CITY AND SUBURBAN
It should be a hanging offence but the Mirror's editor might find the rule hard to enforce
CHRISTOPHER FILDES
Iwonder how my former colleague would get on at the Daily Mirror. I have not seen him since the day when he was made to clear his desk and leave the building. On the paper we worked for, he wrote the share-tipping column, and the stock market noticed a pattern of dealing: somebody was buying the shares in advance of the tips. Two clerks were hauled up to the top floor of the Stock Exchange Tower, and admit- ted to being his nominees. The Exchange passed the facts to the paper, and the tip- ster was sacked on the spot. There were no official codes of conduct in those days, and for that matter no law against insider trad- ing, but he had committed a capital crime. He had stolen from his readers. They were entitled to act on his judgment and advice without having to ask whether he had acted on them first and might be taking his prof- its on the shares that they were buying. I do not know whether this is the rule at today's Daily Mirror but, if it is, Piers Morgan, the editor, might be embarrassed to enforce it. He turns out to have invested £20,000 in an obscure stock on the day before his City column tipped it. It seemed a good buy at the time, he explains, and he was too busy to know what was going to be in the col- umn. The editors of national newspapers are busy people, even if this one seems to have found time for large-scale punting. He might now find the time to look at the rule- book drawn up by Bob Head, for many years the Mirror's City editor. Bob banned his City staff from owning shares. He took a serious view of his paper's responsibilities and of his own. He would never have encouraged Mirror readers to fill their boots with obscure shares, regardless of whose boots had been filled first. I would like to think that Mr Morgan and his City staff take their responsibilities as seriously.
Learn the hard way
I WOULD not go so far as to enforce Bob Head's first law. It is instructive for finan- cial journalists to find out for themselves how markets operate. Investment, so they learn, is not as easy as it looks. The market will bring their mistakes back to haunt them. Obscure stocks can be easier to buy than to sell, most of all in manic markets like these, where share prices are readily ramped and where so many tips have taps behind them. A little sobering experience will make them better at their work — but they must put their readers first, or find another way to make a living. Respectable rule-books still carry the sanction of capital punishment.
A sigh of relief
PARTING with Willem Buiter, the Bank of England must feel what Oxford felt when John Henry Newman went over to Rome: `The University' (so Lytton Strachey put it) `breathed such a sigh of relief as usually fol- lows the difficult expulsion of a hard piece of matter from a living organism.' Professor Buiter reached the Bank from Cambridge as an 'outside' member of its monetary pol- icy committee, which sets interest rates. He turned out not to be a hawk or dove so much as a loose cannon. The Bank had not foreseen that the outsiders would move in on it, making full-time jobs of their work, well-paid and well-publicised, and insisting on wall-to-wall economists to do their bid- ding. This has done nothing to make the committee's work easier, smoother or shorter, but as a career move for Mr Buiter it has paid. He is on his way to the Euro- pean Boondoggle for Remuneration and Disbursement as its chief economist, for a salary unspecified but free of tax. Whew.
Tempting Providence
COURTAULDS is getting cheaper. Forty years ago Imperial Chemical Industries bid £180 million for it. In its day this was the biggest takeover bid ever made. Now Sara Lee of America is bidding £104 million in today's shrunken pounds for Courtaulds Textiles. ICI had bet its Terylene shirt on man-made fibres — high-tech, high-growth, high hopes. Then, as can happen with high- tech growth industries, fibres suddenly stopped looking clever, slowed down and moved to cheaper climates. Courtaulds escaped ICI's clutches and held a thanks- giving service in a City church, with the bells pealing and the board singing 'Praise, my soul, the King of Heaven'. I cannot think that it will tempt Providence again.
Root and branch
POOR Nat West. Nanny was right. He didn't take care of his toys, and now the bogeyman has come over the border and got him. As the screams fade away, I find myself asking what you now get if you buy a bank for £21 billion. Ten or five years ago the answer would have been obvious. You bought a branch network with customers attached to it. Are they attached to it now? Lloyds thinks that they are, even though it plans to shut 400 more branches by way of cutting costs. To justify its claim it has come up with research showing that 70 per cent of its customers enter one of its branches at least once a month. For a retailer of services, that does not sound much of a claim. Bar- clays prefers to maintain that its best asset is its brand. As an asset, a brand is less sub- stantial than a branch, and easier to demol- ish, especially by a new owner committed to change. Judging by what has happened to its share price, those screams from north of the border may be coming from the bogeyman.
Thanks, Caz
WHAT a bit of luck. Through the post comes an offer from Cazenove for my five shares in Oldham Estates. MEPC, Caz's client, is willing to buy them for 160p each, and since it already owns 99,9 per cent of Oldham, its bid seems likely to succeed. I bought them in the cause of duty, to get into Oldham's meetings. Its reclusive chair- man, Harry Hyams, had a gift for backing into the limelight, and once presided in a Mickey Mouse mask. Then the limelight shifted, and I was left with five unwanted shares which would cost more to sell than they would fetch. Oldham and I have been in correspondence ever since. I have even volunteered to hand my five shares back or give them to a good home. Nothing doing. Now this generous bid (£8 cash for £5.651/2p of asset value) has solved my problem, or would do if I could find the certificates. Note to Caz: call it quits and I'll throw in a glass of champagne.
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