Predicament: Life—The Poems of David Lowen Govett

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As the campaign builds to a climax ahead of Budget Day, the Chancellor is being left in no doubt that any moves to impose heavy taxation on pen- sions will result in killing private pension provision in the UK. Everyone waits for the Chan- cellor's Budget statement. Until then, some attention can be devoted 10 the other major decisions that will atfrci the industry, the first of these being the introduction of personal pensions. These plans when implemented could make a serious impact on company pension schemes and the political concensus on pensions between the iwo major poll in a I parties.

Such has been the preoccupa- tion with pensions lax, however, that Ui Cm? All hough Mr Fowler, In his proposals, emphasises that the scheme has been deliberately devised o sir alongside and not threaten company schemes, there is a ereal deal of scepticism about the ultimate effect. The Government his indicted its long-term objective of bringing abour a sli. So Mr Fowler's claim that lie is determined lo ensure that employers'- pension schemes continue lo play their present vital role is no!

Several vital I toms Were also niiv-. The legislation for the scheme has to he tillrudtieed ill I lie ilex! But is it nut clear that this timetable can be achieved. To achieve this target. Unlike other pension plans, it can be used by the self-employed, company directors, key executives and those in non-pensionabie employment. By taking the account from one job to another people avoid having pension benefits frozen and paying unnecessary charges onanewplan.

Over the ID years to 1st January the compound annual growth rates of our principal funds have been asfollows: IF SO you car. The pension fund you have built up will remain invested until you choose to retire. To find out more, send off this coupon and we will send you details of the plan. The longer you wait, the more you stand to lose. A man of Because whatever changes the Government may have in store. London Life's standards of service, value and performance will remain as high as ever.

As will our reputation for finding flexible. Let us help you'. Whatever your situation London Life already-has the answer. Tick appropriate box es to help London Life help you. CD Not in a Pension Scheme? You ought to make your pension, contribution before 5th April. Tax changes for pensions could occur soon. The first sensible step is to get in touch with Richards Longstaff. We have been advising clients on self-employed and personal pension plans for two decades.

Contact Malcolm Keysell on or post the coupon below. To Richards Longstaff Ltd. This practical problem is added to by the philosophical doubts about the lack of per- sonal choice available in the present systems and about whether it is nshi to provide higher pensions for the well-off bv higher taxation on all. JO he so well off. This debate has been cata- lysed by the decision of Hr Norman Fowler. Secretary, to undertake a review of pensions as parr of his inquiries into the welfare state.

Eut there is nothing new about the arguments. An ideal system, he says, must: Q Allow individuals the greatest Privatisation. To meet the first criterion. Professor Morgan argues for a continuation of the basic slate pension at jusi above subsist- ence level, financed by general taxation. It proposes personal retire- ment accounts PRA. An individual setting up a PRA with a bank. There would be a Government-set minimum pay- ment. The welfare role of government would be confined to paving or supplementing the PRA pre- miums of those unable lo pay the minimum.

Professor Morgan argues that the graduated pension scheme should he wound up and rights acquired between Tt would be logical to wind up the earnings-related scheme as well if Ihe principle were accepted that the state should not compel citizens to provide for more than a basic minimum level of old-age income. But Professor Morgan identi- fies a snag: Employers con- tribute to the scheme, as' well as employees and it is very -un- likely that if it were abolished earnings would rise by the amount of the employers' con- tribution.

The problem with this is that it would not give individuals complete freedom to decide the amount and timing of their saving or the management of their assets. But no individual should be forced to have private cover above the minimum PRA level. Apart, froni the traditional arguments about the extent to which people should be left to decide pension matters for themselves there is a.

Aud the ; more individuals who see- the. The responses will not have made particularly pleasant reading at the Department's Elephant and Castle head- fjii3rtc. And of course, there has been bitter opoosition from those with a political or commercial vested interest. The somewhat contradictory nature of the proposals them- selves has hardly helped. For while ostensibly seeking to bring freedom of individual choice into pensions — a field in which at present some 12m em- ployees are locked willy-nilly into occupational schemes — the Secretary of State has also on board a commitment that there will be no threat to exiting employers' schemes.

It is also evident that the Government is keen to pare back State commitments to pensions, and avoid any new spending requirements. So Mr Fowler is determined to prevent individuals from contracting back into the State earnings - related pension scheme, and he is attempting to push the cost of the bureau- cracy involved in personal pensions on "to the private financial institutions. In the meantime the Chan- -cellor. Mr "Nisei Lawson, is believed lo be considering possible changes to- the structure of pension tax reliefs.

AH the same there is at present a considerable political momentum behind the idea of personal pensions. A strong body of right wing opinion, sympathetically listened to by the Prime Minister and other key Conservatives, argues that investments should be brought back tinder individual rather than institutional or corporate control. And if the reality is that personal pensions simply in- volve a switch from one kind of institution to another, there is an alternative argument.

Personal pensions are portable from one job to another, whereas company schemes are designed to favour long service employees and thus act against the kind of employment mobility which the Government wishes to encourage. Briefly, the proposals set out last July provided that all em- ployees should be able to con- tract out of company plans, but should not be entitled to any contributions from their em- ployers except for rebated National Insurance contribu- tions which would vary with age, but would average just over 4.

Personal pensions would qualify for contracting out of the State earnings-related scheme, and would be subject to minimum contribution levels yet to be determined. The Government was also undecided on the crucial question of which organisations or individuals would be allowed to- market- personal pension. From the Government's point of view, the responses to the consultative document have probably contained too little solid advice on- uncertain details, and too much.

National Association of Pension Funds was concerned about ' the possible impact on occupa- Mr Norman Fowler, Social Services Secretary, now -considering pensions consultative doc itme'nt issued. Legal and General Assur- ance. But other institutions, such as unit trusts, are not keen on the idea of being forced to set up life assurance subsidiaries. General and Save and Prosper have given Strong support to the objectives being pursued by Mr Fowler, even if "they have detailed , criticisms.

And perhaps not' surprisingly the Centre for Policy Studies CPS , the right-wing Conser- vative Party think tank, offered a " whole-hearted welcome for the initiatives. J Even the CPS, however, had imports nr reservations. He asked the life and pensions industries for 'their vievfs' on a number of important aspects of the scheme. Attitudes appeared to be that if Blr Fowler wants a per- sonal pension scheme against the wishes of the industry, then he should go ahead and produce a scheme.

Although the long-term objective oLpersonal pensions is the de-institutionalisation of investment, the immediate bene- ficiaries of the scheme will be the. This is far from the actual situation. There is a thriving market in a variety of individual penson contracts, with life companies having a virtual marketing' monopoly.

Life salesmen, only able td sell tax concessions. As a result self-employed pension sales soared last year. Many Life companies report- ing their new business flgtires for are showing that sales of pensions, self-employed and executive, have risen to -a degree that more' than offsets the drop in life business. But, who they go to could have a very great bearing on how well offthey are, ultimately. The Prudential is not only one of the most secure financial. We handle more personal pension plans than anyone else. And our with-profits retirement pension plan is consistently among the best performers in its field.

It all helps to make us No. Before starting - or getting your clients to put more into - a pension plan, consider what we can offer. Which means that should conversion be required to take advantage of any future legislation on portable pensions, full credit wifi be given for benefits secured by payments already made. In this way you can avoid the penalties of delaying pension plans.

Ask your insurance adviser for details of our Personal and Executive pension plans now or post the coupon today. It could stop you losing out. Need for specialist advisers AS PENSION" contracts have traditionally been marketed by insurance companies, so the main source of advice for indi- viduals planning for their retire- ment has tended to be insurance, brokers. But the complexity of the sub- ject has brought pensions advice out of the ranjre of many high street insurance brokers.

Those insurance brokere who specialise in pensions now often have more in common with the accountants, solicitors and in- vestment managers who have entered the field of personal financing planning than with brokers concentrating on general insurance. The registration require- ments for insurance brokers, however, have so far paid little attention to this point. In the qualification demanded of indi- viduals before they can be registered as insurance brokers no distinction is made between experience in the life and non- life assurance fields.

This, he says, makes them more obviously impartial. Of course, several insurance brokers. And accountants do also accept com- mission from Insurance com- panies, although they are pro-' fessionaliy bound to declare it to their clients and are more likely to offset the money against any fees they charge. And Thornton Baker's Mr Kelly said that personal pen- sions would simply not be mar- keted by brokers if the com- mission rates were not good, as had happened with pure term insurance contracts. But although" insurance com- pany direct salesmen "attract a large share of criticism for being too driven by coramos- sion.

As the personal pensions field opens, after the impact of new legislation, Mr McKirdy sees the need for licensing not only the obvious pensions practi- tioners — such as those working for firms that are members of the Society of Pensions Consul- tants — but also accountants, solicitors and perhaps stock- brokers. There may be a growing demand for companies to pro- vide advice on pensions to their employees, particularly new arrivals.

Unfortunately such pious suggestions only serve to high- light the problems rather than solve them. Standardisation is not a very helpful concept when it is important to main- tain a wide degree of choice — though certainly a lot could be done to improve presentation. As for disinterested advice, the fact is that neutral exper- tise is an elusive concept when any salesman or adviser has to make guesses about what might happen many years into the future, and when buyers of in- vestment products are notor- iously reluctant to pay for advice. The debate over the exten- sion of availability of personal pensions adds extra topicality to -the question of consumer protection, at a time when intensive discussions are going on in related fields.

Thus the life assurance in- dustry has been conducting an active inquiry into selling techniques and commission structures, covering pension contracts as well as life assur- ance plans. The industry has drawn up a. Meanwhile, the life and, pen- sions industry has been drawn into a. Mr Norman Tebbit, Secretary of State, is encourag- ing a number of pooled invest- ment organisations— including the life offices and the unit trusts — to co-operate in form- ing a new self-regulatory agency, which will no doubt view the marketing of personal pensions as a major part of its field of responsibility.

The subject of the protection of the consumer can be broken down into two parts. There Is the question of the manage- ment of the investments over the many years for which a pen- sions contract may run: And there is tire second question of whether the mar- keting is of a proper -standard, in relation to the commissions changed, the size of the contract signed, and the persuasive techniques of the salesman. They arc closely regulated by the Department of 1 Trade and Industry, which has developed experience over many years, in monitoring whether.

Even so, it is. Government offers heavy tax relief on,' pen- sion. As for the marketing side. Even the simple - disclosure.. Perhaps the most important question Is whether companies should be allowed to pay above standard commissions to. Individually tailored advice to clients. There is also as argument for a cooling-off period to allow customers toxecover from high pressure ; salesmanship and reconsider an unwise" commit- ment. Ten days Is suggested by the life offices, and.

Nobody knows exactly what investment returns are achievable -Over lfi, 20 ; orSO years;. It is argiied -that it is prefer- able to project' the: And so have you. And you don't just have 60 take our word.. In the with-profits sector, using data supplied by the financial 71ms Self Employed Pensions Survey, the verdict was: Y lOln vestment funds. Since ,- the self-employed have been able to effect individual personal pensions with considerable - tax incenr tires: The policies are offered by life insurance companies and can provide, as well as a pension in retirement, a tax free cash lump'suih.

The tax incentives are threefold: These provide for a guaranteed minimum benefit, to which is added, at regular: Terminal bonuses Even though a life company may be paying terminal bonuses bn policies becoming, claims to- day, it does not mean it will still be paying them when you retire, or that if paid, they will be at the same rate. Over a long -period, benefits arising from terminal bonuses can amount to 25 per cent or more of the total.

As the policy conditions and benefits under the plans are largely the same governed as they are by legislation the property, UK equities, overseas equities, and other specialist investment sectors. The ultimate fortunes of the pension benefits Hill depend on the value of the units when en- cashed, and the unit value will fluctuate in line with market conditions. In return for the greater risk of a unit linked policy, there is the potential of greater benefits, end in a rising market a good unit linked policy will invariably outperform the with profits sector.

Deposit administration policies are a variation on the unit linked theme, hut operate rather like a bank account In a gestatory period LIFE companies. It proposed, that - banks, friendly societies, unit trusts, pension funds and stockbrokers, could provide- personal pen-, sions. Curiously it made ho specific -. An account Is -opened: The proceeds are tfien.

Building societies argue that personal pensions marketed by them would have the advantage ol capital security. They would also have the advantage of simplicity and a visible record of build-up. There are mixed views as to whether societies should simply be the vehicles for accumulat- ing capital, which would then be used by the individual to purchase an annunity that societies would market as agents or whether societies should undertake to proride the pensions.

Government would introduce covering those pro- viding personal pensions and on proposed building society legislation. Where the recent Green Paper showed. Company executives and their advisers are invftedito. However, if other institu- tions are merely to become involved in the funding site of personal pensions which would amount to straight savings contracts there would not be the need for such vigorous regulation.

Those institutions such as building societies and unit trust companies, which are interested in the personal pen- sions market, recognise that were they to provide the pen- sions and so become involved in guaranteeing benefits or build up amounts then there is. That aside, life companies still contend that they offer a better deal on personal pen- sions than other institutions could because they invest their funds over a wide range of Instruments.

Unit trust groups and building societies appear much keener than banks, with unit trusts arguing that they would offer greater scope for. Barclays and Save and Prosper aim to provide per- sonal pensions through their own life companies. However, it is yet to decide how far it wants to move into this market In common with other insti- tutions it is awaiting more detailed information from the Government on how such schemes will be administered before deciding how it would approach the personal pensions market, if at all.

Among ihe unit trust groups the majority are expected to opt for being build up vehicles only, although those with exist- ing life companies such as Save and Prosper will now be able to provide annunities. But while Framlington has made a bold move most other financial institutions are very much in the gestatory period when it comes to the personal pensions market,- awaiting further Government direction. After' making a deduction for charges, the premiums are in- vested in the policyholder's account, to which interest is credited at regular intervals.

The rate of interest will rise and fall in line with market rates, but like the with profits -policies, once the interest has been added it cannot be taken away. The investment funds of all these methods of pension pro- vision are managed by the in- vestment team of the life office. There are, however, limited opportunities for the self em- ployed to manage their own pen- sion funds if they prefer. Earmarked These schemes require fairly high levels of premiums, so are usually only suitable for part- nerships.

Such schemes are offered by a handful of life com- panies. Life Association of Scotland and the biggest opera- tor in this field. These assets arc separately earmarked for the partnership, but form part of ihe life com- panies' own pension fund, and therefore must be suitable for inclusion in that fund.

Accept- able assets are any securities quoted on a recognised stock exchange, commercial properly such as Hie partnership's own business premises and even loan backs to individual partner- ship members are permissible. It can sack the investment manager and appoint another? Another way in which a part- nership ran run its own fund is to set up its own in-house friendly society. These are only open to partnerships of at least sovep members, which may In- clude both full and salaried partners, but noi n mix of partners and employees.

Acceptable investments include building societies, authorised unit trusts, bank accounts with the TSB and the partnership property. They will draft Ihe rules of the friendly society and submit them for approval to the Registrar of Friendly Societies. They wilt also draft a retire- ment annuity policy for sub- mission to the Superannuation Funds Office, and prepare a simple business plan for pre- sentation tn the Registrar. There are nearly different lire offices currently marketing various forms of pensions for the self employed.

It is neces- sary to seek the advice of an insurance broker nr pensions adviser to help select the best plan to march requirements. M Even when the mortgage payments stop, plan. It has a system of contributions and pension the cost of up-keep on the family home keeps right on going. A very good reason for setting up a sub- stantial personal pension to supplement your state pension.

People who are either self-employed or not in a company pension scheme. And some rather substantial tax advantages. Talk it over with your financial adviser, then decide. After all, when you move your manor it should be because you wantto,notbecauseyouhaveto. Otherwise, you might end up on a State Pension, which could mean changing your whole way That's where our new Flexible Retirement Plan comes in.

It provides an income for life on: Your choice You can choose regular or single contributions and increase them or. You can miss a year now and again. And even arrange to have your contributions paid by us if von are ill fora long period. The tax advantages are outstanding, too. You have a wide investment choice, too. You can put your money in one or more of 10 UK and international hinds. Twice a year, if you wish, you can switch funds.

The funds are managed by teams from Fidelity International, one of the top- performing unit trust groups, and Clerical Medical, a leading UK life office with an outstanding record of returns to its with- profits policyholders. Clerical Medical, with its particular expertise in UK equities, fixed interest and property,. Together they give you the best of both worlds: If you wish, you can phase in retirement by taking benefits in stages. When you actually retire, vou can decide what combinations of tax-free cash, pension and dependant's pension suits you best.

Everyone would like to retire wealthy. Or at least comfortably off. Or post the coupon. Medical and General Life Assurance Society. THE VARIOUS supporters of a personal pension ' system attack company pension schemes by claiming they are extremely impersonal, with em- ployees having no involvement or identification in their schemes. In many pension schemes, employees have ihe facility to supplement their pen- sion benefits by paying extra contributions, over and above the normal contributions, into a pension arrangement.

AVC payments can only be made where the employee does not qualify for the maximum benefits from the main pension scheme. The Inland Revenue permits employees to contribute a maxi- mum of per cent -of their earnings towards pensions. Thus if the employee is paying 6 per cent of earnings to the main scheme, he can invest up io a further 9 per cent in an AVC scheme.

The major drawback for many employees is that the assets under an AVC scheme cannot be touched until retirement. Many employees simply do not like the idea of inaccessible assets. Since AVCs are technically an extension of the main com- pany 'scheme, the facilities have to be set up by the trustees. An individual employee cannot make his awn arrangements. It is usual for trustees to arrange AVCs outside the main company scheme — with' a life company, building society or even a bank.

The pensions establishment, in the discussions on personal pensions, took the AVC set-up as the model for its concept of a personal pensions system — a third tier personal pension sitting on top of basic State pensions and company or State earnings-relnted pension. However, the personal , pen- sion proposals. The document pointed, out that relatively few employees -.

The first reaction IS to think that " Mars must- have 4m in- different' "pension scheme that needs such widespread topping- up. But the main scheme , has a good, if somewhat unusual bene- fit structure. It has a normal retirement age of 63 far men and provides a maximum ' pension. This service f is part of Siars comprehensive pre-retirement programme -for 1 'employees. Behind this dooa; no-one can hear a pension scream Ik pensions opportunity than now.

The benefits Furthermore if you have not maximised these T sn;? The Portfolio 7 no Psrvdb h designed t g gSy. What do you have to gain by wafting for the budget? Nothing, but if the Chancellor does change the tax treatment of pensions-then you could lose a great deal. This was partly because women are more job mobile than men.

Also because their careers or jobs may be inter- rupted by time off for raising families, they may not have made sufficient contributions to an occupational pension scheme in order to derive fail benefits. In such schemes a capital sum is built up and this is used to buy an annuity for retire- ment. Life companies, how- ever. Thus, when buy ins life assur- ance. Thus, as the EOC points out. In its response to the Govern- ment's Consultative Document, women option for a personal pension under the present pro- posals "win not acquire 'the same pension entitlement as a man.

To eliminate this discrimina- tion, the EOC. Much progress has been -made in eliminating sex discrimina-. Section policies based on speaking, now have equal access this "wouM only lead to. But the sex men and -annuities to-wdmen. The EOC suggests it would lump sum payments.

In' the the proposed EEC legislation panics were to. It also eliminates different stan- ment age for men and women. The peak ige On the one hand the proposals discrimination would for male deaths- is 79 and for would seem. All pf which leads representa- contributions. Since buy-out annuities are company pension arrangements, the benefits secured by the contract are. Inland Revenue limits of two-. Thus at retirement the employee should inform the trustees of his then pension schemes of the benefits of the buy-hut annuity and the trustees should ask him for details.

Such a situation is ripe for mistakes. The Revenue is con earned that limits could well be' exceeded unintentionally. It is holding discussions with the life associations on these administration aspects. The life companies have made it clear that they cannot take respons bflity -for monitoring the over- all limits. Alternatively; be can take the transfer.

Manchester Assurance,, with ,its TransPlan. Formalised in ; Section - 32 of the Finance " -Act and these annuities are. Many life companies pow market such contracts and are reporting good business for. Single , premium from there. So employees changing jobs have to. Choice not easy The choice is not an easy one to make and neither life com panies nor pension schemes present their figures in a form that enables, an employee to make a comparison easily. Pension'sEhemesusuaHyshow just the current value of the deferred pension with no allow ances for possible increases in that pension before and after retirement.

The current Bill imposes revaluation of deferred pensions earned from this year so adding to- the complications of forecasting the ultimate pen- sion. Life -companies still do their calculations on just one growth rate and show- the cash accumu- The. This gives- the impression ; exempt -funds and the sum.

This -GMP element is - revalued each year to allow for- inflation. If the employee changes jobs vision and takes a transfer value 1 to under better value than a deferred pension, a. The assumptions underly- ing the quotations should be explained- so that the employee has all the necessary informa- tion to make his decision. Mr Fowler and his advisers ties. But as-GMPs gone much further.

GMP file-, use by. Bill will allow transfer values This' degree Of be invested directly into a: Contributions paid are invested in a variety of funds and the value accumulated to retirement. The underlying investment funds offered by a life company or other financial institutions are invariably the same funds irrespective of the type of plan, with the same investment impli- cations. The "differences be- tween the contracts arise from the different tax treatments imposed by the Inland Revenue.

Investors, particularly the self-employed and executives, have a wide choice of underly- ing investment funds for their pension plans. Each type of contract on offer carries a parti- cular style of investment with varying degrees of investment risk. Those investors who want complete guarantees in money terms can still take out non-pro- fit plans from life companies where the cash accumulation, or the pension is guaranteed in money terms. However, this is possibly the riskiest investment in real terms, especially if interest rates and inflation rates are rising.

Those self-employed who like the underlying security offered by building society investment can take out pension contracts where their contributions are invested directly with a build- ing society, getting a gross rale of return. Building societies are more active in the AVC sector. Around one quarter of AVC. Other life companies market a building society style of con- tract, where the investment re- turn is normally guaranteed to be not less than the building society mortgage rate.

These contracts are all basic- ally fixed-interest investments. Ideally, pensions should be in- vested in real rather than money assets so that the real value of pensions can be maintained. The halfway house between complete guarantees and an in- vestment media with no guaran- tees at all is the conventional with-profit contract marketed by traditional life companies. The system now becoming popular is one which operates basically as a de- posit account, wnh a guaranteed low-rate of interest, say 4 per cent, and bonus interest is added each year depending on per- formance.

The underlying investment fund operates on a pooled basis for all contracts, with invest- ments across the whole spec- trum — fixed-interest. UK and overseas equities and property being the main holdings. The mix is decided by the in- vestment manager, but there The underlying concept of will he a significant fixed- with-profits is that a basic level interest clement to match the of benefit is guaranteed at a low guaranteed liabilities.

Each year the life com- yestor has no involvement in party adds bonuses to the bene- investment decisions. A bonus once declared is then guaranteed, but future bonus rates are not. Usually a final bonus is paid when the investor An investor who is prepared to carry the investment risk himself and reap the rewards can take out a unit-linked con- tract.

Those contracts carry no guarantees, hut offer the pros- pects of high returns. It is a simple concept with the investor buying units in the investment fund of his choice and buying a pension with the cashed-in value of the units. There is now a wide range of funds available to investors, including a variety of UK and overseas equity funds, pro- perty. This latter feature offers investors the chance to become involved in the strategic investment decisions through selecting and switching funds, leaving the institution to handle the running of such a fund.

The investor can leave every- thing to the institution by selecting the managed fund, where the institution decides on the choice of investment mix. In theory, unit values can fall to zero, or at least become depressed at the time the investor has to cash them in. This risk feature was high- lighted by the pensions estab- lishment during the discussions with the Government on per- sonal pensions. The debate as to whether] unit-linked or with-profits con- tracts offer the best perfor- mance prospects has been going on for some time.

Tfie accompanying table shows that the claims of linked pension supporters have been realised Unit-linked contracts not onl. The fears that the perfnr mance of the worst funds would! There ar e a variety of way:! It is interestin' to note that property funds— highly recommended a decadi ago — are among the worsi performers. But what about thos e who are self employed? And what about those executives and directors who need to make more sophisticated arrangements?

At Provident Mutual, we see no reason why any two people should j be treated in the same way. After all, if your circumstances change for better or for worse , your particular pension plan should be equally I capable of changing. When it comes to pensions, we not only keep up with the times, we stay very much ahead.

All that changed with the passage of the Social Security Act I9? There are well over such plans available on the UK in- surance market. These plans fall into three main groups — unit-linked, with profits and deposit administra- tion. Whichever type is chosen, certain key elements are common by virtue of various pieces of financial legislation. Executive pension plans are designed for approval by the Inland Revenue under Finance Act This requires that the employer must contribuie to the plan and the contribu- tion must be more than a mere token. Contributions are off- settable against corporation tax.

It is not essential for the employee whether controlling director nr senior executive to contribute to the plan but if he does so. An executive pension plan must be set up in trust, and most insurance companies will provide the documentation. All contributions to the plan are invested in a fund which is entirely free of all tax on its income from investments and deposits, and free of capital gains tax. Service which may be taken into account consists of years with one's present employer or other companies in the same group, including service both before and after starting the plan.

Service with former employers or periods as a Schedule D taxpayer do not count. If a member leaves the service of his present employer, or the company is involved in a take-over or merger, the plan can be continued by the new employer. An executive pension plan can also be used to provide working capital through a loan- back arrangement, and as a basis for CTT planning. Single premiums can also be paid and this option can be useful in alleviating a com- pany's corporation tax burden. These plans are not available to the self-employed. In theory all employed people arc eligible — the only conditions being residence in the UK and taxa- tion under Schedule E.

Insurance companies may put a lot of marketing muscle into executive pension plans but they do not have a monopoly. Such arrangements have long been commonplace among many household - name companies whose pension funds either employ their own investment managers or use the services of stockbrokers and merchant banks. However, it is only within the t ast few yea rs tha t such arrangements have been advo- cated widely for small schemes —broadly defined as those with fewer than 20 members. There are two principal advantages associated with these small self-administered, or captive, schemes, as they are sometimes known.

First, there is scope for the scheme to make loans to the company, normally up to 50 per cent of the scheme's total assets. Not that the trustees of such a scheme have carte blanche in respect of how they invest fund monies. Among other things- Memo- randum Number 38 makes it clear that the SFO is unlikelv to approve a small self- administered scheme which in- vests a significant amount of its funds in works of art or other non-income producing assets which could be made available for the personal use of scheme members. A further SFO requirement, usually for schemes with fewer than 12 members, is the appointment of a so-called pen- sioner trustee whose job is to ensure that the scheme is not wound up other than in accor- dance with normal pension scheme practice.

This is to ensure that the scheme is not prematurely closed, with assets being distri- buted among members. Insurance companies have responded to self-administra- tion with their own hybrid schemes which offer a mixture of self-administration and in- sured management There is no shortage of options when it comes to executive pensions.

There is no shortage of incentives either, although whether the full range of tax breaks will remain in place is currently the subject of much speculation and not a little passionate debate. Rumours spread of an impending attack on pen --ion? From last March, however, until December, neither Mr Lawson nor the Financial Secre- tary to the Treasury, Mr John Moore, made any further sug- gestion that an assault was likely, or was even being con- sidered. This contrasts with state- ments by both ministers in which they have hinted fairly strongly that they would like to spread the net of Value Added Tax to include more goods and services which are at present zero-rated.

In December, the Chancellor was confronted with reports that many people were con- sidering premature retirement before the Budget in order to escape any possible removal of the tax exception granted to lump sum retirement pay-outs. Thi- k cl-arl; -r. Obviously, til'd mubi important factor will be the size of your pension fund when you retire.

All too often, thi? The table above compares die actual results of an investment in the Target Personal Pension Plan - linked ro rhe Target Managed Pension Fund - with five of the market leaders in individual pensions. What it doesn't show, however, is that, die Target plan has out-performed all other similar plans over the last five years. Wha t's i note, only rhe Ta rget plan provides you with a. He has nevertheless given no other indication of his plans. For this reason, the pensions industry has had to prepare detailed and in-depth defences against all possible attacks with- out knowing which is the most vulnerable spot.

The Chancellor has insisted on maintaining Budget secrecy and has refused to engage in consultations on ibis, or any other non-lechnical. Few outsiders Thus the case for the opposi- tion to pension tax privileges has been left to a few outsiders such as Mr Philip Chappell, of the merchant bank Morgan Grenfell, whose proposals for removing all the differences between pensions and other forms of saving are too radical and probably impractical to be seriously contemplated by the Government.

The latest figures of the revenue losses of the various reliefs, published by Mr Moore in response to a Parliamentary question earlier this month, are however higher than had been previously assumed. The substantial upward revision must have increased the attractiveness of attacking the Jump sum pay-out For even ii the tax' was phased in gradu- ally. Thus a general switching to annuities would not necesarily depress the tax yield.

Leaving aside the political constraints, an attack on the lump sum tax exemption must appear the most attractive to the Chancellor. Removing anomaly Such a change would also have no knock-on effects by throwing up ether distortions in the economic or financial system. In fact, by removing an anomaly in the general prin- ciples of pension fund taxation, it would undermine the pro-. These hinge on investing large sums with tax relief in the last few.

It is regarded as a form. In any case the scale of. Politically, however, an attack on the lump sum payment would be more difficult to follow through. It is the' one tax benefit granted to pensions that the' general public can -easily understand and fully appreciate. The Chancellor must have felt he was entering a morass as he delved Into the complexities. Labour government would, tax their overseas invest- ment, Mr Lawson has the advan- tage that the pensions industry would probably consider a limited attack on the lump sum or on their investment ittcoipe as being let off lightly: There is no obligation on I he part of schemes to revalue de- ferred pensions, so inflation soon erodes the real value of ine benefits lelr behind by the job changer.

These revalue deferred pensions in line with inflation and this solu- tion was put forward by the Occupational Pensions Board nearly four years ago. But only now has the Gov- ernment got down to the task of imposing a solution on schemes, since pension schemes and employers were not pre-: The Social Security Bill now in the Committee stage in i he House of Commons, pro- poses tfvt in future deferred pensions will be revalued up ro retirement date by the rise in the Retail Price Index, sub- iect to a maximum Increase nf 5 per cent per annum over the period.

But it is nowhere near as simple as that The main subject of the dis- cussion was the cost element and how pension schemes and employers would meet the p xtra costs involved. Indeed, many employers were opposed to having to pay anything for ex-employees who bad left their employment voluntarily. It was argued with. Benefits acqnired before do not have to be revalued-. Thus the legislation will result in a complex situation lor early leavers deciding on the value of their deferred pen- sion.

Until well into the next century many employees changing jobs wall be faced with the situation that different bits of their deferred pension will be treated differently; in as many as four ways according to what the benefits represent and when they were acquired. The solution will not really become effective in solving the problem until the next century and then only if the annual inflation rate remains at or below 5 per cent.

A return to double-figure inflation would make the pro- tection under these proposals far from complete. However, once these proposals are on the Statute hooks, a future Govern- ment could change the maxi- mum rate — a thought ' that perturbs the pensions Industry. Point overlooked A point often overlooked by commentators and one that has not been emphasised is that the Bill does not require the revlua- tion of the deferred pension to continue once he pension becomes payable.

It is then treated like other pensions in payment. A significant minority of pen- sion schemes jn the private sec- tor still do not revalue pen- sions in payment by more than three per cent a year. Under the proposals, em- ployers could find themselves facing a moral obligation to continue the revaluation once the pensions became payable, and to apply that revaluation to all pensions. It must be remembered that these proposals only apply to job changers wilh at least five years service with their pre- vious employer or to those employees who are entitled to a deferred pension with less services.

Most job changers have lets service and their entitle- ment is usually a refund of con- tributions. This situation will continue. However, where job changers are entitled to a deferred pen- sion; the BUI is now giving them an automatic right to a transfer payment instead of a deferred pension. Most large and medium schemes already do this.

Employees must use this transfer payment to: At present there are no other forms. The legislation is pre- paring the way for a personal pension, system. The thorny problem of calcu- lating transfer values is still undeF discussion between the Department, of: Employees changing jobs are usually upset over what they consider are low transfer values based on a comparison with what they feel has been paid into their old scheme and what rights it vfll buy in the hew scheme.

The problem is that his idea and the actuaries idea of fair values differ somewhat ' However, Mr Fowler has warned the acturial profession publicly that if it dogs not produce a basis acceptable P all,. Reigata Asphalte House, Palace Street,.. Those who sent off tbeir money to more exotic climes may not have done disastrously compared with their stick-at- home counterparts but, in nearly ail cases, they would have been saved by only one factor: The slump in the pound against international currencies.

But, as far as the dollar was concerned there was move- ment in one direction only, except for a brief spell last February. Unfortunately for UK investors, that spell was sufficient to make many fund managers so nervous that they then, nullified much of the sub- sequent rise of the dollar by hedging against it. Partly for this reason, and partly because of the decline in U. But don't be too quick to draw unpleasant conclusions about your manager.

Hardly anyone has been able to forecast currency movements. More useful would be the pub- lication of unit trust perform- ance figures in dollar terms so that investors could assess their manager's stock market per- formance in isolation. The Japanese stock market rose much more strongly but all save one of the Fund manager. The tables of the top in per- forming unit trusts and invest- ment trusts shows a high repre- sentation of UK-invested funds.

In fact, the two best-performing UK unit trusts. Manulife High Income and Oppenheimer Income anu Growth, have the objective of investing in high-yielding stocks with the aim of achieving a high income rather than capita! According to Kenneth inglis. UK equity analyst al London stockbrokers Phillips and Drew, the prolonged upturn in the economic cycle in 19S4 led to a revision ot the prospects for many of the highest-yielding stocks.

That at least is what the unit trust marketing world was say- ing just 12 months ago, as investors rushed to pour their money into anything which had Japan on it. The interest had picked up the previous sum- mer. Even more remarkable were the events in the investment trust sector where share prices for the last 11 years have been languishing as discounts of more than 20 per cent to their net asset value.

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Suddenly a few trusts were to be found whose shares were trading at prices above the value of their assets. GT had one trust on a premium of 15 per cenL The only reason for their new- found popularity was the reali- sation that they were investing in Japan. Then the stock market slumped. The Nikkei-Dow Jones index fell from What was worse was that the UK unit trusts and investment trusts which, over the previous.

Several funds missed out on most of the rise and then took the fall squarely on the chin. Since July the market has been climbing steadily. Over the 12 months of Investors in only one of the Japanese unit trusts lost any capital last year. Interestingly, however, that one Japanese unit trust. An article on these pages 13 months ago.

Daiwa, like mpst other Japanese securities houses, has had a particularly poor performance in managing funds for its customers hack home. Daiwa was in fact sacked as the manager in July since when the Atlanta fund's per- formance has picked up a little. The second fund to be man- aged by a Japanese house, the Providence Capitol Japan Growth unit-linked fund man- aged by Nomura, performed Not that the UK-managed funds investing in Japan have had much to be proud of over the last year in terms of their investment performance. Only one unit trust. Fidelity Japan, actually managed to beat the index, the broadest measure of.

Most of the others under- performed by a large margin. Fortunately, the general rise in the stock market compounded by the equally powerful rise in the Yen against the pound has shielded most investors from the normal consequences of such under-performance. It would normally be unfair lo complain about a group of fund managers on the basis or one year's perlormance.

But some of the problems the British fund managers Ipd in ihe Japanese market last year indicate future dangers when investors may not have the cushion of a general slock market and currency rise. The main cause of the failue of the l'K funds to match ihe siock market's average return has been the upsurge in ihe share prices of Japan's banks. Many banks, after holding down tnetr sharep rices artificially for many years so that they were all traded in the same price range, allowed their shares lo more than double in value from January-Marcn Bur foreign investors have never been able to buy major stakes in the financial institutions which now account for nearly 25 per cent of the value of the stock market, so the?

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The rise in bank share prices, however, re fleers ihe increasing liberalisation of the Japanese financial system. Fidelity Japan, which since it was launched in 1 has produced the highest returns of virtually all UK unit trusts over one and three years, is the only fund to be managed exclusively by Japanese in Tokyo. The 11 fund managers and analysts have been trained in Fidelity offices around the globe. According to Yasuo Kura- moto. But although they emphasise fundamental company research, they also seek to beat the Japanese investors at their own same, switching nimbly from sector lo sector in anticipation of changes in fashion.

Over the course of the last year, the fund was heavily com- mitted! Such a strategy is inevit- ably risky and over the last three months, the fund has performed poorly. Over the three-year period, the fund's strong performance probably reflects an element of luck. The investment returns from Firie- Jiiy's other Japanese funds, for non-UK investors, have beer, less spectacular although stiil sound.

The second best-performing Japanese fund has been BailSie Gifford Japan, the top-perform- ing investment trust in It achieved a growth in its asset value of 43 per cent in the year, although the share price, which unlike a unit trust is no: Baillie Gifford missed out on ihe bom in bank shares widen. Removed from the rumours and hot tips o; Tokyo, they focus on making long-term investments based on the fundamentals. The trust's turnover last year was only 40 per cent, which is very low for a Japanese fund. This means they have to be choosy — there are only about 40 companei; m the portfolio.

Tokyo Ordinary Share Index. Tartua ry I UK income funds will continue to do well because of the large number of attractive high- yielding stocks he believes still are around. Manu- life Income, surged 2 head only in the las; few weeks of the year. Although the subsidiary of a large insurance company ir remains a very small fund and has been going for only id monlhs.

So it would be dan- gerous to draw any conclusions yet about its long-term per- forrrnaee potential. The Oppenheimer Income and Growth trust is also a newcomer having come under iis presem management only two year agu. Bui the fund managers have already established a go-gening reputation. Among the longer-established funds. And only 10 of these 79 were overseas trusts. In the investment trust sector, the pattern of poor per- formance is even more striking.

Of the funds in the top In terms of share price, investment trust performance has been more disappointing The share price of those funds investing in Japan, particularly, has risen more slowly than the rise in nei asset value. The adjacent table of the top 10 performing offshore funds is based on statistics com- piled by Lipper Analytical Services. The figures are quoted only in terms of the local currencies. For four of the 10 funds, conversion back into sterling would have meant a substantially-increased gain for UK Investors.

The most successful foreign manager appears to have been the Union Bank of Switzerland, which recently has announced it is to take a stake in Phillips and Drew. The performance of the third is more remarkable as. It benefited from the strong rise in the U. SF — Swiss Franc. HK — Hong Kong dollar. UK — sterling or UK. EQ — equity, ED — bond. G1 — growth and income. CA — capital appreciation. G — growth, FI — fixed income. SG — small company.

Key Equity and General On an offer ofice basis. Canadian insurance - activities span the globe. Canadian tech- nology matches the best of any country in die world. Y nf -mm rw. If you have one. Unit Trusts should ' generally be regarded as longterm. Essex CM 13 1AA. This would have been a more balanced book, for example, if t had given some space to Tenimore Cooper, or for that natter Whittier, Holmes,.

Poe and Whitman to Dickinson, Twain and James. A sort of secondary hero is: Why so nany intelligent Americans lave felt it necessary to break: Richard Blackmur drove himself Into the grave over the lack of response in Cambridge to his Adams lectures. Only Eliot, of ill the American commentators, nad the right idea. But in Kazin he gets a chapter to himself, whereas Eliot has to share a similar space with Pound, as Faulkner does with Dreiser. Partly because it has an axe to grind and partly because it has been cobbled together from lectures given, and articles pub- lished, over the past 20 yearn.

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  6. Am American Procession - is highly selective and frequently repetitive. But then, Kazin never did have much insight into poetic sensibility. Pound and Eliot get in because they are of interest to a mind con- cerned more with literary sociology than with literature as a discipline in itself. This method worked well in On Native Grounds, which cut such a dash in For a while it seemed as if Kazin, then in his late 20s, might turn out to be the heir to Edmund Wilson. His insights were bril- liant and his stand, in those dark days, could not be faulted. Good — but where do we go from there?

    Not exactly flops but not Wilsonian bobby-dazzlers either. But more than 70 per cent - or m - of the cash remitted in the first six months came from Filipinos in the US, of whom a large number are professionals in law. AM figures ana percentages. This will lift a big barrier to competition In basic telecoms with Singa- pore Telecom, the local monopoly. Mr Mah Bow Tan, the communications minister, said the government would held a two-stage tender to decide which companies might compete with SingTel on international and local calls, as wen as in leased cir- cuits, public switched mes- sages, data systems and voice telephony services.

    The licences to be granted represent the widest prom- ised opening of the Singa- pore telecommunications market to date. Foreign companies wifi be allowed equity pa rt icip ation of up to 49 per cent in com- panies to compete with Sing- Tel Mr Mah said preference would he given in the tender to bidders which plan to invest significant amounts and.

    Industry analysts under- stood this to mwm fixari-Hne networks, probably with fibre optic technology. A short list from this will go to a second tender in Sep- tember Results of the tender are to be announced in mid, giving the successful licensee car licensees about 18 months to buQd and test net- works and services before beginning operations- on April 1, The government said in May tt would bring forward the opening of its basic tele- com services to April from an original date of SingTel would be paid com- pensation of S9l.

    The company has not given details of how it plans to use ftp compensation pay men t, but senior executives have said SingTel is Interested in equity partnerships in the Aria-Pacific market Industry analysts said sev- eral large telecom companies might be attracted to tender for the licences on offer, mainly because of the lucra- tive market tor international calls in the-etty-state. The French com- pany reached a preliminary agreement last November to take a 49 per cent stake in Infoa- trada, the Italian joint venture between Olivetti and Bell Atlantic of the US.

    The listing could take place ' within a year. Page 17; World atodks. Sir Brian Pitman, thief executive, said. Net income for the six months to June so fall more than. The result was achieved an turnover, ahead 3 per cent from FFr Renault shares also dropped more sharply than the 0. However, be said he would not reduce bis full-year forecast of FFrLMbn for net income, as he had expected to do. The - group blamed the first-half slide on intensifying competition, particularly in its home market of France. This view was generally shared by analysts. This came down from FFrbn at the end of to FFr6.

    More Importantly, the com- pany pointed to positive trends In European market share. This, it said, bad reached Tekye ntoririt groups announce merger Bjf Christopher Parian In Lbs Angeles Diamond Shamrock and Ultramar, the regional oil refining end retailing special- ists, are to merge to a move which will link their four refi- neries and networks of more than 4, petrol and conve- nience store outlets.

    Including Calif- ornia, Arizona and NevadAi. The renamed Ultramar Dia- mond Shamrock Carp, which will have aggregate annual sales of f8bn and a market value of fXJBbn, expects annual cost savings of f75m in after one-time merger costs of 87m, mostly booked to the current financial year. Diamond Shamrock has emerged aggressively from its travails of the late s, when it failed to engineer a merger with Occidental and later split off its oil produc- tion and exploration arm as it fought successfully to evade takeoverbyMrT.

    BoonePlck- ens, the Texan oU mag n ate. In keeping with the industry-wide trend towards one-stop shopping for gro- ceries and foeL The company has capacity to refine , barrels of oil a day at two plants to Texas and sells petrol through 2, convenience stores - 1, owned and operated by the group - to nine states.

    The group is also one of the biggest north American home heating oil. The appointment was seen by most analysts as a further indication that. The Princeton-educated Lachlan started to Australia as general n-wmaggr of the News offshoot, Queensland News- papers. In July last year he became publisher of the flag- ship News publication. The - Australian, before becoming deputy managing director of the company to December.

    The latest promotion means 1 achlffn wDl have operational management of News's activi- ties to Australia. The group is also active in online technology and has a separately listed magazine and printing offehoot But some observers cau- tioned that the other Murdoch I chil dren — elder sister Eliza- beth and younger brother James - could also yet emerge from careers outside the News group to press their claims to succeed their father. For years Mr Murdoch has hoped that one or more of his children would came to promi- nence in the business. The News Corp chairman has emphasised that this would only happen If they have the ability to do so.

    The move Is a reaction to Intensifying competition from rival Euro- pean stock markets. The authorities will demand quarterly reporting of some Information from all busi- nesses quoted on the exchange, rather than simply the half-yearly data they now must provide. The aim is to improved transparency and liquidity. They will also require spon- soring Institutions of the quoted companies to hold a reserve of the shares, for release to the market during periods of high demand.

    This would help stabilise price vol- atility. The modifications - just over six months after the mar- ket was launched - come at a time of intensifying competi- tion between new equity mar- kets, with Easdaq, the Bel- gian-based pan-European growing companies market, set to join the fray at the end of the month. They also respond to frus- tration from investors who have bought shares to compa- nies quoted on the nouveau march6, only to witness prices drop sharply. The average value of the dozen businesses introduced to the market since its launch has fallen 9 per cent Some, such as Infonie, an Internet service, have proved even worse.

    Mr Jean-Franpois Thdodore, chairman of the Soctete des Bourses Fran pais es SBF , operator of the French stock markets, stressed yesterday the companies had perfor m ed better than competitors, including French groups quoted on the US Nasdaq exchange. He said there would be a wave of new listings before the end of the year, doubling the total to about The 40V4p drop to L0Qp in the share price reflected surprise at the extent of the group's problems.

    Berisford bad warned of problems at Magnet, its UK manufacturer of doors and window frames. However, the disclosure of difficulties at WelMlt, its US commercial kitchens maker, came just three months after the com- pany said the subsidiary was doing well. Berisford, a former commod- ities and property group, has sum varied fortunes in recent years. It only returned to the blade and the dividend list last year after five years of losses. During the period ft has been transformed Into a kitchens and joinery company. Mr Alan Bowkett who became chief executive in , said: Just before this, the shares were at a year high of p, up from 48p when the new manage- ment arrived.

    Mr Bowkett said US demand had dropped in the past six to eight weeks, blam- ing lower consumer spending in the fast food outlets sup- plied by Welbflt. The problems had escalated following the introduction of a computer System at Cleveland, a Welbflt subsidiary. That is partly because Swedish Insti- tutions have limits on how much they can own in any one company.

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    Mr DahlbSck admitted the company would be a curios- ity for Anglo-Saxon inves- tors. It has holdings in a variety of Swedish compa- nies, inclu ding Astra, the drugs group; Ericsson, the telecoms company; and Incentive, another holding company with stakes in ABB, the engineering group, and Electrolux, the con- sumer products company. Mr Dahlbftck acknowl- edged such holding compa- nies were unfashionable. We are not a conglom- erate, because we do not manage our investments- We are an investment trust or an industrial holding com- pany.

    It was targeting medical technology, telecoms and media, although the group had little experience in this area. It also wants to diver- sify geographically. About 10 per cent of investments should be outside Sweden by the end of the decade, com- pared with 2 per cent now. The company's main pur- pose was to provide above average returns, he said.

    Pick any period you want - we have done it. The group consistently outperformed the Swedish stock market by about 4 per cent a year, he added. One reason for this record was that the company worked as active owners. Scharp, chairman of SKF. Alcatel is competing with Lagardire, the French missiles-to-magazines con- glomerate, for control of Thomson, which the French state la privatising. The Alcatel chairman painted a picture of a decen- tralised organisation capable of creating value by means of technological transfers between its main activities - activities that he argued were increasingly inter- linked — wnd by exploiting its global negotiating muscle.

    In defence, he argued, the increased emphasis in mod- ern warfare on speed of action and the need to be able to strike with extreme precision meant "communi- cation techniques. Consequently, increasingly large propor- tions of hard-pressed defence budgets were being spent on electronics.

    CSFs defence activities were in priority sectors. A partnership involving Alcatel could also benefit the Thomson Multimedia con- sumer electronics business. It would allow it to get the most from the move towards digital technology. It is the end of the analogue era and the beginning of the digital one. One was its rela- tively small presence - in Asia. An Asian partner could help in this respect, and help to improve the competitiveness of the com- pany's products. Mr Tchuruk emphasised Alcatel bad no wish to take on the day-to-day manage- ment of activities outside its core telecoms operations.

    Group turnover rose per cent to 5Fr4. Income from the sale of non-strste- gic assets more than trebled to SFrl28m, of feet ting the SFrSOm increase in financ- ing charges, and net profit after minorities fell only 8 per cent to SFr2l7m. However, earnings per bearer share fell Holderbank has a bigger exposure to fast-growing developing countries than its competitors. In Switzerland, cement consumption fell 12 per cent- Cement deli varies fell 20 per emit in Germany and 40 per cent,. In northern Italy they rose 7 per cent, but this was more than offeet by low prices. Holderbank said European profits would be below bud- get this year.

    The downturn in Holder- bank's European operations overshadowed the buoyancy of its business in North and South America. US sales of cement and clinker rose 6. This announcement appears as a matter of record only. The amendment of the Bank's statutes has been registered In the commercial register of the country court Amtsgericht of Frankfurt am Main on July 3, The reclassification of the share capital wffl be followed by an adjustment of the quotation. Existing stock exchange orders wfll expire on September 30, at stock exchange close.

    The depositary banks wffl adjust foe security accounts as of September 30, evening In the ratio 1: This transaction does not change toe respective share of a shareholder in the share capital. The adjustment of toe security accounts Is free of charge for the shareholders. Did you know over one million people are living with it? Definitive shares will approximately be available at the end of 1 Upto that data no definitive shares In the nominal value of DM 5 can be obtained. The following warrants with option rights to acquire shares of Commerzbank AG warrants attached to the 6.

    The French company reached a preliminary agree- ment last November to take a stake in Infostrada, the joint venture between Olivetti and Bell Atlantic, of the US, which to challenge the dominance of Telecom Italia, the Italian state-controlled operator. Olivetti and France Tfilfecom reached a draft agreement hwrf month to take a 70 per cent stake in the domest ic phone network of Ferro vie della State, the Italian railway company. Bell Atlantic, which has a stake in Omnitel, to comment yesterday. Mr Colaninno bps asked for a month, to examine.

    Oli- vetti's strategy, aimed at transforming the company into a broad-based informa- tion technology and tele- coms group. One of his priorities will be to find a partner for the personal computer subsid- iary, which is said to have attracted a number of specu- lative offers already. Mr Gary Klesch, who heads a debt trading company, refused to comment yester- day about reports that he bad already tabled a bid for the PC unit.

    But their refusal to issue denials heightened the belief. Both stocks rose sharply initially, before failing hark in later trading, although still outper f orming a 1. A tie-up between the two would create by far the biggest hank in the Nordic region, with total assrtsaf. In a long-awaited restructuring of the Swedish banking sector, which has shrugged off the ill-effects of a loan-loss crisis in the early s.

    Analysts suggested the two would be a good -fit. Han d elsbanken ' 8 focus is retail banking, where it bas a wider Nordic presence than SE-Bankea. He predicted It would provide the firepower to compete against bigger European banks once capital markets were Integrated following the tntroduction of a European rfwgio currency. The biggest challenge is likely to be bridging the cultural divide between the two. SE-Banken has a reputation.

    Han dels banken, which is controlled by a number of Swedish and foreign institutions, bas tended to pursue a more decentralised but cautious strategy. The group is shortly to come under full control of Belgium's biggest hriiiHwg company, Sodfete Gfenferale de Belgique. Group turnover increased 6. SGB a nr,fMrnrft d last week that it - was purchasing stakes totalling 25 per cent in Tractebel from Groupe Bruxelles Lambert, Belgium's sec- ond-largest holding company, and Royale Beige, the insurance group.

    A far- ther 2 per cent is held by AG Group. Tractebel shares closed yes- terday at HFri. Although Tractebel 1 s results are usually hi gher in the first half than the second, owing to the seasonal nature of same af its activities, the company expects foil-year profits to exceed those for The group, which controls Daimler to sell postal equipment subsidiary By Wolfgang Munchau in Frankfurt Daimler-Benz, the German transportation group, plans to sell parts or all of its AEG Electrocom subsidiary, a producer of postal automa- tion e q uipme n t, by the end of the year.

    AEG Electrocom is the world leader in equipment that allows post offices to sort letters automatically. Daimler said it had received approaches from 24 interested parties. DMllDm in and DMm in For Daimler-Benz, the move is a further step in a series of disposals, including several other AEG busi- nesses in the industrial automation and energy sec- tors. Other sales included Fokker, the Dutch regional aircraft maker, and Hornier, the German regional air- craft group. Daimler sold most of these units because they were loss-makers. The Securities and Exchange Commission was last night on the verge of giving final approval to the listing document for the secondary offering; ti-igggHw g roadshows to investors in the US aod other countries from today.

    UAP plans to offer 7m of its shares, representing 28 per cent of Scar's capital, while leaving a further lxo - or 4 per cent - with its sponsoring banks for the placement. In case of excess demand. It will use the proceeds to reduce its debt. UAP said it would continue to hold its remaining 10 per cent stake in the company after the sale In the long-term, and had developed a number of important c ommer cial links with Scor. Goldman Sachs is global coordinator for the operation, and JJP. Morgan is joint co-ordinator.

    He was responding to an article in the business weekly Veckans Affoerer. BCH said it had received an offer from Caja Salamanca to buy a All the offers are of Ptas. The Spanish group has joined with the private-sector company Empresa Madeixense de Tabaco, which operates in the Portuguese islands of Madeira and the Azores, to bid for the 65 per emit stake being offered for sale by the Portuguese government in the first stage of privatisation. Recognition of Citibanks unique understanding of global strategies and solutions. And a deep commitment to excellence in every country for every client.

    So instead oi remembering all 3b categories, make it easy on yourself. Thanks to stable net financial expense and to continued tax planning measures, net Income group share declined less than operating expense during the period. Net financial debt stood at FF Payment for the acquisition was effected on July 1st, thus the resulting indebtedness is not included in the June 30th figure.

    Henri Pascaud, closed the company's accounts for the six months ending June 30, Excluding changes in scope of consolidation i. Excluding changes in scope of consolidation and' exchange rates, sales rose by a comparable 5. Net income from consolidated companies increased by 23 percent in the first half; to " Growth excluding CMG and other changes in scope of consolidation was 42 percent.

    This net income represented a net margin of 2. Interim financial results were shaped by three factors: As part of this Initiative, It seek3 outstanding individuals whose task will be to facURate the privatisation of the country's major Industrial enterprises. Working with local general management, rasponsibflity is to the Romanian Stats Ownership Fund for provkSng management talent and commercial acumen. The reepirwnent tsfara s iicc esg fuJ record ki ccxixyate rtHtovery, tunvaround and tfeposa te prefe ratity In an International manufacturing or process context and In an errvfconrnont of change.

    Experience of mergers, trade sales. Industrial financing and emerging markets is desirable. Contracts, for between one end two years, win probably be on a fun-time expatriate packages wtt be highly competitive. Salaries and For further details and an application form to be returned by 1st October , please tax one of the following European offices of the Accord Gimp, who are advisers on mis aspect of the Phare programme: S Note par US. It won another advantage on June 30 when the Eastern Express. SCMP painted an upbeat picture for the coming year. Mr Robert Kuok, c h a irman , expects an improvement - in the economy as retail and property markets pick up.

    The group will also benefit from tower newsprint costs and a full yearns contri- bution from TVE. The state-owned bank is looking to sell 1. Pricing will be decided on October 24, and the share offer period will be November Last year, Telkom, the Indonesian domestic telecoms carrier, was forced to slash the price and. Revenues rose 14 per cent to Rphn.

    The results announcement was accom- panied by a cash bonus of HKfl a share and a dividend payout of HKJl. The funds will be used as general working capital, - Also exploiting renewed market fervour was Cosco Pacific, a container owner- ship and leasing company. Cosco yesterday placed m shares at HKJ6. Tata Sons, the holding company, plans to charge all group members a royalty for using the Tata brand name from the fiscal year which started in March. Tata said yesterday the royalty, which will range from 0.

    Although no longer the largest industrial house in India. Analysis say the royalty move will enable Tata Sons to exploit the name and bring into line its numerous subsidiaries and associates. Tata Sonsltaelf is more than 78 pear cart owned by philan- thropic trusts. The royalty will be capped at 5 per cent of profit before tax, and vary according to individual company use of the Tata name.

    After three years of strong profit growth, the interim results are expected to mark a downturn in the Indian earnings cycle and farther depress already gloomy stock market sentiment. A liquidity crunch follow- ing a tightening of monetary policy is months ago, the Imposition Of a mlnlmimi corporate tax in the budget in July, a fall in commodity prices, high interest rates, and a rise in administered petroleum prices have com- bined to depress the bottom line of Indian companies. Now we are looking to see how low they will be.

    Its most prominent indicator, the BSE 80 Index, rose 46 per cent in the first half of the cal e n d ar year, from a Janu- ary low, on the hack of a surge in foreign i nv e s tm ent. However, from a June Analysts say that even if the results are in line with expectations, the market is says those hit hardest will be stocks which are sensitive to commodity prices, in such sectors as steel and cement, and low-fax companies. The ' July national budget introduced a corporate tax system under which compa- nies will have to pay a mini- mum 12 per cent tax on earnings. The one-time Indian, share mar- ket leader has been one of the hardest bit.

    If they come out worse than expected, as many analysts suspect, the market could slide further. The first-half results' are also expected to provide an Important Indicator of the extent of the slowdown in India. Most analysts expect gross domes- tic product growth to slip to around 6 per cent in from 7 per cent in However, the slowing in profit growth is likely to be felt unevenly in the corpo- rate sector.

    Many first-half results will be hit by high interest costs, with most corporates now paying interest rates above 20 per cent for finance.

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    Also, many which raised funds in the Indian stock market boom will report lower inter- est income, as much of this money has now been depleted through investment In various projects. However, Mr Jasyja said the slowdown would be felt less in the services sector and among subsidiaries and associates of multinational companies. These were less sensitive to commodity fluc- tuations and were already corporate taxpayers, ,, Ttlis thetor is likely to see the constituents of the BSE 30 Index post higher first, half net profit growth than the market as a whole, given the heavy weighting to mul- ttnatiotral and service sector stocks.

    However, all signs point to: SCt has v jpso- posed a.

    However, SCI has hinted it may raise its bid and launch a tender offer far Loewen shares. The pOl, adopted In , gives existing shareholders lights to acquire shares at a 50 percent di s count to help feud off an unwelcome bid. Local conservationists said the cable had damaged, exquisite coral reefs. But investments such as the Cayman-Jamaica cable are clearly worth bouts of public disfavour.

    It was installed- to meet the growing demand for improved telecommuni- cations in. The system will be: Installation and ratal rates woe also increased. Consumer groups and opposition parties criticised Mr Robert Pickersgill, the utilities minister, for grant- ing the increases, particu- larly in light of tire compa- ny's Mr Pickersgill said his hands were tied by an agree- ment between ToJ and the previous government, which guaranteed the company a Tninimum In its deal with Ford, the UAW won guarantees for 95 per cent of its members employed at the company. For a company like Dana, which has prospered as the auto industry has moved away from vertical integra- tion In recent years, that could have a notable impact.

    Pres- sure from the UAW has already led Ford to take back the production of vehicle axles that it had pre- viously fanned out to Dana. The impact of the two-tier wage s t r ucture, which win apply only to new workers, may not be felt at a company like Dana for some time. Also, as Mr Ayers points out,' Ford is unlikely to want to re-enter capital-intensive operations like manufactur- ing vehicle frames. Accord- ing to this argument, vehicle makers will do best by con- centrating on developing and marketing new vehicles, and leaving the manufacture of parts to outsiders. At the least, though, this year's labour agreement - if extended to the other US automakers - is likely to heighten the exposure of the parts companies to a US eco- nomic downturn.

    As demand for new vehicles fells, then the job guarantees extended to their own employees will encourage manufacturers to cut back on suppliers first, where possible. For now, though, Dana's problems are of an alto- gether different nature: Sales of the compa- ny's F-series pick-up truck have outstripped expecta- tions.

    Dana, in fai nt, admits to difficulties in supplying enmigh vehicle frames. Echoing the consolidation under way elsewhere in the parts industry, Dana has bought. Also, says Mr Moorcot, Dana is wen on the way to generating half its sales from operations unrelated to its core business of supply- ing parts to vehicle makers. It is not difficult to see the motivation behind Dana's diversification. But until the US new vehicle market slumps - and Dana proves it can keep growing regardless - the stock market seems unlikely to give him the benefit of the doubt.

    The new madifaiM ri gnal the emergence of a new cate- gory of desktop computers that bridge the gap between high-performance PCs and Bnglmy rlng wurfcstMtionB. Traditionally, workstat- ions have run Unix software and used proprietary reduced instruction set com- puting Rise microproces- sors. Windows NT is gaining quickly an Unix as an alter- native operating system for computers linked to corpo- rate networks, and Digital afaia to be in the forefront of the trend.

    An official announcement outlining the requirements and procedures to participate to the auction was pitofished on Venezuela's leading newspapers on September 8, Interested parties may obtain a copy of the announcement by calling the undersigned. Bancaracas Mercatios de Capitatesj, CA 4ta. TransversaldaMontecfteto Ecfifldo Bancaracas' Caracas. JPMorgan June This announcement appears as a matter of record only. UK Inchcape expects pick-up By RassTteman Sir Colin Marshall, brought in as fthfltmum by interna- tional trader Inchcape in January to revive profits, yesterday predicted a sharp second-half pick-up as restructuring began to pay off.

    The dividend has been cut by 30 per cent to p, pay- able as a foreign income div- idend. Mr Philip Cushing, installed as group chief exec- utive in March, said: Toyota sales gained from the manu- facturer's model renewal programme, while losses from Mazda sales In France were staunched. Profits also fell at the marketing opera- tion, which mainly distrib- utes branded consumer and industrial products.

    Pringles crisps came under pricing pressure in Japan, where start-up costs also hampered the Timberland shoe business. Despite having shed 40 brands and 20 businesses, Mr Cushing said a further prod- uct cull was necessary. To improve agility in its mar- kets. Profits fell 4 per cent to in the Coca-Cola bot- tling business. German buys help lift SIG By Patrick Harverson The first contribution from recent German acquisitions enabled SIG, the former Sheffield Insulations group, to increase first-half profits despite continued weak demand for building materi- als across Europe.

    He said that was achieved by coat cutting and the group's broad product mix, which includes energy con- servation products increas- ingly demanded by govern- ment regulations for new buildings. The company will announce today its intention to add a London listing to its Nasdaq quotation in the US. It wants the cash to take its experimental drugs to the next stage of development. If successful, this would be the first public listing in London since the failure of Cambridge-based Cambrio to float in July. Most of the UK biotech sector floated or had rights issues in the first half of the year as share prices rose quickly.

    But investors spurned the sector when share prices stalled in mid- summer. US investors have shown a siTniiar reluctance to put more cash into bio- tech in recent months. With a UK research base, it has attracted more Euro- pean investors than many Nasdaq stocks.

    Mr Trevor Twose, chief financial offi- cer, said about 40 per cent of the company was owned in the UK and the rest of Europe. A London listing would better serve their needs, he said. The shares will be sold in a placing sponsored by Grieg Middleton, the stockbroker. A pathfinder prospectus is planned for October with dealings starting in mid-No- vember. The shares are trading at roughly half their best levels depressed by the knowledge that the company would soon have to issue more stock to raise money.

    Full text of "Financial Times , , UK, English"

    Xenova was founded In , making it one of the oldest companies in the UK biotech sector. Its main prod- ucts are In cancer. The most advanced is about to enter the second of the three phases of testing normally required by health regula- tors. Pb m el o an guarantee company Homeloan Guarantee Company a South African company which facilitates access to home loan finance for low income c ommuni ties has entered into a long term agreement negotiated by Lloyd Thompson Limited a leading insurance and reinsurance broker with Centre Reinsurance International Company a wholly owned subsidiary of Zurich Insurance Group on behalf of Home Finance Guarantors Insurance Limited, the captive insurance company of Homeloan, man agftd by International Risk Management Guernsey limited.

    The asset, which Premier said had considerable gas reserves, is adjacent to a field bought by Premier on Friday. The remaining Dis- covery production is from Australia. After the deals Indonesia will provide almost a third. Sir Brian Pitman, chief, execu- tive, said yesterday:: The offer Includes a provi- sion for shareholders to receive cash, instead of up to half the Lloyds TSB shares.

    Unfortunately, Mr Bowkett appears to be better at buying businesses than - pin wing theiA. Mftta cooking equipment manufacturer which was Mr Bcmk etfs other acquisition. Only three business was going from strength to strength A smxe and a faulty computer installation, which Jave bated the "situation, could happen to anybody. But just two wain businesses to look after, senior manage- ment should have spotted the problem more quickly. Berisford remains profitable and is even planning to raise its dividend. On reduced brokers forecasts, it is trading on a derisory seven times earnings.

    But without -further deals — and it is hard to see it getting wty v. That tails for a different kind of man- agement. Mr Bowkett says he would leave without a pay-off if shareholders asked him to. Perhaps they should take him at his wtorcL Close Bros rises for 21st year By Nicholas Denton Close Brothers, the UK merchant bank that now rivals Hambros in market capitalisation, yesterday reported its 21 st year of unbroken profits growth but warned of a worsening in business conditions.

    It benefited from a busy market in the smaller company stocks in which it specialises. B 1 1 2. Dividends shown nat Figures In brackets are for cotre ap o mi ng period. AAtter excep ti onal charge. If After exceptional credit tOn Increased capital. Although VCI had lined up the financing and the offer was being taken, seriously by the Manchester United board, ft was forced to with- draw after the football club's share price rose sharply, put- ting the deal out of reach.

    Had the VCTbid been suc- cessful. The deal will come as a blow to Yates Brothers Wine. Lodges, the Bolton-based independent drinks group which until last Tuesday was the front runner to acquire the pub, group. Rank under Mr Andrew Teare. The purchase will ma rk a new direction, for Rank which does, not own any pubs. One Annual Report that will be on every boardroom table. On Friday, September It win analyse the condition of the world economy, explain the changes of the last year and the Ijkely future effects of underlying economic forces. It will also have a special focus on G3 countries developing countries and emerging markets!

    But many believe that it is both inevitable aud likely to bring unforeseen conse- , , quenees. They could reduce the effort involved in Internet shopping by retrieving product and price information tailored for the needs of individual customers. This has raised concerns that widespread use of agents could destroy pricing differentials for retailers and possibly erode their role altogether by making it easier for manufacturers to deal directly with customers.

    They are changing the concept of retailing from being totally pas-' sive to being totally interactive, 1 " he says. At first, this is a matter of dis- playing, say. In the project's second phase, the agents will be able to make specific suggestions to the individual. For examp le, somebody who had previously bought a golf club might be asked if they wanted to consider a golfing holiday.

    It gives them a more exciting experience. Taken together with their brows- ing and buying patterns, retailers will have new information about their customers which they can use to test and refine their prod- uct range. Some agents could provide even more sophisticated recom- mendations. Firefly Network, a company based in Cambridge, Massachusetts, uses an approach known as collaborative filtering, pioneered by researchers at the Massachusetts Institute of Tech- nology.

    These agents can make suggestions based on the prefer- ences of other agents belonging to people with gfonfiar interests. For example, one of its agents recommends music and films. The agent asks the user to rate a handful of artists and films, and then compares those ratings with those erf other users. That allows it to recommend artists and fiimc that have been liked by people with similar tastes.

    Firefly is aware that some peo- ple might view these develop- ments as a potential risk to their privacy and has taken steps to address these fears. It uses aliases, network firewalls and log-in encryption to assure them that information is anonymous unlaws users indicate otherwise.

    A ndersen Consulting is also tackling concerns that agents could lead to an invasion of privacy. Last month Andersen launched an expe rimental agent for its Web page called Lifestyle-Finder that alma to provide Information without requiring personal details about users. Instead of giving specific details such as gender, income or postcodes, the users indicate their tawtew through answering a series of multiple choice ques- tions.

    These indicate type of accommodation, favourite activi- ties and what sort of drinks they like. At the end of the question- naire, tha agent lists sites that might interest the user. The approach is designed to give retailers a new tool for col- lecting information about con- sumers that would allow them to target more accurately their cus- tomers with specific marketing messages. LifestyleFinder is the latest in a series of experiments into the future of intelligent agents and electronic commerce being con- ducted by Andersen Consulting. This project began with the release of BargainFinder.

    Even without intelligent agents, suppliers are' anxious that they could lose business as customers use the Internet to compare prices. Earlier this year a German wholesale and foreign trade association blamed the Internet for the loss of lucrative niche markets. But comparing prices on the Internet is a labori- ous task far products that are. The significance of agents is' He believes users have found Bar- gainFinder enormously useful.

    Of the 12, Internet users who responded to a survey about Bar- gainFinder, 91 per cent, reacted positively to the concept of con- sumer intelligent, agents. It has problems coping with dif- ferent spellings of artists' names and furthermore, had to be con- stantly updated to cope with new retailing sites. A more serious problem was the attitude of some of the retail- ers. Three compact disc compa- nies blocked the agents, refusing to allow them access to the nec- essary data.

    Their reluctance is understand- able, since the system makes it so easy for customers to find the lowest price. But at present, they are mostly taking a wait-and-see approach. Christine Gullfoyle, an associ- ate at Ovum, the research com- pany, think s that re tail ers in niche mar kets which appeal to young people, such as music, books, trainers and computer games, will be the first to be affected by these developments.

    But Gullfoyle believes there are many barriers to overcome before agents become familiar in elec- tronic retailing. She says there are still credibility and quality control issues to be solved. The centre has assumed responsibility for designing and developing manual transmissions for all Ford vehicles, irrespective of where they are buDt. Delivery time for a protot y pe transmission is being cut from 25 weeks to 14 weeks.

    This reduction is to be achieved by using new terinriqnMi which are being install ed at the centre, and which have as their focus a Cray supercomputer. When the centre is frilly equipped next year, it will be able to build 2, prototype transmissions a year. Those pressures are being compounded, he adds, by a substantial reduction in permitted engineering tolerances. Already narrowed by nearly 30 per cent over the past five years, maximum tolerances of eight microns are now typical. It is also developing mechanisms to get feedback from the marketplace which will help it improve the feel and quality of transmissions.

    These quiz drivers on their likes and dislikes. Transmissions developed at the centre will be placed in both small cars targeted at the developing world and in vehicles for the European market. However, drivers in India or Thailand will not be settling for second-best, Foellinger insists. Such a driver can expect to get exactly the same standard as a driver in the west. The days of passing an outdated technology have gone; now everyone knows what is second-best. However, with ever-larger numbers of drivers using mobQe phones, hampering their ability to use a manual transmission, there are questions about the long-term future of the centre.

    Foellinger stresses that mnriiwi t ransmissions are more than capable of holding their own against automatics, particularly in Europe where automatics have a market share of only 10 per cent. However, he acknowledges that future manna! Under new systems, the clutch pedal will disappear; replaced by electronic operation and engine management which will automatically match engine speed to road speed.

    The system can already be regularly seen cm TV - on Formula One racing cars. The Belgian case con- cerned the requirement of prior authorisations from authorities for the retrans- mission by cable of televi- sion broadcasts from other member states. The Commission consid- ered that such a requirement constituted a serious restric- tion on the freedom to pro- vide broadcasting services within the EU. The Belgian government argued that the relevant EU legislation only covered primary television, broadcasting and not cable retransmission.

    On the issue of compatibil- ity of the domestic law with the relevant EU provisions, the court said first that as a matter of EU law, member states had to ensure freedom of reception and could not restrict retransmission on their own territory of televi- sion broadcasts from other member states.

    It was therefore solely for the member state from which the television broad- cast tn question emanated to monitor the application of the law and thereby ensure compliance with the EU pro- visions and it was not for the receiving member state to exercise its own control. Xf a member state consid- ered that another EU coun- try had failed to fulfil its obligations under the EU provisions then It could bring infringement proceedings or request the Commission to take action.

    But it could not adopt unilat- eral measures designed to obviate any such breach. The Belgian government argued that. Chris Adam meanwhile takes responsibility for the Japan region from his previous position as head of Nippon Wellcome, the majority owned joint venture with Sumi- tomo. Japan is also an area of rela- tive weakness for the company.

    With these moves, Glaxo intends that regional directors such as Rai- mundo will have a stronger voice dose to the top of the companies, with the aim of improving the sales, marketing and production infrastructures in their areas. Daniel Green Credit Suisse moves Credit Suisse Group has turned, for the second time in three years, to its CS First Boston investment banking subsidiary to find a new chief financial officer.

    The appointments take effect at the end of the year. Credit Suisse Group is in the midst of a major restructuring and its top management team has been in a state of flux following the abrupt resignation of Josef Acker- mann, president of Credit Suisse, who had been passed over as chief executive of the enlarged group. Thornburgh, who has been chief ffnanria! Credit Suisse wifi now have to find a new chief financial officer for this side of its business.

    He has spent most of his career as an investment banker, and big along as a chief financial officer of a major multinational have yet to be tested. William HaU Costa at the time of the global market crash of October - and moved over to Peregrine Brokerage just in time to see the market plummet in the wake of the Tian- anmen Square repression of June , from bis new seat of regional research director.

    His timing this time round may prove tricky for the opposite rea- son. With the Hong Kong market looking distinctly bullish, job hop- ping is on the increase. WI Carr, the stockbroking arm of Banque Indosuez, has certainly seen its share of musical chairs. With Mul- cahy installed as managing direc- tor, below the globe-trotting Nick Harbinsoh, chief executive, the group wifi be hoping it can stem the flow without paying sky-high salaries.

    South African by origin, he began hia career in journalism and arrived in Hong Kong in , as the territory was racked by uncer- tainty over its future. He switched into broking with Vickers da Andre Gafllfe. He moves over from the top job at Gaz Metropolitain, Quebec's natural gas distributor, on October 1. Both business and diplomatic skills will be needed to keep the utility on an even course. However, it now faces a tricky combination of domestic price reg- ulation, sluggish domestic market growth and deregulation in the north-eastern US, its main export market. Caillfe must complete a restruct- uring and cost-cutting exercise and at the same time restore public confidence after two years of politi- cal interference and management changes, deal with entrenched trade unions, and keep lines open to the separatist Parti Quebecols government in Quebec city.

    He moved to Gaz Metro - 68 per cent owned by two provin- cial agencies and 25 per cent by Gaz de France - in and became chief executive in A new chairman of the Quebec- Hydro board will be appointed soon, following resignation of Yvon Martineau a month ago. A former senator who is also a director of American International Group and Ivax Corp- Bentsen becomes the 13th member of Continental board. He is also a director of Nestlfe, Prudential Insurance Co. Ron Forbes, his predecessor, becomes vice-president of in l u rnatl n ml finance, responsible for all financial activities outside north America.

    Loren Hillbeig becomes company secretary, replacing Robert Connors who remains chief operating officer. He replaces Erwin Knpni gg, who has asked to leave the company. She was previously a consultant to various International organisations. He was previously senior vice-president of technology for the communications division.

    Similar authors to follow

    He will be responsible for managing day-to-day operations, freeing Rod Beckstrfim. He succeeds Hans Thierstein. Europe's core markets, led by Germany, were unsettled by concern over the health of Mr Boris Yeltsin, the Rus- sian president, while high- yielding Italian and Spanish bonds outperformed on renewed Emu bullishness. Observers said the market was hit by investors putting on convergence trades.

    Analysts divided over likelihood of Federal Reserve rate move Analysts are split over whether the US Federal Reserve will move to change interest rates today - hut a small majority expects a tightening, accord- ing to a survey published yesterday. Among US institutions, the majority of those in favour of a tightening was larger, at 57 per cent - of which 6 per cent said they expected a rise of more than 25 basis points. Italian BTPs were firm rel- ative to other markets throughout the day, as the lira rose to less than Ll, against the D-Mark.

    Prices fell in after-hours trading, however, and the BTP fixture touched an intra- day low of Uncertainty over the forth- coming budget also weighed on the market, as new ten- sions surfaced between the government and its coalition partners over envisaged spending cuts. Spanish bonos also outper- formed bunds, their year yield spread tightening by 6 basis points to points. The December futures con- tract on year bonos was down 0. Analysts said the market was supported by rumours that Spain's chances of join- ing the single European cur- rency on schedule in were improving.

    M French bonds traded In line with bunds. The Matif s December notional future settled at A4, down Short-term rates, however, proved more resilient, helped by hopes of Anther cuts in official rates by the Bank of France. The Decem- ber PIbor future dosed 0. For the first time in sev- eral months there was a great deal of uncertainty about whether. Economic data have shown the economy to be growing at a moderate pace, but last week the market priced in a small Interest rate increase after a news agency reported that eight cut of 12 regional Fed presi- dents favoured such a move.

    The new bonds were priced to yield basis points over us Treasuries - the lowest-accepted spread bid by investors - reflecting strong demand for exposure to this improving credit. The yield spread narrowed to basis points during yester- day's trading. The Philippine offering was buoyed by widespread speculation that its rating is set to impro v e, after strong economic fundamentals and a recent peace agreement with Moslem guerrillas.

    Spreads on Philippine eurobonds have narrowed sharply in recent months - due to the relative scarcity of bonds from the country and strong demand among Asian investors for local securities. The rest may be used to repurchase more expen- sive multilateral debt. I Over tntarpotaod yield. The fixed-rate tranche went mainly to UK life insurers and fund managers, with the floating-rate part going to corporations, banks, money market funds and other European instf tutinns.

    Deutsche Morgan Grenfell and Merrill Lynch are joint leads. The issue will be floated on the London Stock Exchange.

    • A Man for All Species: The Remarkable Adventures of an Animal Lover and Expert Pet Keeper.
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    • Full text of "The Times , , UK, English".
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    Suez f-ompnt- has been one of the most profitable Egyptian companies in what is one of the fastest growing sectors of the country's economy. It awns two cement factories with a totiUoutp of 2. This is the second GDR offering in Egypt. Cairo Liffe rises to Emu challenge The London International Financial Futures and Options Exchange yesterday announced the launch of the first European contract on very short-term interest rates - a futures contract on one-month euromark rates.

    Launching a one-month fixture was partly inspired by the growing use of similar instruments in the over-the-counter - or non-exchange listed - derivatives market. Cato Puts Dec Cato Puis AH Qpwi MsreR figs, cn fcr prerioua day. Ooupon BandK looc Mstfiura: Ftad tataraec Mgn since oompasHon: Wa r Amor Dm tfe Price W attar Pram.

    The dollar was little moved against the D-Mark. By close of trading in Lon- don yesterday it had Slightly, to DMl. Against the yen it was slightly up at Y The D-Mark fell slightly on European cross-rates, as the European Union -finance minister's meeting in DobUn at the weekend supported market optlmisih about European monetary union. The French franc firmed to FFr3. More importantly, the Fed would probably be at pains to portray it as such. However, comments at the weekend by Mr Bruno Geh- rig, a board member of the Swiss National Bank, may have added upward momen- tum to the Swiss franc.

    Mr Gehrig said the SNB's monetary policy does take the level of the Swiss franc Into account but efforts to change its market value can only be temporary. The implication is that the SNB would not stand in the way of a rise in the Swiss franc. SmralMMnwM by ttw F. BondM rat Ntetanta WMtmtnstar. Dec -OM ECQD tond rare Mg.

    He paroesaga rtfl ee ro a OKieei tte eeturt arekto aadBrecwU aarooy. Caaajuao Ptaa lisa Predeua dart epae ka. Tha coupon amoure due tar are partad ItlSO M8. They attributed the mod- est rallies to routine jobber covering and said there was little solid buying from the trade, which was content to hold off. COPPER was again the bell-wether for the complex, although other metals needed little excuse to move lower.

    Today's LME stocks data was expected to do little for mar ket sentiment. Traders thought the mar- ket would remain weak, given that consumers were adopting a hand-to-mouth, scale-down buying policy. Also, stocks were on the increase. Fundamentally the market was under pressure from the perception that world stocks will be higher at the end of the year and the likelihood that the current meeting of the Association of Tin Prod- ucing Countries in Singa- pore would do little for senti- ment, traders expl ained.