world, through changes in review processes and career incentives. ..TX.- There will in future be more emphasis on detailed country reviews which will provide a framework for individual project loans. Promotions will also be based on how well projects perform, and not, as in the past, on the number and size of loans negotiated by staff. ..TX.- 'While commitment levels and the size of resource transfers cannot be ignored, the ultimate test of the Bank's operations is the actual performance of Bank-financed programmes, including their long-term development impact on our clients and particularly on the poorest segments of their populations,' the Next Steps document says. ..TX.- The Wapenhans report revealed alarming problems with the Bank's follow-through on loans: the proportion of projects in the World Bank's Dollars 138bn (Pounds 92bn) portfolio showing big problems nearly doubled from 11 per cent in 1981 to 20 per cent a decade later. Projects were taking an average of 2 1/2 years longer to complete than Bank staff estimated at the outset. ..TX.- Environmental groups have already criticised the Next Steps programme for focusing too much on financial accountability and too little on improving the actual development impact of the Bank's lending. ..TX.- Discussions on disclosure during last week's board meetings also made considerable progress, and a final document will be prepared over the summer. The creation of an inspection panel has proved more controversial, but a final paper is expected to be drafted by the World Bank's annual meeting in September. ..TX.- Executive directors are leaning towards an appeals commission to respond to complaints from local citizens and environmental and human rights groups, but insist the commission must be answerable to the board. This is likely to disappoint outside critics of the bank, who have argued that a wholly independent panel is needed. ..TX.- However, the measures are expected to satisfy the US government, which has played a critical role in prodding the Bank towards new policies on disclosure and appeals. The administration has been backed by the threat of Congress withholding authorisation for the US's Dollars 3.75bn contribution to the International Development Association, the World Bank unit which provides low interest rate loans to the very poorest countries. ..CN.- Countries: US United States of America. ..IN.- Industry: P9311 Finance, Taxation, and Monetary Policy. ..TP.- Types: MGMT Management & Marketing. CMMT Comment & Analysis. ..IX.- P9311. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGLB7AAKFT ..HL.- 930712FT 930712 Sun's 5p price cut launches tabloid war (433) ..BL.- By RAYMOND SNODDY ..TX.- MR RUPERT MURDOCH last night launched a bitter tabloid circulation war as his main popular newspaper, The Sun, announced it was cutting its price by 5p to 20p. ..TX.- The move, to last through the summer, is designed to boost flagging popular newspaper sales in the difficult summer market and put pressure on The Sun's main rivals, the Daily Mirror and the Daily Star. ..TX.- Mr David Banks, editor of the Daily Mirror last night unveiled his response as soon as he was sure the Sun presses had begun to roll for the first edition. ..TX.- For today only the Daily Mirror is cutting its price to 10p to allow potential readers to sample the paper. 'I hope this highlights the lunacy and stupidity of The Sun's cut-price tactics,' Mr Banks said. The paper will return to its normal cover price of 27p tomorrow. ..TX.- Mr David Montgomery, chief executive of Mirror Group Newspapers, described The Sun's price cut as 'the act of a desperate man with no other cards to play but cost-cutting'. He said the Daily Mirror would be promoted as a quality popular daily that was worth paying for. ..TX.- Mr Banks added that The Sun had still 'a long way to fall in price before it found its true level'. ..TX.- The Sun's price experiment, which the editor, Mr Kelvin MacKenzie, described yesterday as 'a recession beater', followed market research carried out at Martin's newsagents in areas such as Southampton and Milton Keynes. A local 5p price cut advertised by posters in the newsagents resulted in an 8 per cent increase in sales. ..TX.- Mr Murdoch, chairman of News Corporation, who personally authorised the price cut on Friday, is taking a gamble that a dramatic price cut and the accompanying publicity will lure back some of the lost regular readers. ..TX.- Sales of the mass circulation dailies have been in decline for some time. Between January and June, for example, The Sun suffered a 2.6 per cent drop. The Daily Mirror fared better but sales still fell 1.76 per cent. ..TX.- The results of The Sun's price promotion will be assessed in mid-September when a decision will be taken on whether or not to return to 25p. ..TX.- Mr MacKenzie, who is appearing in a television campaign to promote the price cut, said the paper would cut its price to 15p if anyone tried to match the first reduction. ..CO.- Companies: News Corp. Mirror Group Newspapers. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P2711 Newspapers. ..TP.- Types: COSTS Product costs & Product prices. ..IX.- P2711. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGLB7AAJFT ..HL.- 930712FT 930712 Maxwell funds seek Pounds 56m from Goldman Sachs: Pension schemes ask for detailed talks (646) ..BL.- By NORMA COHEN ..TX.- GOLDMAN SACHS, the US-based investment bank, has been asked to pay up to Pounds 56m to two pension schemes formerly controlled by the late Mr Robert Maxwell. ..TX.- This is the first time that Goldman Sachs, which dealt extensively for the Robert Maxwell family and their companies, has been approached for payment in connection with the pension schemes. Goldman is not believed so far to have rebuffed the requests. ..TX.- The requests, made in the past few weeks by two former Maxwell pension schemes, relate to a series of transactions in 1990 in which Goldman Sachs acted as purchaser for shares in Maxwell Communication Corporation from the Mirror Group Pension Scheme and the Maxwell Communication Corporation Staff Scheme. It is not clear on whose behalf Goldman Sachs was acting, but the shares were later repurchased from the firm by two Liechtenstein-based trusts controlled by Maxwell family interests. ..TX.- The requests have been made in letters to Goldman Sachs from the pension schemes, which are now seeking detailed discussions. The Mirror Group Pension Scheme last year filed a writ against five UK and international banks seeking about Pounds 87m for assets which it claims were wrongly taken from the scheme. The first of these cases is set to come to court next January. ..TX.- It is believed that Sir John Cuckney, chairman of the government-appointed charitable trust which raises money for the Maxwell pensioners, is seeking round-table talks with all banks against which the pension schemes are likely to pursue claims. For any party to admit it is in talks would suggest it erred in carrying out the relevant transactions. ..TX.- It is expected that if Goldman Sachs agreed to hand over all or part of the money it would seek a privacy agreement barring disclosure of details of the deal. ..TX.- Sir John is understood to believe the best course of action would be for firms wishing to make payments to be able to make them anonymously to his trust, which could later announce the total sum raised. ..TX.- Sir John believes anonymity is essential if pension fund assets are to be secured without resorting to the courts. ..TX.- According to testimony last autumn before the parliamentary select committee on social security, Goldman bought the shares from the two pension schemes but made payment to a third party, Bishopsgate Investment Trust (BIT), a private entity which acted for the Maxwell family interests. Goldman Sachs has said it paid the funds to BIT on the instructions of Mr Maxwell's son, Mr Kevin Maxwell, who was a trustee of both pension schemes at the time. ..TX.- It is believed that the requests for the return of the assets depend on two questions raised by both schemes: first, whether Goldman Sachs could be branded a 'constructive trustee' with a specific duty to safeguard scheme assets, and second, whether it obtained formal authorisation from the full trustee boards of both schemes to act on instructions of individual trustees for certain kinds of activities. ..TX.- Neither Goldman Sachs nor trustees to the two schemes would comment on whether they had discussed the assets, but it is believed that talks are in preliminary stages. ..TX.- To date the Cuckney trust has raised only Pounds 6m from some City firms which had business dealings with Mr Maxwell. Auditors have found a total of Pounds 440m missing from pension schemes controlled by Mr Robert Maxwell. ..TX.- In June Goldman Sachs was fined Pounds 160,000 by the Securities and Futures Authority for breaches of UK securities rules in connection with the Maxwell affair. ..CO.- Companies: Goldman Sachs Group Limited Partners. Maxwell Communication Corp. Mirror Group. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P6081 Foreign Banking and Branches and Agencies. P2711 Newspapers. P6371 Pension, Health, and Welfare Funds. ..TP.- Types: COMP Company News. ..IX.- P6081, P2711, P6371. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGLB7AAIFT ..HL.- 930712FT 930712 World News in Brief: Prost wins (72) ..TX.- Frenchman Alain Prost won the British Grand Prix at Silverstone in a Williams-Renault, increasing his lead in the world drivers' championship. The other Williams-Renault driver, Damon Hill of the UK, was in the lead when he had to retire with engine trouble. ..CN.- Countries: GB United Kingdom, EC. ..IN.- Industry: P7948 Racing, Including Track Operation. ..TP.- Types: NEWS General News. ..IX.- P7948. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGLB7AAHFT ..HL.- 930712FT 930712 World News in Brief: Russian roulette death (53) ..TX.- French former rugby union international Armand Vaquerin, 42, shot himself dead with a pistol while playing Russian roulette in a bar in Beziers, southern France. ..CN.- Countries: FR France, EC. ..IN.- Industry: P99 Nonclassifiable Establishments. ..TP.- Types: NEWS General News. ..IX.- P99. ..DS.- The Financial Times ..XP.- London Page 1 ***************************************************************** ..AN.-00DGLB7AAGFT ..HL.- 930712FT 930712 World News in Brief: Kurds kidnap Britons (77) ..TX.- Missing British engineer David Rowbottom, 27, and his cousin, Tania Miller, 28, have been kidnapped in south-east Turkey by Kurdish rebels, the Kurdistan Information Centre said. The two were reported to be 'safe and well' in the hands of the People's Liberation Army of Kurdistan. ..CN.- Countries: TR Turkey, Middle East. ..IN.- Industry: P9229 Public Order and Safety, NEC. ..TP.- Types: NEWS General News. ..IX.- P9229. ..DS.- The Financial Times ..XP.- London Page 1 *****************************************************************