The Guardian from London, Greater London, England on June 15, 1984 · 18
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The Guardian from London, Greater London, England · 18

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Friday, June 15, 1984
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FINANCIAL GUARDIAN 18 F lJCMV'ArJU UUAIU1A ' Friday Jim The Jaguar sale could prove that there's life, and prof it, in the old tech yet . away from basic manufactur- no doubt that Jaguar has be- adequately .efficient manufac- tradition of design flair and add enough' valup for us tn Is much more eleeant than nubished v Friday June 15 1984 Hamish McRae IF JAGUAR turns out to be worth the thick end of 300 million, what does that say about our ability as a manufacturing nation of mature products ? There is a popular case, frequently made, that Britain should accept that the trend Forestry Commission remains AC condemns sly sell-offs By James Erlichman The Forestry Commission was indicted bv the Public Ac- Is Pnnimittpn of the Com- ,.tn.rini. Tn rnfncinn trt- reveal' whether it. has sold off public forests at. knock-down prices under the government's ,.ivatictinn cr.hr.mp The Commons Committee aM forced the disclosure that . .r, . , i disnoseri of despite government aispusiu ui m-spiti. feuvniiiiiwij -assurances mat oniy sman pockets of land would bo sold .off by the Forestry Commis- sion to private investors. The Forestry Commission ; was requir by the Forestry Art 1981 to raise 82 million for the Exchocme.r bv 1986 , j; r t.j j xniuuyn ui.sjjuaaih in icwu aim maturing forests. Mr George Holmes, the director-general of the Forestry Commission, told By Maggie ISrovvn I'BI Northern Engineering Industries believes it is about to land an order to sup-i plv turbines worth $200.5 nul-- lion (144 million) for a new power station being Duut Dy Iraq. The order for four 300 "megawatt turbine generators is ' csTJCctcd tn be confirmed shortly and fallows the signing 7 of the main contract in Baghdad. : The S700 million 510 mil-. lion) contract is between the 1 main leading contractor, South ; Korea's Hyundai Construction ! Company, and Iraq's Ministry of Industry & Minerals, has ; been the subject of some secrecy. NIC!, whose NEI Parsons : works and 4,500 employees on Tyncsidc will carry out the order said last night it was . " quietly very pleased." Work an the oil-fired plant and substations for a site 120 miles .north of Baghdad will start shortly. NEI won a 70 million order 13 months ago for three 250 megawatt turbine generators from Singapore, and NEI Par-I sons already supplies a power station m bouth Korea. & The UK's Westinghouse "Tli'film AV Clonal r,nmn!imr Viae won a further 5 million order Ifrom Singapore to supply friction brakes for its urban railway. This follows its 35 million signal control equipment iimii jwi tut; laiLmay iaiu;u m February. BRIEF IN A setback for the Manufacturers Hanover Investment Corporation, the investment arm of the large New York bank, a giant New York pension fund has decided to withdraw $1.9 billion in funds under management. The New York State Teachers Retirement System, which manages $12 billion of teachers fund, says it is making the withdrawal because over the last five years the investments under management by Manufacturers Hanover have consistently performed less well than the Standard and Poor's 500-stocfc index. Manufacturers Hanover Investment has some $24 billion under management. The larger part of the $1.9 billion being moved recorded a return of 12.5 per cent over the last five years against 17.4 per cent for the Standard and Poor's 500. ' EMPLOYMENT in engineering continues to fall despite rises in output. The workforce decline in the year to February 1984 was 3.5 per cent, and " it is still too early to talk about a reversal of the downward trend " warns the Engineering Industry Training Board. Overall, the sector now employs 2,502,000 peoQle4 NEI set for 144m Iraq order away from basic manufacturing and towards high-tech in dustries ana services is firmly established. Economic policy should therefore be devoted to encouraging the growth of services and of high-technology so that these sectors mop up the pool of labour released by the rundown of manufacturing. Of course things in real life do not work as neatly as that, for the people who are employed by the sunrise industries are different people, living in different parts of the country, from the people made redundant ,by the metal bashers. But that is the theory. But here -we have a mature company in a mature industry making an extremely mature product, and it looks as though the hard-nosed financial markets will put a very acceptable price lag on it. Surely that should make us revise this notion that Britain has to get out of traditional manufacturing ? Yes and no. There can be the PAC that 37 million had been raised by January 1984. In evidence, Mr Holmes said that ine uuvcj mucin, o nrivatisation tion demands, had co- incided with a period of fall- ing timber prices and a difn- cult market." No forests had Iicen sold off below the Com- mission's "reserve price" but "e rem eu iui rnmmercial confidentiality ', to reveal the reserve price or the fransaft nns made with " v: - private investors. The PAC report is scathing jn its reply: " The Committee is not satisfied with the rea- sons given by the (Forestry) Commission for refusing to publish the selling price of ,.i,i;inmu Nntino yuuiiw-"".. public disquiet over some sales, the PAC added: "it is necessary for the purpose of Debenhams and Harris to link By Mary Brasicr The long-awaited deal between carpet and furniture chain Harris Queensway and Debenhams will be signed on Monday, giving Harris Queensway's chairman, Mr Phil Harris, a majority stake in two new joint companies covering Debenham's furnishing division and the Green's electrical and photographic business. After nearly three months of negotiations, Harris Queensway is expected to take a two-thirds stake in the companies, which have combined sales of 180 million. Two days later, on Wednesday next week, work will start on revamping the first Debenhams store to include a new carpet outlet, managed by Harris Queensway. Mr Harris says he plans to change all Debenhams' carpet divisions by September. IVIT ridllia &dya lie m " I am very happy with the been a doot Performer tte,''ms ?nly 10 T T DUS"CuSS deal we have agreed. There is nas been a poor Pertorraer- taken from under him at the potential for sales of 250 mil- Greens Leisure is a more at- last minute by Woolworth. The lion from the current level of tractive and profitable proposi- agreement with Debenhams is 180 million," says Mr Harris, tion, which is likely to expand likely to compensate Mr Harris The Debenhams deal gives by opening concessions in Har- by giving him a much wanted Harris Queensway a retail net- ris Queensway stores. For both entry into the field of electn-work that is complementary to Greens and the furnishing cal retailing. It w;ll also re-its existing stores and more company the hope is that Phil store his standing in the City ,.w,..i,ot nnhonhamc' nianc tn Harris's renutatinn for retail- after the Convt episode, and a "H""""-'- "-" set up estate agency services Treasury asks for an extra 137 m By our Economics Staff i.j The Treasury yesterday asked Par lament for provision of an extra 137 million to meet an escalation of its ex- penditure plans for the current financial year. Spending plans have actually risen by 710 million since the revised estimate of 90.5 bil- lion was published on Budget day, but this has been offset, the Treasury says, by expected savings in other programmes plus the benefit from the abo- htion of national insurance surcharge which the Treasury "claws back" from public sec- tor employers. Among the main increases this year are 394 million to the coal industry (already an- nounced), 184 million in capi- tal grants to housing associa- tions, 72 million for aerospace (including launching aid for the European A320 plane) and 45 million for increased Government investment in nationalised industries. Shell puts paid to barnacle bills By Rod Chapman, Energy Correspondent Shell is launching a new invention today which, it claims, could save the world's offshore industries hundreds of millions of pounds a year by preventing mussels, barnacles and weeds attaching themselves to underwater structures. The new Shell system, to be marketed under the. name of Aquatect, is not poisonous and could be used for a variety of other applications, including the growth industry of fishfarming. At present, cloying marine life is dislodged mainly by applying a coating come an extraorainary success story: the turn-round' achieved in the : last four years has become one of those classic examples of a managerial problem. ' being correctly attacked. The right group of people took the right product decisions basically identifying productivity and quality as the twin things to achieve and then marketing the results appropriately. Success followed. But if you look at the foundation of Jaguar's success it is designs, which in the case of the engine, go back to the 1940s, and in the case of the body to the 1960s. To be sure, the replacement engine is now in production, and the new body will be introduced next year. Had this development work not been done Jaguar would be less attractive to financial markets now. But what is being sold is an old (but wonderful) name, an silent on ' knock down prices ensuring proper accountability that this information should be made public in tuture. wiien the Government's iratisat on scheme was an- ,- then Environment Secretary assured the Com- mons that sman poCkets of land would be sold off t0 tidy ,, fi, vnvotrv rnmmissinn's estates. But under cross-exami- nat on by the PAC Mr Holmes jsfj tu,t tv,roB nr fnnr integral forests " each of more :;:a 7nn i v.j v man i.uuu uei-iaica au uku sold off in Scotland to meet the government's demands. The collapse of the UK. pa- per and pulp industry since mand for timber-land and it is widely agreed that tne for- nsh'v Hnmmissinn onlv acceaea -..f -------7- -;- - - ra me privaiMi.uu piuS.a.u..rc reiucianuy. Mr Robert Mactennan. the Phil Harris in some of its stores offering a i : . c.mP'e ""use Si.ifSS- Sa Jwrh 7 -"-.- .' uli mg nan win uuuai aaics nunc According to the Treasury only 619 million of the extra 7lJ0 mil,ion provision for this officially counts as public expenditure. It does not all add t0 planned levels of spend. jng becausej after allowing for the NIS reduction it has been matched by offsetting savings elsewhere or else (226 million 0f it) has been charged to the 198485 contineencv reserve which was fixed at 2.75 bil- lion in the February Public Expenditure White Paper, According to the Treasury, transactions within the public sector and other items not ciassifled as public expenditure (mainly a reduction over four years in the rate support grant) provide an offset of 482 million leaving a net ad- ditional provision sought from Parliament of 137 million. . The revised and summer supplementary estimates were presented to the Commons yes- terday by Mr John Moore, Fi- nancial Secretary to the Trea- sury. which exudes metal-based poison. The oil company's invention aims to prevent the barnacles and their allies taking a grip by coating the surface with silicone rubber. The coating is combined with a special oil which seeps to the surface and is reckoned to have a life of five years and possibly double that. Shell executives say that the invention, developed in a seven-year programme at the company's Thornton Research Centre in Cheshire, could be most useful in new projects in the southern sector of the North Sea. Warmer water here gives greater stimulus to ma-fine growth, which can encrust turing -facility, and a legacy or uue.ny uniiianc design skills which the market has to- hope .can. still deliver something special, next time. , There is nothing unusual in all this. Indeed, one of the peculiar aspects, of the specialist . motor manufacturers, is the .way in which .ohe outstanding design can carry along the .whole' enterprise. The fact that, the Porsche 911 happened to be better than . anyone 4t Porsche realised. (the 928 series was intended to replace, the, 911) helped, the company to pull through', a- very ..difficult patch hr the late 1970s. The fact that the Saab 99 could be cheaply' developed into the 90O . did the sajme for Saab.'; ... ; But it !is dangerous to extrapolate from i Jaguar's renaissance Id' say that-we can still, comfortably remain . in basic manufacturing. : ' Indeed,, perhaps the ' best way tb see -Jaguar is. in the Social Democrat member of the PAC, said he had received iruormmuii uuwiii& um Forestry Commission had sold a nearly mature lorest in nuss and Cromarty for 300 a hect- are the same price that bare land was fetching in the area. The PAC also chastised the Forestry Commission for fail- mg w ioresee w "ae" nuenr.es of a s eenlv falline world timber price and the clo- 0,o f TJritioli mil c The Fnr. -.......... - estry Commission's subsequent improvement m productivity " appears to have been a reac- tion to a crisis rather than the toe" JSP 38 ment, the PAt saio. ine rs ujr ouu.u.., saia last nigui mtu a iun j .iit-ilorl would ?"Vr d 7", be made to the PAC's conclu- sions and recommendations. costs are' kept down by' operating from existing Debenhams floorspace. The advantages for Debenhams, which has nearly 600 million of turnover without the furnishings and Greens interests, lie in increased earnings for its Welbeck Finance offshoot if Greens is more successful. Fifteen;, per cent of the finance company's sales currently come from Green's electricals and photographic business. Apart from being paid for the stake Harris will take, . Debenhams stands to pick up higher credit profits if the strategy improves Green's turnover. Mr Harris was in cautious mood yesterday ahead of signing the deal on Monday morning at 9.30, no doubt chastened UJ ills gauciicuvc; uv( by his experience over etectri- cal discount- chain Comet, wnere ne agrced takeover t:ij u:a cl ,u. ju mu ui - Etam in demand By Tony May Etam has something Heineken advertising which group, Lowe Howard-Spink Campbell Ewald does not apart from brevity. Fashion chain store group Etam's fixed price offer for sale was oversubscribed just one minute after application lists opened yesterday. County Bank was busy counting its haul last night and may be able to announce details of the allotment of shares today. In contrast, Lowe was two- thirds left with underwriters last week when it came to the market, and yesterday its first day of dealings started with the shares at lSlp 4p under the minimum, tender price. After some suDnort from its backers it went to 183d and stuck there. Its launch is seen as a classic case of mistiming a fair . enough stock launched at the wrong time. Meanwhile on the tism Spectrum got away 6p above its placing price at liJbp. a North' Sea platform within four years of installation. An offshoot of the invention will be the use of material to be marketed as Aquasign, a fluorescent substance which will serve to sign post North Sea divers. It is to be used on three new gas platforms in Shell's Sean fields. Shell has been beating the drum for second wave North Sea projects in recent months, and estimates that' 60 billion will need to be spent on bringing 60 to 90 new - oilfields into production by the turn of the century if Britain is to remain self-sufficient in oil, Its chemicals experts argue that the new invention should be ap ctaiismansnip mat we do have in . great measure in this country. Provided a combination -of - design skills and craft can add sufficient value to a product there is no reason why we should not be able to make a living producing it, even if the product itself is a pretty basic one. You could point to all sorts . of other examples of British design which are outstanding in world terms: productions at Covent Garden; TV advertisements; even, if they could make the things, Mr Sinclair's stream of computers and such. Similarly you could point to examples pf supreme craftsmanship : Saville Row ; Hardy's fishing rods; even, in a rather different way, the malt whisky distillers. , Where Jaguar fits in, then, is not so much as a traditional, metal bashing company as such, but rather a company where a combination of design flair and traditional craftsmanship can Booker: Monk ready to draw fire By Mary Brasier FOR A man about to face a City firing squad, Alec Monk, chairman of cash and carry group Dec Corporation, is very relaxed. His 232 million bid for Booker McConncIl will draw the combined fire of Booker and merchant bank S. G. Warburg today when the company's defence document goes out to shareholders urging them to reject Monk's all-paper terms. For his own protection Monk reaches for Booker's last report and accounts which shows that earnings per share rose 8 per . cent a year on average between 1980 and 1983. Dee's comparable performance he tells you. is 38 per cent growth. He also has the satisfaction of owning nearly 15 per cent of Booker shares as a result of successive market raids this week. Hardly . surprising then that he regards a Monopolies Commission reference as the biggest hurdle to overcome in winning control of the agriculture and supermarkets group. "The economic arguments arc very strong. Shareholders get capital uplift, income uplift and our track record is better," he says. 'Even a Monopolies refer ence is unlikely to deflect the Dee Wd though. Alec Monk clearly believes control of -Booker gives his group the. chance to strengthen its UK earnings, expand into the huge US agricultural market and longer-term to outpace his rivals in the food industry. "There is no point in us trying to be a copy of every other food group, partly because wc started too late and because, our people arc different." Monk himself is a nrime example a financier in a retail environment, who reckons he can apoly an b.lec-tive. view to the food business and guide it into nasMres new. The US via Booker is one area for ex-pansii, - financial services could be the next. A combined DecsBooker group is likely to mean rationalistion before expansion. Businesses like engineering and shipping do not fit into the Monk master plan and the Dec chairman savs he has had requests to sell all parts of the Booker empire except the cash and carry.- There the rationalisation will come from merging Dec's Linfood business with Booker in an attempt to boost earnings in an industry suffering from 30 per cent overcapacity. Booker's principal defence that it has strong growth businesses in areas like health foods brings out a Monk secret weapon inside Information that the board turned down a chance to expand in the US because they regarded pills and potions as a "dubious fashion market." "Their record in America is deplorable." he says. "" When they had the opportunity they did not take it. VVe have a better base there in terms of experience. Booker cannot extend their US business without, money from a strong UK base. That is what we can provide." plied to platforms as they are built.. . Shell, began looking into the problem, in the early '70s, when its main concern was to cut-down on marine growth on tankers' hulls. It moved from testing anti-fouling paints to silicone' rubber materials which were tested in the Pacific off California, in the South China Sea and in the North Sea. The cost of cleaning a North Sea platform can be over 150,000, and up to 80 per cent of the costs of an inspection can be spent on removing marine growth. Divers using hvrirohla.qtinp or shnt.hlautin icMiujuues . naye cieanea platforms traditionally, add enough' value for us to oe aoie to cnarge a sufficient premium to justify British wage rates rather than, say, Brazilian. Having said all that, it is only right to point out that the current dollar-sterling exchange rate and the vigour of the American economy do swing things in our favour. If the former were back to some sort of purchasing power parity, and the latter's were to falter, Jaguar would find things much tougher. Meanwhile, it will not just be the markets which will be encouraged by what has been demonstrated. S'Jill rewarded THE Prestel sale to Australia is another encouraging sign of design skill being rewarded, though in a much more advanced sector. The clever thing about the whole Prestel technology is that the solution of adapting the off-the-shelf television set US tough on Argentina over delay with IMF From Alex Brummer in Washington The US Treasury is threatening to withdraw its guarantee of the $300 million Latin American bridging loan .to Argentina when it falls due for renewal today. Its tough tactics were described by Treasury officials yesterday as part of an effort to put pressure on Argentina to reach agreement with the IMF on austerity measures. The letter of intent supplied to the IMF this week by Argentina is regarded as inadequate by the. fund's managing director, Mr Jacques de Larosiere. The risk that a Treasury refusal to renew its guarantee would send fresh jitters through Wall Street receded somewhat yesterday when the Federal Reserve chairman, Mr Paul Volcker, told Congress that he expected the commercial banks to reach an accord with Argentina before June 30 Australia By Peter Large, Technology Correspondent British Telecom's Prestel service has beaten eight world competitors in bidding to sup ply Australia's first public videotex network. GEC won the contract, offering its own mini-computers and a system adapted from the Prestel operation. The initial deal is worth only about 2 million, but the real value is much broader, because videotex is the leading method of spreading computer networks to the home and is attracting political attention worldwide. Videotex is the international label tor the British invention Guinness By Geoffrey Gihbs Arthur Guinness and Sons were last night preparing to toast the success of their 46 million takeover offer for Martin the Newsagent the retail news, tobacco and confection ery group. The brewing giant is expected to announce today that the rush of acceptances ahead of yesterday's first closing date has Dut it in control of around 90 per cent of the issued share capital. The offer is certain to be extended to enable, remaining shareholders to take up the offer. Guinness's financial advisers were last night still sifting through the pile of acceptance forms. But it appears that earlier fears that Martin share A quantum leap for the dongle By Peier Large Sir Clive Sinclair's Quantum Leap computer finally arrived yesterday, five months and two days after it . was first announced. The authorised dedongled version of the QL is on working display at the four-day Computer Fair at Earls Court, London. But Sinclair staff ad mitted that there are only " a few hundred " around so far and, with 13,000 orders to clear, deliveries cannot be promised until August. The dongled history of the QL has been caused by early problems with the operating system, the programming which after being embedded in the circuitry of a microchip tells the computer how to manage its work. Sinclair had to put a dongle on the QL to solve those prob Racal buys Initios rights Racal announced yesterday that it has bought exclusive world marketing rights in the microchip design system of Inmos, the chip company which the Government wants to denationalise. rue deal involves a payment I by Racal of about 1.5 million, is much more elegant than the alternative approach of building a quite different system from scratch, involving monitors which are specially dedicated to that purpose, and for which the selling com- Jiany charges and arm and a eg. For some time it looked as though the British videotext system would join such inventions as the hovercraft and System X and never quite fulfil its promise, We are still a long, long way from getting the British standard established on any international scale, and it may well transpire that we will never really do so. But this Australian order puts videotext in with an infinitely better chance, and GEC's size and competence means that in this area the Brit invention can look the others in the eye. Genuine error A WORD about the full money supply figures irrespective of an IMF agreement. In the recent past such debt agreements have only been concluded after an IMF facility has been granted. Mr Volcker said that he understands " proposals have been made and tentatively agreed upon to enable Argentina to pay interest due to US commercial banks prior to the end of the second quarter." This is regarded as critically important to the confidence of the US banking system since without such an agreement all Argentinian loans would have, to be put on a "non accrual" basis, meaning a sharp drop in earnings. Under the terms of the original Latin American bridging loan to Argentina four debtor countries, including Mexico and Brazil, agreed to put up $300 million backed by a US guarantee. When Argentina reached agreement with the International Monetary Fund the Latin bridging loan would goes for Prestel which, through a few microchips within a TV set, links the home or office TV to central computers via the phone line to provide a huge range of information and transaction services. The operation, to be rim by Telecom Australia, is to open in January. It will be based on three of GEC's 4190 computers in Melbourne. Each of these computers can handle 2,000 calls simultaneously. The system will include " gateways " to open communication with the computers of banks and stores and thus provide home banking and shopping. The eight bidders for the contract included the American is good for Martin holders would rush to accept Guinness's cash offer thereby leaving a substantial block of Guinness shares in the hands of the underwriters have now subsided. Although Guinesses's share and cash terms currently value each Martin share at 347p compared with the cash alternative of 350p late acceptors have been swayed towards the view that the shares represent an attractive way into Guinness. On a dreadful day for the Stock Market as a whole Guinness shares yesterday notched up a lp gain to 148p, supported by the 20 per cent jump in first half profits announced by the group earlier this week. Guinness announced its lems. Donele Mark One was a hurried job that still did not penorm exactly as recjjireu. About 2,000 QLs, plus Dongle One, were sold in May. Dongle Two served for roughly another 2,000 sales. Now the vital chip set is within the computer itself and no dongles arc necessary. Sinclair staff said yesterday that they would be able to start recalliung the dongled machines and replacing them with the true QL by late July. Sir Clive, world pioneer of the cheap home computer, intends the QL to bridge the gap between the cheap introductory machine and the " serious" personal computer. Its basic price is 399. "Dongle is an ancient piece of computer jargon which nowadays generally means a piece ol additional hardware which has to be added on to a computer. plus royalties to Intnos. Inmos devised the system hardware as well as software because it could find nothing in computer-aided design on the market that could handle the complexities of designing . the next-but-one generation of microchips. pubished yesterday, which' showed that sterling M3 had risen by 0.9 per cent in the May banking month. Now, if you think back to last week, the indicated rise was said to be only per cent. It was this better-than-expected figure which saved the authorities from having to allow base rates to rise. Had the correct indication of a rise of 1 per cent been revealed last week (it would have been 1 per cent because they round to the nearest, quarter which they give the preliminary indication) the figures might just have been pom-enough to provoke the rise in base rates. This mistake by the authorities over the figures was almost certainly genuine. But the fact remains that many people in the markets may feel they were given the double shuffle, and will view further favourable indications with greater caution in future. be converted into a direct US loan. The US Treasury Secretary, Mr Donald Regan, who expressed optimism during the London summit on an Argentinian-IMF accord by June 13, is thought to be frustrated by the tactics in Buenos Aires. Treasury officials made it plain yesterday that the US hopes to increase the pressure on Argentina and its Latin American creditors through its display of last-minute brinkmanship on renewal of the guarantee. They made it clear, however, that failure to renew the guarantee today would not rule out a $300 million loan still being granted after Argentina has submitted to the IMF terms. The main har to an accord with the IMF remains the Alfonsin government's commitment to increase real wages by between 6-8 per cent at a time when inflation in llie rmintry is running at. 500 per cent. AT & T and flip French" and Canadian versions of videotex, which have been massively backed by their governments. The British Prestel version is already operating in eight countries. In the UK, Prestel now has 44,000 customers, 38 per cent of them home users. This compares with only 10,000 in 1980, when business use predominated and only 10 per cent of Prestol TV sets were in the home. There are also many private videotex networks, serving individual companies or groups of businesses, like travel agencies. Most of these also link into the public service. agreed offer for the 481 strong Martin chain a month ago when it trumped a contested 34 million bid from W. H. Smith. The Smith directors decided they were not prepared to match the substantially higher Guinness terms and dropped out of the running. The takeover represents a major strategic move for the brewing giant which has disposed of some 150 peripheral businesses in a major rationalisation programme over the past two and a half years. The directors are keen to build up a second significant arm to complement the mainstream brewiny business. They expect Martin to spearhead a new drive into the multiple retailing area where the group already owns the Lavells chain. Tax boost for bonds By Peter Rodgers The government has given big new tax concessions to encourage the fixed interest bond market by widening the scope of measures announced in the March Budget. The aim was to encourage companies to issue bonds instead of relying on bank borrowings. All corporate bonds, including existing issues, will now bo eligible for the same capital gains tax exemptions as gilt-edged stock. The budget gave this benefit to new issues of corporate bonds, but not existing ones. At the same time the government has dropped its proposal that the new concession should be restricted tn corporate bond issues. Now all forms of fixed interest bonds will be eligible including those issued by foreign governments and state oreanisations. and in ternational institutions such as the Euronean Investment Bank. This will encourage the " Bulldog bond " marKct in tor- eign government issues. The changes were unveiled a week aeo in the committee stage of the Finance Bill but only emerged yesterday. They apply to any borrower whose shares or bonds are eli gible for listing on the Stock Exchange or the u&m. ine tax exemption applies to bonds held for more than a year, in exactly the same way as the government's own gilts issues.

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