CityAM 16/09/2010

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CITY banks yesterday received a stark warn-
ing from the City of London Police that the
threat of terrorism is “real and ever-pres-
ent”, after the Real IRA warned it had made
banks and their staff a potential target for
attack.
The force said that the official terrorist
threat level had not been raised because of
the Real IRA’s warning, though it reiterated
calls for vigilance on the part of the public as
“one of the best ways of preventing and
detecting crime”.
Its guidelines for City workers include
informing the police of anything suspicious,
however seemingly insignificant, as well as
keeping alert to the threat of postal bombs –
including unusual-smelling or heavy pack-
ages, or those which are addressed incorrect-
ly, bear too many stamps for the weight or
have grease stains on the envelope or wrap-
ping.
A source at one large firm said the organi-
sation had made sure to make staff aware of
the threat, adding that most of the UK’s
biggest banks kept up a regular dialogue
with the security services over potential
threats.
Leaders of the republican terrorist group
told the Guardian newspaper that the “role
of bankers and the institutions they serve in
financing Britain’s colonial and capitalist
system has not gone unnoticed”.
However, the Real IRA – which has around
100 activists – does not have the same fire-
power as the Provisional IRA, which repeat-
edly targeted London’s financial community
in the 1990s.
In April 1993, a bomb planted in
Bishopsgate exploded, killing one person
and injuring dozens more, while Canary
Wharf was also targeted by the terror group
a few years later.
BUSINESS WITH PERSONALITY
www.cityam.com Issue 1,221 Thursday 16 September 2010 FREE
FTSE 100 ▼ 5,555.56 -11.85 DOW ▲ 10,572.73 +46.24 NASDAQ ▲2,301.32 +11.55 £/$ ▲ 1.56 +0.01 £/¤ 1.20 unc ¤/$ 1.30 unc
RADICAL curbs on short selling and deriva-
tives trading proposed by the European
Commission to bring the multi-trillion dol-
lar industry in from “Wild West territory”
were condemned as costly and potentially
uncompetitive by hedge funds yesterday.
The proposals, released to coincide with
the collapse of Lehman Brothers two years
ago, require increased disclosure of short
selling positions against companies and gov-
ernment debt as well as handing the
European Securities and Markets Authority,
one of the EU’s newly created financial reg-
ulators, the power to temporarily ban short
selling altogether.
Investors will need to disclose short posi-
tions to regulators if they exceed 0.2 per
cent of a company’s issued share capital,
and to the rest of the market if the short
position exceeds 0.5 per cent.
The proposals also cover credit-default
swaps and the clearing of over-the-counter
derivatives – a $600 trillion (£384 trillion)
market. In a bid to reduce counterparty risk,
most derivatives trades will have to be rout-
ed through centralised clearing houses pro-
viding a safety net in the event of a collapse,
and ensuring regulators know how much
money firms owe each other. This forced
transparency, will challenge the dominance
of the roughly half a dozen large banks,
including Deutsche Bank, Barclays,
Goldman Sachs, JP Morgan, Bank of
America and Citigroup, which currently
design derivatives for customers and trade
them among themselves.
Michel Barnier, the EU’s financial services
commissioner, insisted that the regulatory
overhaul was vital for the future stability of
Europe’s financial system.
“No financial market can afford to
remain a Wild West territory,” he said.
Barnier also sought to dampen fears that
the new rules could drive dealers away from
the City, where 40 per cent of the global
derivatives trade is based, saying similar
EU WAGES WAR
ON DERIVATIVES
Certified Distribution
02/08/10 – 29/08/10 is 93,782
BY KATIE HOPE
FINANCIAL SERVICES

measures were being brought in worldwide.
Andrew Baker from the Alternative
Investment Management Association wel-
comed the standardisation across Europe,
but slammed short position reporting to the
market as “uncompetitive.”
Darren Fox, a partner at Simmons &
Simmons, said the disclosure requirements
would “potentially be very expensive” for
firms and trading venues.
While Kevin McNulty, head of the
International Securities Lending Association,
said the proposed thresholds were too low and
could encourage investors to curb their trades to
stay beneath those levels, reducing liquidity and
ironically creating riskier trading conditions.
The regulations, which still need to be
approved by EU member states and the
European parliament, are expected to be in
place by July 2012. EU RULES IN DETAIL: P5
POLICE WARN ON IRA THREAT
BY VICTORIA BATES
TERROR

Eu financial services commissioner Michel
Barnier said nobody will escape the new rules:
“ No market, no player, must remain outside
this set of regulations.” Picture: REUTERS
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News
2 CITYA.M. 16 SEPTEMBER 2010
Ofcom could
probe BSkyB
OFCOM could be asked to review
News Corporation’s bid for BSkyB if a
formal offer is made with business
secretary Vince Cable likely to issue
an “intervention notice”.
The notice would order the watch-
dog to look at the impact of the
takeover. News Corporation wants to
take over the remaining 61 per cent
of BSkyB it does not own.
The corporation has already made
two unofficial bids for BSkyB, the
first valued the company at 675p per
share, the second at 700p per share.
Both were rejected by the broad-
caster, which values itself at above
800p per share.
News Corp is owned by Rupert
Murdoch, and operates News
International, which owns the Sun,
the News of the World and the Times
and Sunday Times newspapers in the
UK.
A Department for Business
spokesperson told the BBC: “The sec-
retary of state has not made a deci-
sion on this matter – indeed at this
stage there is not even a decision for
him to take. We will not be speculat-
ing on this issue.”
A referral to Ofcom would charge it
with looking at whether News Corp’s
complete ownership of BSkyB would
restrict the “plurality” and number of
voices within the media.
BY MATTHEW WEST
MEDIA

We must unleash the private sector
IF YOU want to know why the loom-
ing cutbacks to the public sector will
be so painful, look no further than
what is happening to wage bills. It is
extraordinary that at a time when
savings are desperately needed, state
sector wages are still growing much
faster than those in the private sector.
In the year to July, total pay growth
in the private sector stood at 1.2 per
cent, compared with 2.7 per cent in
the public sector. This makes no
sense: a pay freeze in the public sector
would allow tens of thousands of jobs
to be saved. What matters is the total
wage bill, the number of staff multi-
plied by all of their costs – and the
fact that this is still going up means
that job-cutting will have to be even
harsher.
State jobs are starting to go down
but not yet by much. Public sector
employment peaked at 6.097m – on
the official payroll, omitting contrac-
tors, agency workers, GPs, freelancers
and others who are state sector
employees in all but name – in the
fourth quarter of last year. The subse-
quent two quarters have seen
declines; the number now stands at
6.051m.
So far, the private sector has easily
compensated for this: yesterday’s fig-
ures from the Office for National
Statistics show a huge jump in private
employment. Despite the small cuts
in the state sector, total jobs increased
at the fastest quarterly rate since May
1989, when the economy was in an
other unsustainable bubble. Private
jobs increased by 308,000 (1.4 per
cent), a very healthy number, on the
face of it at least. This easily compen-
sated for the 22,000 (or 0.4 per cent)
drop in public sector employment.
The main caveat is that the quarter-
ly increase in employment was main-
ly driven by part-time workers, which
increased by 166,000 on the quarter to
reach 7.93m, the highest figure on
record. However, full-time workers
increased by 121,000 on the quarter to
reach 21.23m, not a bad result. Part-
time workers now account for 27.2
per cent of total employment.
In the second quarter of 2010, the
public sector accounted for 20.8 per
cent of total employment in the
United Kingdom, down from 21.0 per
cent in the first quarter (these figures
probably underestimate the real
reach of the public sector by around
three percentage points or so).
Those who claim that there is no
way that the private sector can create
jobs to replace the 600,000 or so that
will probably be lost in the public sec-
tor over the next five years are too pes-
simistic. It will be tough but it is
perfectly possible (and in fact likely).
The economy will probably grow by
just 1.7 per cent this year yet we will
finish the year with more full-time
private jobs than we started it.
But that’s hardly a great result. We
need much greater private sector job
creation than we are likely to get. The
problem is not that the public sector
is being cut (that is essential to avoid
national bankruptcy). The problem is
that the private sector is too weak, too
burdened by ever more costly rules
and costs. Shrinking the state will lib-
erate some resources for the private
sector; but what we also need is an
ambitious supply-side, pro-entrepre-
neur programme of marginal tax
cuts, deregulation and vigorous wel-
fare reform to jolt the private sector
and labour market out of their stu-
por. The private sector needs an injec-
tion of fresh capitalist energy to
perform to its true potential. Let us
hope somebody is listening in
Downing Street.
[email protected]
A NUMBER of Europe’s best-known
vehicle makers, including Mercedes-
Benz, are at the centre of a price fix-
ing investigation by the Office of Fair
Trading (OFT).
The OFT last night confirmed that
it had launched both criminal and
civil investigations into suspected
price-fixing by major lorry manufac-
turers in the UK. The OFT said it was
looking into suspected cartel activity,
which was at an early stage.
As part of the probe, the OFT has
visited the UK offices of Daimler’s
Mercedes-Benz as part of a broad-
ranging investigation into the pricing
of trucks. It has also requested infor-
mation from Sweden’s Scania and
Germany’s MAN as part of the probe.
The probes are being carried out
under both the Enterprise Act 2002
and the Competition Act 1998. Proven
price-fixing carries big fines for firms
and criminal prosecutions against
executives.
BY HARRY BANKS
AUTOMOTIVE

Carmakers face OFT probe
ROK is understood to be setting up
refinancing discussions with its
lenders, a month after the building
group issued its second profit warn-
ing of the year.
A company spokesman said it was
not at risk of breaching its covenants,
and said the move to renegotiate its
debt was an indication it was confi-
dent of meeting market expectations
of profits for the year to 31 December.
“We have commenced discussions
with our banks with a view to renew-
ing our banking facilities,” the com-
pany said. “The timing of that
refinancing is in line with the
requirement to put new facilities in
place in the early part of 2011.”
The group’s banks are drafting in
PricewaterhouseCoopers (PWC) to ver-
ify Rok’s accounts ahead of the talks.
Rok drafts in
PwC ahead of
refinance talks
tMercedes-Benz’s UK offices have been probed Picture: GETTY
CONSTRUCTION

EDITOR’S LETTER
ALLISTER HEATH
7
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Email: [email protected] www.cityam.com
Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor Ben Griffiths
Night Editor Katie Hope
Associate Editor David Crow
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
Art Director Darren Soulsby
Pictures Alex Ridley
Commercial
Sales Director Jeremy Slattery
Commercial Director Harry Owen
Head of Distribution Nick Owen
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[email protected]
Rupert Murdoch has
already made two
unofficial offers to buy
the remaining 61 per
cent of BSkyB
BOND STRATEGY LED TO BIG WIN
AFTER LEHMAN
The collapse of Lehman Brothers
and central banks’ unorthodox
monetary policies distorted markets
to create some of the biggest pricing
anomalies ever documented in bond
trading, according to research from
leading US academics. A paper from
the US National Bureau of Economic
Research claims to have identified
by academic research in fixed
income markets the “largest arbi-
trage ever”.
BA CHIEF WARNS EUROPE OF THREAT
FROM MIDEAST AIRLINES
Europe has failed to recognise the “sig-
nificant threat” of ambitious Middle
Eastern airlines, the head of British
Airways has warned. Willie Walsh told
industry leaders: “We have been very
slow in the UK and in Europe to recog-
nise the new competitive threat.
CARDINAL COMPARES UK TO THIRD
WORLD
The start of Pope Benedict XVI ‘s state
visit to Britain starting on Thursday
has been marred by one of his senior
advisers, who has described the UK as
“a third world country” marked by a
“new and aggressive atheism”. As the
Pope prepares for what will be the
first official visit ever made to the UK
by a Catholic pontiff, Cardinal
Walter Kasper, a former adviser on
relations with other denominations,
triggered controversy by making the
comments in a German magazine
article.
CAMBRIDGE TOPS UNIVERSITY RICH
LIST
The University of Cambridge is now
comfortably Britain’s richest univer-
sity, confirming its place in the glob-
al top 10 of academic endowments
with £4bn, after a strong investment
performance and a billion-pound
fundraising drive.
REVENUE FEELS THE HEAT FOR FIASCO
OF UNDERPAID TAXES
The chairman of the Treasury
Select Committee has launched a
scathing attack on HM Revenue &
Customs over its handling of the
tax fiasco that has left millions fac-
ing claims for backdated tax.
Andrew Tyrie told The Times that
HMRC had failed to prepare itself to
deal with taxpayer concern.
AVIVA CALLS IN HEADHUNTERS TO
SEEK OUT NEW CHAIRMAN
Aviva has begun the search for a
new chairman to replace Lord
Sharman, opening up a further
vacancy at the top of corporate
Britain, The Times has learnt.
Britain’s second-largest insurer has
appointed several headhunters to
draw up a list of potential replace-
ments for Lord Sharman, 67, who
has held the role for five years.
CATTLES BONDHOLDERS ENDS
RESTRUCTURING TALKS
Cattles, the stricken door-to-door
lender, said on Wednesday that talks
with its group of bondholders over a
restructuring had broken down. The
company said in a statement on
Wednesday that it would continue
talks with other key creditors to find
a solution.
BANK OF JAPAN RILES US WITH YEN
MOVE
Japan has launched a huge inter-
vention in the foreign exchange
market for the first time since 2004
to stem the rise of the yen and head
off a deflation spiral, prompting
harsh protests from top US
Democrats on Capitol Hill. The
move is the latest dramatic twist in
a world where a growing number of
countries are seeking an economic
edge.
BA CHIEF SAYS LAN MERGER ISN'T
THREAT TO ONEWORLD
British Airways PLC Chief Executive
Willie Walsh said Chilean carrier
LAN Airlines SA's pending merger
with Brazil's TAM S/A isn't a threat
to the Oneworld airline alliance,
which includes BA. “LAN are very
much core members of Oneworld,”
Walsh said in an interview. BA, LAN,
AMR Corp’s American Airlines and
11 other airlines belong to
Oneworld, through which they
cooperate on marketing and strate-
gic planning.
RUSSIA, NORWAY RESOLVE DISPUTE
OVER MARITIME BORDER
Russia and Norway signed an agree-
ment Wednesday on their maritime
border in the energy-rich Barents Sea,
ending a dispute that has dragged on
for decades. The countries said the
deal was significant.
WHAT THE OTHER PAPERS SAY THIS MORNING
LONDON’S competitiveness as an
attractive company listing destina-
tion is in danger of being jeopardised
by political gesturing between busi-
ness secretary Vince Cable and the
Treasury, one of the UK’s most senior
investment bankers has warned.
Sir Laurie Magnus, who was yester-
day appointed chairman of Lexicon
Partners, said plans to separate the
regulation of primary and secondary
capital raising markets would make
London “far more difficult to sell” to
firms looking to list in the capital.
“The problem is partly that the
coalition doesn’t fully understand
what it is doing and the conse-
quences,” Magnus said. “It seems
there’s a political turf war afoot
between Vince Cable and the
Treasury.”
He added: “We’re sleepwalking
towards making life much more diffi-
cult for ourselves. I just hope they
wake up and realise that.”
Magnus, a member of the UK
Listing Authority Advisory
Committee spoke out in support of
the London Stock Exchange chief
executive Xavier Rolet. Rolet has
warned that the rules would “severe-
ly” impact London’s competitiveness
and urged other concerned City prac-
titioners to speak out against them.
The government’s proposals would
see regulation of primary listings
pass to a strengthened Financial
Reporting Council (FRC), which
would be overseen by Cable’s depart-
ment, while secondary capital rais-
ings would fall under the jurisdiction
of the new Consumer Protection and
Markets Authority (CPMA).
The City is also concerned that the
CPMA has the UK’s only vote on
Europe’s new super-regulator, the
European Securities and Markets
Authority (ESMA).“If this goes ahead,
the UK’s voice in Europe will be ham-
strung,” Magnus said.
The government’s consultation
process is due to conclude on 18
October.
Cable’s power
grab threat to
share listings
THREE women who formerly worked
for Goldman Sachs are suing the Wall
Street giant for what they say is ram-
pant gender discrimination that
unfairly favours men in pay and pro-
motions.
The lawsuit filed yesterday alleges
that Goldman has violated federal
and New York City laws by engaging
in a systematic “pattern and practice”
of discrimination against female pro-
fessionals at the firm. They are asking
a federal judge to certify the case as a
class-action suit on behalf of the
firm’s female employees.
The three — a former vice presi-
dent, a managing director and an
associate — also are seeking damages
from Goldman for emotional distress
and humiliation they say they've suf-
fered and for lost income.
And they want the firm to put in
new policies for pay and promotion
decisions.
“We believe this suit is without
merit,” Goldman spokesman Lucas
van Praag in New York said in a state-
ment.
It added: “People are critical to our
business, and we make extraordinary
efforts to recruit, develop and retain
outstanding women professionals.”
The suit was filed in the US District
Court in New York.
Female workers
allege bias at
Goldman Sachs
Business secretary Vince Cable is accused by the City of market meddling Picture: GETTY
BY VICTORIA BATES
REGULATION

COURTS

News
3 CITYA.M. 16 SEPTEMBER 2010
With a flight time of less than
2 hours and a check in time of
only 15 minutes, you’ll hope the
rest of your stay doesn’t go as
quickly. Book at ba.com
LONDON
CITY TO
COPENHAGEN
FROM £65
ONE WAY
T
HE EUROPEAN Union’s new
proposals on short selling
address a practice that suppos-
edly contributed to recent
financial crises. But there is still too
much misunderstanding of short
selling, and these wide new powers
bring dangers of their own.
It is easy to point the finger of
blame at those who borrow shares
they believe will fall and buy them
back at a profit. Finding short sellers
at the scene of every disaster, naïve
observers confuse correlation with
causation, and ignore the valuable
service provided in the early discov-
ery of overvalued stock.
Politicians attacked short sellers as
“spivs” after HBOS shares plunged in
2008, leading to a takeover by Lloyds.
But it soon emerged that borrowed
stock, a clear measure of short sell-
ing, was just three per cent of avail-
able shares, a level typical for the UK.
The Lehman bankruptcy report by
Anton Valukas this March found that
Lehman’s available liquidity and the
actions of its senior executives and
auditor were central to its collapse –
yet former Lehman CEO Richard Fuld
wrongly blamed short sellers and
sought a naked short selling ban
before bankruptcy was filed.
Short selling was actively involved
in a market collapse this May, but
that was because the German govern-
ment banned some kinds of short
selling overnight. Billions were
wiped off the major European
indices, with the FTSE falling 2.8 per
cent. The new EU regulations restrict
such “rogue” actions at a national
level. But if the result is pan-
European bans of uncertain length,
it will be scant comfort.
There’s little evidence that bans
help. Research on the SEC’s 2008 ban
by Ekkehar Boehmer, Charles Jones
and Xiaoyan Zhang (2009) found no
clear evidence that it helped stem a
collapse in share prices. Alessandro
Beber and Marco Pagano (2010)
looked across all the global bans and
concluded “the overall evidence indi-
cates that short-selling bans have at
best left stock prices unaffected, and
at worst may have contributed to
their decline.”
Despite the eagerness of many to
blame the messenger, short sellers
spot companies with real problems.
Cracking down on them won’t make
these problems go away – they will
just take longer to become public.
New EU rules
on short sales
trade in myth
News
5 CITYA.M. 16 SEPTEMBER 2010
ANALYST VIEWS: WHAT DO YOU THINK OF
THE NEW REGULATIONS? Interviews by Matthew West

FOLAKE SHASANYA | DIRECTOR AFME
“We welcome the proposals to help increase trans-
parency and reduce credit and operational risk in the mar-
ket. But more work will be needed to analyse whether these
proposals could help mitigate systemic risk.”


JAMES COILEY| PARTNER AT ASHURST
Although the text of the proposal is balanced, it per-
mits national regulators and the European Securities and
Markets Authority to ban entry into credit default swaps on
as wide or as narrow a basis as they choose.


JUSTIN URQUART STEWART | SEVEN INVESTMENT
I have no problem with more transparency, so that
people can see we are not taking unnecessary risks that
cause systemic failures. But it is also essential that they
realise these things are essential tools of the trade.


ANDREW BAKER |CHIEF EXECUTIVE AIMA
In the interests of international regulatory consis-
tency it is desirable that the Commission is harmonising
rules in both these fields. A common regime that concen-
trates on reporting is the way forward.

Struggling governments and firms like to pass the
buck for their own failings, explains Marc Sidwell
● If the European parliament and
27member states agree, the two laws to
reform short-selling and derivatives will
come into effect in 2012. Negotiations
with countries and lawmakers, however,
could water down the rules.
● Commission officials want to intro-
duce standardisation to the derivatives
markets such as interest-rate swaps that
bet on borrowing rates. This would make
trading more transparent and easier to
move from over-the-counter to
exchanges, where it can be easily moni-
tored.
● The rules will ask derivative traders to
use clearing houses which provide a safe-
ty net in the event of a collapse like
Lehman Brothers, by stepping in should
either buyer or seller to a trade go bust.
● The proposals make it mandatory to
report all trading to central data banks or
repositories, which will make it possible
for regulators to keep tabs on the market
●Industrial companies will be given
exemptions, provided their use of deriva-
tives does not pass a threshold that will
be set up the new European supervisor.
●All trades involving short-selling will be
flagged as such. Smaller short positions
will be shown to the regulators while
traders will be obliged to publicly post
big short positions – where the value tops
0.5 per cent of the market value of the
company concerned.
●If a seller cannot close a short sale
after four days by coming up with the
assets he promised to sell, the regulator
can force him to pay the buyer cash
instead. A fine can also be imposed.
●The markets watchdog will also be
able to prohibit short-selling for three
months at a time. Regulators can also
impose a one-day ban if the price of a
financial instrument suddenly dips.
●The rules also introduce tight controls
for "naked" short selling, when sellers
have not arranged to borrow the assets
such as company stock they promised to
sell.
AT A GLANCE | EUROPEAN SHORT SELLING PROPOSALS
News
6 CITYA.M. 16 SEPTEMBER 2010
DEUTSCHE TELEKOM said its chief
executive Rene Obermann is the only
top company official among the eight
people facing investigation in a sus-
pected bribery case in its eastern
Europe operations.
In a show of support however, the
company started negotiations this
month with Obermann to extend his
contract, which expires in November
2011, according to a person with
knowledge of the matter .
Deutsche Telekom declined to com-
ment.
Telekom’s top lawyer, Manfred
Balz, said that Obermann was not the
target of a US investigation that trig-
gered searches in Germany but was
being questioned as a witness in the
US probe, Balz told a conference call,
adding no other members of top
management or the supervisory
board were involved.
German prosecutors are investigat-
ing eight people including Obermann
at the request of US authorities who
are looking into suspected bribery in
Macedonia and Montenegro.
The WirtschaftsWoche magazine
reported on Monday that prosecutors
searched Obermann's home and con-
fiscated documents last month as
part of the investigation.
Deutsche Telekom chief faced with probe
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FIRST QUANTUM MINERALS is suing
units of Eurasian Natural Resources
Corp which bought rights to Kolwezi,
a disputed copper project, after
Democratic Republic of Congo with-
drew First Quantum’s licence.
First Quantum will also inititate
international arbitration proceedings
shortly over Frontier, a second project
in the DRC, as the miner fights for
the return of assets in the country,
the group’s president, Clive Newall
said.
The miner suspended operations at
Frontier last month after being
stripped of its exploration permit, a
move it said was retribution for enter-
ing into arbitration over Kolwezi.
A spokeswoman for FTSE 100 miner
ENRC reiterated comments made last
week that the miner would vigorous-
ly defend any legal action. Newall said
the amount of compensation First
Quantum was seeking over Kolwezi
would emerge during the proceed-
ings. “We are claiming for essentially
the fair value of the project which
will be in the billions, but just how
much depends on prevailing metal
prices,” he said.
ENRC faces legal action
BY HARRY BANKS
MINING

GUY Hands, the founder of private
equity group Terra Firma, was yester-
day granted permission by a judge in
New York to sue US bank Citigroup
for fraud over his £4bn acquisition of
the record label EMI.
Hands alleges Citigroup misled
him into believing there was another
bidder for the troubled record label
during the auction process in 2007
causing him to overpay.
The record label’s value has halved
to around £2bn since then.
Hands decided to sue Citi last year
after falling out with the bank when
it refused to write off some of the
£3bn of debt he used to finance the
deal.
While Judge Rakoff threw out two
of Terra Firma’s claims he ruled the
firm could press ahead on two other
counts of fraud despite Citi’s attempt
to have the entire case thrown out.
The case will now go to a jury trial
with the first hearing slated for 18
October.
A Terra Firma spokesman said: “We
are pleased that judge Rakoff has
rejected Citi’s attempt to avoid a trial
on both of Terra Firma’s fraud claims.
We look forward to the trial on 18
October when Citi will have to answer
to a group of New York Jurors”.
Citigroup said: "We are pleased that
Judge Rakoff has dismissed two of the
four claims in the case. We believe
this case is entirely without merit,
and we are confident that Citi will
prevail at trial on the remaining two
claims."
While EMI is a British company
Hands opted for the case to be heard
in the US because many of Terra
Firma’s investors are based in
America. Hands, who is a tax exile,
also told the court he did not want to
jeopardise his tax status by having
the case heard in London.
Terra Firma
case set for
fraud trial
A HANDFUL of buyout firms are
understood to be submitting indica-
tive bids for mental-health specialist
the Priory Group, which seller Royal
Bank of Scotland (RBS) hopes could
fetch about £1bn.
Advent International, Bain Capital,
Blackstone and Cinven were all
thought to be planning to submit non-
binding bids by yesterday’s deadline.
The Carlyle Group and KKR are also
thought to have also examined the
business, but it was unclear whether
they intend to lodge bids.
The private equity firms, RBS and
the Priory all declined to comment.
The Priory operates more than 50
hospitals, schools and care homes in
Britain. It is best known for treating
celebrities including “Britain’s Got
Talent” star Susan Boyle, Libertines
singer Pete Doherty, and comedienne
Ruby Wax, who went on to write a
show about depression, dubbed “Live
From the Priory”.
It is being sold as RBS sheds non-core
assets to slim its unwieldy balance
sheet. Priory expects to generate earn-
ings before interest, tax, depreciation
and amortisation of about £95m in
the year to December, a source previ-
ously said.
Banks would be willing to lend
about 5.5 times that amount, the
source said, leaving a private equity
buyer to stump up about £500m in
equity.
The business is viewed as a strong
performer with a good management
team, meaning a new private equity
buyer may have little more to add to
the business and could need to target
lower returns, another source said.
Buyout firms usually target net
returns of 20 to 25 per cent, but have
been prepared recently to put in more
equity and accept lower returns for
businesses they perceive to be low-risk.
Priory looks
healthy for
buyout bids
GREECE’S finance minister has
strongly rejected the idea the country
will be forced to restructure its debts,
saying that a default would break the
eurozone.
On a two-day visit to London, Paris
and Frankfurt to convince investors
Greece is beginning to recover from
its economic crisis, George
Papaconstantinou told the Financial
Times a Greek default would spark
selling in other so-called peripheral
bond markets such as Portugal and
Ireland.
The minister’s message to investors
was backed up by officials from the
International Monetary Fund,
European Union and the European
Central Bank.
One senior IMF official said “no
one would benefit from a Greek
default”.
Greece rejects debt doubts
EUROZONE ECONOMY

First Quantum boss Clive Newall is taking action against ENRC Picture: REUTERS
BY HARRY BANKS
PRIVATE EQUITY

BY HARRY BANKS
TELECOMMUNICATIONS

BY MATTHEW WEST
PRIVATE EQUITY

THE NUMBER of people in employ-
ment grew at the fastest rate since
records began in the three months to
July, official figures revealed yester-
day – boosted by a surge in part-time
workers as employers cut back on
working hours.
Employment for the quarter rose
by 286,000 to 29.16m, representing a
0.4 per cent rise in the rate to 70.7 per
cent. This is the biggest quarterly rise
since 1971, according to the Office for
National Statistics (ONS).
However, the figure was boosted by
166,000 part-time jobs, continuing a
trend during the year for employers
to rely increasingly on part-time
workers.
Part-time workers now account for
27.2 per cent of total employment, up
from 25.4 per cent as of mid-2008.
Despite the rise in employment,
the number of Britons claiming job-
less benefits in August rose for the
first time since December 2009.
Overall, the claimant count rose by
2,300 last month, taking the total to
1.466m, and ending seven consecu-
tive months of a decline in those
claiming Job Seeker’s Allowance. This
increase was entirely borne by
women, the figures showed.
The mixed picture painted by yes-
terday’s data, especially the more
recent claimant count figures, disap-
pointed economists.
“The jump in part-time employ-
ment indicates that many companies
are reluctant to add full-time workers
amid serious concerns over the sus-
tainability and longer-term strength
of the recovery,” said economist
Howard Archer at IHS Global Insight.
Although earnings growth picked
up, it still remained subdued.
Headline average weekly earnings
rose 1.5 per cent in the three months
to July up from 1.1 per cent in the
quarter to June.
But stripping out the more volatile
bonus component, core earnings
growth rose to 1.8 per cent in July , a
little stronger than expected.
Part time jobs
fuel surge in
employment
LLOYDS Banking Group launched a
rare 30-year senior sterling bond yes-
terday, capitalising on the upbeat
tone of the credit markets and on
demand from pension funds and
insurers for long-dated sterling assets.
The bond deal is the bank’s first
ever sterling issue with a 30-year
maturity, an official with the bank
said.
Initial guidance on the bond was at
UK gilts plus around 250 basis points.
“There is natural demand from UK
pension funds and insurers because
they have long-duration liabilities
such as annuities,” said one financial
sector analyst at a UK-based asset
manager.
Lloyds has done relatively few sen-
ior bond deals this year, but this
month has joined in a rush by
European banks to raise cash via the
bond markets.
Banks have seized the chance to tap
cash-rich investors and take advan-
tage of positive sentiment towards
credit versus equities due to fears of a
fresh economic slowdown.
At the start of September, for exam-
ple, Lloyds raised £1.04bn with a five
year senior bond at a spread of 200
basis points over mid-swaps.
The managing banks on the 30-year
deal are Lloyds, Barclays and HSB.
Lloyds launches
a thirty-year
sterling bond
BY JESSICA MEAD
UK ECONOMY

BANKING

News
8 CITYA.M. 16 SEPTEMBER 2010
“I think it’s picking up slowly; I’m not convinced
it will have improved much by the end of the
year. If you want a job now you have to
accept a lower salary and worse con-
ditions generally, but we’ll have to
get used to that.”
DAVID SAHNER | HEATH LAMBERT
“I think unemployment rates in the City are rel-
atively stable, at least for this year. I don’t think
it will get a huge amount worse. Currently the
banking sector seems to be rejuvenat-
ed, and is employing more people,
but it’s not the same everywhere.”
JAMES PARRATT | MILLER INSURANCE
“I work in recruitment, and the markets are
getting stronger. After cutbacks during the
recession, some sectors are hiring again, and
as long as there isn't a double-dip it will
continue. But nationally things might
get worse before they get better.”
MARK ABBOTT | PCR LTD
CITY VIEWS: WHAT ARE THE PROSPECTS FOR
THE JOB MARKET IN THE NEXT YEAR?
Interviews by Alasdair Peoples and Marion Dakers
MERVYN King launched a broad-
side against bankers’ bonuses yes-
terday, telling unions they were
right to be angry at the industry –
but he warned there was no alter-
native to swingeing spending cuts
to reduce the deficit.
Speaking at the Trades Union
Congress annual conference in
Manchester, the Bank of England
governor said the economic crisis
rested squarely on the shoulders of
the banking industry.
He said: “Remuneration, especial-
ly the structure of financial sector
bonuses, encouraged excessive risk-
taking... your members, and indeed
the businesses which employ them,
are entitled to be angry.”
However, King – who will soon
have overall responsibility for bank
regulation – said that clamping
down on bonuses was not the
answer, because “if banks want to
pay this money to those individuals
they will find a way to do it”.
The governor also fired a warn-
ing shot across the bow of the
unions, insisting that savage spend-
ing cuts and public sector job losses
were essential if Britain is to reduce
its “unsustainable” deficit.
He said: “It is vital for any govern-
ment to set out and commit to a
clear and credible plan for reducing
the deficit. The current plan is to
reduce the deficit steadily over five
years – a more gradual fiscal tight-
ening than in some other coun-
tries. As a result of a failure to put
such a plan in place sooner, some
euro-area countries have found... a
much more rapid adjustment
being forced upon them.”
Unions reacted angrily to King’s
comments. Paul Kenny, GMB gener-
al secretary, said: “His analysis of
the excesses of the banking system
reminds me of Jessie James warn-
ing people in the Wild West about
the dangers of train robberies.”
King tells the unions
cuts are only option
BY DAVID CROW
POLITICS

News
9 CITYA.M. 16 SEPTEMBER 2010
THE PEOPLE’S SUPERMARKET
TESCO chief executive Sir Terry Leahy was on hand at the Economist Emerging
Markets Summit in London yesterday to hear his designated successor Philip
Clarke predict China will become profitable for the retailer during his tenure.
The supermarket giant is planning to invest around £2bn into developing shop-
ping malls in the People’s Republic. Picture: GETTY
DAVID MILES, the Bank of England’s
rate setter, warned yesterday that UK
inflation is uncomfortably high.
“I am particularly concerned about
inflationary pressures, since it is our
job to keep the rate close to the two
per cent target and it is uncomfort-
ably above that at present,” said Miles
yesterday.
Miles said there still remained a
“great deal of uncertainty” over
whether spare capacity in the econo-
my could help to alleviate inflation-
ary pressures.
His remarks come as figures yester-
day showed that the Consumer Price
Index has remained above three per
cent for the sixth consecutive month.
Inflation has continued to sit above
the Bank’s two per cent target for
almost a year.
Meanwhile, bread, clothes and
cereal prices have continued to rise
during August.
BoE rate setter
says inflation is
too high in UK
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. E G A
. 6 6 2 4 0 / 0 1 r e b m u n e c n a i l p
. s r e m o t s u c t e l o t y u b d n a s r e m o t s u c e g
TIM Yeo, chairman of the energy and
climate change select committee, has
said there was “a degree of over-reac-
tion”over the Gulf of Mexico oil spill
after outgoing BP chief executive
Tony Hayward was quizzed by MPs
yesterday.
Yeo said BP was the “unwitting vic-
tim” of US domestic politics after
Hayward told the parliamentary com-
mittee that the failings which caused
the spill were not particular to the
company he heads.
“It’s been easy for some parties to
suggest that this is a problem with BP.
I emphatically do not believe that that
is the case,” the outgoing chief execu-
tive said.
Hayward denied that there was any
link between the accident and previ-
ous safety lapses at BP such as a 2005
refinery blast that killed 15 workers.
“It’s very dangerous to join up dots
that may not be appropriate to join
up,” he said.
Hayward said the decision of rivals
such as Royal Dutch Shell and Exxon
Mobil to criticise it in the wake of the
disaster reflected the political climate
in the United States at the time, rather
than because of BP operating outside
industry norms, as the companies
said.
Hayward received a less confronta-
tional treatment from the committee
than he received from a US
Congressional committee. His appear-
ance came on the same day regulators
criticised BP for its safety training
regime in the North Sea.
Health and Safety Executive (HSE)
inspectors found the company lacked
a clear chain of command for dealing
with a loss of well control on a North
Sea oil rig – three months before a
blow-out in the Gulf of Mexico caused
America’s worst ever oil spill.
In a letter HSE said to BP that there
was “evidence of a culture among your
contractors, Seawell (up to senior lev-
els of management), of working out-
side of procedures, permit or permit
conditions”.
Yeo claims BP
was victim of
over-reaction
STATE-controlled Abu Dhabi National
Energy Co (TAQA) announced another
purchase of mature North Sea oil
assets yesterday in a move analysts
said could increase its UK oil output
by almost 20 per cent.
TAQA, 75 per cent-owned by the
government of Abu Dhabi, said in a
statement its unit TAQA Bratani
agreed to buy Total’s entire 81 per
cent stake in production licences for
two blocks in the Otter oilfield.
Otter produces around 8,000 bar-
rels per day (bpd) of oil, lies next to
existing TAQA interests and is linked
under the sea to the Eider Platform,
operated by TAQA Bratani.
TAQA’s oil production so far this
year has been running at a little over
35,000 bpd and the acquisition from
Total should add in excess of 6,000
bpd, North Sea oil analysts said. TAQA
gave no financial details.
The purchase is the latest in a series
over the last two years of North Sea oil
interests by TAQA, which has concen-
trated on building up assets in
mature offshore fields that other, big-
ger oil companies have discarded.
Analysts say TAQA has some advan-
tages over larger oil majors because it
optimises output from older fields
through new technology and will
operate much smaller oil fields.
Abu Dhabi buys
more oil assets
in North Sea
Tony Hayward fell on his sword following criticism over the Gulf oil spill Picture: PA
BY HARRY BANKS
ENERGY

ENERGY

News
10 CITYA.M. 16 SEPTEMBER 2010
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SPEAKERS at the ABI’s investment
conference yesterday urged company
shareholders to sign up to the govern-
ment’s new Stewardship Code, argu-
ing that improving the long-term
attitude of investors is crucial in
order to hold at bay radical changes
to governance regulation at a
European level.
Peter Montagnon, who left the ABI
earlier this year to become senior
investment adviser to the Financial
Reporting Council (FRC), said a collec-
tive display of long-termism would
put the UK “in a strong position to
push back on more radical alterna-
tives” currently being mulled over by
the European Commission.
Those alternatives “would almost
certainly involve more direct regula-
tion of companies and also of the
markets with possible limits on the
right of shareholders who put up cap-
ital”, Montagnon warned.
Alain Dromer, the new chair of the
ABI’s investment committee, stressed
the importance of proving that “insti-
Shareholders urged to sign
up to new Stewardship Code
Focus on ABI Conference
12 CITYA.M. 16 SEPTEMBER 2010
BY VICTORIA BATES
REGULATION

tutional investors are determined to
make it work and evolve over time” in
order to avoid “yet another layer of
regulation” from Brussels.
The Stewardship Code was pub-
lished by the FRC in July in order to
increase awareness among institu-
tions of their role in overseeing com-
pany leadership. The FRC has given
institutions until the end of the
month to declare their support.
Employment relations minister
Edward Davey underlined the impor-
tance of long-termism among share-
holders with regard to takeovers,
adding that the government is com-
mitted to tightening up the Takeover
Code as part of its current review.
Solutions may include “higher merger
fees or a pre-notification requirement
for some deals”, he said.
Also attending the conference were
outgoing HSBC chairman Stephen
Green, Cable & Wireless chairman
Richard Lapthorne and Severn Trent
chairman Sir John Egan.
MP Edward Davey was a
speaker at the ABI’s invest-
ment conference
THE NEW chairman of the ABI’s
investment committee has warned
regulators that an over-zealous
approach to protecting the interests
of retail shareholders in the wake of
the financial crisis could come at the
expense of institutional investors.
In his first official speech in the
role, Aviva Investors chief executive
Alain Dromer expressed support for a
new regulatory structure with
increased emphasis on financial sta-
bility and a greater role for the Bank
of England.
But he said regulators should
guard against the danger of focusing
too heavily on the “perceived short-
falls in banking regulation” and skip-
ping over the needs of institutional
investors.
“Financial markets, we should
always remind ourselves and regula-
tors, allow capital allocation between
investors and issuers. Intermediaries
are servicing this purpose,” Dromer
said.
“There are significant differences
between retail and wholesale markets
and it is important that the priorities
of the Consumer Protection and
Markets Authority are not dominated
by thinking rooted in consumer pro-
tection.”
ABI: Don’t ignore
UK’s institutions
BY VICTORIA BATES
REGULATION

ABI Conference
13
AVIVA Investors chief Alain Dromer
went through a baptism of fire yester-
day as he hosted the Association of
British Insurers’ investment confer-
ence on his very first day as chairman
of the investment committee.
Frenchman Dromer replaced fellow
industry heavyweight Keith Skeoch,
the chief executive of Standard Life
Investments, in the role and has also
joined the ABI’s board. The appoint-
ment was first announced just last
month.
He has been at the helm of Aviva
Investors for the past three years and
has a wealth of experience in the
financial services sector.
His CV includes stints as head of
group investment businesses at HSBC;
senior executive vice president and
head of asset management and insur-
ance at Credit Commercial de France;
and positions at La Compagnie
Financiere Edmond de Rothschild in
Paris, in the French Treasury and the
French Institute for Statistics and
Economic Studies.
ALAIN DROMER
CHAIRMAN OF THE
ABI INVESTMENT
COMMITTEE
The FRC’s Peter Montagnon, above left, and HSBC chairman Stephen Green
that its hesitation constituted a
breach of duty, causing the contractu-
al break.
Regal declined to comment, while
no one from Mirabaud was yesterday
available to talk to City A.M.
For now, it seems the firm is happy
with its relationship with ongoing
broker Bank of America Merrill
Lynch, though whether or not the
shareholder unrest settles down may
turn out to be quite another matter.
UNSUNG HERO
Tullett Prebon boss Terry Smith was a
happy man indeed yesterday as a stat-
ue was unveiled in Waterloo Place of
Air Chief Marshal Sir Keith Park, the
“unsung hero” of the Battle of Britain.
Smith has been campaigning for
over a year for a permanent statue of
Park in central London, to recognise
his valiant efforts in defending south-
ern England from the Luftwaffe as
commander of 11 Group Fighter
Command.
“My background in studying histo-
ry and my love of flying as a
private pilot perhaps partly
explain why I instigated the
campaign,” Smith said.
“Park’s central role in the
Battle of Britain has not
been suitably recognised –
until now, that is.”
SAFE AS HOUSES
A robust defence of the attrac-
tiveness of fine wines as an
investment play, courtesy of the
Fine Wine Investment Fund.
The fund – which is up 25 per cent
for the year to date – took issue in its
monthly update at a recent sugges-
tion that fine wine prices were never
likely to exceed residential property
prices as no one would ever pay more
for a case of vino than they would for
a house, no matter what the vintage.
Not so, the fund argues.
Apparently, on a historical basis
(going back to 1988) there is almost
no evidence of correlation between
the two markets, with fine
wine hugely outperforming residen-
tial property over the past two
decades.
“As fine wine prices increase as a
fraction of property prices, if the
argument was correct then their rate
of growth would slow, whereas the
opposite is true,” the fund wrote,
indignantly. “Nor does it make sense
on a qualitative basis. Fine wine is a
tightly supplied luxury consumable
good purchased for pleasure whereas
UK residential property is a large mar-
ket with very different value drivers,
not least of all interest rates, the sup-
ply of credit and affordability ratios…”
Apparently, the average UK residen-
tial property in 1983 was worth 89
cases of Lafite Rothschild 1982, but is
now worth a little under five. “We
would not bet against them reaching
parity in our lifetime,” ventures the
fund, bravely.
BOOKISH TYPES
Ping! In zooms an email from law firm
Latham & Watkins, which seems dis-
proportionately excited about a new
service it’s just launched on its website
and on a free iPhone app.
The app in question – called the
“Book of Jargon” – is an interactive
glossary of capital markets and bank-
ing slang, the firm informs me,
though it’s more an encyclopaedia of
serious terms than a collection of
humorous examples of cringeworthy
“business-speak”.
“We had a lot of fun putting togeth-
er this glossary of Wall Street lingo,”
explains Kirk Davenport, co-chairman
of the firm’s capital markets practice
group. “The Book of Jargon is definite-
ly one of the most useful
things we have ever pub-
lished and the new iPhone
app is by far the coolest
thing we have ever done…”
Someone get that man
to a boozy business lunch,
and pronto.
ACTION MAN
Finally, a note of congratula-
tions to Hugh-Guy Lorriman,
leisure research guru over at
Seymour Pierce.
Lorriman at the weekend com-
pleted a gruelling 140 mile coast-to-
coast endurance event, biking,
kayaking and running his way from
North to South Devon in aid of Trinity
Hospice, and all despite recent
Achilles tendon and knee injuries.
Our action man – so-called because
he sometimes wears combats into
the office, a little bird tells me – is
fundraising at www.justgiving.com/
Hugh-Guy-Lorriman, if you want to
chuck him some cash.
REGAL DITCHES BROKER MIRABAUD
AFTER TUSSLE OVER LEADERSHIP
IT WAS the end of an activist era yes-
terday for broker Mirabaud Securities
and oil and gas firm Regal Petroleum,
which parted ways on, shall we say,
less than friendly terms.
Regal’s terse termination state-
ment to the stock exchange came
after Mirabaud questioned the tenure
of the company’s chief executive,
David Greer. That’s not a procedure
which is unheard-of in the City, of
course, but sources close to Regal said
the company’s beef isn’t with
Mirabaud’s feelings towards Greer
but in the manner in which it went
about expressing them.
Mirabaud, for its part, is under-
stood to have sent a letter in early
August to Regal chairman Keith
Henry, claiming that a significant
investor had called for Greer to be
replaced with ex-Burren Energy chief
Atul Gupta. The broker also claimed
to have elicited the support of several
other shareholders concerned at the
dramatic slide in the firm’s share
price.
But though sources close to Regal
admitted that the share price per-
formance has been less than ideal
since a $1m capital raise last year,
they said Mirabaud should have
approached Henry much earlier and
Regal chief executive David Greer has been under pressure from shareholders
The Capitalist
14 CITYA.M. 16 SEPTEMBER 2010
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
[email protected]
Terry Smith in front of the statue
FRENCH Connection bounced back
into profit yesterday after cost-cutting
measures were taken to breathe new
life into the business.
The group saw a slim half-year prof-
it of £200,000 compared with losses
of £5.4m over the same period last
year.
French Connection is closing loss-
making stores in the US alongside the
closure of its Japanese business and
some European retail outlets to get
the business back in line.
The company has also offloaded its
loss-making Nicole Farhi brand.
Turnover rose by four per cent to
£96.2m in the six months to July.
French Connection shares jumped
seven per cent to 47p after the
improved figures were announced.
Founder Stephen Marks has said
the fashion brand, which was a hit
until its FCUK brand lost its appeal,
appeared to be “back on track”.
Turnover rose four per cent to
£96m including a three per cent rise
in like-for-like sales in Britain and
Europe, driven by growth in
menswear and e-commerce.
“The like-for-like sales performance
in our retail stores in the early weeks
of the new season has shown a
decline making us more cautious
about our outlook for the second
half,” the retailer said.
It added: “However our wholesale
forward orders are ahead of this time
last year and we expect to be able to
maintain the stronger gross margins
achieved recently.”
Profit back at
ailing French
Connection
JJB Sports has appointed Ben
Sherman international retail director
Kate Hayes as its trading director to
nurse it back to health.
Hayes will work alongside retail
director Ron Rome and HR and train-
ing director Paul Mitford.
She will join the retailer on 1
November and will be based at its
Retail Support Centre in Wigan.
Hayes has worked in retail for more
than 15 years.
Before joining Ben Sherman, Hayes
worked at Nike for eight years.
She was originally a European buy-
ing and merchandising director and,
after a short spell at Tesco.com, as
Nike’s UK retail director.
JJB chief executive Keith Jones said:
“Kate’s experience in the sportswear
market will be a great asset as we con-
tinue to strengthen our senior man-
agement team and drive the
turnaround of JJB Sports. Kate will
lead improvements in our product
offer to customers.”
New trading
director hired
to steer JJB
ANALYSIS l French Connection
21 Jun
35
30
40
45
50
55
p
9Jul 29Jul 18Aug 8Sep
47.00
15 Sep
French Connection founder Stephen Marks says the brand is back on track
BY JOHN DUNNE
RETAIL

CONSUMER

Consumer News
16 CITYA.M. 16 SEPTEMBER 2010
Identity crisis persists
FRENCH Connection is a retailer
which has more gallic luck than its
rivals. At the tail end of the 20th
Century, it managed to arrest an
alarming decline in sales by rebrand-
ing itself as FCUK, tapping into the
youth counter culture and stealing a
march on rivals like Gap. But in
recent years it has struggled to hold
its own, and many thought it would
be a casualty of the downturn: its
clever FCUK moniker (since discon-
tinued) couldn’t hide the fact that
the likes of H&M and Zara were mak-
ing more interesting clothes.
It has once again confounded the
doubters, swinging from a £5.4m
pre-tax loss last year to a £0.2m pre-
tax profit. But this was mainly down
to an admittedly impressive 240
basis points improvement in gross
margin. A new licensing deal, which
should add £1.5m to next year’s pre-
tax profit, also provides cause for
cheer. Sales continue to bump along
the bottom, however, and French
Connection’s bizarre positioning –
part high-end brand, part main-
stream High Street – is still confus-
ing shoppers and shareholders alike.
BOTTOMLINE
Analysis by David Crow
Kate Hayes has moved
from Ben Sherman to
JJB Sports with the
task of improving the
company’s fortunes
TV CHANNEL Ideal Shopping posted a
first half pre-tax profit compared to a
loss the year before with trading in
the second half in line with manage-
ment expectations.
For the 26 weeks ended 4 July 2010
pre-tax profit was £2.89m compared
to a loss of £1.2m a year earlier.
Revenue for the period increased to
£56.58m from £47.42m. Like-for-like
sales jumped by 11.4 per cent to
£52.8m. Chairman Paul Wright said:
“We are optimistic for the second half
year. Trading in the first eight weeks
of the second half is positive.”
NEXT yesterday reported a 15 per cent
rise in first half pre-tax profit and
pinned its hopes on internet sales to
fuel expansion.
The retailer said the tough con-
sumer climate, weakened by a loom-
ing VAT hike and job cuts in public
services would mean at least three to
five years of low sales growth.
Next sales rose five per cent in the
period with homeware performing
strongly. Pre-tax profit was £213.3m
and the company repeated its annual
profit forecast of around £530m.
The company’s share price jumped
7.8 per cent to close at 2,176p follow-
ing the announcement, which also
included a warning that clothes
prices would rise up to eight per cent
because of spiralling cotton costs.
Chief executive Lord Simon
Wolfson said a consumer boom had
been “supercharged” by easy credit
which was no longer available
However, he claimed Next was in a
good position to ride out the storm
because of its strong cash position.
“The economy is neither falling off
a cliff nor recovering quickly, the
truth is somewhere in between,” he
said. He added that this environment
meant like-for-like sales improvement
would be “difficult”.
Referring to the internet he said:
“We will have to adapt to a new type
of consumer environment, one in
which like-for-like sales growth is like-
ly to be low for some time and top-
line growth will need to come from
other opportunities.”
Among the changes online will be
a guarantee that most customers will
receive their goods the next day if
they order as late as 9pm.
Wolfson said international sales on
the web had grown 250 per cent with
sales in Eastern Europe proving par-
ticularly strong.
Next expects
online sales to
drive growth
VISIT ENGLAND has reported a
growth in domestic tourism as Brits
holiday at home on so-called “stayca-
tions”.
The group, which champions
homegrown tourism, said that 51 per
cent of hotels and 42 per cent of
camping businesses have seen an
increase in guest numbers over the
summer. Meanwhile 76 per cent of
those questioned said they were con-
fident that they will have done as
well as or better this year and 83 per
cent think they are going to have a
great autumn.
Chief executive James Berresford is
confident that tourism businesses
will continue to do well in the future.
“The staycation shouldn’t be seen as a
cheap alternative because it offers
quality,” he said.
Staycations hand
boost to economy
WORKERS at a London Coca-Cola fac-
tory went on strike yesterday in a row
over pay.
Unite said the stoppage at the plant
in Edmonton will lead to millions
fewer bottles of Coke being produced
this month.
The union, which has threatened a
series of walkouts, warned that the
dispute could escalate unless the
company increases a two per cent pay
offer. Coca Cola said the decision to
strike had been “disappointing”,
while claiming that its pay offer had
been fair.
Coca-Cola hit
by strike action
Ideal Shopping
in profit surge
BY JOHN DUNNE
RETAIL

CONSUMER

CONSUMER

Next chief executive
Lord Simon
Wolfson believes
that the UK econo-
my will gradually
recover after a
series of challenges
ANALYSIS l Next
21 Jun
1950
2050
2150
2250
2350 p
9Jul 29Jul 18Aug 8Sep
2,176.00
15 Sep
BY JOHN DUNNE
LEISURE

Consumer News
17 CITYA.M. 16 SEPTEMBER 2010
TALKS aimed at restructuring belea-
guered doorstep lender Cattles broke
down yesterday as the company’s
bondholder creditors walked away
from the discussions.
The company issued a statement to
the stock market in which it said it
would continue discussions with
those creditors that remained in
order to find a solution.
The bondholders own around one
third of the nominal value of the
lender whose shares were suspended
in April 2009 at 6.88p having traded
at over 200p the year before. The col-
lapse in share price followed the reve-
lation that the lender’s bad debts had
been incorrectly reported.
That led to Deloitte being called in
to conduct a full scale audit. Seven
directors were removed with immedi-
ate effect and the chairman and chief
executive resigned.
The lender was then forced to close
its doors to new business while
restructuring negotiations took
place.
In June this year Cattles announced
that one of the options being dis-
cussed with its creditors was a propos-
al under which shareholders would
be offered 1p per share in the newly
incorporated company.
Cattles said it still believed “that it
remains in the interests of all parties
to reach an agreement.” The biggest
problem its creditors face is the fact
that the lender owes more to them -
£2.4bn - than it is owed by its own cus-
tomers.
While the bondholders could put
the company into administration
they would face an uphill struggle to
recover any of the money owed to the
lender by customers if the company
ceased to exist, possibly one reason
why they have not done so yet.
Cattles rescue
talks collapse
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BY MATTHEW WEST
BANKING

TALKS to avoid another set of crip-
pling strikes by Tube staff are set to
take place next week.
Senior management from the
London Underground (LU) will meet
with trade unions RMT and the
Transport Salaried Staffs’ Association
(TSSA) at conciliation service Acas in a
bid to soothe a heated dispute over
proposed job cuts to station staff.
The two sides are currently at odds
over plans by LU to cut up to 800 sta-
tion jobs.
If the negotiations are successful,
the unions could call off three more
planned strike periods, which are cur-
rently set for 3 October, 2 November
and 28 November.
Earlier this month RMT and TSSA
caused chaos on London’s transport
network after Tube workers launched
industrial action.
Tube bosses to meet with unions
to avoid further strikes by staff
TRANSPORT

GERMAN finance minister Wolfgang
Schaeuble yesterday launched a new
campaign to merge publicly-owned
landesbanks, which suffered in the
credit crisis and could lose support
more quickly under new capital
rules.
The Basel III agreement on bank
capital rules passed at the weekend
has given new momentum to long-
running plans to consolidate or pri-
vatise such regional lenders, the
finance ministry spokesman Michael
Offer said.
“The need for action has
increased, and it’s correct that the
finance minister will increase his
efforts to work towards a solution on
this issue,” he added.
Consolidation could start with the
sale of a landesbank in the western
state of North Rhine-Westphalia
(NRW).
“The trigger could be the sale of
WestLB,” a high-ranking landesbank
source said. “But I wouldn’t expect
much support from the state pre-
miers, because they want to main-
tain the status quo for the most
part.”
Landesbanks like WestLB, LBBW
and BayernLB provide wholesale
banking services to their local public
savings banks and are a source of
prestige and patronage for state
politicians.
New push to merge German
publicly-owned landesbanks
BY HARRY BANKS
BANKING

News
18 CITYA.M. 16 SEPTEMBER 2010
Margaret Young is executive chairman of Cattles,
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JAPAN intervened in the currency
market to weaken the yen yesterday,
ending a 15-year high and setting the
tone for Prime Minister Naoto Kan’s
time in office after fending off a lead-
ership challenge on Tuesday.
The dollar jumped to 85 yen from
its earlier low of 82.87 immediately
after the Bank of Japan, acting for the
Finance Department, stepped in to
flood the market with the currency
for the first time in six years.
Traders cited market estimates that
the latest intervention amounted to
around 1.5 trillion yen (£11.2bn).
The move helped propel the euro,
Australian dollar and sterling sharply
higher against the yen, though
traders doubted Japan had bought
anything other than dollars.
Stock investors cheered the move,
sending the Nikkei 225 stock average
up by 217.25 points, or 2.3 per cent, to
close at 9,516.56.
Currency traders had long specu-
lated on whether Japan would inter-
vene to halt the growing strength of
the yen and ease the burden on
Japanese exporters.
“If Kan was ever going to intervene
it had to be shortly after the election,
to make it clear where the leadership
stood,” said Simon Derrick, head of
currency research at BNY Mellon.
The foreign exchange markets will
now watch to see if Japan will repeat
the move to keep the yen weak.
“Speculators have been long of yen
so there is scope for further yen sell-
ing. But there’s scepticism over
whether the Japanese can change the
trend as fundamentals haven’t
altered,” said Beat Siegenthaler, FX
strategist at UBS.
Japanese PM
intervenes to
weaken yen
HEDGE fund BlueCrest hopes to cash
in on demand for its AllBlue fund to
raise up to £80m this month, after
announcing a share sale yesterday.
It is the AllBlue fund’s third offer-
ing in 12 months, and will place new
shares worth 9.99 per cent of total
issued stock.
AllBlue successfully raised £349m
in June and took £100m in December,
and said there was ongoing desire for
its shares.
AllBlue chairman Richard Crowder
said: “This proposed placing responds
to the considerable demand we have
witnessed from investors.
“BlueCrest AllBlue is performing
well and is trading at a premium to
net asset value. BlueCrest remains
confident that it represents an attrac-
tive opportunity in current market
conditions.”
RBS Hoare Govett and Dexion
Capital are acting as joint bookrun-
ners for the company, which tracks
other funds owned by parent
BlueCrest Capital Management.
AllBlue had $5.2bn (£3.3bn) of
assets under management on 1
September, when it hit its target half-
year return of five per cent on its ster-
ling shares. AllBlue’s smaller euro
and dollar share classes returned 9.2
and two per cent respectively.
BlueCrest goes
to the market
for more cash
BY MARION DAKERS
FOREIGN EXCHANGE

HEDGE FUNDS

● The yen hit a 15-year high against the dollar
this month, meaning the USA was paying less
for Japanese goods from firms such as Sony.
● The Japanese government last stepped in to
alter the currency markets in March 2004.
FAST FACTS | THE JAPANESE YEN
News
20 CITYA.M. 16 SEPTEMBER 2010
ANALYST VIEWS: WHAT DOES JAPAN’S
MOVE TO INTERVENE MEAN? Interviews by Marion Dakers

SIMON DERRICK | BANK OF NEW YORK MELLON
The intervention by Japanese authorities was in the
top ten largest interventions this year. It’s been very success-
ful on the day. It’s interesting that there seems to be support
from the EU for the intervention.


ASHRAF LAIDI | CMC MARKETS
It doesn’t mean much for the sterling-yen trade,
though we could see a brief reprieve in the rates. It’s not the
start of a systematic intervention but Japan can now try to
run the show with additional verbal warnings.


CHRIS REDFERN | MONEYCORP
Last week Japan reached the end of its tether, and
this could be a bit of a short-term move to point the market
away from endless rises in the currency. We could see more
interventions, the yen is no longer a one-way street.

Japanese Prime
Minister Naoto
Kan’s
government
believes sharp
currency
movements have
harmed the
domestic
economy
Picture: GETTY
ASTRAZENECA’S potential new block-
buster heart drug Brilinta faces a
three-month delay in winning
approval in the United States, slicing
valuable revenue-earning time off the
product.
The company said the Food and
Drug Administration (FDA) needed
more time to study the application
and would now complete its review
by 16 December rather than by 16
September as originally indicated.
Brilinta is AstraZeneca’s most
important pipeline product and the
company is relying on its revenues to
offset expiring patents.
TWITTER yesterday said it is redesign-
ing its website in an effort to make it
easier for users to navigate the service
and discover new information.
Chief executive Evan Williams
announced that the four-year-old com-
pany, which on average is now signing
up 370,000 new users daily, will intro-
duce a completely new system which
is more responsive and user friendly.
The site will feature a new two-pane
layout and users will be able to embed
YouTube videos and various other con-
tent on the screen.
The changes promise a “richer and
faster experience”, Williams said at a
press conference to announce the new
site. His hopes are that the redesign
will also help to better monetise the
service as a new advertising system is
introduced.
Forrester analyst Augie Ray said the
redesign should help improve engage-
ment with users.
“Twitter’s new web functionality is
a significant evolution that promises
to attract more visits to Twitter.com,
improve Twitterers’ interactions with
content and each other, and ease adop-
tion for Twitter newbies,” Ray said in a
blog post.
The new Twitter.com will be
launched for a small percentage of
users next Tuesday, and will later be
rolled out incrementally across the
globe over the coming weeks.
The announcement comes after
Google bosses this week said that their
company plans to develop a new social
networking platform.
The move is being regarded as a seri-
ous attempt to challenge the domi-
nance of rival Facebook in social
media.
With more than 90m tweets sent
per day on average, Twitter is increas-
ingly challenging established web
giants such as Yahoo and Google for
consumers’ online time.
Twitter ready
to monetise
with revamp
Ready for your MBA?
London MBA
Conference
Sunday 19 September 2010
Grange City Hotel, 8-14 Coopers Row
10:30-17:30hrs
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ONE of the world’s largest satellite
operators Eutelsat Communications
yesterday said it is reaching nine out
of 10 homes in those countries it
serves, as it announced the key high-
lights of its bi-annual survey of televi-
sion reception by satellite and cable
homes.
Eutelsat own satellites that provide
coverage over the entire European
continent, the Middle East, Africa,
India and large parts of Asia and the
Americas. The survey showed 204m
satellite and cable homes receive
channels via Eutelsat, up from 190m
in 2008.
Eutelsat reaches
more TV homes
Astra drug to
face FDA delay
BY ALASDAIR PEOPLES
TECHNOLOGY

PHARMACEUTICAL

ECONOMY

Jack Dorsey created Twitter which is now ramping up its challenge to rivals Picture: REUTERS
News
21
SANOFI-AVENTIS sees a reasonable
chance of buying US biotech
Genzyme at a fair price, but
expects it will take some time to
agree a deal that would further
diversify the French drugmaker
and strengthen its US foothold.
Chief executive Chris Viehbacher
yesterday reiterated Sanofi would
not be rushed to buy Genzyme, a
specialist in rare diseases, after it
rejected Sanofi’s $18.5bn (£11.8bn)
non-binding cash offer at the end
of August.
“I think there’s a reasonable shot
at a deal getting done at a reason-
able price, but it’s not going to be a
quick process,” Viehbacher said in
a webcast presentation at a Bank of
America-Merrill Lynch Global
Healthcare conference in London.
Genzyme chief executive
founder, Henri Termeer, late last
month said there was a “high prob-
ability” of a deal getting done but
demanded, without wanting to
specify, a reasonable starting point
for negotiations to begin.
Viehbacher had met about 50
per cent of Genzyme shareholders
in the US last week and has yet to
meet Genzyme management,
whom he has accused of forming a
“brick wall”, to discuss Sanofi’s
offer of $69 a share.
“It was easier to see Genzyme
shareholders than management,
but that will hopefully change very
shortly,” he said.
Viehbacher did not say at what
price the Genzyme shareholders he
had met would consider selling
their holdings in the company.
Several of Sanofi’s key drugs are
facing generic competition which
along with future patent expiries
will shave about a third of its 2008
sales until 2013. Buying Genzyme
would help Sanofi bridge that gap
and add rare diseases as a sixth
growth platform next to others like
emerging markets and vaccines.
Sanofi chief hopeful
of buying Genzyme
BY HARRY BANKS
BIOTECHNOLOGY

HOUSEBUILDER and construction
firm Galliford Try yesterday said it
planned to cut a further five per
cent of its workforce in the con-
struction business amid fears of gov-
ernment spending cuts and a
continued decline in demand.
The company, which employs
about 3,850 people, said it has cut as
many as 15 per cent, or about 500
jobs, in the construction division
from 3,300 last year.
“It’s a very challenging market in
construction. There is undoubtedly
less work out there... we are actually
encouraging our construction divi-
sion to downsize,” said chief execu-
tive Greg Fitzgerald.
Fitzgerald expects construction
sales to fall seven per cent in the
current fiscal, mainly due to the
British government’s programme to
slash public spending. “We would
anticipate somewhere between 20
and 40 per cent cutbacks in most of
our areas where the government
spends money,” he said.
According to a survey of purchas-
ing managers, growth in Britain’s
construction sector slowed marked-
ly in August, and employment with-
in the sector decreased.
However, Fitzgerald expects sales
from the its housebuilding unit,
which the company planned to
expand, and private commercial
projects to offset the lower demand
in construction.
For the year to 30 June, revenue
was £1.22bn, down 16 per cent from
a year ago. Galliford Try, whose
landbank rose 24 per cent to 9,700
plots, expects to double its housing
market sales in 2012 from £316m
currently. Pre-tax profit rose to
£26.1m from £24.5m last year.
Galliford Try forecasts more demand
for jobs in the construction industry
CONSTRUCTION

News
22 CITYA.M. 16 SEPTEMBER 2010
The government has again put the Tote on the block Picture: REUTERS
THE GOVERNMENT will launch the
sale of the state-owned Tote book-
makers in the late autumn, a minis-
ter confirmed yesterday.
The disposal of the Tote, which
takes bets on horse racing, football
and other sports, forms part of a
wider sale of government assets as
the country aims to deal with a
yawning budget deficit.
“This process will be open to all
organisations who have an interest
in the Tote and the government
expects to be in a position to update
the House early in the new year,”
said minister for tourism and her-
itage John Penrose in a statement to
parliament yesterday.
“The government will continue to
liaise closely with the board of the
Tote and with racing interests as this
process unfolds.”
Private-sector rivals such as Paddy
Power and Ladbrokes have previously
said they could be interested.
The Labour government’s
attempts to sell Tote were cancelled
in 2008 due to poor market condi-
tions. The company was thought to
be worth upwards of £300m at the
time.
Current chancellor George
Osborne announced in his June
emergency Budget that he planned a
future for Tote that “secures value
for the taxpayers”. It will now be put
onto the open market.
The High Speed 1 rail link, air traf-
fic control and the student loan
book are among the other assets that
the coalition government hopes to
sell off to pump billions of pounds
into the public purse.
Government to try
again to sell off the
Tote bookmakers
BY HARRY BANKS
M&A

Sanofi-Aventis boss
Chris Viehbacher
said he will not be
rushed into buying
rival firm Genzyme
WEALTH manager Brooks
Macdonald posted a 78 per cent
jump in pre-tax profit for the year
yesterday, prompting the Aim-listed
firm to hike its dividend by 64 per
cent to 9p.
Brooks generated £35.1m in rev-
enue in the year to 30 June, it said
yesterday, and made a profit of
£5.68m before tax.
Its funds under management bal-
looned 57 per cent to £2.19bn, and
the firm said all parts of its business
grew last year.
“Organic growth fuelled by office
openings and new strategic alliances
with professional introducers has
been a key driver, but has been com-
plemented by the acquisition of
Lawrence House during the year and
of Braemar Group post year end,”
said chief executive Chris Macdonald
yesterday.
Total staff numbers have increased
from 140 to more than 200, helping
to push administrative costs up 57
per cent to £29.5m.
Profit jumps by
78pc at Brooks
Macdonald
FINANCIAL SERVICES

FLEMING Family & Partners, the pri-
vate wealth manager, has joined the
growing pool of firms interested in
investing into the legal sector once
the market opens up next autumn.
The family arm, which manages
personal wealth for high net-worth
families, has recently been in discus-
sion with a number of law firms in
the City about becoming a potential
third party investor, say sources close
to the talks.
It can only do so after October next
year once the government brings the
Legal Services Act (LSA) into force.
Flemings joins a growing number
of bodies, including a raft of private
equity firms, which could inject capi-
tal into law firms in the future.
Other potential parties include
Lyceum Capital, Phoenix Equity
Partners, Lloyds Development Capital
and Investec.
A growing number of family
offices, similar to Flemings, are
becoming increasingly interested in
investing in the legal sector with
hopes that their returns will be sub-
stantial.
Flemings declined to comment on
any potential investment into law
firms.
The LSA, which received Royal
Assent three years ago, is likely to rad-
ically change the landscape of the
legal sector. The act is expected to
open the traditionally closed partner-
ship model to external investors and
will enable law firms to have the abil-
ity to raise additional finance
through an initial public offering.
A number of legal bodies are
already considering their options and
whether or not to float on the stock
market once the act comes into force.
It will also open the door to non-
legal entities, including banks, real
estate agents and insurers to join
forces with legal outfits to create an
alternative and broader business
structure.
Fleming set to
pounce as law
firms open up
THE Ministry of Justice (MoJ)
launched a two-month consultation
on the Bribery Act to help companies
prepare for new legislation due to
come in next April.
A consultation period with indus-
try bodies kicked off yesterday and
will run until the beginning of
November. The government said that
it plans to publish the responses in
early 2011.
The consultation covers corporate
hospitality and promotional expendi-
ture. Firms have been concerned that
the wording in the act was too broad,
leaving large international compa-
nies vulnerable to bribery charges,
especially when it came to entertain-
ing clients and business partners.
Others fear that strict new legisla-
tion currently threatens to put UK
companies and those doing business
in the UK at a competitive disadvan-
tage
“That the government has now
issued draft guidance is welcomed.
The guidance is, as expected, based on
principles. Although it doesn’t solve
some of the problems, especially con-
cerning the bribery of a foreign offi-
cial, it is positive that some guidance
has been provided on that point,” said
Simmons and Simmons lawyer
Patrick Boylan.
ANTHONY ROSE, a former partner
with a City law firm, has launched
Hampden Law, an independent prac-
tice, with hopes it could become one
of the first legal practices to receive
outside external investment once the
Legal Services Act comes into force
next year.
Hampden Law, which advises on
commercial work, already has busi-
ness support from insurance services
firm, The Hampden Group.
The legal outfit receives external,
accounting, secretarial and IT sup-
port from Hampden Chambers, a sub-
sidiary of the group.
Rose is hoping that after the Act
comes in, Hampden Law will become
part of the Hampden Group and serve
as the group’s legal team.
He said: “We perhaps will be
acquired by the Hampden Group as
its legal team next year.”
UK firms under
threat from new
Bribery bill
Hampden Law seeks fresh
investors in bid for growth
Anthony Rose (inset) founded City firm Hampden Law Picture: Micha Theiner/City A.M.
BY EMMA SADOWSKI
LEGAL

LEGAL

News
CITYA.M. 16 SEPTEMBER 2010
BY EMMA SADOWSKI
LEGAL

23
WORLD Trade Organisation (WTO)
judges have found aircraft maker
Boeing received more than $20bn
(£12.7bn) in US government subsidies
challenged by the European Union
and called for them to be withdrawn,
an EU source said yesterday.
The confidential ruling, if con-
firmed, would add weight to European
calls for a negotiated settlement to the
transatlantic row over the aerospace
industry – the biggest bilateral trade
dispute – following WTO condemna-
tion in June of illegal European subsi-
dies for Boeing rival Airbus.
But in the past both sides have
accused the other of putting out mis-
information so early leaks must be
treated with caution.
The confidential report, issued only
to EU and US officials, will not be
made public until possibly mid-2011.
Boeing argues any aid for which
Washington is faulted pales in compar-
ison with subsidies for Airbus that
were resoundingly denounced by the
WTO in a ruling in a parallel case.
Both sides have appealed various find-
ings in that case.
The European source said the WTO
judges had backed EU complaints over
some $17bn in research contracts
from the US aerospace agency NASA
and the Pentagon, and $4bn in tax
breaks from Washington state.
The WTO judges found these pay-
ments broke WTO rules and should be
withdrawn, the source said. The fig-
ures were not cited in the report but
were derived from adding the respec-
tive claims.
But the WTO dispute panel did not
find that aid challenged by the EU was
prohibited – as it did in a ruling in the
parallel case against Airbus subsidies
brought by the US – which would have
required faster remedies.
Boeing hit by
WTO’s ruling
I am
Ruby
Wax
I am
Ben
Griffiths
I am
Jane
English
I am
Jon
Snow
I am
Helen
Mirren
I am
Richard
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BY HARRY BANKS
WORLD TRADE

US INDUSTRIAL output slowed last
month and a regional measure of fac-
tory activity touched a 14-month low
in September, pointing to a cooling in
manufacturing as the boost from an
inventory build-up fades.
The reports yesterday were consis-
tent with other data suggesting the
US economy is stuck in a soft spot,
but they also showed the manufac-
turing sector continued to expand
and offered nothing to suggest a new
recession was brewing.
Industrial production rose 0.2 per
cent in August, Federal Reserve data
showed, matching economists’ fore-
casts for a sharp slowdown from July
when unusually strong auto manu-
facturing lifted output. July’s gain
was revised down to 0.6 per cent from
one per cent.
Excluding motor vehicles and
parts, total industry output increased
0.4 per cent in August, compared
with July’s 0.3 per cent advance.
Separately, the New York Fed’s
“Empire State” general business con-
ditions index slipped to 4.14 in
September from 7.10 in August.
September's reading marked the low-
est since July 2009 and was below
market expectations for 8.0.
Any reading above zero in the
index, which economists look to for
early clues on national output, indi-
cates expansion.
US industrial output growth
slows while import prices rise
BY HARRY BANKS
WORLD ECONOMY

News
24 CITYA.M. 16 SEPTEMBER 2010
BEST OF THE BROKERS
ANALYSIS l Aggreko
1,350
1,450
1,400
1,600
1,550
1,500
1,650
21 Jun 9Jul 29Jul 18Aug 8Sep
p
1,528.00
15 Sep
AGGREKO
Standard & Poor’s has initiated coverage
on the temporary power supplier with a
“hold” rating and a target price of £17.00.
Analysts believe Aggreko’s exposure to
developing markets means continued
demand for its services, and thinks growth
could accelerate in the next five years.
However, S&P sees potential for earnings
disappointment.
To appear in Best of the Brokers email your research to [email protected]
ANALYSIS l ARM
280
320
300
380
360
340
400
21 Jun 9Jul 29Jul 18Aug 8Sep
p
386.60
15 Sep
ARM
Execution Noble thinks it’s time for a
breather on the technology company, and
downgrades the stock to a “sell” with a fair
value of 300p. The broker says that ARM
remains well placed to outperform the
semi-conductor industry, and will continue
to expand into new end markets, but the
current value of 29 times 2012 core earn-
ings forecasts is hard to justify.
ANALYSIS l Sainsbury
320
340
330
370
360
350
380
21 Jun 9Jul 29Jul 18Aug 8Sep
p 380.50
15 Sep
SAINSBURY
RBS has downgraded the supermarket to a
“hold” from a “buy”, with a target price of
£3.82, after shares reached its previous
target of £3.70. The broker says it does not
see any near-term triggers that could
change its forecasts, and prefers peers
Tesco and Morrisons. It predicts a 1.1 per
cent rise in sales growth at the firm’s quar-
terly results in October.
●NASA-funded federal research programmes
have injected more than $10bn into Boeing. The
US defends these funds as being payments for a
service; the EU says they break WTO rules.
●The US Department of Defense (Pentagon) has
given Boeing $2.4bn worth of dual-use technology
for its large civil aircraft, as well as access to the
department’s facilities, equipment and staff.
●Boeing received $726.4m worth of intellectual
property rights in free patents, industry secrets
and data rights from NASA and the Pentagon for
its large civil aircraft.
●NASA and the Pentagon paid Boeing another
$3bn for independent research and to pay for
Boeing government contract bids. US says these
payments are legal commercial transactions.
●Washington state gave Boeing $3.5bn in illegal
tax breaks, tax rate discounts, interest subsidies
and bond issuance. Illinois and Chicago gave
Boeing a relocation package, tax credits and rent
subsidies. Kansas supports Boeing with a $900m
package of tax breaks and subsidised bonds.
●Boeing is still eligible for $2.2bn of export sub-
sidies the WTO has already ruled illegal.
●All US support, which has helped Boeing
launch its 787 Dreamliner, is non-repayable.
THE EU’S CASE | THE MAIN ISSUES RAISED
LET’S TALK
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ƫ ƫ ƫ ƫ ƫ ƫ ƫ ƫ ƫ ƫ ƫ ƫ ƫ ƫ ƫ

gftuk.com/cityam
SPREAD BETS | CFDs | FOREX / gftuk.com / free phone 0800 358 0864
GFT Global Markets UK Ltd. is authorised and regulated by the Financial Services Authority. CD03UK.118.090110.

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DANISH brewer Carlsberg yesterday
said successful launches in Russia of
Somersby cider and Eve, a fruit
flavoured malt beverage aimed at
women, meant it could look to prod-
ucts other than core brands for
growth.
Chief executive Jorgen Buhl
Rasmussen also said the world’s
fourth-biggest brewer was to target
women in general and northern and
western European markets in particu-
lar, as it looked to broaden its offer-
ing. Carlsberg could also turn to bot-
tled water and soft drinks if that paid
off, he said at the company’s annual
investor day. “When we look at inno-
vation in the future, we will see prod-
ucts that support beer,” he said.
Head of global sales, marketing
and innovation, Khalil Younes, said:
“We have launched Somersby in 12
markets, including Russia, with great
success.”
Eve, flavoured with fruit juice, has
also done well there, Younes said.
“Year-to-date we have sold 60 per cent
more than our budget. So we have
surprised ourselves.”
Among other non-beer products,
the group has launched Tuborg Lime
Cut in Denmark and Norway.
Rasmussen said he expected east
European markets to begin growing
again soon after a hard 2009.
The group’s Ukraine chief told
Reuters in an interview that the local
market – Carlsberg’s second biggest
by volume – had turned around after
shrinking seven per cent in 2009.
Carlsberg stood by its mid-term tar-
get for operating margin in its
Northern & Western Europe division
to rise to 15-17 per cent in 10 years,
finance director Jorn Jensen said.
Carlsberg eyes cider sales
GERMANY’S Bayer yesterday said it was
targeting a market worth as much as
$15bn (£9.6bn) with its anti-blood-clot-
ting pill Xarelto, setting the stage for
decisive study results to be released
later this year.
Chief executive Werner Wenning,
who will hand over to Marijn Dekkers
next month, said the new generation
of experimental anticoagulants such
as Xarelto – designed to replace prob-
lematic existing treatment warfarin –
could have combined annual sales of
$12-$15bn.
Industry analysts believe the market
eyed by Bayer and its development
partner Johnson & Johnson could
eventually be worth more than $10bn
a year and possibly as much as $20bn.
Wenning also reconfirmed an esti-
mate for Xarelto, based on the active
ingredient rivaroxaban, to have peak
annual sales of more than €2bn
(£1.7m). A key study on Xarelto will be
presented at the American Heart
Association meeting in November.
Bayer’s Xarelto anti-clotting drug
targets potential $15bn market
PHARMACEUTICALS
▲ BY HARRY BANKS
BEVERAGES

Aviva Investors
The investment firm has appointed
James Morrow as client portfolio man-
ager for real estate in the UK and
Europe.
Morrow joins from Ernst & Young
Real Estate Finance, where he was an
assistant director responsible for devel-
oping a global real estate capital capa-
bility. Prior to that, he worked at DTZ
Corporate Finance.
KPMG
The accountancy firm has hired
Graham Macken as a partner in its per-
formance and technology consultancy
practice.
Macken was previously at Navigant
Consulting, where he was a managing
director and spearheaded the growth of
the firm’s investment management
advisory practice in Europe. He has also
had experience working for Morgan
Stanley Investment Management and
Merrill Lynch Investment Managers.
Kingston Smith
Silvia Vitiello and Richard Heap have
joined the accountancy firm as part-
ners.
Vitiello is a general practice partner
with expertise in a range of sectors
including property, technology, not-for-
profit and professional firms. She joins
from MacIntyre Hudson.
Heap joins from BDO, where he spe-
cialised in the technology, media and
telecoms sector.
RMG Wealth Management
The private client investment manager
has hired Stephen Greene as a client
portfolio manager.
Green was formerly chief investment
officer and a partner at ACPI
Investments and has also held the posi-
tion of global head of hedge fund
research at Deutsche Bank Private
Wealth Management.
CITY MOVES | WHO’S SWITCHING JOBS Edited by Victoria Bates
Jefferies
The investment bank has appointed Julian
Smith from Collins Stewart as its new head of
UK corporate broking.
Smith has over 16 years of corporate broking
and equity experience.
In addition to his role as a managing director
at Collins Stewart, he previously spent 15 years
at Dresdner Kleinwort in corporate broking and
equity capital markets roles, also most recently
as a managing director.
+44 (0)20 7557 7245
morganmckinley.com
To appear in CITYMOVES please email your career
updates and pictures to [email protected] SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
in association with
News
25 CITYA.M. 16 SEPTEMBER 2010
26
Investment| Listed Products
CITYA.M. 16 SEPTEMBER 2010
C
OMPETITION in the exchange-traded
fund (ETF) market stepped up anoth-
er notch yesterday when Swiss bank
Credit Suisse launched 45 ETFs on
the London Stock Exchange (LSE), solidify-
ing its European presence and paving the
way for a global launch of its ETF product.
T
HE yen lurched downwards 2.4 per
cent versus the dollar and 2.8 per
cent against the euro yesterday as the
Bank of Japan (BoJ) waded into the
forex markets to weaken the currency.
While many institutional investors are not
plaguing its economy. The yen’s surge to 15-
year highs against the dollar was therefore
little more than the result of the markets’
ongoing quest to find somewhere safe to
store cash: as a stable advanced economy,
Credit Suisse
expands into
UK ETF market
only the beginning of the story, we see
potential for rapid growth in Europe, sim-
ilar to that seen in the US over the past
decade.”
His colleague Bob Parker, senior adviser
and member of the Credit Suisse global
investment committee, says: “Our latest
development is consistent with how we
see client demand and changes in capital
flows. Over the past 10 to 15 years, clients
have been moving away from traditional
asset management and into either ETFs
For the past decade, new arrivals in the
European ETF space have been trying to
wrestle market share away from the behe-
moth that is BlackRock, whose European
division iShares controls 33.2 per cent of
the European market.
But Credit Suisse is confident that ETF
provision is not a zero-sum game, particu-
larly in Europe, which is lagging behind
the US market. Deutsche Bank forecasts
that annual growth in the European
exchange-traded product market may
reach 25-30 per cent before the end of
2010.
Credit Suisse’s global head of ETFs Dan
Draper says: “We believe it is an exciting
time for the European ETF industry. This is
A timely arrival for
Credit Suisse ETFs
Picture: REUTERS
Listing in London is
the first step in the
bank’s global shift,
says Jessica Mead
Use forex products to gain
as Japan wrestles the yen
Tokyo’s intervention could speed
up a devaluation versus the
greenback, writes Juliet Samuel
permitted to bet directly on forex, a wide
range of currency-tracking products enable
them to benefit from these movements
through exchange-traded notes (ETN).
ETF Securities (ETFS) says it has seen
money moving steadily into short yen posi-
tions over the last two weeks. ETFS’s Martin
Arnold says that this position now repre-
sents 18 per cent of all assets under man-
agement in the firm’s currency products –
slightly down from 24 per cent a week ago.
But this does not necessarily reflect con-
fidence in the effectiveness of the BoJ’s
actions: the yen is slated to weaken over the
medium-term without intervention. In
response to the announcement yesterday,
Capital Economics released a note:
“Barring a major new shock in global mar-
kets, we continue to expect the yen to fall
back to around 90 against the dollar by
year-end, regardless of intervention.”
So the policy change could just speed
things up. Japanese fundamentals have
been poor for a long time, with sluggish
growth, deflation and an estimated govern-
ment gross debt of 228 per cent of GDP
ETF Securities – World’s largest
Exchange Traded Currency platform
• Brought by the management team who invented Gold ETFs/ETCs
• 100% LBMA ‘Good Delivery’
1
investment grade bars
• Traded and settled as a share through your stock broker or bank
2
• Open ended and can be created and redeemed to demand
• Multiple market makers and traded in USD, EUR and GBP on
all major Exchanges
• Physical delivery available
• Part of the ‘Exchange Traded Gold’ stable a World Gold Council initiative
For more information T: +44 (0) 20 7448 4330
www.etfsecurities.com
The advertisement is issued by ETF Securities Marketing LLP (“ETFSM”) and is intended for and directed towards
persons who are considered professional investors (as defined in the UK Financial Services and Markets Act or its
equivalent under applicable law or regulation in the relevant jurisdiction) and have professional experience in investing.
It has been approved for the purposes of Section 21 of the Financial Services and Markets Act 2000 (“the Act”)
by Flow Traders B.V.PHAU is issued by ETFS Metals Securities Ltd (MSL). GBS is issued by Gold Bullion Securities
Ltd (GBS). MSL and GBS are each regulated by the Jersey Financial Services Commission. The United Kingdom
Listing Authority (UKLA) is the ‘home regulator’ for purposes of listing and passporting the prospectus under the
Prospectus Directive.
The products in this advertisement may or may not be suitable for a particular investor.
You should obtain your own independent financial, taxation and legal advice before making
any decisions about any investment. Investment in the products discussed carry with it
certain risks, including those set out in the relevant prospectus, which can be obtained from
the ETFSMat +44 (0)20 7448 4330 or [email protected]. All codes listed above are
for the London Stock Exchange.
1 ‘Good Delivery’ as defined by the LBMA in relation to the standard of gold bars.
Please see prospectus for more information.
2 Brokerage fees may apply.
Europe’s largest gold exchange
traded commodities
• ETFS Physical Gold (PHAU) – AUM $5.2bn
*
• ETFS Gold Bullion Securities (GBS) – AUM $5bn
*
*AUM figures as at 29th June 2010
S
UGAR prices have hit a high this year at
24.87 cents per pound. An increase in
demand and export bottlenecks in
Brazil could see further rises. Spreadex
has a Sugar No 11 October contract at
24.08c -24.18c.
Next stormed ahead yesterday following
a fantastic trading update. The jump could
be a precursor to further share price gains.
Retail stocks have also benefited from some
good US sales data this week. Capital CFDs
quotes a price of 2,140.9p-2,145.1p.
But the future might not be so rosy –
recent results from the sector have shown
that inflation is starting to be felt in manu-
facturing. Dunelm, the furniture manufac-
turer, is expected to announce that prices
will rise and demand will fall in its annual
report out today. Cantor Index offers a
spread of 398.2p-392.0p.
Silver hit a two-and-a-half-year high yes-
terday, touching $20.56 an ounce. It has
tracked the rise in gold and base metals
such as copper, lead, aluminium, zinc and
nickel. Since silver also has industrial uses,
strong industrial production numbers in
India and China have caused the jump. But
many spread betters are keeping their stop
losses tight since volatility in silver can be
more pronounced. ShortsandLongs.com has
a daily December spread of $20.39-$20.42.
Having pushed to an all time high this
week, there appears to be no end in sight for
gold’s upside. Safe haven plays remain popu-
lar and as long as uncertainty over the eco-
nomic outlook – especially in the US –
lingers, then this is unlikely to change.
American CPI data is due on Friday so a
poor reading could spark a jump in the
metal. The current IG Index price is
$1,267.33-$1,267.83.
Japan intervened in the FX market for the
first time in six years to control the yen’s
appreciation. The move surprised traders
who had thought prime minister Naoto Kan
less inclined to intervene. The dollar-yen
rally could meet good offers from Japanese
exporters who want to hedge their FX risk.
Spread Co quotes dollar-yen at ¥85.55-
¥85.58. Donata Huggins
THE
TIPSTER
SUGAR WILL PROVIDE
SOME SWEET PROFITS
Deutsche Bank: 28.5%
iShares: 28.2%
Credit Suisse: 13.8%
Lyxor: 8%
ETF Securities: 6.1%
Source: 4.9%
Powershares: 4.7%
HSBC: 2.8%
RBS (Market Access): 1.8%
Marshall Wace Indices: 0.9%
Osmosis: 0.3%
%
ANALYSIS l Number of ETFs listed on the LSE by issuer
Source: London Stock Exchange
Global demand for
sugar is rising
Picture: SXC
RBS SEMINAR ON TECHNICAL ANALYSIS
RBS is tonight hosting a seminar where
Jackson Wong from research and analysis
provider Investors Intelligence will be giving
a full market update from a technical analysis
perspective. Wong is a technical analyst spe-
cialising in indicators and chart patterns in
the global fixed income markets. He will
focus on the major asset classes and give an
insight into what is coming next for listed
products. RBS will also provide a talk on its
products. The seminar will run from 5.30pm-
7.00pm and will be held at 250 Bishopsgate.
To register: www.rbs.co.uk/markets.
RBS LISTS 2,000 TURBOS IN PARIS
RBS announced the launch of 2,000 turbos
on NYSE Euronext in Paris earlier this week.
These turbos are already listed on NYSE
Euronext in Amsterdam. They offer investors
a greater choice of available strategies
through exposure to a broad range of under-
lying assets: 31 French equities, 105 other
equities, 44 indices, 24 commodities, 10 cur-
rencies and seven bonds. Turbos allow lever-
aged exposure to trends in underlying assets
without the constraints of a predetermined
maturity date or excessive sensitivity to
volatility.
TRADERS TAKE PROFITS IN CORN ETCS
ETF Securities’ agriculture ETCs have seen
their seventh consecutive week of outflows
as traders rushed to take profits. Supply side
problems continue to support prices and
investors have taken advantage of rising
prices to reduce their positions. Outflows
over the past seven weeks have totalled
$313m with last week accounting for $31m.
The outflows are concentrated in ETF
Securities’ corn ETC, which saw the largest
outflow in over two years at $13m. This was
followed by ETF Securities’ sugar ETF at
$6m of outflows.
Supply problems have
boosted corn prices
Picture: REUTERS
LISTED PRODUCT NEWS
DONATA HUGGINS
WILL FERRELL AND
MARK WAHLBERG
THE OTHER GUYS REVIEWED
IN TOMORROW’S PAPER
27 CITYA.M. 16 SEPTEMBER 2010
Japan was merely seen as the best of a
very bad set of options.
But analysts have been anticipating an
end to these highs for some time. The BoJ
has been putting off intervention in part
due to a G7 agreement to forego direct
intervention in the currency markets. US
officials are likely to look unkindly on
the policy change, which rather under-
mines the case against voracious Chinese
purchases of Treasuries.
But even if the US goes for further
quantitative easing, most economists
expect the balance to tip back in favour
of dollar strength. Which means that –
unless the global economy double dips –
the BoJ and short yen traders may get
their wish without having to pour
money into a bottomless pit.
Tokyo is taking on
the yen’s strength
Picture: REUTERS
and index products or into alternatives.”
But while there is certainly room and
demand for more providers, entrants
still need to demonstrate an edge over
their competitors to acquire market
share in what is a highly competitive
industry.
Credit Suisse has managed to differ-
entiate itself from the existing UK
providers. The tie-up between its invest-
ment bank and its asset management
division has allowed Credit Suisse to
become the first European provider to
offer both physically-backed and swap-
backed ETFs. Of the 45 listed yesterday,
there are 32 physically replicated ETFs
and 13 swap-based products.
The swap-backed ETFs allow Credit
Suisse to place a strong emphasis on
emerging markets within its London-
listed range, including the first ever
Ucits-regulated Chinese A-shares ETF,
giving exposure to the Chinese market.
Swap-based ETFs both remove many
of the problems associated with track-
ing error and give exposure to markets
that are more difficult to access, but
they throw up the issue of counterparty
risk. This has become particularly rele-
vant post-crisis so Credit Suisse ETFs
have a daily swap reset, restricting coun-
terparty risk to a single day’s mark to
market movements.
Credit Suisse certainly has ambitious
plans for its ETF range. Whether it can
gain enough traction in the UK market
remains to be seen.
LONDON’S TOP 250 Trade these shares from £1.50 with Interactive Investor - www.iii.co.uk
3i . . . . . . . . . . . . . . . . . . . . . . . .284.90 +0.90 310.00 246.90
3i Infrastructure . . . . . . . . . . . . . 113.90 — 115.00 97.00
A.B. Foods . . . . . . . . . . . . . . . .1064.00 –6.00 1096.00 790.00
Aberdeen Asset Man . . . . . . . . . .147.50 +0.10 155.60 111.00
Admiral . . . . . . . . . . . . . . . . . . .1647.00 +11.00 1653.00 1003.00
Aegis . . . . . . . . . . . . . . . . . . . . .121.50* +0.60 137.30 103.10
Afren . . . . . . . . . . . . . . . . . . . . .103.80 +0.10 111.00 70.50
African Barr Gold . . . . . . . . . . . .598.00* –21.00 685.00 520.50
Aggreko . . . . . . . . . . . . . . . . . .1528.00 –12.00 1639.00 664.50
Alliance Trust . . . . . . . . . . . . . . .331.30 –0.20 352.70 292.80
AMEC . . . . . . . . . . . . . . . . . . . . .950.50 +6.50 958.50 724.50
Amlin . . . . . . . . . . . . . . . . . . . . .410.90* –2.60 437.60 350.80
Anglo American . . . . . . . . . . . .2550.00* –22.00 3015.50 1846.50
Antofagasta . . . . . . . . . . . . . . . 1152.00 +1.00 1160.00 699.50
Aquarius Platinum . . . . . . . . . . .331.00* +7.80 490.00 211.50
ARM Holdings . . . . . . . . . . . . . . .386.80* –2.20 416.40 132.70
Ashmore . . . . . . . . . . . . . . . . . . . 311.90 –2.10 335.30 215.00
Astrazeneca . . . . . . . . . . . . . . .3348.00 –37.00 3389.50 2668.00
Atkins(Ws) . . . . . . . . . . . . . . . . .715.00* –4.00 801.00 532.50
Autonomy Corp . . . . . . . . . . . .1809.00 +15.00 2012.00 1278.00
Aveva . . . . . . . . . . . . . . . . . . . .1385.00 –19.00 1487.00 856.50
Aviva . . . . . . . . . . . . . . . . . . . . .417.70 +0.10 474.00 290.20
Babcock International . . . . . . . . .564.50 +13.00 660.50 489.00
BAE Systems . . . . . . . . . . . . . . .340.80 +6.40 389.90 288.10
Balfour Beatty . . . . . . . . . . . . . . .258.80 +3.80 328.85 228.60
Barclays . . . . . . . . . . . . . . . . . . .316.75 –7.25 394.25 253.40
Barratt Development . . . . . . . . . .102.70 +0.10 186.56 89.10
BBAAviation . . . . . . . . . . . . . . .195.00* –1.00 220.00 145.90
Bellway . . . . . . . . . . . . . . . . . . . .568.00 — 927.50 510.00
Berkeley . . . . . . . . . . . . . . . . . . .833.50 –8.50 959.50 735.00
BG . . . . . . . . . . . . . . . . . . . . . .1093.50 –5.00 1248.00 966.90
BHP Billiton . . . . . . . . . . . . . . .1963.00* –18.00 2346.00 1583.50
BlackRock Mining . . . . . . . . . . . .608.00 +0.50 654.50 469.20
BlueBay . . . . . . . . . . . . . . . . . . .320.50 +6.10 393.00 251.00
Bluecrest Allblue GBP . . . . . . . . .167.10 –0.70 169.00 139.20
Booker . . . . . . . . . . . . . . . . . . . . .48.75 — 49.50 37.50
BP . . . . . . . . . . . . . . . . . . . . . . .404.10 –11.10 658.20 296.00
Brit Insurance . . . . . . . . . . . . . . .993.50 +1.50 1017.00 709.00
British Airways . . . . . . . . . . . . . .234.40 –0.60 255.80 172.40
British Amer. Tob . . . . . . . . . . .2358.50* +3.50 2386.50 1832.00
British Empire Tst . . . . . . . . . . . .454.90 +1.50 467.90 338.50
British Land . . . . . . . . . . . . . . . .483.30 –3.70 531.00 416.00
Britvic . . . . . . . . . . . . . . . . . . . . .488.80 –3.70 518.00 340.00
Brown(N.) . . . . . . . . . . . . . . . . . .235.30 +5.90 284.30 204.80
BSkyB . . . . . . . . . . . . . . . . . . . .714.00 –0.50 732.00 521.00
BT . . . . . . . . . . . . . . . . . . . . . . .144.40 +0.40 151.00 108.40
Bunzl . . . . . . . . . . . . . . . . . . . . .754.50 –2.50 784.50 594.50
Burberry . . . . . . . . . . . . . . . . . . .906.00 +7.00 917.00 457.70
Cable & Wire Comms . . . . . . . . . .61.10 +0.10 150.00 53.00
Cable & Wire Wwide . . . . . . . . . . .74.20 +0.25 94.80 60.05
Cairn Energy . . . . . . . . . . . . . . . .433.60 –6.70 497.60 306.80
Caledonia Invs . . . . . . . . . . . . .1627.00 +6.00 1759.00 1496.00
Capita . . . . . . . . . . . . . . . . . . . . .767.00* –3.50 829.50 693.00
Capital & Counties . . . . . . . . . . .129.50 +0.50 131.00 99.60
Capital Shopping Centres . . . . . .361.00 +1.20 580.00 300.10
Carillion . . . . . . . . . . . . . . . . . . .317.50* +3.60 361.90 263.90
Carnival . . . . . . . . . . . . . . . . . .2366.00 –33.00 2937.00 1876.00
Catlin . . . . . . . . . . . . . . . . . . . . .340.10* –5.80 394.60 303.20
Centamin Egypt . . . . . . . . . . . . .168.40 +2.40 188.70 92.00
Centrica . . . . . . . . . . . . . . . . . . .342.50 –1.50 346.10 236.30
Charter Intl . . . . . . . . . . . . . . . . .666.50 –11.00 855.50 563.50
Chemring . . . . . . . . . . . . . . . . .2950.00 –26.00 3711.00 2284.00
Close Bros . . . . . . . . . . . . . . . . .705.50 +5.00 806.50 657.00
Cobham . . . . . . . . . . . . . . . . . . .236.30 –2.00 278.60 205.50
COLT Group . . . . . . . . . . . . . . . . 119.90 +0.60 144.20 107.70
Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p)
Compass . . . . . . . . . . . . . . . . . .545.00 –5.00 574.50 350.10
Cookson . . . . . . . . . . . . . . . . . . .478.00 –6.80 616.00 347.60
Croda Intl . . . . . . . . . . . . . . . . .1430.00* –1.00 1460.00 637.00
CSR . . . . . . . . . . . . . . . . . . . . . .358.60 +8.60 518.00 276.00
Daily Mail ‘A’ . . . . . . . . . . . . . . . .496.10 +4.70 539.00 381.00
Dana Petroleum . . . . . . . . . . . .1788.00 +1.00 1817.00 968.50
Davis Service . . . . . . . . . . . . . . .395.00 –9.70 442.30 356.00
De La Rue . . . . . . . . . . . . . . . . . .697.00 –1.00 1021.00 638.00
Debenhams . . . . . . . . . . . . . . . . .66.30 –0.90 90.00 51.95
Derwent London . . . . . . . . . . . .1505.00 –17.00 1540.00 1174.00
Dexion Absolute . . . . . . . . . . . . .142.00 — 148.00 125.70
Diageo . . . . . . . . . . . . . . . . . . .1089.00* +2.00 1176.00 930.50
Dimension Data . . . . . . . . . . . . . 119.50 +0.10 125.50 58.90
Dixons Retail . . . . . . . . . . . . . . . .24.40 –0.54 39.75 23.11
Domino’s Pizza . . . . . . . . . . . . . .478.30 +2.20 481.10 262.20
Drax . . . . . . . . . . . . . . . . . . . . . .398.20 –15.70 496.50 321.50
Dunelm . . . . . . . . . . . . . . . . . . . .396.00 +10.00 438.40 290.10
Easyjet . . . . . . . . . . . . . . . . . . . .389.90 +2.50 499.90 339.80
Edinburgh Inv Tst . . . . . . . . . . . .428.30 –2.70 436.00 338.00
Electrocomponents . . . . . . . . . . .241.90 –0.30 246.30 142.90
EnQuest . . . . . . . . . . . . . . . . . . .120.20 +0.10 125.90 87.35
Essar Energy . . . . . . . . . . . . . . .459.70 –4.30 475.90 358.50
Eurasian Nat Res . . . . . . . . . . . .866.00* –18.50 1276.00 781.00
Euromoney Inst Inv . . . . . . . . . . .601.50 +12.00 630.00 286.00
Experian . . . . . . . . . . . . . . . . . . .674.00 +5.50 677.00 499.00
Ferrexpo . . . . . . . . . . . . . . . . . . . 311.30* +2.20 396.20 138.00
FirstGroup . . . . . . . . . . . . . . . . .352.30 –6.30 448.80 331.20
Foreign & Col Inv Tst . . . . . . . . . .285.60 –0.80 297.20 240.50
Fresnillo . . . . . . . . . . . . . . . . . . 1189.00* –1.00 1197.00 647.00
G4S . . . . . . . . . . . . . . . . . . . . . .252.50* –1.60 285.70 217.70
Genesis Emerging Mkts Fd . . . . .498.00 –2.00 506.00 370.00
GKN . . . . . . . . . . . . . . . . . . . . . .159.90* –0.30 164.70 100.40
GlaxoSmithKline . . . . . . . . . . . .1283.50* +1.50 1347.00 1088.00
Great Portland Estates . . . . . . . .331.00 –1.60 334.40 236.60
Greene King . . . . . . . . . . . . . . . .429.80 –1.60 484.00 372.50
Halfords . . . . . . . . . . . . . . . . . . .482.70 –1.30 562.50 324.00
Halma . . . . . . . . . . . . . . . . . . . . .307.40 –2.90 315.30 198.00
Hammerson . . . . . . . . . . . . . . . .389.40* +0.80 460.30 332.20
Hargreaves Lansdown . . . . . . . .437.10* +11.10 439.20 259.40
Hays . . . . . . . . . . . . . . . . . . . . . .109.00 –0.40 119.00 82.50
Henderson . . . . . . . . . . . . . . . . .136.10* +1.40 157.80 112.10
Heritage Oil . . . . . . . . . . . . . . . . .322.70 –1.00 585.00 298.20
Hikma Pharma . . . . . . . . . . . . . .801.00* +1.00 813.00 443.00
Hiscox . . . . . . . . . . . . . . . . . . . .367.10* +7.10 371.10 299.60
Hochschild Mining . . . . . . . . . . .415.00* +8.80 424.80 220.00
Home Retail . . . . . . . . . . . . . . . .214.50 +2.10 326.30 208.50
Homeserve . . . . . . . . . . . . . . . . .487.40 +1.10 502.00 435.40
HSBC Hldgs . . . . . . . . . . . . . . . .676.60* +0.40 766.80 595.20
Hunting . . . . . . . . . . . . . . . . . . .644.00 +13.00 659.50 429.10
ICAP . . . . . . . . . . . . . . . . . . . . . .454.70 –3.30 478.30 291.70
IG . . . . . . . . . . . . . . . . . . . . . . . .510.00* +0.50 532.00 291.00
Imagination Tech Gp . . . . . . . . . .347.70 +0.50 385.00 154.00
IMI . . . . . . . . . . . . . . . . . . . . . . .737.50* –3.00 786.00 410.00
Imperial Tobacco. . . . . . . . . . . .1925.00 +2.00 2159.00 1728.00
Inchcape . . . . . . . . . . . . . . . . . . .287.40 –2.30 347.00 235.00
Informa . . . . . . . . . . . . . . . . . . . .417.00* –3.10 439.40 263.30
Inmarsat . . . . . . . . . . . . . . . . . . .724.50 +5.00 831.00 526.00
Intercontl Hotels . . . . . . . . . . . . 1118.00* +3.00 1244.00 762.50
Intermediate Capital . . . . . . . . . .291.80 –0.80 332.00 233.50
Intertek . . . . . . . . . . . . . . . . . . .1800.00 +6.00 1808.00 1136.00
Intl Personal Fin . . . . . . . . . . . . .270.30* +0.10 283.00 135.30
Intl Power . . . . . . . . . . . . . . . . . .388.60 –5.90 396.80 248.20
Invensys . . . . . . . . . . . . . . . . . . .277.10 +0.10 350.30 224.90
Investec . . . . . . . . . . . . . . . . . . .510.00 — 565.00 411.50
ITV . . . . . . . . . . . . . . . . . . . . . . . .57.15 –0.50 71.75 41.04
Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p)
Jardine Lloyd Thompson. . . . . . .587.00* –7.50 604.50 420.70
Johnson Matthey . . . . . . . . . . .1770.00 +12.00 1814.00 1302.00
JPMorgan Emerg Mkts . . . . . . . .572.50 +1.50 576.50 419.50
Kazakhmys . . . . . . . . . . . . . . . .1355.00* –8.00 1634.00 955.00
Kesa Electricals . . . . . . . . . . . . .135.40 +1.00 162.00 98.45
.LQJÀVKHU . . . . . . . . . . . . . . . . . .218.90 +7.20 255.00 196.50
Ladbrokes . . . . . . . . . . . . . . . . .143.00* +1.50 174.29 114.60
Lamprell . . . . . . . . . . . . . . . . . . .322.00* +0.80 338.90 156.70
Lancashire Hldgs . . . . . . . . . . . .554.00* +3.00 556.00 416.70
Land Securities . . . . . . . . . . . . . .639.50 –11.00 743.50 543.00
Legal & General . . . . . . . . . . . . .102.40* +0.20 105.00 69.05
Lloyds Banking Gp . . . . . . . . . . . .77.34 +0.20 78.62 45.30
Logica . . . . . . . . . . . . . . . . . . . .123.20 –1.50 149.10 100.80
London Stk Exchange . . . . . . . . .691.50 +2.50 949.50 540.50
Lonmin . . . . . . . . . . . . . . . . . . .1669.00 –31.00 2198.00 1344.00
Man . . . . . . . . . . . . . . . . . . . . . .235.60 +3.70 373.60 199.60
Marks & Spencer . . . . . . . . . . . . .379.60 +12.60 412.70 321.90
Meggitt . . . . . . . . . . . . . . . . . . . .291.00* –3.20 331.00 218.60
Melrose . . . . . . . . . . . . . . . . . . .265.20* –0.90 275.10 160.00
Mercantile IT . . . . . . . . . . . . . . . .969.00 –0.50 1002.00 822.50
Michael Page Intl . . . . . . . . . . . . .443.60* –5.40 461.50 313.00
Micro Focus . . . . . . . . . . . . . . . .367.90* +4.90 550.00 272.20
Millen & Copthorne . . . . . . . . . . .538.50* +13.50 547.00 321.40
Misys . . . . . . . . . . . . . . . . . . . . .290.00 — 291.20 180.80
Mitchells & Butlers . . . . . . . . . . .302.10 –0.80 343.90 228.30
MITIE . . . . . . . . . . . . . . . . . . . . .200.60 +2.90 269.20 187.80
Mondi . . . . . . . . . . . . . . . . . . . . .512.00* +2.00 515.00 296.20
Monks Inv Tst . . . . . . . . . . . . . . .320.50 +0.40 322.70 258.00
Morrison Wm . . . . . . . . . . . . . . .298.50 +2.00 306.30 255.00
Murray Intl Tst . . . . . . . . . . . . . . .904.00 +7.50 907.50 689.00
National Express . . . . . . . . . . . . .244.00 –2.90 258.60 155.86
National Grid . . . . . . . . . . . . . . .560.00 –2.00 607.65 474.80
Next . . . . . . . . . . . . . . . . . . . . .2176.00 +136.00 2360.00 1666.00
Northumbrian Water . . . . . . . . . .346.60 –3.10 353.00 225.20
Old Mutual . . . . . . . . . . . . . . . . .139.20 +0.30 140.50 91.80
Partygaming . . . . . . . . . . . . . . . .293.30 +1.90 339.70 205.80
Pearson . . . . . . . . . . . . . . . . . .1001.00* +9.50 1069.00 738.00
Pennon . . . . . . . . . . . . . . . . . . . .605.50* –2.50 616.50 440.40
Persimmon . . . . . . . . . . . . . . . . .399.30 +0.30 523.00 335.90
Petrofac . . . . . . . . . . . . . . . . . .1385.00 –25.00 1446.00 900.00
Petropavlovsk . . . . . . . . . . . . . .1252.00 +54.00 1370.00 834.00
Premier Farnell . . . . . . . . . . . . . .270.20 +1.20 272.60 140.60
Premier Oil . . . . . . . . . . . . . . . .1668.00 +9.00 1681.00 984.00
Provident Financial . . . . . . . . . . .850.50 –10.00 986.00 795.00
Prudential . . . . . . . . . . . . . . . . . .627.50* +6.50 665.00 475.70
PZ Cussons . . . . . . . . . . . . . . . .342.40* –0.30 373.20 222.10
Qinetiq . . . . . . . . . . . . . . . . . . . . 114.50 –1.20 179.10 103.50
Randgold Resources . . . . . . . . .6245.00 –45.00 6600.00 3930.00
Reckitt Benckiser . . . . . . . . . . .3448.00* +28.00 3667.00 2938.00
Reed Elsevier . . . . . . . . . . . . . . .539.00 –0.50 566.00 454.60
Regus . . . . . . . . . . . . . . . . . . . . . .75.40* +0.25 125.50 64.05
Renishaw . . . . . . . . . . . . . . . . . .970.00 –10.00 1021.00 479.00
Rentokil Initial . . . . . . . . . . . . . . .106.90 –0.10 140.20 91.15
Resolution . . . . . . . . . . . . . . . . .254.10* +4.50 264.80 220.10
Rexam . . . . . . . . . . . . . . . . . . . .309.60* — 348.80 253.40
Rightmove . . . . . . . . . . . . . . . . .730.00 –5.00 796.50 456.90
Rio Tinto . . . . . . . . . . . . . . . . . .3572.50 –49.50 4104.00 2435.00
RIT Capital Partners . . . . . . . . . 1134.00 +1.00 1215.00 940.00
Rolls Royce . . . . . . . . . . . . . . . .584.50 +0.50 631.50 434.50
Rotork . . . . . . . . . . . . . . . . . . .1685.00* +16.00 1693.00 1050.00
Royal Bank Of Scot . . . . . . . . . . . .49.66 –0.49 58.95 28.25
Royal Dutch Shell A . . . . . . . . .1861.00 –5.00 2068.50 1621.00
Royal Dutch Shell B . . . . . . . . .1807.50 — 1997.50 1550.00
RSA Insurance . . . . . . . . . . . . . .129.40* +1.90 142.00 114.10
SABMiller . . . . . . . . . . . . . . . . . 2011.50 +43.00 2090.00 1450.00
Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p)
Sage . . . . . . . . . . . . . . . . . . . . . .255.30 +1.30 260.50 208.20
Sainsbury(J) . . . . . . . . . . . . . . . .380.50 +0.70 383.50 307.60
Schroders . . . . . . . . . . . . . . . . .1428.00* +2.00 1450.00 1053.00
Schroders N/V. . . . . . . . . . . . . . 1159.00* +8.00 1187.00 864.00
Scot. & Sthrn Energy . . . . . . . . . 1162.00* –17.00 1206.00 357.50
Scottish Mortgage . . . . . . . . . . . .612.50 –0.50 623.50 473.10
SEGRO . . . . . . . . . . . . . . . . . . . .269.50* +0.10 403.10 244.00
Serco . . . . . . . . . . . . . . . . . . . . .616.00* –3.00 656.50 479.80
Severn Trent . . . . . . . . . . . . . . .1388.00 –6.00 1404.00 939.50
Shaftesbury . . . . . . . . . . . . . . . .444.50 +7.90 446.60 341.70
Shire . . . . . . . . . . . . . . . . . . . . .1521.00* +13.00 1526.00 999.00
Smith & Nephew . . . . . . . . . . . . .566.00 +1.50 700.50 525.50
Smith(Ds) . . . . . . . . . . . . . . . . . .153.30* +3.90 155.10 90.30
Smiths . . . . . . . . . . . . . . . . . . .1223.00 –2.00 1244.00 814.00
SOCO Intl . . . . . . . . . . . . . . . . . .461.80 –1.30 510.00 380.60
Spectris . . . . . . . . . . . . . . . . . .1020.00 +10.00 1043.00 653.00
Spirax-Sarco Eng . . . . . . . . . . .1680.00 +19.00 1716.00 994.50
Spirent Comms . . . . . . . . . . . . . .145.00* +2.80 145.10 84.15
Sports Direct Intl . . . . . . . . . . . . .126.70 +2.70 129.10 89.85
SSL Intl . . . . . . . . . . . . . . . . . . . 1157.00 +1.00 1190.00 596.50
St James’s Place . . . . . . . . . . . . .273.00* –0.60 296.90 203.40
Stagecoach . . . . . . . . . . . . . . . . .185.20 +0.40 204.90 137.00
Standard Chartered . . . . . . . . . .1923.50* –7.00 1939.00 1366.50
Standard Life . . . . . . . . . . . . . . .226.20* +4.00 237.00 170.00
SuperGrp . . . . . . . . . . . . . . . . . 1111.00 +4.00 1150.00 499.00
TalkTalk . . . . . . . . . . . . . . . . . . .137.90 +2.10 147.10 106.60
Talvivaara Mining . . . . . . . . . . . .443.90 –0.30 501.50 341.40
Tate & Lyle . . . . . . . . . . . . . . . . .468.80 –3.00 509.00 388.00
Taylor Wimpey . . . . . . . . . . . . . . .29.29 +0.15 49.40 24.29
Telecity . . . . . . . . . . . . . . . . . . . .524.50 +0.50 542.50 311.30
Templeton Emrg Mkts . . . . . . . . .587.50 — 598.00 428.60
Tesco . . . . . . . . . . . . . . . . . . . . .430.70 +7.45 454.90 368.40
Thomas Cook . . . . . . . . . . . . . . .196.10* –0.20 277.20 172.30
Tomkins . . . . . . . . . . . . . . . . . . .323.80 +0.10 325.70 155.00
Travis Perkins . . . . . . . . . . . . . . .828.00 +7.50 915.00 647.50
TUI Travel . . . . . . . . . . . . . . . . . .221.00* –0.80 313.90 189.20
Tullett Prebon . . . . . . . . . . . . . . .398.40 +3.40 436.20 261.20
Tullow Oil . . . . . . . . . . . . . . . . .1265.00 –5.00 1375.00 979.50
UK Commercial Prop . . . . . . . . . . .80.65 +0.30 84.90 69.10
Ultra Electronics . . . . . . . . . . . .1748.00* +10.00 1764.00 1198.00
Unilever . . . . . . . . . . . . . . . . . .1778.00* –7.00 2024.00 1628.00
United Utilities . . . . . . . . . . . . . .585.00 –10.00 620.00 429.00
Utd Business Media . . . . . . . . . .604.00* –2.00 613.00 408.30
Vedanta Resources . . . . . . . . . .2137.00 +9.00 2967.00 1795.00
Victrex . . . . . . . . . . . . . . . . . . .1233.00 — 1320.00 726.50
Vodafone . . . . . . . . . . . . . . . . . .161.05 +1.10 162.00 126.50
Weir . . . . . . . . . . . . . . . . . . . . .1407.00 +10.00 1420.00 635.00
WH Smith . . . . . . . . . . . . . . . . . .440.00 +3.20 551.00 392.20
Whitbread . . . . . . . . . . . . . . . . .1585.00 –4.00 1645.00 1141.00
William Hill . . . . . . . . . . . . . . . . .183.40 +1.90 217.80 160.50
Witan Inv Tst . . . . . . . . . . . . . . . .458.50* –2.30 487.00 396.30
Wolseley . . . . . . . . . . . . . . . . . .1434.00 –1.00 1742.00 1155.00
Wood Group (John) . . . . . . . . . . .384.80* –6.60 411.70 279.60
WPP . . . . . . . . . . . . . . . . . . . . . .712.50 +9.00 744.00 520.50
Xstrata . . . . . . . . . . . . . . . . . . . 1160.00 –10.00 1344.50 815.00
LONDON TOP 250 BY MARKET CAPITALISATION
* Ex-Dividend † Suspended
www.interactivedata.com
Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p)
Wall St edges up
despite poor data
S
TOCKS advanced yesterday on
Wall Street but remained
hemmed in a recent trading
range as disappointing econom-
ic data hindered the S&P 500 from
breaking through a stubborn techni-
cal level.
Markets were pressured early by a
report showing a measure of New
York state business conditions slipped
to the lowest level in more than a
year, while industrial output rose at a
slower rate in August.
The S&P found support shortly
after the reports at its 200-day moving
average, climbing back above the
1,115 level.
But the benchmark index was once
again unable to pierce the 1,130
threshold, seen as a key resistance
level by analysts, which, if breached,
could spark further buying.
The Dow Jones industrial average
gained 46.24 points, or 0.44 per cent,
to 10,572.73. The Standard & Poor's
500 Index rose 3.97 points, or 0.35 per-
cent, to 1,125.07. The Nasdaq
Composite Index climbed 11.55
points, or 0.50 per cent, to 2,301.32.
Among the top decliners, energy
shares were pressured by a fall in
crude oil prices and technology
shares lost ground after some bearish
analyst comments.
Equities were little moved after the
Japanese government intervened in
global currency markets to sell yen
for the first time in six years, though
the US dollar climbed.
October crude futures settled down
1 per cent to $76.02 per barrel, while
the S&P Energy index lost 0.2 per
cent.
Chevron slipped 0.4 per cent to
$79.21 and was among the top declin-
ers on the Dow.
Fellow Dow component Kraft Foods
gained 1.7 per cent to $31.59 after say-
ing it would squeeze another $1bn in
revenue from its global business by
2013 as its North American business
faces challenges.
Semiconductors edged lower after
Goldman Sachs downgraded chip-
makers Micron Technology to “neu-
tral” and Maxim Integrated Products
to “sell.”
Micron shares lost 4.5 per cent to
$6.94 and Maxim shed 0.5 percent to
$16.75. The Philadelphia semiconduc-
tor index fell 0.3 per cent.
Volume was light with about 6.6bn
shares traded on the New York Stock
Exchange, the American Stock
Exchange and Nasdaq, well below last
year's estimated daily average of
9.65bn.
Advancing stocks outnumbered
declining ones on the New York Stock
Exchange by about 1.1 to 1, while on
the Nasdaq, advancers beat decliners
four to three.
C
OMMODITY stocks pulled
Britain’s top shares lower yester-
day as US data showed a sharp
slowdown in industrial output,
and after investors switched into the
dollar after The Bank of Japan’s yen
intervention and recent sharp gains.
The FTSE 100 index closed down
11.85 points, or 0.2 per cent at
5,555.56, snapping a five session win-
ning streak, having inched higher
late on Tuesday to extend Monday’s
four-month closing peak.
Heavyweight mining and energy
stocks fell in tandem with crude and
base metal prices as worries persisted
over the choppy economic recovery in
the US.
Industrial output data from the
world’s biggest economy showed a
rise of 0.2 per cent in August, match-
ing expectations for a sharp slow-
down from the prior month when
auto production was unusually
strong.
Investors also saw better value in
switching funds into the US dollar
after the Bank of Japan intervention
to curb yen strength, and following
the recent strength in commodities.
Despite continuing concerns over
the recovery in the United States,
Jimmy Yates, head of equities at CMC
markets, said a double-dip recession
is unlikely and sees the FTSE consoli-
dating into 2011.
“At current levels, the FTSE has
already troughed. While the picture
going forward is still very unclear, I
do not think any downside will push
us below 4,800 seen in July,” he said,
forecasting the FTSE to be around the
5,675 level by mid-2011.
BP fell 2.7 per cent. The oil major
lacked a clear chain of command for
dealing with a loss of well control on
a North Sea oil rig, safety regulators
found three months before a blow-
out in the Gulf of Mexico caused
America’s worst ever oil spill.
Health and Safety Executive (HSE)
inspectors visiting the Magnus plat-
form 160km northeast of the
Shetland Islands in late January dis-
covered there was confusion about
who would order a well shut-off in
the event of a blow-out, according to
documents published on the HSE
website on Wednesday. BP also failed
to provide adequate safety training to
North Sea staff and to conduct ade-
quate oil spill response exercises.
Declines were curbed as US indexes
showing some resilience following
the industrial output figures provid-
ed encouragement to the bulls.
As the UK market closed the Dow
Jones and S&P 500 were firmer.
Both US indexes have lagged the
FTSE’s rally over the last three weeks.
London's blue chips have broken out
of their two-month trading range,
touching four month highs and ris-
ing almost 9 per cent.
The UK blue chip index carried a
12-month forward price-to-earnings
of 9.84 times, versus a 10-year average
of 14.86, Thomson Reuters
Datastream showed.
Fashion retailer Next led blue-chip
gainers, up 6.7 per cent after meeting
forecasts with a 13 per cent gain in
first-half operating profit and keep-
ing its full-year outlook unchanged.
Other retailers also benefited from
Next’s success, with Marks & Spencer
and Kingfisher each up 3.4 per cent,
while supermarket groups Tesco and
WM Morrison added 1.7 per cent and
0.6 per cent respectively.
Elsewhere on the downside,
AstraZeneca shed 1.9 per cent after
saying US regulators had extended
their review of the drugmaker’s
potential new blockbuster heart drug
Brilinta by three months. Banks were
easier. The session marked the two-
year anniversary of the collapse of
Lehman Brothers, which sparked tur-
moil in global financial markets.
Commodities drag FTSE 100
down as US output eases
THELONDON
REPORT
THENEW YORK
REPORT
ANALYSIS l FTSE ANALYSIS l FTSE
21 Jun
4800
4000
5000
5200
5400
5600 p
9Jul 29Jul 18Aug 8Sep
5,555.56
15 Sep
Markets &Investment
28 CITYA.M. 16 SEPTEMBER 2010
T
HE popular obsession with City pay
has not gone away, as was in evi-
dence recently when the news that
Bob Diamond will become CEO of
Barclays was accompanied by lurid head-
lines about the “bonus banker”. City remu-
neration might be a dog-whistle issue for
tabloids, but it’s also a big issue for every-
body who works here, especially if you are
considering a move at any point in the
next few months – before or after the
bonus round that starts in December.
So what is the state of play? Pay-wise,
things are looking up. Earlier this week
professional services firm Deloitte pub-
lished a report asking: “Is it business as
usual for executive pay?” It concluded that
in FTSE 100 companies in 2010 the median
bonuses for directors of the top 30 compa-
nies were 140 per cent of salary, almost 20
per cent higher than last year and close to
pre-crisis levels. For the others, they were
100 per cent of salary, again numbers rem-
iniscent of the boom days.
Just a few days later, recruitment firm
Norman Broadbent also published a report
which said that we are seeing the emer-
gence of a “bulge bracket” of top banks
which “are starting to operate differently
from the rest” and where pay is exception-
ally high. Although bonuses are not as
high as they were, there has been a com-
pensatory rise in base pay, which has
increased by 50-100 per cent in the last
year, says the report.
In terms of remuneration, things are
looking healthy in the top echelons of
the City, then. That said, the market is
still slow. But you should be aware that
regulatory and commercial pressures
have changed things significantly across
the board. Nimble footwork is needed to
make the best of the new realities. So
when the time comes for that job-move,
what should you be asking for?
Thomas Drewry, managing partner at
executive advisory and search firm Veni
Partners, says that compensation packages
have become “as much about regulatory
compliance as a commercial decision” and
some practices have all-but vanished. For
example, two-year guarantees are now far
less common. Ditto dual contracts, where
an employee is paid in two jurisdictions in
a tax-efficient way – these were once stan-
dard for senior bankers. “These days you
have to prove that you have a legitimate
actually work against you.
Andrew Hanson, director of financial
services at recruiter Robert Walters says:
“Somebody who has worked in two or
three organisations is often a more attrac-
tive candidate – they will have experience
of different environments, systems, man-
agement and business structures.”
The general rule is that short-term
thinking is best for your long-term career
goals, if that doesn’t sound too paradoxi-
cal. The odds are that the market we see
around us does not reflect a permanent
change, but a blip. Sooner or later the
City’s favourite recruitment technique –
the tap on the shoulder – will be back with
a vengeance. When business as usual does
return, you should be ready for it.
The recruitment landscape has
changed, and it pays to keep up
to date, writes Jeremy Hazlehurst
Be ready to leap when the market turns
Just hold on
a bit longer
Picture: GETTY
I
became a lawyer because I strug-
gled at school socially and wanted
to go to the local college, but you
could only do that if you took a sub-
ject they didn’t do at the school, so I
chose to do law A-level. I was taught by a
female barrister and she was so exciting
and glamorous that I decided I wanted
to go and be a young lady barrister in
London. I was called to the bar six years
ago and I work in the chambers of John
Coffey at 3 Temple Gardens, and I spend
a lot of my time in the Old Bailey,
Southwark and Blackfriars Crown
Courts.
I do a lot of serious violence cases,
some sex cases and drugs. I recently did
a child abuse case, and not that long ago
I defended a bigamist. I’ve just had my
first rape case, which was very exciting,
and also my first attempted murder.
There can be interesting moments – I
have been attacked in a cell by some-
body who was undiagnosed with bipolar
disorder and he thought I’d come to
arrest him. But I’m a tough girl and I
can take it.
You learn about all sorts of things in
this job – a couple of years ago I had a
case where somebody had graffitied
trains, so I learned all about graffiti,
and went to lots of exhibitions of
street art. A lot of it is violent crime,
though. I also know all about blood-
spattering and how to best dispose of
a body.
Some barristers say they
get hardened to the vio-
lence, but I don’t think I
am. Not long ago I
defended somebody
who had bitten off
somebody’s ear and I
was leafing through the pictures at my
birthday barbecue. When the jury saw
them they were almost sick, but it’s just
life. Whatever they’ve done, you have to
think of your client as a person. If
they are guilty, it’s a question of get-
ting them what they need – the
right kind of counselling or
rehabilitation to help them
improve their lives. If you can
stop them reoffending, that’s
the best thing for society, too.
I frequently get flowers and
champagne from people who
were convicted and have done
their time and are able to move for-
ward.
It’s an exciting job, and I never
know what I will be doing the next
day. When a stack of papers come in
with a red ribbon it could be any-
thing, I am still excited by untying it
and finding what I am working on, I
still get butterflies in my stomach. My
aspiration is to become a district judge.
City Focus| Careers
WHY I LOVE
THE KINDLE
SEE BOOKS, P31
29
business connection with both countries
where you are paid,” Drewry says.
Other practices have replaced these.
Base salaries, of course, have increased to
compensate for a loss in cash bonus and
have doubled in many cases. Bonuses have
a much heavier stock component than
before. This means that if you are contem-
plating a move, then you should make sure
you are confident about the firm’s long-
term prospects. A mercenary move is not a
good idea in this market.
Be aware too that accelerated stock vest-
ing has recently been banned by the FSA.
This was a technique whereby your stock
in one company could be transferred to
another very quickly, rather than taking
the usual three years. However, some
banks are still offering all cash sign-ons to
sweeten any deals. Norman Broadbent say
that buy-outs are also on the agenda, and
deals worth 200 per cent of salary are not
unknown.
Of all these, the most significant change
is the proportion of remuneration in stock.
On the face of it, this suggests that long-ter-
mism is the best policy for your career. But
while it might look that way now, don’t get
complacent. Once the markets return to
buoyancy, then things will change again
and a long stay at one employer might
You need to accept that the negotiation
started before the salary review meeting,
it’s built into the whole employee-employ-
er relationship. So you need to build your
own value, the contribution you make and
your employer’s perception of you well in
advance of the meeting. Here are the 10
top tips to maximise on your chances of a
good salary increase.
lDo your research on what people
around you earn and have a clear view on
what you think you are worth.
lBuild your value to the company and
ask your employer before the meeting
how you can help them achieve their
objectives.
lDon’t talk about how much you need –
talk about how much you contribute and
your plans to contribute more.
lIf you want to be a director start
behaving like one now.
lNever put your marker down first. It’s
always possible they had a higher salary
in mind than you.
lKeep neutral body-language. Don’t look
or sound desperate. But be persistent.
lConsider everything in the deal. It’s not
just about basic salary and bonus.
lAgree only with a struggle. You were
always expecting more.
lEndeavour to agree you are worth
more next time if you achieve more.
lTie up all the details. Write down what
the negotiator said.
Philip Hesketh is a professional speaker
on the psychology of persuasion and the
author of the bestselling book, How to
Persuade and Influence People.
www.heskethtalking.com
10 NEGOTIATION TIPS | PHILIP HESKETH
50-
110%
increase in base
pay at big banks
in 2010
140%
of base salary
paid in bonuses to
top FTSE 100
directors
150%
of salary FTSE
350 directors hold
in stock
MIA WELLFARE
CRIMINAL BARRISTER
ODD JOBS
A lawyer talks blood-spattered bodies and
explains why convicts send her flowers
M
ODERN technophiles are already
used to multi-tasking online. And
with online mainstays now ven-
turing into the coveted space of
TV entertainment, attention spans are set
to encounter another challenge.
Google TV is due to launch in the US by
the end of the year to rival Boxee – a serv-
ice built originally from open source Xbox
software code – while Apple TV has been
slimmed down in preparation for its UK
launch at a retail price of £99.
Preview screenshots show that Google
TV users will simultaneously have the abil-
ity to watch TV in one corner of the screen
and browse online content related to the
programme on the rest of it.
So while technophobes wheel out argu-
ments against the mesmerising gaze of tele-
vision turning its consumers into passive
couch potatoes, the TV of the future is more
likely to join smartphones and Twitter as a
relentless source of hyperactivity.
But what do these sleek new appendages
to the idiot box actually add? And, crucially,
can these flashy services distract us from a
more important development: the growing
accessibility of low-cost – or even free –
online TV.
Already it is possible to watch TV feeds
online through services like hulu.com and
ivi.tv. And there is an ever-expanding range
of TV apps for mobiles, such as Rok TV,
which offers Blackberry users live feeds of
ITN and Reuters for just over £3 per month.
Detractors argue that many of these so-
called new developments are just rehashes
of existing services. PC World’s Barbara
Hernandez dismisses Apple TV as “a glori-
fied TiVo nobody needs”. The Apple TV box
lets users purchase episodes in TV quality a
la carte – but why bother when you can
watch and share many online for free
through legal services like Hulu?
Hernandez suggests other functions that
could help rivals out-manoeuvre Apple’s
prescriptive offering, including video-con-
ferencing and an ability to store one’s
media library online.
Paul Entwistle of Pace – a leading manu-
facturer of set-top boxes – agrees that mak-
ing content mobile is key. In the future, he
says: “The content will belong to the viewer,
not to one particular device, and they will
have the power to transfer it around the
devices operating in their home, whether
it’s the TV, the PC screen or the iPad.”
But there is still a major barrier to the lib-
eralisation of TV content: old media. While
new media firms like Apple and Google are
striking deals that add limited functionality
and don’t threaten the subscription TV
model, new firms like ivi.tv have less incen-
tive to play nice. ivi.tv offers a full TV service
for free on your computer (unfortunately
only in the US), which it promised would be
“highly disruptive”.
Its CEO Todd Weaver
says: “The cable industry
has spent countless millions of
dollars on so-called ‘TV
Everywhere’ solutions to prop up outdated
technology and business models. ivi
empowers its users to experience TV
Anywhere, offering them major broadcast
channels delivered live to their laptop or
desktop, making the set-top box and any
‘Web to TV’ products obsolete. Instead of
attempting to bring the web to the TV, ivi
intuitively brings TV to the web.”
To compete in such a world, old media
companies need to start offering services
beyond mere content. Whether viewers are
willing to pay the same prices just for a
high-quality picture or the ability to search
their programmes remains in question.
In other words, your living room is about
to be engulfed in the same dilemma that is
tearing apart the traditional, paid-for
music and newspaper industries: how to
get users to pay for content they can now
access for free.
So it’s a shame that the new multi-task-
ing services on offer mean that we might
not have the attention span to follow the
debate.
Internet TVgives you
free content online –
so why pay a boring
old subscription fee?
asks Juliet Samuel
Internet TV threatens
the power of the old
idiot box
Picture: GETTY
Lifestyle | Gadgets
30 CITYA.M. 16 SEPTEMBER 2010
The idiot box gets smart –
and threatens old media
GADGETS | NEWS IN BRIEF
COMMANDOS EMBRACE TWITTER
Even as US commanders are still grappling with
the implications of Wikileaks’ publication of
sensitive military intelligence regarding
Afghanistan, their fellows this side of the
pond are embracing new media – albeit with
limits. As he leads 450 men into battle,
Lieutenant Colonel Dougie Graham will be sending
updates of his progress to Twitter, subject to mili-
tary approval. He told the Telegraph: “I would
like to be able to give people a feel for the real-
ity because it’s not all fighting, it’s not all
bombs and bullets. What we’re trying to do is
draw everything together so that we can get
messages of support to the men, as well as updates
of what the battalion’s been doing back home.”
SMARTPHONE BOASTS ANDROID IN HD
HTC has finally unveiled the much-anticipated HTC
Desire HD, an HD version of the heir to the G1 smart-
phone that first boasted Google’s Android platform and
a decent rival to the iPhone. The Desire offers users a
full QWERTY keyboard, like its predecessors, as well
as an 8-megapixel camera, a 4.3-inch screen and the
use of Android 2.2.
GADGETS | REVIEWS
AMAZON KINDLE
£149 with 3G www.amazon.co.uk
hhhhi
A
CONFIRMED fan of Amazon’s Kindle e-
book reader, I was lucky enough to be
given the latest model to play with in
advance. If you’ve seen the ads on the
Tube and wondered whether to join the e-
book revolution, the new Kindle is unlikely to
disappoint.
This is the second Kindle available in the
UK. The previous model was slim and Apple-
pretty, but many important features were
disabled outside the US. The new Kindle has
been properly integrated with Amazon’s UK
services. It has also been significantly
improved.
A 3G Kindle now weighs just 247 grams,
comparing favourably to 730 grams for a 3G
iPad. There is much better contrast on the e-
ink screen, and the Kindle’s battery can now
go 10 days between charges with 3G on.
You will, incidentally, want to pay £40
extra for 3G. Free global 3G is a bargain, even
if the Kindle’s web browser is fairly limited.
Having 3G also makes it easier to subscribe
to blogs that update through the day, or even
share your favourite passages as you read on
Twitter and Facebook.
The Kindle’s light weight and a storage
capacity of up to 3,500 books make it an
ideal solution for global travellers and com-
muters looking to keep up with their reading
on the move, although I find it less handy for
reading downloaded pdfs and work docu-
ments. Marc Sidwell
NICK
BOOTH
TECH TALK
A raft of new
apps to help
you find deals
T
HE everything-is-cheaper-online myth
was created by the retail industry so
they could charge you more and work
less. That said, Google has created a
price comparison website for phones that
run Android. OK, it’s slow on my handset, but
Google Shopper is worth the wait – and
you’ll wait even longer to see it on iPhone.
Still, these price comparison websites
aren’t perfect, so you need back up sources
of information. TheFashionPixie.com (for
iPhone) is promising. It gives you up-to-date
information on all the latest sales and vouch-
er codes that you can print off. Gap, Phase 8,
Joules and White Stuff are all offering big
discounts on the site. One deal, with
Very.co.uk, gave a £10 discount, even for
goods that cost £10. So you got it free. They
slashed £1,000 off designer bags (Prada,
Marc Jacobs, Gucci) in a Selfridges sale.
If you’re disciplined, you’ll trawl sites like
Vouchercodes.co.uk and print off all the rele-
vant discount voucher codes before you
start. Having done that, use Yell.com to map
out your shopping strategy.
Fancy some online collective bargaining?
The creators of comparison site Kelkoo.com
have now formed a buying club, Key Noir. By
aggregating buyers, they drive down prices,
giving you up to 65 per cent discounts. A full
makeover at Butterfly Salon in Cornhill was
bargained down from £85 to £30 on
KeyNoir.com. It’s good for hotel and restau-
rant deals too, if you’re out and about with
an iPhone.
OK, sometimes goods are cheaper online.
But buying them is more dangerous.
Secure yourself with a Visa card
with Dynamic Passcode
Authentication – it’s all the rage in
digital banking circles, such as
Visaeurope.com.
Had a row over the shop-
ping? Use your mobile to
apologise. For £1.49
Touchnote.com lets you
create and send a physi-
cal card using the pho-
tos on your iPhone,
Symbian and
Android. My wife
sent me one say-
ing, “Ok, did your
bum look big in
those trousers? You
be the judge! See attached
photo.” Nick Booth is the edi-
tor of mobbed-online.com.
I
HAVE seen the future of books, and it
isn’t lumps of dead tree. Whether the
iPod of books turns out to be
Amazon’s Kindle, Barnes and Noble’s
Nook or Sony’s Reader – or even Apple’s
iPad – these readers will catch on. The e-
ink screens favoured by everyone but
Apple still can’t do colour or video,
though they already match the book’s
main advantages over computer screens:
crisp contrast and pages that can be read
in any light without hurting the eye.
But e-readers aren’t just as good as
books – they are better than books. I love
my library for its content, not its format,
and the idea of having my library always
with me, just as we all now carry our
music collections on MP3 players, is noth-
ing short of miraculous. Now I have a
Kindle, I can search easily across the
whole collection instead of flipping vain-
ly through a shelf of heavy books for the
right page. And if I think of a new book I
want to try or buy, I can be reading it in
seconds wherever I am. And when you
want to annotate, you don’t have to inter-
rupt your train of thought by scrabbling
around for a pen – yes, you can scribble
on e-readers, too.
There are those who will always
love the feel of paper books. But
there were those who loved manu-
scripts and scrolls more than the
products of the printing press.
Paper books will become a niche
market, and those who couldn’t
live without them will die and be
replaced by generations who can’t
imagine why we lugged those old-
fashioned things around.
The launch of a new Kindle proves how fast we’re
moving away from paper books. Is this a good thing?
Many people will miss
reading real books.
Others, well, might
not.
Books | Lifestyle
31 CITYA.M. 16 SEPTEMBER 2010
Another month,
another e-reader
£27.50
Roast New Season Grouse
with a glass of
Justerini & Brooks Red Burgundy
Game dish of
the year
Restaurant
Magazine 2008
Boisdale of Bishopsgate
Reservations on 020 7283 1763
Boisdale of Belgravia
Reservations on 020 7730 6922
The Lamb at Hindon
Reservations on 01747 820 573
Subject to availability from
17th August until 30th September
MARC SIDWELL
YES
Gangsters and spies
still thrill if done well,
says Zoe Strimpel
OUR KIND OF TRAITOR
BY JOHN LE CARRÉ
Viking, £18.99
hhhii
A LE Carré book is an event whether
you’re a fan or not. He is the last great
British thriller writer, a former spy for MI5
and MI6, and a man with an intellectually
political core. He also manages to provide
page-turners in a way that makes Dan
Brown’s attempts at writing seem ludi-
crous and cheap.
Having left his old favourite topic of the
Cold War behind, le Carré has embraced
such modern crises as the war on terror,
post-Soviet Russian gangsters and their
skulduggery, and the underhanded behav-
iour of big business in the developing
world. He is, perhaps surprisingly, a lefty
through and through.
In his latest book, a smart young couple
– Perry, an Oxford professor and Gail, a
lawyer – head to Antigua for a tennis holi-
day. Once there, they meet Dima, a tat-
tooed Russian gangster who oozes money.
A money launderer who has spent 15
years in prison, Dima is wanted dead by
some of the fouler elements in his world,
and desperately wants to attain a safe-
haven in England with his daughter at
Spies and Russians in
classic le Carré London
Roedean. Gail and Perry become roped in
as the middlemen between Dima and the
British secret service – in return for asy-
lum, Dima’s prepared to vomit up reams
of top secret names and crimes that are
more shocking than anyone at MI6 had
imagined. As usual with le Carré, machi-
nations in London are just as corrupt as
those in Russia and those official agents
meant to be patriotic and loyal are, in the
end, easily bought off.
The book is sophisticated and thrilling –
but not always as juicy as it could be. One
has the sense that Le Carré is getting a bit
tired, perhaps a bit bored of spinning
these psychologically-embellished tales of
intrigue. The only real flaw, though, is
Gail and Perry’s involvement – just why
they’re willing to put their lives at risk for
a minor oligarch is never quite clear.
Suspending disbelief for more minor
authors is one thing; with le Carré, one
rather hopes not to have to do it.
LAST NIGHT AT CHATEAU
MARMONT
BY LAUREN WEISBERGER
Harper Collins, £7.99
hhiii
THE new book from The Devil Wears
Prada author should satisfy any literary
sweet tooth. Brooke and Julian live happi-
ly in New York; she’s the breadwinner and
he’s a struggling musician. Suddenly he is
discovered by a Sony exec and becomes a
star. When Julian is photographed in a
compromising position at the Chateau
Marmont, Brooke has to decide if she’s
going to sink or swim.
A
FEW weeks ago I lost my diary and
declared so in a round-robin email.
About half of the responses were
remonstrations about still having a
paper diary.
To which I said, if I had to look at a screen
and tap at a keyboard any more than I do
already for work (and the odd bout of
Facebook stalking), I would be sick. Or I’d go
mad. Or I’d fall into a deep depression. The
human eye was not made to bend itself on
a chimera of pixels; combinations of galli-
um arsenide, polarised glass and mercury.
It’s bad enough staring at one all day, every
day in a professional capacity. I told my
detractors that it is a pleasure to take out a
pen and paper and write my appointments
in it; also, to feel the crackle of well-penned
pages.
Books are on a different level entirely.
They are not just purveyors of information
and language, but meaningful objects
themselves. In the days before you snug-
gled up with your iPad, you snuggled up
with your favourite book – and a damn
sight more comforting it was. Rather than
being confronted by endless choice and
another shifty screen, you had one
story, with one typeface, framed in
nice neat pages and a solidity that
can only be described as earthy
and life-affirming. The brain
could settle, the soul engage. Tell
me how that’s possible on a
machine that is constantly prof-
fering something else? Those
beguiled by the promise of end-
less choice are chasing the
wrong rainbow, particularly
when it comes to books.
ZOE STRIMPEL
NO
John le Carré was
born David John
Moore Cornwell.
Picture: GETTY
T
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R
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E
S
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I
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EASTENDERS
BBC1, 7.30PM
Sam is left reeling after the revelation
of her deceit and struggles with the
idea of being a single parent and Ronnie
has some life-changing news for Jack.
EMMERDALE
ITV1, 8PM
Alicia continues to argue with Leyla
about why her sister left and Moira is
shocked when she confronts a
remorseless Holly.
TRUE BLOOD
CHANNEL4, 10PM
New series. Sookie’s relationship with
Bill is tested when she learns the truth
about his involvement in her uncle’s
death. Drama, starring Anna Paquin.
BBC1
SKY SPORTS 1
7pmSky Sports News at
Seven 7.30pmPremier League
World 8pmThe Rugby Club
9pmRingside Special 10pm
Time of Our Lives 11pmThe
Rugby Club 12amRingside
Special 1amTime of Our Lives
2amPremier League World
2.30am-6amPremier League
Snooker
SKY SPORTS 2
6.30pmRace World 7.30pm
Live Premier League Snooker
11pmEuropean Tour Golf
12.30amGolfing World
1.30amIAAF Athletix Weekly
2amSailing 2.30am-4am
European Tour Golf
SKY SPORTS 3
7pmNRL Fulltime 7.30pmLive
Championship Rugby League
9.30pmSuper League’s
Supermen 10pmWWE: Late
Night – Raw12amWWE: NXT
1amNRL Fulltime
1.30amChampionship Rugby
League 3.30am-4am
Wakestock 2010
BRITISH EUROSPORT
7pmFight Club 9pmLive
Women’s Under-17s World Cup
Football 11pmRallying 11.15pm
Cycling: Vuelta a Espana
12.15am-1.00amTable Tennis
ESPN
5.30pmLive UEFA Europa
League Football 10.15pmGoal!
10.45pmMMA Live 11.30pm
UEFA Europa League
Highlights 1.30amESPN
Scottish Premier League Kicks
2amLive Major League Soccer
4amESPN Kicks Extra
4.15am-5.15am30 for 30
LIVING
7pmFour Weddings US 8pm
Private Practice 9pmMy Fake
Baby 10pmCriminal Minds
12amCSI: Crime Scene
Investigation 2amCharmed
3.50amGirls of the Playboy
Mansion 4.40amMake Me a
Supermodel US 5.30am-6am
Home Shopping
BBC THREE
7pmLive Women's World Cup
Football 8pmTop Gear 9pm
Britain’s Really Disgusting
Drinks 10pmEastEnders
10.30pmThe King Is Dead
11pmFamily Guy 11.45pmHim
and Her 12.15amBritain’s Really
Disgusting Drinks 1.15amThe
King Is Dead 1.45amE20
2.15amBeckii: Schoolgirl
Superstar at 14 3.10amCherry
Has a Baby 4.10amE20
4.40am-5.10amHim and Her
E4
7pmHollyoaks 7.30pmFriends
9pmThe Big Bang Theory
9.30pmHow I Met Your
Mother 10pmAccidentally on
Purpose 10.30pmThe
Inbetweeners 11pmSchool of
Comedy 11.30pmFacejacker
12.05amScrubs 1.05am
Accidentally on Purpose
1.30amFacejacker 2amJoan
of Arcadia 4.10amSamantha
Who? 4.30amThe Hills
4.50am-6amSwitched
HISTORY
7pmHow the Earth Was Made
8pmIce Road Truckers 10pm
Extreme Trains 11pmMega
Disasters 12amIce Road
Truckers 1amThe Lost
Evidence 2amHow the Earth
Was Made 3amThe Crusaders’
Lost Fort 4am-5amThe
Universe
DISCOVERY
8pmHow Do They Do It?
8.30pmHow It’s Made 9pmI
Shouldn’t Be Alive 10pm
Deadliest Catch 11pmGreatest
Tank Battles 12amBear Grylls:
Born Survivor 1amDeadliest
Catch 2amChris Barrie’s
Massive Engines 3amTop Tens
3.50amSpecial Forces Heroes
4.40amMystery Investigator:
Olly Steeds 5.30am-6amHow
Does That Work?
DISCOVERY HOME &
HEALTH
7pmMultiple Mums 8pmTwo
Foot Tall Teen 9pmI Didn’t
Know I Was Pregnant 10pm
Surviving a Super Tumour
11pmMedics 12amI Didn’t
Know I Was Pregnant 1amI
Have An Embarrassing Medical
Condition 2amMedics 3am
Two Foot Tall Teen 4amA
Baby Story 5am-6amBringing
Home Baby
SKY1
8pmThe Real A&E 8.30pm
Real Filth Fighters 9pmLie to
Me 10pmFILMBatman
Returns 1992. 12.25amNCIS:
Los Angeles 2.15amRoad
Wars 3.05amOops TV 3.30am
The 4400 4.20amCrash Test
Dummies 5.10am-6amSell Me
the Answer
BBC2 ITV1 CHANNEL4 CHFIVE
S
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T
E
&
C
A
B
L
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TVPICK
6pmBBC News
6.30pmBBC London News
7pmThe One Show
7.30pmCHOICE EastEnders;
BBC News
8pmWatchdog
9pmThe Young Ones
10pmBBC News
10.25pmRegional News
10.35pmQuestion Time
11.35pmFILMK2: With
Michael Biehn 1991; Holiday
Weatherview
1.25amSign Zone: Panorama
1.55amSign Zone: Countryfile
2.55amSign Zone: Ben Fogle’s
Escape in Time 3.40amSign Zone:
Britain’s Empty Homes 4.10am-
6amBBC News
5pmThe Pope’s Visit 2010
7.30pmCoast
8pmJames Wong and the
Malaysian Garden: The garden
designer searches for
inspiration in Malaysia.
9pmGareth Malone’s
Extraordinary School for Boys:
The choirmaster introduces an
element of competition to
improve reading skills.
10pmMock the Week: With
Stewart Francis and Ed Byrne.
10.30pmNewsnight: Weather
11.20pmRide of My Life: The
Story of the Bicycle
12.20amGlastonbury 2010
2.20amBBC News 4.10am-6am
Close
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale
7.30pmKeeping the Faith?:
Tonight
8pmCHOICE Emmerdale
8.30pmCoronation Street
9pmLaw&Order: UK: Steel
pushes the boundaries of the
lawto the limit in a prosecution.
10pmITV News at Ten
10.30pmLondon News
10.35pmFILMOn Deadly
Ground 1994
12.30amThe Zone; ITV News
Headlines
2.30amThe Jeremy Kyle Show
3.25amKeeping the Faith?: Tonight
3.50am-5.30amITV Nightscreen
6pmThe Simpsons
6.30pmHollyoaks
7pmChannel 4 News
7.55pm4thought.tv
8pmLocation, Location,
Location
9pmAlan Davies’ Teenage
Revolution: The actor examines
how Thatcher’s Britain was
divided by political debate.
10pmCHOICE True Blood
11.20pmFILMAliens: Sci-fi,
with Sigourney Weaver. 1986.
2.10amThe Fairy Jobmother
3.05amThis Is Me 3.10amThe
Trouble with the Pope 4.05am
Cameron’s Black Tory 5am
Countdown 5.45am-6.10amYo
Gabba Gabba
6pmHome and Away: Tony
discovers Rachel’s ticket to
Boston.
6.25pmLive from Studio Five:
Topical reports.
7pmFive News at 7
7.30pmLive UEFA Europa
League Football: Liverpool v
Steaua Bucharest (Kick-off
8.05pm).
10.10pmFILMOutlaw:
Premiere. Crime drama,
starring Sean Bean. 2007.
12.10amSuperCasino
4.05amChinese Food in Minutes
4.30amHouse Doctor 4.55am
Rough Guide to Beaches 5.10am
The New Tomorrow5.35am-6am
Michaela’s Wild Challenge
1 2 3 4 5
6
7 8 9
10
11 12 13
14
15 16 17
18 19
20 21
22 23
8 21 13
22 6
23 15
26 19
6 15
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21 10
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16 39
4 22 11
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38
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28
Fill the grid so that each block
adds up to the total in the box
above or to the left of it.
You can only use the digits 1-9
and you must not use the
same digit twice in a block.
The same digit may occur
more than once in a row or
column, but it must be in a
separate block.
COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUE’S
SOLUTIONS
KAKURO
WORDWHEEL
Using only the letters in the Wordwheel, you have
ten minutes to find as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
SUDOKU
WORDWHEEL
Place the numbers from 1 to 9 in each empty cell so that each
row, each column and each 3x3 block contains all the numbers
from 1 to 9 to solve this tricky Sudoku puzzle.
SUDOKU
QUICK CROSSWORD
ACROSS
1 US composer of
military marches
(1854-1932) (5)
3 Noosed rope (5)
7 Tibetan or Mongolian
priest (4)
9 Tree with sharp
thorns (6)
10 Arabian ruler (4)
11 Remedy (4)
12 Artist’s tripod (5)
15 Sauce typically served
with Italian food (5)
17 Game on horseback (4)
19 Abreast of (4)
20 Frogmen (6)
21 Ancient Greek harp (4)
22 Very steep, almost
vertical (5)
23 Freight (5)
DOWN
1 Choose (6)
2 Bring dishonour upon (5)
4 Victoria Beckham’s
former surname (5)
5 Opaque gem (4)
6 Store for goods and
merchandise (9)
8 Combine (5)
13 Black wood (5)
14 Be earlier in time,
precede (6)
16 Unglazed leather (5)
17 Bohemian dance (5)
18 “Beware the ___ of
March”, advice given
to Julius Caesar (4)
The nine-letter word
was ABSORBENT
A
D
M
K
A R
R
E
E
4


4
4




S P A S M A S P I C
P P P I P E E
R O G E R D R A M A
I N I E S
G O L D E N E A G L E
V T A D E
B A T H I N G S U I T
A R E H R
S K E I N M E C C A
E A F A R E P
D I R T Y A T L A S
1 6 5 8 9 3 4 2 7
2 7 9 1 5 4 6 8 3
4 8 3 2 6 7 5 1 9
6 3 7 5 1 9 2 4 8
8 5 1 4 3 2 7 9 6
9 4 2 6 7 8 1 3 5
7 1 8 9 2 5 3 6 4
3 2 4 7 8 6 9 5 1
5 9 6 3 4 1 8 7 2
3 1 7 2 7 4 9
6 7 8 5 9 2 1 6
4 8 1 5 4 3 2 7
1 6 5 7 9 5 8
2 9 6 2 8 1
3 2 9 1 5 6 8
9 8 7 8 9 5
4 9 8 7 5 7 3
3 8 4 2 1 7 5 1
1 7 3 7 9 8 6 4
2 3 1 5 1 3 2
Lifestyle | TV&Games
32 CITYA.M. 16 SEPTEMBER 2010
Sport
33
ANELKA FIRES BLUES
TO A WINNING START
TWO-GOAL NIC LEADS BLUES ON
A EURO STROLL IN SLOVAKIA: P34
James Hildreth’s century took Somerset within sight of the title. Picture: ACTION IMAGES
SPONSORED BY
THE 129TH VARSITY MATCH
TWICKENHAM STADIUM, 9TH DECEMBER 2010, KICK OFF 2PM
WHAT SHADE OF BLUE ARE YOU?
.TICKETMASTER.CO.UK WWW TICKETS 0844 CALL OR .TICKETMASTER.CO.UK FROM TS ADULLT PRICES: 2492 847 FROM JUNIORS £20.00. FROM Y) APPLLY FEES (BOOKING £10.00. FROM
SPORT | IN BRIEF
Gollings to captain Sevens
RUGBY UNION: Ben Gollings has been
named as captain of the England
Sevens team for next month’s
Commonwealth Games in Delhi.
The 30-year-old former Harlequins
fly-half, who now plays in New Zealand
for Tasman, will be competing in his
third Games after playing in Manchester
in 2002 and winning a silver medal in
Melbourne in 2006.
England face Namibia, Australia and
Uganda on day one of the 16-team tour-
nament on 11-12 October.
SQUAD: G Barden, K Barrett, J Brake,
D Caprice, C Cracknell, I Damudama, B
Gollings, S Hunt, D Norton, T Powell, J
Rodwell, M Turner.
Exiles announce new deal
RUGBY UNION: London Irish have
announced internet security provider
Trend Micro as their new kit sponsor
and partner for the 2010-11 Aviva
Premiership season.
The company logo will be branded on
the first-team shirt and Trend Micro will
also become title partner in the club’s
community programme.
Richard Marsh, London Irish's com-
mercial director, said: “Trend Micro have
an ethos of continually striving for fur-
ther success, this dovetails perfectly
with London Irish.”
Grant excused for Yom Kippur
FOOTBALL: West Ham boss Avram
Grant has been excused from attending
Saturday’s Premier League game with
Stoke to observe Yom Kippur.
The Day of Atonement is the most
significant date in the Jewish calendar
and is a strict day of fasting and forbids
followers to work. Defender Tal Ben
Haim is also expected to miss the game.
Grant’s assistant Zeljko Petrovic will
take temporary charge of team affairs.
Mascarenhas banned for 14 days
CRICKET: Hampshire captain Dimitri
Mascarenhas was last night suspended
for 14 days by the England and Wales
Cricket Board following his foul-mouthed
Twitter outburst earlier this month.
The all-rounder, currently out with a
long-term Achilles problem, blasted
national selector Geoff Miller on two
seperate posts on his Twitter page.
He was fined £500 by the ECB, to go
with his £1,000 fine from Hampshire,
and his ban will start at the beginning
of next season.
NOTTINGHAMSHIRE director of crick-
et Mick Newell was last night
resigned to his side falling foul to a
cruel twist of fate in the County
Championship title race.
Heavy rain in Manchester again
washed out an entire day’s play of
their crucial final match of the sea-
son against Lancashire, meaning only
28 overs have been possible ahead of
today’s final day.
Newell’s men began the final week
two points clear of Somerset at the
top of the table and nine clear of
Yorkshire in third.
But with Somerset claiming a max-
imum eight bonus points at Durham
and Yorkshire securing five against
Kent at Headingley, it looks increas-
ingly likely that a lack of action will
cost Notts dear.
To be sure of denying Somerset a
first-ever County Championship title,
Newell’s men would need to claim six
bonus points and win themselves by
contriving a run chase for Lancashire.
“If Lancashire are prepared to
chase a score tomorrow then that dis-
cussion is going to have to take place,”
Newell admitted. “But you’ve got to
keep the integrity of the game to the
extent that you can’t give anything
away.”
Somerset’s eighth bonus point
came after reaching 426 – a lead of
140 – and the Cidermen will feel con-
fident of wrapping up a maiden title
despite Durham rallying to 171-2 at
the close.
Victory for Yorkshire over relega-
tion-threatened Kent looks unlikely,
however, with the Tykes ending the
day of 51-1 – an overall lead of just 10.
But Kent weren’t helped either by a
century from Ian Bell which helped
Warwickshire to a sixth bonus point
as they hit 303 against Hampshire.
Notts curse
rain as title
charge fades
BY JON COUCH
COUNTY CRICKET

ENGLAND’S Lee Westwood insists he
is over his injury troubles and ready
to spearhead Europe’s quest to
reclaim the Ryder Cup next month.
Westwood, the world No3, has not
struck a ball competitively since
pulling out of the WGC-Bridgestone
Invitational seven weeks ago.
But Europe’s highest-ranked player
is convinced he has recovered from a
ruptured calf muscle and will be fit
enough to play a full part against the
United States at Celtic Manor.
“I haven’t had any pain for three
weeks,” said Westwood. “I’ve made
great progress. I’m pretty strong at
the moment. I’d be fine playing in all
five matches [at the Ryder Cup]. I’ve
been working with my coach, Pete
Cowen, and he says I’m swinging it
better than I was before.”
Westwood’s confidence will pro-
vide a major boost to the European
camp just two weeks before the bien-
nial contest tees off in Wales.
Earlier this week vice-captain Paul
McGinley admitted Westwood’s
injury had “hurt” their prospects and
was the team’s biggest problem.
The Worksop player has also
revealed he has cut out alcohol for
the past month and lost almost a
stone in weight as part of a strict
regime to shape up for the competi-
tion. “I haven’t had a drink in four
weeks and have lost 12lbs since the
Open,” Westwood added.
Westwood will step up his come-
back by playing in a charity event in
Scotland early next week before play-
ing back-to-back rounds on Friday in
order to prepare for the competition’s
heavy schedule. He said: “I just want
to replicate the Ryder Cup with two
matches in one day.”
Booze-free Westwood ready for Ryder
BY FRANK DALLERES
GOLF

CARLO ANCELOTTI hailed his ruth-
less Chelsea after Champions
League rookies MSK Zilina were
given a rude awakening in their
Group F opener in Slovakia.
Nicolas Anelka scored twice,
either side of strikes from Michael
Essien and Daniel Sturridge, as the
Blues began their European cam-
paign with a thumping win.
“The first half was fantastic,” said
a delighted boss Carlo Ancelotti
after seeing his side waltz into a 3-0
lead at the break.
“We played very well on the
counter-attack. We had a lot of
chances. It was a fantastic per-
formance. The second half was dif-
ferent. We had a good control of
the game.
“We are doing very well. We are
in a good moment. We started well
in the Premier League and in the
Champions League – everything is
okay now.”
Essien side-footed the Blues
ahead from Anelka’s centre on 13
minutes before the French striker
himself doubled the lead soon after
from Florent Malouda’s chipped
through ball.
Four minutes later Anelka made
it 3-0 after the returning John Terry
had headed Malouda’s corner onto
the crossbar.
Sturridge made it four three min-
utes into the restart with his first
Champions League goal after coolly
rounding keeper Martin
Dubravaka, and his proud moment
wasn’t to be spoilt by Tomas Oravec
netting a consolation for the hosts.
“I’ve been dreaming of this since I
was a young boy,” Sturridge said.
“I’m delighted to get off the mark in
the Champions League and hopeful-
ly there’s many more to come.
“There’s a lot of world-class play-
ers in this team. I’m delighted to be
part of things.”
Results
UEFA CHAMPIONS LEAGUE - GROUP E
Bayern Munich.........(0) 2 Roma.....................................(0) 0
Muller 78
Klose 83 Att: 67,253
CFR Cluj-Napoca......(2) 2 Basle.......................................(1) 1
Rada 9 Stocker 45
Traore 12 Att: 16,000
P W D L F A GD Pts
Bayern Munich 1 1 0 0 2 0 2 3
CFR Cluj-Napoca 1 1 0 0 2 1 1 3
Basle 1 0 0 1 1 2 -1 0
Roma 1 0 0 1 0 2 -2 0
GROUP F
MSK Zilina...................(0) 1 Chelsea................................(3) 4
Oravec 55 Essien 13
Anelka 24, 28
Att: 11,181 Sturridge 48
Marseille.......................(0) 0 Spartak Moscow..........(0) 1
Att: 54,000 Azpilicueta 81 (og)
P W D L F A GD Pts
Chelsea 1 1 0 0 4 1 3 3
Spartak Moscow 1 1 0 0 1 0 1 3
Marseille 1 0 0 1 0 1 -1 0
MSK Zilina 1 0 0 1 1 4 -3 0
GROUP G
AC Milan........................(0) 2 Auxerre...............................(0) 0
Ibrahimovic 66, 69 Att: 74,296
Real Madrid.................(1) 2 Ajax........................................(0) 0
Higuain 31, 73 Att: 80,142
P W D L F A GD Pts
AC Milan 1 1 0 0 2 0 2 3
Real Madrid 1 1 0 0 2 0 2 3
Ajax 1 0 0 1 0 2 -2 0
Auxerre 1 0 0 1 0 2 -2 0
GROUP H
Arsenal...........................(3) 6 Braga ....................................(0) 0
Fabregas 9 (pen), 53
Arshavin 30
Chamakh 34, Vela 69, 84 Att: 59,333
Shakhtar Donetsk .(0) 1 Partizan Belgrade .......(0) 0
Srna 71 Att: 45,907
P W D L F A GD Pts
Arsenal 1 1 0 0 6 0 6 3
S Donetsk 1 1 0 0 1 0 1 3
P Belgrade 1 0 0 1 0 1 -1 0
Braga 1 0 0 1 0 6 -6 0
NPOWER LEAGUE 1
MK Dons........................(0) 2 Southamptn.....................(0) 0
Balanta 72, Leven 87 Att: 8,133
TODAY’S DIARY
Europa League - Group A
SV Red Bull Salzburg v Man City (6pm) ..........................................................
Group K
Liverpool v Steaua Bucuresti (8.05) ..................................................................
Women’s World Cup Qualifying Play-Off Second Leg
Switzerland (0) v England (2) (6pm)..................................................................
GOLF
Austrian Open (Diamond Country Club, Vienna, Austria).
SPORTS EDITORJON COUCH
email [email protected]
Sport | Football 34 CITYA.M. 16 SEPTEMBER 2010
ARSENAL boss Arsene Wenger singled
out Cesc Fabregas for praise after his
captain orchestrated a Champions
League demolition of Braga, scoring
twice and setting up two more in a
victory of embarrassing ease.
Substitute Carlos Vela had time to
register a brace of his own, while
Andrei Arshavin and Marouane
Chamakh added to the visitors’ humil-
iation as the Gunners racked up pic-
turesque goal after picturesque goal.
Fabregas launched the drubbing
with a penalty before adding a header
after the break in a commanding per-
formance that dispelled any doubts
that his commitment might have
been dented by his manager’s refusal
to let him join Barcelona.
“Cesc is a fantastic influence and
it’s important that he leads this team
to winning,” said Wenger. “I believe as
well that the playing alongside him is
a fantastic opportunity for young
players to improve.
“I like as well that he gave the ball
to Vela instead of trying alone [for his
hat-trick]. That reflects the way we
want to play the game and also the
real attitude of a leader; he does what
the game wants and is not selfish.
“He loves this club, people doubted
It’s Anelka at the
double as Chelsea
take Euro stroll
Wenger hails captain Cesc
as awesome Arsenal hit six

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BY FRANK DALLERES AT EMIRATES STADIUM
CHAMPIONS LEAGUE

6
0
ARSENAL
BRAGA
BY JON COUCH
CHAMPIONS LEAGUE

1
4
MSK ZILINA
CHELSEA
that, but I never doubted that. He
arrived here at the age of 16 and he
enjoys the way we play. What do you
want more, to be happy?”
A fourth straight victory took
Arsenal’s tally to 16 goals in three
home games, although the value of
this win was tempered by Braga’s
ineptitude. The Gunners still looked
vulnerable at times and better oppo-
nents might have capitalised.
The rout began when, in the eighth
minute, goalkeeper Felipe took
Chamakh’s legs and Fabregas confi-
dently slotted home from the spot.
The Spaniard’s jink and threaded
pass then allowed Arshavin to toe-
poke the second on the half-hour.
In truth, the match resembled a
training ground exercise, none more
so than when Wilshere capped a ludi-
crous move by backheeling for
Chamakh to finish. An unmarked
Fabregas nodded the fourth soon
after the interval from an Arshavin
cross, and the Russian’s through-ball
set up Vela to net a cool finish.
Fittingly Fabregas fed the Mexican
to cap a thumping win with a side-
footed finish with five minutes to go.
Captain Marvel Cesc
Fabregas is congratulated
by two-goal Carlos Vela.
Picture: ACTION IMAGES
LIVERPOOL manager Roy Hodgson has
hit back at criticism of Fernando
Torres and dismissed claims the strik-
er does not want to be at the club.
Torres was singled out for flak after
Sunday’s 0-0 draw with Birmingham,
with suggestions his form is related to
possible regret at staying at Anfield.
“He certainly isn’t fed up,” said
Hodgson, ahead of tonight’s visit of
Steaua Bucharest. “It’s very wrong to
read someone’s state of mind from 90
minutes’ football.”
Sport | Football
35 CITYA.M. 16 SEPTEMBER 2010
HARRY Redknapp seems to be getting
a bit bristly in his old age. The
Tottenham manager objected to the
notion that his side’s failure to hold
onto a two-goal lead at Werder
Bremen on Tuesday suggested they
had lessons to learn about the
Champions League. That’s silly.
Make no mistake, Spurs will view
the result as an opportunity missed.
Away wins in this competition are
vital because they ease the pressure
to take maximum points at
home and, although Bremen
are a good attacking side, it
was two points lost.
Redknapp’s squad may be
full of internationals but
they are inexperienced
in playing as a team in
the Champions League.
Of course you have to
learn lessons. Even the
best teams slip up some-
times.
Perhaps Redknapp
(right) is starting to feel
the pressure. Expectations are very
high but it looks like being a tough
season for Tottenham, who must jug-
gle a European campaign and a scrap
to maintain their top-four Premier
League status.
Spurs are not a team you’d put
money on to finish in the Champions
League places again this time but
Redknapp won’t want to prioritise
domestic matters over the
Champions League, so I expect he’ll
look to field his strongest line-up as
often as he possibly he can.
That’s not an accusation you could
level at Sir Alex Ferguson, however,
who paid the price for selecting a
weakened Manchester United side
against Rangers. They needed some-
one to produce some magic, but with
Paul Scholes, Dimitar Berbatov and
Ryan Giggs all left out they failed.
Ferguson won’t be reaching for the
panic button yet but there are a lot of
issues he needs to address: a lack of
form and fluidity, defensive errors,
and a reliance on Rooney’s goals.
United urgently need to shake
off the malaise that has seen
them squander winning positions
at Fulham and Everton and now
draw with Rangers, starting by beat-
ing Liverpool on
Sunday.
In the meantime,
Chelsea will be look-
ing to capitalise on
their main rivals’ slump
by opening up a big gap.
Bristly Redknapp
may be starting
to feel pressure
JOSE MOURINHO got off to a winning
start in the opening match of his
Champions League defence after
guiding Real Madrid to a comfortable
2-0 win over Ajax at the Bernabeu.
The former Chelsea chief, who won
the title with Inter last season to add
to his success with Porto in 2004,
looked on as a goals in each half from
Argentinian srtriker Gonzalo Higuain
put paid to Martin Jol’s Dutch side.
In the other game in Group G,
Zlatan Ibrahimovic scored twice as
Italian giants AC Milan also came
through 2-0, at home to French side
Auxerre.
Likewise, last season’s runners-up
Bayern Munichbegan with a comfort-
able 2-0 win, this time over Italian
side Roma.
German World Cup stars Thomas
Muller and Miroslav Klose netted in
the final 12 minutes for Bayern.
CFR Cluj overcame Basel 2-1 in the
other Group E game thanks to early
goals from Ionut Rada and Lacina
Traore.
Joining Chelsea on maximum
points in Group F is Spartak Moscow,
who sprung a surprise by beating
Marseille 1-0 on the road with Cesar
Azpilicueta netting an own goal nine
minutes from time.
The other game in Arsenal’s group
saw ex-Rangers striker Darijo Srna
give Shakhtar Donetsk a 1-0 win over
FK Partisan.
It’s easy pickings for Real boss Jose, as
Milan and Bayern also cruise through
Hodgson slams
Torres criticism
EUROPA LEAGUE

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MANCHESTER City boss Roberto
Mancini has just two strikers fit for
tonight’s opening Europa League
match at Red Bull Salzburg.
Emmanuel Adebayor has not recov-
ered from the dead leg that kept him
out at the weekend, meaning Mancini
has only Carlos Tevez and Jo at his dis-
posal. Centre-back Joleon Lescott is
also absent but full-back Wayne Bridge
is in line for his first start of the season
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City are striker
light in Austria
EUROPA LEAGUE

ON THE BALL WITH
TREVOR STEVEN
Nicolas Anelka fired
Chelsea with two goals in
Slovakia.
Picture: GETTY
BY JON COUCH
CHAMPIONS
LEAGUE 2010-11
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