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05/07/2010 till 01/08/10 is 94,889
US authorities will step up their
investigation into insider trading at
Banco Santander today as the scandal
threatens to engulf BHP Billiton’s
$39bn (£25bn) bid for PotashCorp.
The Securities and Exchange
Commission (SEC) has secured pow-
ers to seize documents, emails and
phone logs from Santander’s Madrid
office after charging senior executive
Juan José Fernández García with mar-
ket abuse.
Fernández García is accused of
making nearly $1.1m in illegal profits
by piling into call options in
PotashCorp before BHP made its hos-
tile offer and selling them shortly
afterward when the stock had soared.
Santander, which is advising BHP
on its attempted takeover, yesterday
suspended Fernández García and
insisted it had followed the “appropri-
ate procedures”. “We are awaiting the
results of both our internal and the
supervisors’ investigations,” a
spokesperson said.
The SEC will question Santander’s
Mergers &Acquisition bankers to see
whether they leaked news of the
impending bid to Fernández García,
who works in a separate part of the
bank as head of European equity
derivatives research.
Daniel Hawke, head of the SEC’s
market abuse division, told City A.M.:
“We will be examining all avenues of
inquiry relating to the circumstances
surrounding the trading. It appears
highly suspicious and the likelihood
that it was based on an investment
decision without access to private
information is low.”
Fernández García, 35, has hired top
lawyer Scott Lassar of Sidley Austin in
Chicago to help argue his case. Lassar
is a former US attorney and has
worked for clients such as Charles
Conaway, the former Kmart chief
executive, who was fined more than
$10m for misleading investors in the
retail chain in February.
It is not known whether Fernández
García’s co-accused, Luis Martín Caro
Sánchez, has engaged a lawyer. Caro
Sánchez also lives in Madrid but is
not thought to work for Santander.
The two men have been sum-
moned to appear before judge Marvin
Aspen at the US District Court for the
Northern District of Illinois today.
Aspen will set another date in two
weeks’ time, by when the SEC must
report with details of its probe.
Santander, the Eurozone’s largest
bank, is one of several institutions
that helped BHP line up a $45bn debt
facility for its PotashCorp approach.
BHP chief executive Marius Kloppers
launched a fresh attack at speculators
yesterday saying that “fast money”
was piling into Potash in an attempt
to profit from the deal. He said as
much as 40 per cent of Potash’s share
register had changed hands in the
last two weeks, and dismissed talk of
a counter-bid. MORE: P2 and P8
SANTANDER
SUSPENDS
TOP ANALYST
BY OLIVER SHAH
REGULATION

www.cityam.com Issue 1,207 Thursday 26 August 2010 FREE
ASIL NADIR
BACK IN UK
RETURNS AFTER
17 YEARS ON THE
RUN P2
WHY CAMERON’S WRONG
TO TAKE PATERNITY LEAVE
A FATHER OF TWO SPEAKS OUT P23
BUSINESS WITH PERSONALITY
Fernández García is
accused of making nearly
$1.1m in illegal profits by
piling into call options in
PotashCorp before BHP
made its hostile offer
Standard Life supports
Minerva in board battle
CITY stalwart Standard Life threw its
weight behind the board of Minerva
yesterday, after the property investor
and its activist shareholder KiFin trad-
ed another round of inflammatory
statements.
“It is not clear to us that the KiFin
nominated board candidates would
act in the best interests of all share-
holders,” said Andrew Jackson, an
investment director at Standard Life
Investments, which owns a 4.89 per
cent stake in Minerva.
KiFin, owned by billionaire Nathan
Kirsh, defended its plans to oust sever-
al Minerva board members in its lat-
est strongly-worded letter to share-
holders yesterday.
It complained of the apparent apa-
thy of Minerva’s non-executive direc-
tors, and claimed the firm “has
continued to mislead you” by couch-
ing the planned overhaul as KiFin’s
attempt to seize control by stealth.
KiFin also turned on chief executive
Salmaan Hasan, pointing out his
salary represents 14 per cent of the
firm’s wage bill.
Minerva hit back, telling sharehold-
ers it regrets KiFin’s continued public
criticism, but strongly recommends
they vote down the proposals at a
crunch meeting on 8 September.
BY MARION DAKERS
PROPERTY

Under fire Minerva boss Salmaan Hasan received backing from Standard Life
News
2 CITYA.M. 26 AUGUST 2010
Coalition hits
back at IFS
THE coalition government hit back
yesterday against claims its austerity
budget is regressive and will hit the
poorest hardest.
The Institute of Fiscal Studies (IFS)
claimed poorer families will suffer
most from stringent welfare cuts
such as slashing housing benefits.
But deputy Prime Minister Nick
Clegg, whose reputation relies on
convincing the electorate that the
Budget is fair, criticised the “partial”
IFS report.
He said: “If you just look at who is
receiving benefits then, in a sense,
you don’t ask the most important
question of all – how you can relieve
poverty and make Britain fairer.”
He added: “[It is a] single snapshot
that simply doesn’t provide the full
picture of what we are trying to do.”
He was joined by financial secre-
tary Mark Hoban, who said the report
made “some fairly challenging
assumptions about the impact of
some of the welfare reforms.”
The IFS’s conclusions were support-
ed by the National Institute of
Economic and Social Research, anoth-
er respected thinktank. Simon Kirby,
an economist, said the work appeared
“very robust”, and added that the situ-
ation may be even worse than the IFS
suggested because its model did not
account for spending cuts.
BY STEVE DINNEEN
POLITICS

US CHAINS BEEF UP MEALS TO LIFT
PROFITS
Fast-food chains in the US are rolling
out more expensive premium prod-
ucts after two years of relentless focus
on lower priced meals in the hope of
recouping profit margins surren-
dered during the recession of 2008
and 2009. McDonald’s is selling a
“smokehouse deluxe” burger in
Canada priced at more than US$5.00
at close to 100 restaurants in the
province of Ontario.
UK COAL EXPECTS RETURN TO BLACK
UK Coal said the end of lossmaking
legacy contracts coupled with bur-
geoning production should return
the group to profitability next year.
However, pre-tax losses at the UK’s
largest coal miner widened from
£81.5m to £93.2m in the six months
to June 26, on revenues down from
£159.8m to £141.3m.
OUTLOOK IMPROVES FOR FORTH PORTS
Oil producers’ safety concerns follow-
ing April’s Deepwater Horizon acci-
dent in the Gulf of Mexico hit
first-half throughput at two of the
Scottish oil and gas terminals operat-
ed by Forth Ports, its chief executive
said on Wednesday. Announcing
interim results at the ports and prop-
erty business, Charles Hammond said
oil shipments through Hounds Point
and gas exports through Braefoot Bay,
both on the Firth of Forth, had fallen.
DUBAI WORLD PLANS $19BN ASSET
SALE
Dubai World has told lenders it could
raise up to $19.4bn from selling its
assets, in a bid to repay $14.4bn of the
holding company’s debt, the terms of
which it is looking to restructure,
according to people close to the situa-
tion. In late July, the company set out
its debt restructuring plan, including
a time frame over which it would con-
sider selling assets to raise funds to
repay lenders.
CONFUSED.COM FAILS TO COMPARE TO
A TENOR
Confused.com lost the battle of the
price comparison websites in the first
half, ceding the market-leading posi-
tion in online car insurance to its
upstart rival GoCompare.com.
Confused.com, owned by the Admiral
Group, has been locked in a high-pro-
file TV marketing war with
GoCompare.com.
IT COMPANY THAT AXED 700 JOBS
HAS 700 NEW VACANCIES
Hewlett Packard, a global computer
company that axed 700 jobs last year
at its factory at Erskine,
Renfrewshire, has announced that it
is to create 700 new jobs there. The
remarkable turnaround by Hewlett
Packard exemplifies global trends in
manufacturing, for while the lost
jobs were in making computer equip-
ment.
APPLE TAKES A BITE AT HULU WITH TV
SHOW RENTAL
Apple is poised to unveil a major
revamp of its Apple TV offering, a
make-over which includes giving US
users the option to rent – rather than
buy – programmes for as little as 99
cents. The consumer technology giant
is reported to be talking to a number
of US television networks about its
proposals, which could be announced
as early as next month.
ROEWE CASHES IN ON MG ROVER'S
BRITISH HERITAGE
Five years ago, the last car stuttered
off the production line at Longbridge
as MG Rover, Britain’s last major car
manufacturer, collapsed ignomin-
iously. Today, however, sales of Rover’s
twin brother, the Roewe, are soaring
in China. And the white gates of
Longbridge are open again, producing
a new MG6.
COST SAVINGS, SALES HELP L'ORÉAL'S
FIRST-HALF PROFIT
L'Oréal, the world’s largest cosmetics
company by revenue, said Wednesday
its first-half profit jumped 21 per
cent, as a sharp sales increase and
drastic cost cuts drove a rebound. The
French company, owner of such
brands as Maybelline, L'Oréal Paris
and Lancôme, said net profit reached
€1.31bn in the first six months of the
year, up from €1.08bn a year earlier.
RUSSIA'S AUTO MARKET PICKS UP
SPEED
Russia’s car market is rebounding
more quickly than expected, buoyed
by a return of cheap credit and a suc-
cessful government scrappage
scheme, top auto makers said on
Wednesday. Car sales in the country
are up 9 per cent for the first seven
months of the year compared to the
same period in 2009.
WHAT THE OTHER PAPERS SAY THIS MORNING
Kloppers won’t fall into the bid trap
BHP chief executive Marius Kloppers
was determined yesterday to play
down fears that he is about to over-
pay for PotashCorp, the Canadian fer-
tiliser group.
As Kloppers unveiled healthy annu-
al results, most people’s minds were
focused on what he had to say about
the group’s pursuit of Potash, for
which he has made a $39bn bid.
Different times require different
tactics, and that applies to mergers
and acquisitions as well as anything
else.
In the heady days of the 1980s, for
example, the City loved a deal junkie
and flocked to back the likes of Lord
Hanson and Williams’ Holding’s
Nigel Rudd.
Obviously investors were con-
cerned at the kinds of premium being
paid to take companies out, but in the
main they trusted management to
get it right.
But the financial crisis we have just
been through has changed all that.
The careers of men such as Sir Victor
Blank and Sir Fred Goodwin took a
turn for the worse after they were
considered to have made ill-judged
acquisitions.
Then there is the case of Tidjane
Thiam at the Prudential whose $35bn
proposed acquisition of AIA had to be
aborted due to a lack of support from
investors.
With markets as nervous as can be
and with sentiment clearly against
the macho deal-doer, Kloppers could
be forgiven for emphasising he won’t
overpay for Potash.
He was keen to dampen down spec-
ulation there would be a host of other
bidders for the Saskatchewan-based
fertiliser group, something that
might lead to the price being ramped
up. “This is the only bid on the table,”
he said.
In the next few days Kloppers will
embark on a globe-trotting roadshow
where he will canvass shareholders
about the bid.
He has not had an opportunity
between Potash’s rejection last week
and yesterday’s results to meet the
Saskatchewan-based company’s man-
agement.
My guess is that he will reassure
investors he won’t get into some crazy
bidding war but that he might be pre-
pared to up his $130 a share bid a
touch in return for an agreed deal.
Moving to $140 a share would not
break the bank. The bid at current lev-
els, for example, is worth just two and
a half years of BHP’s cash-flow.
I’m fairly convinced that if there is
an auction, Kloppers will walk away if
he thinks he has to. And he will be
well regarded for doing that.
DOUBLE DIP
There’s been so much conjecture
about whether we’re headed for a
double dip recession and yet nobody
really is any clearer about it now than
they were a few weeks ago.
Each set of economic data is pored
over voraciously by analysts and the
media alike in an effort to make sense
of where the world economy is going.
And yet....
Today on page 12, Dan Corry, for-
mer economics adviser to Gordon
Brown, sets out his thoughts on the
circumstances that face the coalition
government and concludes that
many of the events – most of them
outside the UK, such as the outcome
of the Eurozone crisis – which will
determine success or otherwise for
the chancellor George Osborne lie
outside his control. Somehow that
doesn’t sound too comforting.
[email protected]
Allister Heath is away
ASIL NADIR, the multimillionaire
businessman, who fled the UK after
facing a series of significant fraud
charges, is to return after almost two
decades to face the courtroom.
Nadir will arrive at Luton from his
native North Cyprus today to face
multimillion-pound fraud charges
linked to the collapse of his Polly Peck
business, according to The Times.
Nadir fled to North Cyprus, which
has no extradition treaty with
Britain, in 1993 rather than stand
trial and is now expected to go court.
The businessman will appear before
the Old Bailey on 3 September where
he will comply with £250,000 bail
conditions.
In 1993 Nadir was due to stand trial
on 66 charges of false accounting and
theft involving £34m but fled the
country in the middle of the night
first to France and later to North
Cyprus where he has lived for the
past 17 years.
BY EMMA SADOWSKI
LEGAL

Nadir is back after 17 years
Asil Nadir faces 66 charges of false accounting and theft Picture: PHOTOSHOT
NEWS | IN BRIEF
Unions set Tube strike dates
Transport unions RMT and the
Transport Salaried Staffs’ Association
(TSSA) yesterday confirmed dates for a
series of 24-hour strikes to be launched
by 10,000 London Underground staff in
what will bring severe disruption to
London’s commuters. The unions said
the first staff walk out will start at 5pm
on 6 September, with similar action
planned for 3 October, 2 November and
28 November. The dispute between the
unions and London Underground is over
plans to axe up to 800 jobs. London
Underground urged union leaders Bob
Crow and Gerry Doherty to call off the
strike, which is expected to cost the city
up to £48m a day. RMT said yesterday
that London Underground has failed to
answer requests to meet with Acas, the
conciliation service provider.
Plus gets derivatives facelift
Plus Markets, the small-cap listing and
price-reporting platform, is to relaunch
as a full blown derivatives and stock
exchange. The move, which is part of a
strategy set out in March, will put Plus
against the London Stock Exchange, Chi-
X Europe and similar trading venues.
DEPUTY EDITOR’S LETTER
DAVID HELLIER
7
th
Floor, Centurion House,
24 Monument Street,
London, EC3R 8AJ
Tel: 020 7015 1200 Fax: 020 7283 5334
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
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
Editorial Statement
This newspaper adheres to the system of
self-regulation overseen by the Press Complaints
Commission. The PCC takes complaints about the
editorial content of publications under the Editor’s
Code of Practice, a copy of which can be found at
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Nick Clegg criticised
the “partial” IFS report,
which he said does not
consider plans to get
people off benefits
ENDING the regulatory dividing line
between a bank’s trading and core
books would price risk better and
help avoid public bailouts sparked by
the financial crisis, the markets
watchdog said yesterday.
The Financial Services Authority
unveiled a 126-page discussion paper
looking at approaches to tightening
up the rules, that would prevent
banks from exploiting differences in
the amount of capital they must hold
against losses in their trading and
banking books.
Paul Sharma, FSA director of pruden-
tial policy, said: “The financial crisis has
highlighted that, for trading activities
in particular, an over-reliance on the
principles of efficient financial markets
can lead to severe consequences when
risks are misunderstood.”
HEDGE fund boss Richard Breeden
was burned by a second support serv-
ices company yesterday as a badly-
timed PR move by Xchanging wiped
11 per cent from its market value.
Breeden European Partners saw
£158m shaved from its stake in the
outsourcing provider as nervy
investors fled the stock. Just a fort-
night ago, Breeden crystallised a
£30m loss by selling out of troubled
support services firm Connaught,
which is battling for survival in the
face of government spending cuts.
Shares in Xchanging fell 10.8 per
cent to 110p after the market was
spooked by an unexpected conference
call in which chief executive David
Andrews tried to dispel “baseless
rumours” circulating about the com-
pany. Andrews insisted Xchanging’s
accounting practices had been
approved by its auditor, while finance
director Richard Houghton said its
profit and loss account had not been
flattered by deferred income.
Although the announcements
were designed to reassure investors
following the high-profile problems
suffered by Connaught and Rok,
many analysts missed the call as it
coincided with results from Serco.
Caroline de La Soujeole at Seymour
Pierce said the board was right to
fight back against gossip. “They just
picked the wrong day to do it.”
Mike Allen at Panmure Gordon
said: “If a company in this market has
to defend its accounting policy, it’s a
bit of a recipe for disaster.”
Breeden hurt
as Xchanging
PR push fails
UK life insurers could be hit with tens
of millions of pounds of costs if they
are forced to comply with tough regu-
lations on tax evasion being drafted
by US authorities.
Companies such as Aviva, Old
Mutual and Prudential would be
forced to report the tax details of
their US account holders every year
under proposals being drafted in
Washington. The life insurance indus-
try is anxious about the potential cost
of overhauling information systems if
it is caught up in the wave of red tape.
The Association of British Insurers
(ABI) yesterday went into battle to try
to win the exemption of UK life firms
from the rules. Peter Vipond, director
of taxation at the ABI, said: “UK insur-
ers represent no significant risk to US
tax revenues and we are keen to avoid
unnecessary and onerous costs on the
industry that will ultimately be borne
by all policyholders.”
The trade body has written to the
US Treasury and Internal Revenue
Service. It will attend a series of meet-
ings with policymakers over the com-
ing weeks to point out that savings
sold by UK life insurers are taxed by
HM Revenue & Customs, and US resi-
dents make up just 0.1 per cent of UK
life policyholders.
ABI struggles to
save UK insurers
from US rules
FSA policy director Paul Sharma (inset) is arguing for tougher rules Picture: REX
BY OLIVER SHAH
SUPPORT SERVICES

News
3 CITYA.M. 26 AUGUST 2010
BY OLIVER SHAH
INSURANCE

ANALYSIS l Xchanging
105
110
115
120
125
130
4pm 2pm 12pm 10am 8am
p
110.00
25 Aug
FSA says banking trading
warrants tougher action
BY HARRY BANKS
REGULATION

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OIL explorer Tullow faced tough ques-
tions over its plans in Uganda yester-
day, as shares dipped despite a 152 per
cent increase in pre-tax profit in the
last six months.
Its $10bn (£6.6bn) project on oil
fields once owned by Heritage stalled
in January, after the Ugandan govern-
ment disputed Heritage’s capital gains
tax payments on the sale.
Exploration director Angus McCoss
told City A.M. yesterday: “It’s a very
short-term situation and we want to
make sure that we set the industry off
on the right foot in Uganda.”
McCoss added: “I think these things
are characteristics of a new entrant to
the oil industry. We encounter similar
problems in other places; it’s the real-
ity of being a frontier explorer.”
Tullow, which is led by Aidan
Heavey, saw its stock closed down 4.6
per cent at £12.38 after the results
announcement raised concerns.
“When you get beyond the headline
figures you find significant problems
in Uganda,” said Doug Youngson, oil
analyst at Arbuthnot. “It’s misleading
for the company to say this will be
resolved in weeks, since it’s been
going on for months. And the longer
this goes on, the colder the deal gets
for its partners Total and CNOOC.”
Pre-tax profit more than doubled to
$131m (£84.8m) in the six months to
30 June.
Tullow slides
on Ugandan
project delay
BY MARION DAKERS
ENERGY

London’s evening university
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Tullow boss Aidan Heavey faces hold up Picture: Micha Theiner/ CITY A.M
ANALYSIS l Tullow Oil
1,000
1,100
1,200
1,300
13Aug 26Jul 6Jul 16Jun
p
1,238.00
25 Aug
ANALYST VIEWS: WHAT DO TODAY’S RESULTS
MEAN FOR TULLOW? Interviews by Marion Dakers

JONATHAN JACKSON | KILLIK
The interim results from Tullow were in line with
expectations. However, the commentary on Uganda is less
positive. While today’s news is frustrating, we believe the
potential upside from the region remains intact.


IVOR PETHER | ROYAL LONDON ASSET MANAGEMENT
There isn’t an awful lot to say about the results, but
there is a lot of disappointment with the delays in Uganda.
It’s an expensive place to drill anyway, given the distance
from the pipeline to a export point, without this.


JOB LANGBROEK | DAVY
While not directly Tullow's problem, the group cannot
complete its intention to farm down to CNOOC and Total until
the dispute is resolved. This is unfortunate as it will overshad-
ow what is otherwise a strong performance.

News
5 CITYA.M. 26 AUGUST 2010
News
6 CITYA.M. 26 AUGUST 2010
A ROW broke out between S&P and
Ireland yesterday after the country
accused the credit rating agency of
“flawed” analysis of its debt position.
The war of words broke out after
S&P cut its rating for Ireland by a
notch to AA- after the markets closed
on Tuesday night and placed the
country on a “negative outlook”, indi-
cating that another rating cut could
be on the cards.
The agency expects debt to peak at
137 per cent of GDP, compared with
the 97 per cent estimated by the Irish
government. S&P also estimates that
the cost of bailing out the nation’s
banks will surge to €50bn – more
than double the government’s own
predictions.
John Corrigan, chief executive of
Ireland’s National Treasury
Management Agency, insisted that
the analysis failed to take into
account the value of its investment in
AIB or Bank of Ireland. There was fur-
ther disagreement over the ratings
agency’s inclusion of the liabilities of
the National Asset Management
Agency (NAMA) — which is buying up
Ireland’s bad property loans — in the
debt figure. “They have invented a
new standard that doesn’t conform
with Eurostat or IMF measures. It
results in a very exaggerated figure.
Where you see faulty analysis you
have to challenge it,” Corrigan said.
But S&P fought back, saying in its
original document: “We understand
that NAMA has been organised in
such a way as to keep it off the Irish
government’s balance sheet under
Eurostat’s accounting rules. We take
a different approach and have treated
similar off-balance-sheet arrange-
ments to support national financial
systems in other countries as direct
obligations of the government.”
The downgrade pushed up the cost
of borrowing for the Dublin govern-
ment as yields on ten-year bonds rose
from 5.5 per cent to 5.7 per cent. That
took the premium that investors
demanded to hold the bonds rather
than German bunds to the highest
level since the Greek financial crisis.
Yields on ten-year gilts also
dropped to a record low of 2.79 per
cent as investors fled to the safety of
British government bonds.
Dublin in row
with S&P due
to downgrade
Or this?
BY KATIE HOPE
EUROPEAN ECONOMY

Why are the Irish banks still in such a mess?
I
RISH banks seem unable to shake
off the financial crisis, in fact they
seem to be in worse shape now
then at the start of the year. The
main casualty is Anglo Irish Bank,
which threatens to squash the eco-
nomic recovery under an estimated
€24bn of bad loans. It has already
caused credit rating agency S&P to
downgrade Ireland’s sovereign rating
from AA to AA-.
But how does a country with a pop-
ulation of 4m get itself into this posi-
tion in the first place? Whereas the
rest of the world suffered a financial
crisis because of very complicated debt
structures like CDO’s, Ireland’s bank-
ing crisis is essentially home grown. It
boils down to the bursting of one of
the largest property bubbles in history.
The genesis of Ireland’s problems go
back 10 years. “Until about 2000,
growth had been on a secure export-
led basis, underpinned by wage
restraint. However, from about 2000
the character of the growth changed: a
property price and construction bub-
ble took hold,” wrote Patrick Honohan
of Trinity College Dublin – now gover-
nor of the Irish Central Bank – in a
report published in 2009.
Anecdotal evidence of the scale of
the boom is staggering. In one prosper-
ous Dublin suburb an acre of land sold
for over €80m in 2005.
This is also a tale of hubris. Philip
Lane, head of economics at Trinity
College Dublin, notes that the banks
are in trouble not because of home-
owners defaulting on their mortgages,
but as a result of a small number of
property developers. These guys bor-
rowed billions during the boom years
and are now facing bankruptcy.
Taxpayers have been consigned to
spending huge sums to prop up the
banks, including Anglo Irish, which
ran aground after making bad loans.
Former chief executive Sean
Fitzpatrick took $114m in personal
loans over eight years at the bank, but
recently declared bankruptcy. The gov-
ernment has been investigating.
What is most startling in Honohan’s
report is his refusal to blame the inter-
national financial crisis for Ireland’s
problems. It would have happened
anyway, the straight-talking central
banker says, and the collapse of
Lehman Brothers in autumn 2008
only exacerbated the Irish banks’ fund-
ing problems.
The end of Honohon’s report sums
up this chapter in Ireland’s history:
“The Celtic Tiger period represented a
solid convergence of Ireland to the
frontier. But it ended in 2000, to be suc-
ceeded by an old-fashioned property
bubble.”
At least its central bank governor is
under no delusion of what caused the
crisis. It took a decade to grow, it may
take a decade to unwind.
ANALYSIS
KATHLEEN BROOKS
ANALYSIS l IRELAND 10 Year Gilt Yield
Sep Nov 10 Mar May Jul
5.511
6
5.8
5.6
5.4
5.2
5
4.8
4.6
4.4
ANALYSIS l GERMAN 10 Year Gilt Yield
3.4
3.2
3
2.8
2.6
2.4
2.2
2
Sep Nov 10 Mar May Jul
2.118
Prices correct at thetimeof goingtoprint, subject toavailability andconditions, basedonselecteddates andprices.
Pleaseseewww.lastminute.comfor full terms andconditions.
alton towers from £15
thorpe park from £19
legoland from £19
them
e parks from
£
15
DELOITTE, one of the Big Four
accountancy firms, has seen UK rev-
enues fall for the second year in a row
in the face of challenging markets and
a difficult economic environment.
The global firm posted £1.95bn in
UK revenue for the year ended 31
May, marking a £16m fall from last
year.
“Despite a second successive year of
very challenging markets for Deloitte
and our clients, we are emerging
from the recession with a very satis-
factory performance,” said Deloitte
senior partner and chief executive
officer John Connolly.
Connolly, said that revenue in
Deloitte’s UK corporate finance divi-
sion was up 10.6 per cent during the
year, while income in the firm’s UK
consulting business fell by four per
cent and the group’s tax division saw
revenue decrease by 2.3 per cent.
Also, Deloitte’s UK auditing busi-
ness posted a 2.9 per cent decline in
revenue, despite winning FTSE 100
companies Kingfisher and Essar
Energy as new audit clients.
Connolly said that although the
economic environment remained
fragile, he anticipated a return to rev-
enue growth for the firm’s audit, tax
and consulting business by 2011.
Meanwhile, Deloitte added 750
people to its roster during the year
after bolstering its business through a
series of acquisitions, most notably its
January merger with property con-
sultants, Drivers Jonas.
Deloitte also added advisory firm
ReportSource and Swiss group
Exsigno to its consultancy division
and expanded its risk and security
business through the acquisition of
IM Global and Simulstrat.
Connolly added: “We will continue
to look for opportunities to bring in
highly skilled people who enable us
to offer increased range and depth of
advice to a broader number of
clients.”
Partners earned £873,000 in profits
last year after pensions and annuities
Deloitte upbeat despite
lower partner profits
Deloitte senior partner John Connolly is confident on the year ahead Picture: REX
BY EMMA SADOWSKI
ACCOUNTANCY

News
7 CITYA.M. 26 AUGUST 2010
payable to retired partners, marking
a drop from 2009 when partners
earned £883,000.
● Overall 2010 revenue fell £16m to £1.95bn.
● Corporate finance revenue up 10.6 per cent.
● Consultancy revenue down four per cent.
● Audit income fell 2.9 per cent.
● Tax revenue down by 2.3 per cent.
FAST FACTS | DELOITTE UK INCOME
INDUSTRIAL giant BHP Billiton
posted bumper profits in nearly all
areas of its business yesterday, as
chief executive Marius Kloppers
remained confident over the
firm’s $40bn (£25.9m) offer for
Canadian fertiliser group Potash.
“I have heard all the specula-
tion, but I have only seen one bid
on the table. Given the all-cash
nature of what have offered, it
doesn’t seem like there is an enor-
mous universe of potential inter-
lopers here,” Kloppers said
yesterday.
He said the world’s biggest
miner will remain disciplined
with its all-cash hostile offer, and
will not increase the bid if it risks
the firm’s A+ credit rating.
Kloppers and four teams from BHP
will this week begin a charm offen-
sive on all its shareholders to con-
vince them of the takeover’s value.
Kloppers said around 50 per
cent of BHP shareholders in the
USA also hold stakes in Potash.
“More information is always a
good thing,” he added.
The company identified potash
fertiliser as a candidate for expan-
sion as early as 2005, said Kloppers,
along with investing in platinum.
BHP Billiton posted a 65 per cent
rise in operational profit to $20bn
yesterday, on the back of a 5.2 per
cent rise in revenue to $52.8bn.
Earnings per share more than
doubled to 228.6 cents.
Six of the firm’s nine areas of
operation posted growth, with
some of the biggest jumps due to
rising commodities prices.
Shares fell two per cent yester-
day to close at £17.67.
BHP Billiton stands
firm on Potash bid
Hammonds in merger talks
with American legal rival
BY MARION DAKERS
MINING

UK law firm Hammonds con-
firmed yesterday that it is in merg-
er talks with American rival Squire
Saunders & Dempsey, marking an
increasing trend of trans-Atlantic
consolidation within the legal sec-
tor.
Discussions between the two
legal outfits are at an early stage,
but should they merge, the consol-
idated firm is expected to generate
annual revenue of $625m (£405m).
Currently the firms are undergo-
ing due diligence with expecta-
tions that a decision to merge will
be brought to a partnership vote
before the end of the year.
Hammonds managing partner
Peter Crossley said a merger with
Squire Saunders would help the
firm to meet its long-term growth
strategy.
He said: “Operating as one firm
around the world is a foundation
of the Hammonds culture which is
shared by Squire Saunders.”
Senior management at both law
firms notified partners yesterday
of thier intentions to join forces.
Hammonds needs 75 per cent of its
partners to vote in favour of the
merger to go through, while Squire
Saunders needs support from two-
thirds of its partnership.
Should the merger go through,
it will mark the third significant
trans-Atlantic tie-up in the legal
sector this year.
In May, City based law firm
Lovells officially merged with
Washington’s Hogan & Hartson,
while Denton Wilde Sapte
announced in the same month its
plans to merge with Sonnenschein
Nath & Rosenthal.
BY EMMA SADOWSKI
LEGAL

The Halifax Reward
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g i H . ) % 0 2 y l t n e r r u c , w a l y b d e i f i c e p s e t a r e h t
v i e c e r o t h t n o m r a d n e l a c h c a e 0 0 0 , 1 £ n i y a P
o h w d n a r e v o r o 8 1 d e g a , s r e m o t s u c l a n o s r e p
s e h c n a r b r u o f o e n o t i s i v r o e n i l n o o g , s u l l a C
r e t s i g e R . 0 0 0 7 2 3 C S . o N d n a l t o c S n i d e r e t s i g e R
















o i t i d d a y a p o t d e e n y a m s r e y a p x a t e t a r r e h g
d i a p d r a w e R . y l h t n o m ) s s o r g ( 5 2 . 6 £ / ) t e n ( 5 £ e
f o n o i s i v i d a s i x a f i l a H . K U e h t n i t n e d i s e r e r a o
r t s e r e t n i d n a s e e f l l a n o n o i t a m r o f n i e r o m r o f
. Z Y 1 1 H E h g r u b n i d E , d n u o M e h T : e c fi f O d e
















rd a w re e h t n o x a t l a n o
t a ( x a t e m o c n i f o t e n d
c l p d n a l t o c S f o k n a B f
o t y l n o e l b a l i a v AAv . s e t a r
News
8 CITYA.M. 26 AUGUST 2010
Chief executive
Marius Kloppers
said he had full
confidence in BHP
Billiton’s bid for
Potash at the com-
pany’s annual
results announce-
ment at the Merrill
Lynch Financial
Centre yesterday
Picture:
Micha Theiner
/CITY A.M.
ANALYSIS l BHP Billiton
1,700
1,800
1,900
2,000
13Aug 26Jul 6Jul 16Jun
p
1,767.00
25 Aug
ANNUAL RESULTS TO JUNE 2010
TOTAL REVENUE: $52.80bn (+5 per cent on 2009)
(Petroleum: $8.78bn (+22 per cent), Aluminium: $4.35bn (+5 per cent), Base metals: $10.41bn (+47 per cent), Iron ore:
$11.14bn (+11 per cent), Metallurgical coal: $6.06bn (minus 25 per cent)
EARNINGS PER SHARE: 228.6 cents (+116.5 per cent)
COST OF ONGOING PROJECTS: $10.1bn
OPERATING CASH FLOW: $17.9bn
ROGUE shareholder Crystal Amber
has continued its campaign against
Pinewood chairman Michael Grade
despite the film-studio upgrading
its expectations for the year.
Crystal Amber has waged a cam-
paign against Grade, whose stew-
ardship of the firm and track
record has been called into ques-
tion.
Yesterday a spokesman told City
A.M.: “We are pleased to see there
are encouraging signs for the sec-
ond half but our underlying con-
cerns remain. Our views as the
largest shareholder remain valid.”
Michael Grade declined to com-
ment when contacted by City A.M.
yesterday but chief executive Ivan
Dunleavy defended the board’s per-
formance.
He said: “We’re pleased with a
resilient performance. We’re sure
all of our shareholders are pleased
that our revenue is expected to rise.
“We’re enthusiastic about the
business. With Michael Grade as
chairman we are running the busi-
ness for shareholders. It is not
appropriate to comment on indi-
vidual personalities.
“We meet all of our shareholders
individually on a regular basis and
take their views into account.”
Crystal Amber recently
increased its stake in the studio
behind the Bond films from 16 to
27 per cent, making it the firm’s
largest shareholder. January to
June pre-tax profit for the group
was £1.5m, down from £1.7m last
year.
Crystal: Grade still
the wrong leader
BY STEVE DINNEEN
MEDIA

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a n o s r e p o t y l n o e l b a l i a v AAv . d n a m e d n o e l b a y a p e r
n a r o f e t a r t s e r e t n i l a u n n a l a u t c a e h t s i s i h T . e t a r
m r o f s e h c n a r b r u o f o e n o t i s i v r o e n i l n o o g , s u l l a C




















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e d i s e r e r a o h w d n a r e v o r o 8 1 d e g a , s r e m o t s u c l a
d n a s e e f t n u o c c a o t n i e k a t t o n s e o d t I . t f a r d r e v o
R A E . s e t a r t s e r e t n i d n a s e e f l l a n o n o i t a m r o f n i e r o m




















. Z Y 1 1 H E h g r u b n i d E , d n
a s i x a f i l a H . K U e h t n i t n
e r a s t f a r d r e v O . s e g r a h c
l a u n n a t n e l a v i u q e e h t s i R
News
9 CITYA.M. 26 AUGUST 2010
Indian oil firms step back
from move to buy into Cairn
STATE-RUN Oil and Natural Gas
Corp, GAIL India and Oil India will
not make a counterbid against
Vedanta Resources’ $9.6bn (£6.2bn)
stake purchase in Cairn India, a
senior official in India’s oil min-
istry said yesterday.
The decision makes it likely that
Cairn Energy’s planned sale of up
to a 51 per cent stake in its Indian
division will proceed, analysts said,
and boosted the Edinburgh-based
company’s shares.
“There is no chance for a coun-
terbid by Indian firms as the valua-
tion done by Vedanta for Cairn
India is already very high,” the oil
ministry official said.
He declined to be named as he
was not authorised to speak pub-
licly.
Previously, an oil ministry
source had said all options were
open for Indian state-run firms on
Cairn India and domestic media
reported the firms had held infor-
mal talks on a joint bid.
ONGC, Oil India and GAIL
declined to comment yesterday.
Last week, India-focused miner
Vedanta said it agreed to spend up
to $9.6bn to buy a majority stake in
Cairn India from parent company
Cairn Energy.
“I think it is very likely to go
through,” said Will Armstein, oil
analyst at brokerage Finncap,
adding that since it was a corpo-
rate transaction rather than the
sale of an individual field, the gov-
ernment had few mechanisms
available to block the deal even if it
sought to.
Shares in Cairn closed up 0.9 per
cent at 449p yesterday.
BY HARRY BANKS
OIL

CITY VIEWS: IS FACEBOOK WORTH ITS $33BN
VALUATION? Interviews by Tom Day
“As a non-user, I struggle to imagine where a pri-
vate company can possibly make anywhere near
that much money with an asset like
Facebook.”
PAUL STAPELY | CONNING ASSET MANAGEMENT
“It is difficult to measure the impact Facebook
has had on 500m-plus lives as a monetary value,
especially since we do not know the profitabil-
ity. But it is hard to see how the current rev-
enue models could justify such a valuation.”
MARCANTOINE DE ROYS | GROUP M
“Facebook is obviously an unbelievably popular
website. With the right marketing strategy, it
could plausibly generate that kind of valu-
ation. Nonetheless, as it stands I cannot
see how it can be worth that much.”
DEREK TYLER | WASPFORD & SALTING
ANALYSIS l Crystal Amber Fund
7Jun 25Jun 15Jul 4Aug
104.00
25 Aug
108
107
106
105
104
103
p
Cleaning firm
ISS considers
£4.4bn IPO
ISS, the Denmark-based cleaning
services firm, is looking into a stock
market flotation as its owners join a
line of private equity firms testing
markets with an eye to selling long-
term investments.
Confirming what sources familiar
with the matter said last month, ISS
said yesterday it was considering an
initial public offering which analysts
say could value the group at nearly
40 billion crowns (£4.4bn).
The company has appointed
Goldman Sachs and Morgan Stanley
to assist in its strategic review and
Rothschild to act as adviser to ISS
and its shareholders.
Jyske Bank corporate bond analyst
Alex Hauge Andersen said ISS should
be valued at nine times expected
earnings before interest, tax, depreci-
ation and amortisation, based on its
size and earnings potential, within
the range of its peers that trade
between seven and 11 times earn-
ings.
BY HARRY BANKS
SUPPORT SERVICES

HEDGE FUND
MAN GOES
LONG ON
BANGERS
CELEBRITY endorsement works, at least
if the celebrity involved is a glamorous
sportsman like Usain Bolt, who yesterday
announced the biggest deal ever, to help
Puma flog its pumps and T-shirts. But
can you really imagine Crispin Odey, the
permanently pin-striped hedge fund
guru, as a brand ambassador?
Well, he is. The new branch of the
Union Market organic grocery store in
Fulham – a company that is run by
Odey’s pal Tony Bromovsky, and which
the fund manager has invested in – has
added an “Odey Sausage” to its range,
made from prime Middle White rare
breed pork.
This raises several questions. Firstly,
what sort of person buys a sausage
because it is named after a hedge fund
manager? And secondly, could this be
the start of a trend for Odey? Can we
expect to see Crispin Duck pancakes on
Mayfair menus soon?
But most importantly, will his wife,
Nichola Pease, who works at investment
manager JO Hambro, bring out her own
range of peas to go with her husband’s
bangers? Surely an opportunity too good
to be missed.
Bangladesh to boot.
The reason – profitability is secondary
to ensuring a survivable future for human-
ity – according to the release. Putting the
environment before investor returns for an
oil company seems a tad unlikely. A quick
call to Cairn confirms that it is indeed a
hoax release from a mystery party that has
hacked into its systems. “It’s simply not
true,” a spokeswoman confirms.
WHAT’S IN A NAME?
WHEN the birth of the Camerons’
daughter was announced, speculation
about the name was rife. Borisina?
Nichola? Nobody copuld have expect-
ed Florence Rose Endellion. What can
we make of it? That third, Cornish
name sounds like an investment fund,
but could it also be an attempt to woo
Cornish voters? After all, the south west
is a hotbed of Lib Dem seats, and any-
thing the Tories can do to make headway
has got to help. If he wants to keep that
part of the country yellow, the deputy PM
will have to get procreating, and fast.
BARKING BANKERS
I’VE never yet set foot in a Metro Bank
branch, but judging by a press release
they sent out yesterday they sound like a
cross between a particularly gaudy funfair
and an EasyJet check-in desk in Magaluf,
with some mild hallucinogens thrown in.
And dogs. Dogs everywhere.
A press release announcing the launch
of three new branches breathlessly boasts
that customers will be “greeted by three
days of free giveaways including free
breakfasts, smoothies, and popcorn… stilt
walkers, musicians, jugglers and shoe
shiners”. The branches will all have “the
Metro Bank Magic Money Machine™” and
offer “A friendly welcome to dogs and
their owners, with water bowls and dog
biscuits on hand for man’s best friend –
dogs rule at Metro Bank!”
Hmm. Somehow I’m not sure I
want the people who run my bank
acccount to be having quite so
much fun.
POLAR BEARS
BEFORE PROFIT?
Just one day after Cairn Energy
enthustically talked up its prospects
in Greenland, a press release pops up
in The Capitalist’s inbox saying it’s
pulling out of not just Greeland –
land of polar bears – but Nepal and
Would you buy sausages from this man?
The Capitalist
10 CITYA.M. 26 AUGUST 2010
EDITED BY
JEREMY HAZLEHURST
GOT A STORY? EMAIL
[email protected]
Will Crispin
Odey’s wife
Nichola
Pease launch
a range of
frozen peas
to go with
her husband’s
sausages?
News
11 CITYA.M. 26 AUGUST 2010
GERMANY’S cabinet yesterday agreed
to adopt a levy on bank assets which
will raise around €1bn (£818m) a year
for bailouts, a government source
said, a move that small lenders
slammed.
Small banks complained the new
bank restructuring bill fails to rule
them out as potential contributors
toward a common pot for rescuing
big banks, whose collapse would send
shock waves through the financial
system.
The levy aims to shift the cost of
bailouts to the private sector in a bid
to avoid future taxpayer-led salvage
efforts.
The bill, which is expected to come
into force next year after parliamen-
tary approval, would also give the
state powers to coordinate restructur-
ing of banks struck by crisis.
“We can’t understand the list of
those called upon to contribute,” a
spokesman for the association of
German savings banks said.
He added: “It’s like asking the driv-
er of a small car to help pay the insur-
ance for a large hazardous goods
transporter.”
Large banks would benefit at the
expense of smaller and stable lenders,
the spokesman said.
Germany agrees to take up banking levy
www.cityindex.co.uk
0845 077 1178
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1 point spreads available during our market hours only.
Spreads lowered on our rolling and daily future spread bet markets.
Spread betting can result in losses that exceed your initial deposit.
OUTSOURCING giant company Serco
posted a 21 per cent increase in half-
year pre-tax profit and said govern-
ment spending cuts would boost sales
in areas where outsourcers would be
hired to achieve savings.
Serco, which runs Boris Johnson’s
new cycle hire scheme, said yesterday
pre-tax profit for the first half to 30
June was £101.4m, against £83.4m
last year.
Support services companies with
significant exposure to government
contracts are bracing for Downing
Street’s October Spending Review,
which will outline the extent of the
coalition’s drive to cut public spend-
ing.
Serco said it and other companies
used by the government were in talks
with government officials about how
to help achieve its cuts.
“[The coalition government] have
called us in to say ‘where can we save
money?’ We see Serco as a big partner
to government, we still see them as a
very strong customer, they still see us
as a very strong supplier,” chief execu-
tive Christopher Hyman said yester-
day.
Serco bullish on outlook
BY HARRY BANKS
SUPPORT SERVICES

SIG, the insulation and roofing
group, said UK government austerity
measures were a drag on its outlook
despite an encouraging start to the
second half after a fall in first-half
pretax profit.
Sales across the group recovered in
May and June -- with sales per day in
July up four per cent year-on-year --
after cold weather badly affected sales
at the start of the year.
“We think that certainly over the
last three to five months, things have
been gradually improving,” said chief
executive Chris Davies.
SIG reported a core pre-tax profit of
£18.5m for the six months to the end
of June, compared with £21.9m in the
same period last year.
However, the company offered a
note of warning due to a faltering eco-
nomic recovery and the British gov-
ernment’s programme to slash public
spending.
“SIG’s management remains cau-
tious on how its markets will develop
over the next few months ... based on
the continuing macroeconomic
uncertainty and concerns about the
potential impact of government aus-
terity measures and credit availabili-
ty,” chairman Les Tench said
yesterday.
Shares in SIG closed up 2.5 per cent
at 93p yesterday.
SIG fears
government
cash cuts
AGGREKO, the world’s biggest
provider of temporary power, again
upgraded its outlook for the year
after posting a jump in first-half prof-
it, helped by contracts for major
sporting events.
Aggreko said events such as the
Vancouver Winter Olympics and the
soccer World Cup, for which it provid-
ed generators and chillers, brought its
local business unit £48m in revenues
in the first half.
“We believe that we will make fur-
ther good progress in the second half
and the outcome for the year as a
whole will be slightly better than our
previous expectations,” chairman
Philip Rogerson said.
The company, which is supplying
cooling and power equipment to peo-
ple cleaning up the Gulf of Mexico oil
spill on the Louisiana coast, said it
also planned to raise the interim and
final dividend by 50 per cent each to
reflect recent profit growth.
For the six months to the end of
June, underlying trading profit rose
23 per cent to £131.2m on revenue up
17 per cent at £585.6m.
Pre-tax profit rose 19 per cent to
£127.1m and the interim dividend is
being increased to 6.55p.
A poll of analysts taken before yes-
terday’s results showed a mean esti-
mate of £285m for 2010 pre-tax profit.
Aggreko in
boost from
World Cup
MEMBERS of American Airlines’
mechanics union rejected a contract
proposal and authorised union lead-
ers to call a strike, the Transport
Workers Union (TWU) said yesterday.
The union said on its website late
on Tuesday that two American
Airlines work groups represented by
the TWU -- the mechanics and the
stock clerks -- voted against a provi-
sional pay deal.
A third bargaining unit -- the tech-
nical specialists -- approved their deal.
“Our members have spoken loud
and clear,” said TWU International
vice president Garry Drummond,
who heads the union’s Air Transport
Division. “After four years of negotia-
tions, a majority of TWU members ...
were not convinced that this agree-
ment represented an adequate
return,” he added.
Airline workers snub deal
AVIATION

Serco boss Christopher Hyman says public spending cuts will benefit his firm Picture: GETTY
BY HARRY BANKS
SUPPORT SERVICES

BY HARRY BANKS
BANKING

BY HARRY BANKS
SUPPORT SERVICES

ANALYSIS l Aggreko
1,200
1,300
1,400
1,500
1,600
1,700
13Aug 26Jul 6Jul 16Jun
p
1,343.00
25 Aug
ANALYSIS l SIG
100
110
120
Aug Jul Jun2010
p
93.00
25 Aug
E
CONOMIES are pretty resilient
things. Of course output can
decline extremely sharply as a
result of negative shocks – and
the British economy shrunk 6.4 per
cent in 2008-9 as a result of the
world financial crisis and subse-
quent recession. But at some point
they do usually bounce back to
decent growth rates, particularly if
you are lucky enough to get decent
employment rates. That is the good
news.
The trouble is that the length of
time it takes and the pace of that
recovery is very uncertain, and is not
under the control of anyone. And
that is news to make you nervous
not only if you are tending to a busi-
ness on the edge or searching for a
job, but if you are the chancellor
tasked with making sure the econo-
my comes right in time to win you
the next election.
Of course this last is never explicit-
ly stated, but that is what all George
Osborne’s colleagues are expecting
of him. Indeed he needs to pull it off
a lot faster if the Coalition is to hold.
Bewitched by the lure of power, the
Liberal Democrats have supported
very tough fiscal policies despite hav-
ing stood full square against them in
the general election. But that sup-
port won’t hold for ever if there are
no visible signs that the pain is
going to be worth it.
IT’S ABOUT THE WORLD NOT THE UK
So much can go wrong with econom-
ic recoveries. The world economy is
the most important factor for a
medium sized, open economy like
the UK. So if the US falters, if the
German obsession with fiscal consol-
idation rather than growth is too
strong, if the Greek crisis does spill-
over to Portugal and Spain, if China
stalls, then however low our
exchange rate, a booming export led
recovery to save the day will not
materialise.
And then there is that elusive driver
of domestic demand that Keynes
called animal spirits, and that busi-
ness and the city usually call “confi-
dence”. Osborne staked the house on
some old fashioned, pre Keynesian
economics in his first Budget.
He bet that getting down spend-
ing fast to reduce the deficit would
allow interest rates to stay low,
would get the thumbs up from inter-
national markets and would con-
vince business decision makers that
now was the time to invest, to
expand, to hire. In other words he
bet that this strategy would boost
not dent confidence.
For Osborne this course of action
was not a risk at all. Broadly speak-
ing most Conservative economic
thinking sees the deficit and debt as
the root of virtually all our econom-
ic problems. In the Tory version of
history the harsh Budget of 1981 was
not an event that prolonged and
deepened the degree of recession,
but the vital ingredient in the strong
growth later on in that decade. The
lesson is cut and cut fast whatever
the external circumstances.
The trouble is that while the pub-
lic have never bought into the con-
cepts of Keynesian economics (every
mythical housewife knows you pull
in your belt when in debt, you don’t
spend more), they know bad times
coming when they stare them in the
face and that is what they seem to
feel the first Osborne Budget offered
them.
CUTTING FOR RECOVERY?
It was a categorical rejection of
the idea that the state has
any role in supporting
demand through fiscal pol-
icy. Instead, to bring down
the deficit swiftly, thou-
sands of jobs are to go –
directly in the public
sector and indi-
rectly from
the firms
which sup-
ply them
and from the
The old guard offers Osborne advice
News
12 CITYA.M. 26 AUGUST 2010
CITY COMMENT
DAN CORRY
consequent fall in spending power.
And VAT is to go up steeply.
And to add to that this
week Martin Weale, the
newest member of the
MPC, has said there is
still a real risk of a dou-
ble dip recession while
centre-right think
tank, Policy Exchange,
has claimed that infla-
tion may take off forcing
interest rates to rise to
eight per cent. No won-
der confidence indicators
are not looking healthy.
George Osborne and his
team will be sweating over
each and every economic
statistic, looking for
signs of life and
momentum.
T h e y
may pull
through and he will be a hero.
Or he may just prove that
you cannot cut your way out
of a recession.
Both the economy and
the future politics of
Britain will be heavily
influenced by the gam-
ble he has taken and
by events he cannot
control.
That indeed is the
lot of a chancellor.
Dan Corry, ex-senior advis-
er on the economy to former
Prime Minister Gordon
Brown
Economic News
13 CITYA.M. 26 AUGUST 2010
FEARS of a double-dip in the US hous-
ing market intensified yesterday
after data showed that new home
sales fell at the sharpest monthly
pace in July since records began.
Sales of new homes plummeted
12.4 per cent to an annual rate of
276,000 – the lowest since the data
was first recorded in 1963 and well
below the market’s expectations of a
rate of 330,000 homes. The
Commerce Department also revised
down June’s annual sales pace to
315,000 units.
New home sales have struggled to
pick up over the past few months
and the annual pace is only a quarter
of what was seen in the boom years
of the early 2000s.
New York-based Steven Ricchiuto at
Mizuho Securities said: “It is a bad
report through and through, there is
nothing in the details to tell you that
things are improving whatsoever.
The odds of the dreaded double-dip
are increasing.”
The downbeat data initially
weighed on US equities but buying
activity capped losses.
Analysts expect the pace of new
home sales to remain depressed for
some months to come and predicted
possible years of excess supply.
ING’s Teunis Brosens said: “Sales
may recover slightly in the coming
months, as the demand fallout fol-
lowing the expiry of the homebuyer
tax credit fades. But we expect them
to remain low.”
“Homebuilders continue to face
tough competition from distressed
sales. These typically sell at a dis-
count and currently make up about
30 per cent of total sales. Moreover,
while the building spree peaked in
2006, the housing market is still bur-
dened with substantial excess supply.
It may take several years to clear this
excess,” he warned.
US new home
sales slump
BY JESSICA MEAD
US ECONOMY

GERMAN businesses have this month
shrugged off weak markets and con-
cerns about the health of the United
States and are now as confident as
they were in June 2007, according to
the Ifo institute’s business climate
index, which was published yesterday.
The headline index rose to 106.7
from 106.2 in July while firms’ assess-
ment of the current situation contin-
ued to rise to 108.2, from 106.8.
Although the expectations index
dipped slightly in August to 105.2
from 105.5, it remains far above its
historical average, indicating that the
manufacturing-led recovery in
Europe’s largest economy is showing
little sign of losing momentum.
Hans-Werner Sinn, president of the
German economic thinktank, said:
“Manufacturing firms have reported
a better business situation than in
July. With regard to the six-month
business outlook they are still very
confident.”
Societe Generale’s Klaus Baader
said: “There is no sign whatsoever of a
cyclical downturn in this survey
which has historically provided a very
reliable guide to growth.”
Carsten Brzeski, economist at ING
agreed:
“The Ifo index reflects untarnished
confidence and bodes very well for
near-term growth prospects. Second
quarter growth will remain excep-
tional. However, even with an
inevitable shift into a lower gear in
the second half of the year, the
Eurozone’s growth engine will con-
tinue to run smoothly.”
BY JESSICA MEAD
EUROPEAN ECONOMY

German businesses
remain confident
ONLY a surge in orders for commer-
cial aircraft kept durable goods orders
in positive territory last month, cast-
ing yet further doubt over the
resilience of the US recovery.
Durable goods orders only man-
aged to grow by 0.3 per cent on the
previous month but the more closely-
watched core capital goods orders fig-
ure slumped eight per cent on June.
Consequently, the three-month
growth rate dropped to just 19.8 per
cent from 30.9 per cent.
Paul Ashworth, senior US econo-
mist at Capital Economics, said:
“July’s durable goods report adds to
the recent evidence from numerous
activity surveys that the manufactur-
ing recovery has lost nearly all of the
considerable momentum it had.”
He added: “The rebound in manu-
facturing was one of the bright spots
in an otherwise disappointing recov-
ery. Take it away, throw in a renewed
collapse in housing, and you don’t
have much left.”
Durable orders
fuel doubt over
recovery’s legs
US ECONOMY

The pace of new home sales dropped sharply in July. Picture: GETTY
THE Swiss franc surged to an all-time
high against the euro yesterday as
fears over the potential for a double-
dip recession continued to drive
investors into perceived safe-haven
assets.
The franc traded at €1.300 yester-
day, within sight of the record level of
€1.2968 hit earlier in the session. And
yields on 10-year Swiss bonds fell to
1.02 per cent as weaker-than-expected
US new-home sales and durable
goods orders intensified the flight
out of equity markets.
The franc’s rise accelerated after
the Swiss National Bank dropped its
pledge to intervene in the currency
markets at its June meeting, saying
that deflation risks had largely disap-
peared and the economy was on track
for a healthy recovery.
The Dow Jones was off as much as
103 points at one stage, before rally-
ing to close up 19.6 points – or 0.2 per
cent – at 10,060, while the broader
S&P 500 index gained 0.3 per cent,
ending four straight days of losses.
The FTSE 100 index closed 0.9 per
cent down at 5,109.40, Germany’s
DAX fell 0.6 per cent and Tokyo’
Nikkei dropped 1.7 per cent to hit a
16-month low of 8845.39.
Swiss franc surges to a
record high against euro
CURRENCIES





ADMIRAL GROUP could bid for
Spanish insurer Linea Directa and is
eyeing an expansion into the house-
hold market after growing its interim
profit by more than a fifth to £127m.
Admiral, which specialises in car
insurance, said an offer for Linea
Directa was a possibility at the right
valuation. The Spanish business
could be worth around €850m
(£700m) based on the price at which
its parent, Bankinter, bought out
joint venture partner Royal Bank of
Scotland’s 50 per cent share last year.
Admiral finance director Kevin
Chidwick told City A.M.: “It’s a ‘maybe’
if it was at a very good price, but
we’ve got fantastic growth on the
organic side too.”
Separately, Chidwick said Admiral
would launch a household insurance
pilot project toward the second half
of next year. The FTSE 100 company
has a large database of motoring
cover customers and would hope to
leverage its brand to enter the home
insurance space, Chidwick said.
His comments came as rising sales
and prices boosted Admiral’s pre-tax
profit 20.5 per cent to £126.9m. The
group, run by Henry Engelhardt,
increased its half-year dividend 18 per
cent to 32.6p and announced plans to
hand out 1,500 free shares to each
employee worth £6m in total.
One dark spot was Confused.com,
Admiral’s comparison website,
which saw profits drop 20 per cent
as it was outgunned by
Comparethemarket.com.
Admiral looks
at Linea deal
as profits rise
Admiral boss Henry Engelhardt is looking for growth Picture: Micha Theiner/ CITY A.M
BY OLIVER SHAH
INSURANCE
s
Focus on Admiral
14 CITYA.M. 26 AUGUST 2010
ANALYSIS l Admiral Group
7Jun
p
25Jun 15Jul 4Jul
1512.00
25 Aug
550
500
450
400
350
300
250
200
Strong trading
but the stock
has had its day
WITH a moniker reserved for the
highest-serving officers in the
Navy, you’d expect Admiral to be
sailing ahead of its competitors. At
first glance, yesterday’s numbers
don’t disappoint. It was UK motor-
ing, where insurance rates grew 14
per cent, which put in the
strongest performance. Customer
numbers were up 23 per cent
while the combined ratio – a key
indicator of performance for insur-
ers – held stable at 89 per cent
(numbers under 100 indicate prof-
itably). However, the main driver
was growth in profit commission
(the amount Admiral earns from
sharing in the profits of the firms
it underwrites for); this was up
from £23m to £37m, but doesn’t
reflect Admiral’s performance,
just improving conditions for
everyone in the industry.
Elsewhere things were less rosy.
Confused.com profit fell from
£11m to £9m after rival Compare
the Market’s meerkat campaign
won the marketing battle. Already
trading on a hefty 20.3 times earn-
ings, these shares have had their
day. Investors should reduce.
BOTTOMLINE
Analysis by David Crow
ADMIRAL'S HALF-YEAR RESULTS:
Pre-tax profit s20.5% to £126.9m
Interim dividend s18% to 32.6p per share
Turnover s33% to £720.5m
Customers s23% to 2.37m
Shares in Admiral s2.7% to £15.12
PADDY Power reported soaring profits
yesterday, despite admitting trading
in its Irish home-market is tough.
The firm saw pre-tax profits grow
54 per cent to €52.5m (£43m), buoyed
by strong performances in its interna-
tional divisions.
The bookmaker says it expects full-
year earnings to rise by up to 30 per
cent after an “exceptional” World Cup
helped it to smash profit expectations.
Chief executive Patrick Kennedy
told City A.M. the firm has performed
well across the board but admitted
Irish customers have been “spooked”
by the country’s precarious financial
situation.
He said: “We are continuing to
grow in Ireland and our market share
has risen by seven per cent to 32 per
cent since the recession. We are trad-
ing there harder than ever. But cus-
tomer confidence is not great. The
government finances have spooked
customers and trading is tough.
“Most of our expansion is coming
internationally now. Our customers in
Australia have shot up 84 per cent and
we are now launching in France.
“Three quarters of our online rev-
enue comes from the UK, which is
our biggest market.”
However, he added that changing
the firm’s domicile to London to
reflect its increasingly international
business model is “not on our imme-
diate agenda”.
The firm also acknowledged new
taxes and fees in the UK and Ireland
could affect earnings going forward.
Paddy Power
sees profits
soar by 54pc
Johnston Press back in black
£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
EMBATTLED Scotsman owner
Johnston Press breathed a sign of
relief yesterday as it limped to its first
profit since 2006.
The Scotsman owner arrested its
declining revenue amid a remarkable
turnaround in the advertising market.
Total advertising income fell by 6.3
per cent after plummeting 18 per
cent during the darkest days of the
advertising drought in 2009.
But stringent cost cutting in the
wake of the financial crisis allowed
Johnston to post a first-half pre-tax
profit of £26.1m on revenue of
£207.3m.
Chief executive John Fry said:
“These industry leading trends along
with our continued focus on costs,
efficiencies and debt reduction, give
the board confidence, in the absence
of a further deterioration in the UK
economy, that the outcome for the
group in 2010 will be in line with cur-
rent market expectations.”
The results follow a remarkable
recovery for advertising giant WPP,
which saw first-half profits jump 36
per cent.
BY STEVE DINNEEN
GAMING

BY STEVE DINNEEN
MEDIA

DELL is planning to submit a more
competitive bid for data storage firm
3PAR, challenging Hewlett-Packard’s
offer of $24 per share, a source famil-
iar with the talks said yesterday.
3PAR said on Tuesday it would start
merger talks with HP after HP’s
$1.6bn offer topped Dell’s previous,
$1.15bn bid.
HP has more cash and cash equiva-
lents than Dell but with $15bn and
$11bn, respectively, both could easily
afford to buy 3Par.
Dell is following HP’s expansion
into services and is increasing its
foray into smartphones.
Analysts are expecting a fierce bid-
ding war between the two firms for
3PAR.
Dell and HP both declined to com-
ment yesterday.
Dell to challenge HP with
an improved bid for 3PAR
News
15 CITYA.M. 26 AUGUST 2010
ANALYSIS l Paddy Power
24
25
26
27
28
29
13Aug 26Jul 6Jul 16Jun
€ 26.50
25 Aug
Richard Desmond (above) hopes
Five will post a second half prof-
it, while Dawn Airey (below)
will take up a post with the
channel’s former owner RTL.
FORMER Five owner RTL expects the
loss-making broadcaster to swing
back into profit this year, despite
clocking a first half loss of €49m
(£40m) on the channel.
The venture was sold to Express
owner Richard Desmond last month
for £103.5m. Its operating loss was
just €6m but RTL wrote down a fur-
ther €36m before offloading it.
Desmond plans to streamline the
operation, with 80 of its 300 staff
expected to be out of a job.
Among the most high profile leavers
is Five chair and chief executive Dawn
Airey, who actioned a clause in her con-
tract guaranteeing her a job with RTL if
Five was sold. RTL would not comment
yesterday on what role Dawn would
take with the firm.
The news comes as RTL posted rev-
enue growth of 7.5 per cent in its first
half, with advertising income finally
beginning to pick up.
This allowed the media giant to
swing to a profit of €257m, a remark-
able turnaround after posting losses
of €105m the year before.
Chief executive Gerhard Zeiler said:
“The stronger than expected rebound
seen in the Western European TV
advertising markets is the result of
the overall economic recovery.”
RTL: Five should
make a profit
later this year
BY STEVE DINNEEN
MEDIA

ANALYSIS l Johnston Press
7Jun
p
25Jun 15Jul 4Aug
16.00
25 Aug
21
20
19
18
17
16
15
14
13
BY STEVE DINNEEN
TECHNOLOGY

BELGIAN insurer Ageas reported a
surge of cash coming into its business
in the first half, particularly in Asia,
and strong earnings from its life
insurance business.
The company, formerly known as
Fortis, said yesterday that inflows
grew by 22 per cent during the first
six months of 2010 and by 59 per cent
in Asia.
Insurance net profit dropped to
€180.5m (£145m) from €260.4m a year
ago, when it booked a €94m one-off
tax benefit in Belgium. Almost all of
the insurance net profit came from its
life business.
The overall net profit, a difficult fig-
ure to forecast because of legacy issues
related to its previous incarnation as
Fortis, was €455m, higher than the
€261m average forecast.
Ageas, which operates as AG
Insurance in Belgium and sells insur-
ance for the supermarket giant Tesco,
reiterated its forecast that the amount
of cash coming into the business in
2010 should be higher than in 2009. It
halved its exposure to southern
European sovereign bonds in the first
half of the year to €8.9bn.
Fortis successor Ageas
reports strong earnings
INSURANCE

CHINA’S Geely, whose parent bought
Ford’s Volvo unit this month, warned
of tougher competition and slower
sales after its record first-half earnings
beat forecasts yesterday.
China overtook the United States
last year to become the world’s biggest
car market, as Beijing rolled out
incentives to boost spending during
the global downturn.
But that growth is expected to
wane in the second half as the govern-
ment presses the brakes to keep the
economy from overheating.
Geely, which has been trying to
move up the value chain by launching
bigger and better quality cars in
China, posted a 804.85m yuan
(£76.61m) net profit for the first six
months of this year against 595.91m
yuan a year earlier.
The record profit topped an average
forecast of 756.4m yuan from ana-
lysts.
The company sold 195,734 cars in
the first six months, up 42 per cent
from a year earlier. But its July sales
growth turned negative, falling 12 per
cent to 21,684 year-on-year.
Competition is rising in China as
some car makers cut prices to boost
sales, which have been slowing down
from last year’s breakneck pace.
Founded by chairman Li Shufu,
dubbed the Henry Ford of China,
Geely said it will launch new and
higher end car models this year and
focus on building its export business
to making it less vulnerable to China’s
volatile domestic market.
Despite the dimming outlook for
China’s car market, there is a poten-
tial bright spot for the carmaker -- its
parent’s new Volvo unit.
If the Geely’s parent, Zhejiang Geely,
can turn Volvo around, that could
allow Geely to benefit from technolo-
gy transfers and eventually take over
the premium brand, said Man.
Volvo has been profitable since the
start of the year, said Li Shufu, a big
change for the luxury brand, which
posted a $653m (£423m) pre-tax loss
last year.
Geely warns of tough outlook
BY HARRY BANKS
AUTOMOTIVE

News
16 CITYA.M. 26 AUGUST 2010
HEINEKEN, the world’s third-largest
brewer, reported a higher than
expected rise in first-half net profit
yesterday after cost savings helped
offset lower beer sales in Europe and
the United States.
The Dutch-based brewer, whose
chief brands are Heineken and
Amstel, Europe’s number one and
three beers, said group beer volumes
fell 2.3 per cent on a like-for-like
basis.
But costs savings, lower raw mate-
rial and interest costs and its joint
ventures led to a 17 per cent rise in
net earnings.
The company said it remained cau-
tious about beer consumption in
Europe and the United States due to
continued weak consumer spending
and planned austerity measures, but
expected volumes to grow in Latin
America, Africa and Asia.
Heineken’s first-half results includ-
ed two months from the beer busi-
ness of Mexico’s Femsa, bought to
boost exposure to faster-growing
emerging markets.
Just over half of Heineken’s rev-
enue last year came from western
Europe. Heineken said the integra-
tion of FEMSA Cerveza was on track,
with synergies due in the second half.
For the full-year, Heineken forecast
the percentage growth of net profit
to be at least in low double digits
with further cost savings and price
hikes continuing to have some
impact.
Heineken’s net profit before one-
offs increased to €621m (£508m).
Analysts had on average expected a
net profit of €595m.
Cost savings
help Heineken
boost profits
BY HARRY BANKS
LEISURE

THE Financial Services Authority
(FSA) regulator fined French bank
Societe Generale £1.575m yesterday
for failing to provide accurate transac-
tion reports.
The fine handed out to SocGen,
which in 2008 lost around €5bn
(£4.1bn) in a trading scandal, follows
previous penalties handed out to
Barclays, Credit Suisse and
Commerzbank for similar failings.
The FSA said that between
November 2007 and February 2010,
SocGen had either failed to report, or
inaccurately reported, 18.8m of its
23.5m reportable transactions.
It added that the SocGen breaches
occurred despite the FSA sending out
repeated reminders to companies of
their obligations to provide accurate
data, and of the importance of com-
plying with FSA rules concerning the
reporting of transactions.
“SocGen failed to accurately report
a very high proportion of its transac-
tions for a significant length of time,”
Margaret Cole, FSA director of
enforcement and financial crime,
said.
“This failure is a serious breach of
our rules as it can have a damaging
impact on our ability to detect and
investigate suspected market abuse,”
she added.
Watchdog slaps £1.6m fine on SocGen
REGULATION

BEST OF THE BROKERS
ANALYSIS l Amlin
370
380
390
400
410
420
430
440
13 Aug 26 Jul 6 Jul 16 Jun
p 408.20
25 Aug
AMLIN
The insurer’s underlying performance
remained solid despite results at the bot-
tom end of consensus estimates, according
to Jefferies. The broker added that Amlin
should see the benefits of pruning its port-
folio in 2011. Jeffries kept its EPS forecasts
for 2011 unchanged at 6.3 times after high
acquisition costs, but kept its “buy” rating.
ANALYSIS l Persimmon
340
350
360
370
380
390
400
410
420
13Aug 26Jul 6Jul 16Jun
p
347.20
25 Aug
PERSIMMON
The housebuilder’s margins jumped in its
interim results this week, said Citi, though
its asset writeback remains conservative at
around 23p per share. The broker was
impressed by Persimmon’s improving bal-
ance sheet, with gearing of just seven per
cent. Citi said the firm’s land bank would
provide continued support. “Buy” at 650p.
ANALYSIS l WPP Group
620
640
660
680
700
720
13Aug 26Jul 6Jul 16Jun
p
634.00
25 Aug
WPP
Deutsche Bank said buying shares in the
advertiser is a balanced way of gaining
exposure to the recovery in media budgets,
after upgrading its full year EPS forecasts
by 4.5 per cent. The broker said the gap
between WPP and rival Omnicom is clos-
ing, thanks to organic revenue growth of
seven per cent in July. “Buy” at 860p.
To appear in Best of the Brokers email your research to [email protected]
Netplay
Tim Mickley joins the board of the
interactive TV gaming company as non-
executive director, replacing the outgo-
ing Moshe Edree. Mickley still holds
numerous directorships, including at
TSM Consultancy and Brickington
Trading and recently left a role in cor-
porate finance as a managing director
with Collins Stewart, where he led the
gaming team and advised on significant
transactions in the sector.
Tullow Oil
Tutu Agyare has been appointed non-
executive director of the oil explorer
with immediate effect. He has held
numerous senior positions at UBS, most
recently as the head of European
Emerging Markets. He joins from
Nubuke Investments, a company he
founded in 2007, and will maintain his
role of managing partner. His new
capacity will see him assist in Tullow’s
expansion in Africa.
Hermes
Zu Cowperthwaite has been appoint-
ed as a portfolio manager in the
company’s global equities team. She
joins from Loomis Sayles where she
managed a global consumer
long/short hedge fund containing
both domestic and international
equities. The move is designed to
boost the asset management firm’s
Boston-based global equities team.
Cowperthwaite has previously held
posts at Evergreen Investments and
David L. Babson & Co as a senior
analyst and has 17 years of experi-
ence in market research and man-
agement.
Fortis Global Liquidity Funds
Marc Raynaud has joined the fund
manager as a director, with immedi-
ate effect. He remains chairman of
BNP Paribas Partners in Luxembourg.
He also became head of global fund
solutions at the bank in 2010, and has
held several managerial roles in the
company since he joined in 1979. His
work for BNP Paribas has taken him
to Italy, France and the USA. Raynaud
studied Italian and Russian at the
University of Paris Sorbonne, and
holds a Master of Sciences in
Management from the Ecole
Supérieure des Sciences Economiques
et Commerciales.
CITY MOVES | WHO’S SWITCHING JOBS Edited by Tom Day
Borro
Paul Gratton, formerly chief executive of Egg,
has been elected to the board of the online
pawnbroker. Gratton, who founded the survey-
or Shepherd Direct, was part of the founding
team at First Direct. His experience in the mort-
gage broking market is intended to assist
Borro’s new venture, which will launch at some
point during the autumn. He joins Sportingbet
founder Mark Blandford, who was appointed to
the board in April.
+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
ANALYSIS l Heineken
7Jun

28Jun 12Jul 2Aug
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37
36.50
36
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35
34.50
34
33.50
33



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36 Office: egistered R 90312. No Scotland
DEEPWATER Horizon-owner
Transocean changed a locking mecha-
nism on the blow out preventer,
resulting in a severe delay in respond-
ing after the Gulf Oil rig exploded,
according to a BP vice president.
Harry Thierens, executive vice pres-
ident for drilling and completions at
the oil major, told a panel of federal
investigators that crucial hours after
the 20 April explosion were wasted
after it became apparent that
Transocean had made the changes.
The Texas-based panel heard from
Thierens, who had a personal role in
trying to stop the leak, yesterday that
it took between 12 and 24 hours to
locate drawings of the changes.
His testimony is part of a joint inves-
tigation by the US Coast Guard and
the Interior Department into the caus-
es of the Deepwater Horizon explo-
sion, which killed 11 people and led to
one of the worst oil spills in history.
Thierens testified alongside Billy
Stringfellow a subsea superintendent
for Transocean and Halliburton’s
Vincent Tabler.
On Tuesday, Jesse Gagliano, a
Halliburton technical adviser told the
panel that BP had ignored his con-
cerns that a cement seal inside its
Macondo well might fail.
He also alleged that the oil major
had argued with him when he sug-
gested that more devices used to plug
the well were needed.
However, BP’s lawyers disputed his
allegations after producing email evi-
dence that Gagliano had said that he
was happy with the procedure.
BP hired Halliburton to perform
and design the cement jobs on the
Macondo well.
The oil giant is currently attempt-
ing to retrieve the damaged blow out
preventer from the floor of the Gulf.
Meanwhile, BP confirmed yester-
day that it has withdrawn its applica-
tion for an exploration licence in
Greenland, currently the centre of a
new oil rush.
Crucial time
wasted after
rig explosion
OFFICE landlord Derwent London
reported sustained growth in the
value of its portfolio to £2.2bn yester-
day, easing fears of a new real estate
slump as Britain’s economic
prospects wilt.
Chief executive John Burns said
Derwent’s signature strategy of pro-
viding affordable offices in the capi-
tal’s nascent business hubs would
hold up as firms budgeted for slower
expansion and higher rates of infla-
tion.
“We have a sort of formulaic busi-
ness model, operating off the middle
market for rents between £30-50 a
square foot and I’m just very positive
that the momentum has continued.
Even over this summer period, we
were making lettings,” Burns said.
“We have been able to deal with all
the crises without having a rights
issue and we’ve still bought property,
we’ve got a lot of uncharged property
that’s not mortgaged and a lot of
unused facilities,” he added.
Derwent marked a long-awaited
return to investment with the £146m
purchase of the West End’s Central
Cross building in July.
The firm posted a 17 per cent rise in
first-half net asset value to 1,365p a
share, against 18 per cent six months
earlier.
Derwent posts
higher profit on
bargain hunters
Halliburton’s Jesse Gagliano accused BP of ignoring his concerns over the well
PROPERTY

News
17 CITYA.M. 26 AUGUST 2010
BY EMMA SADOWSKI
BP IN CRISIS
ANALYSIS l BP
250
300
350
400
550
500
450
13Aug 26Jul 6Jul 16Jun
p
376.80
25 Aug
I
NVESTORS fed up with volatile, range-
bound markets that apparently have
little sense of clear direction will be
cheering the end of the summer and
the dust being swept off the City trading
floors. But those hoping for an immediate
return to normality and a bullish rebound
are likely to be sorely disappointed.
The FTSE 100 has been drifting down-
wards as US economic data disappoints
and Hindenburg Omens – a little-known
market timing gauge which points to an
imminent market crash – have been sight-
ed and are hitting the investment pages
and blogs on a disturbingly regular basis.
And things aren’t expected to get any
better any time soon. While October might
be more renowned for market crashes, his-
torical data reveals that September is the
worst month for market returns in the
United States – the average September loss
for the Dow between 1980 and 2010 was
1.25 per cent. In contrast, the much-
maligned October enjoys average gains of
about 1.2 per cent.
But with a choppy September to con-
tend with first, what will happen to the
FTSE 100 and how should traders be look-
ing to play the markets?
After reaching the giddy heights of
5,833 back in April, the UK blue-chip index
Be prepared for
the turbulent
autumn ahead
take positions that leave you exposed to
unlimited losses and use leverage, even if
you can set stop losses to ensure you don’t
end up owing thousands of pounds.
By picking a covered warrant, you can
bet on the FTSE 100 hitting at least a cer-
tain level on a pre-specified date. For exam-
ple, if you think that the index is going to
suffer over the next few months, then you
could buy put covered warrants with a
strike price of 5,000 with an expiry date of
17 December. Providing the index is trad-
ing at or below 5,000 on this date, you will
have turned a profit and if it isn’t, then
you only lose your initial investment.
SANTA RALLY
However, you might be expecting an
immediate decline followed by an upturn
in the fourth quarter – markets tend to
perform well at this time year, in what is
known as a Santa rally.
To bet on a rally, youcould buy a call cov-
ered warrant with a strike price of 5,400
with an expiry date of 17 December.
For those investors who are more risk
T
OO much choice can be a problem
for investors these days. Online con-
sumer champion Which? singled out
structured products as being some of
the most confusing instruments on offer
and was particularly unhappy about their
lack of transparency, particularly when it
comes to counterparty risk. The UK
Structured Products Association hit back at
the research saying that listed products are
regulated by the FSA and praising the stan-
dard of educational material produced by
the providers. This argument doesn’t exact-
ly help investors who are trying to find
returns in an environment of low interest
rates. So to help our readers, we have
looked in depth at some of these products
to de-bunk some myths and figure out
what the lingo actually means. These prod-
ucts are complex, but not impossible for a
retail investor to understand.
Investing is getting
more complex, says
Kathleen Brooks
is now is struggling to stay above the psy-
chologically important 5,000 level.
Richard Perry, chief market strategist at
Central Markets, reckons that the FTSE
could see further falls towards the mid-
4000s once the market comes back to
work: “A lot of people are talking about the
market having a poor September and
October; this seems to be supported by the
charts and the fundamentals that are com-
ing out.”
PRECARIOUS POSITION
He explains: “From a chart perspective the
overriding feeling is that there continues
to be a bearish look about the FTSE 100
Index. Although the original head and
shoulders top pattern may have been
recently aborted [which saw the index
drop briefly below 5,000 in July] the long-
term position continues to look rather pre-
carious for the market bulls.”
Equally worrying, the 200-day moving
average, which shows the long-term trend
of the market, has stopped rising for the
first time in a year and the sequence of
higher lows, which is a bullish signal has
been broken. Perry warns: “The index
would probably now need to make a deci-
sive move through 5,832 to defer what con-
tinues to look like an extended topping out
phase.”
The buyers of the FTSE 100 just aren’t
there at the moment. Simon Denham,
managing director of Capital Spreads says:
“Normally on a move down of 250 points
we would be finding a large number of
buyers looking for a bounce but this time
they are almost matching themselves out.”
For retail traders looking to navigate a
stormy September, it can be daunting to
Don’t get swept away
Picture: GETTY
Listed products can
offer a low-risk way
to trade the FTSE,
writes Jessica Mead
18
Investment | Listed Products
CITYA.M. 26 AUGUST 2010
Barclays launched the first ETNs listed on
the London Stock Exchange earlier this
year. An ETN is actually a promise of an
issuer (say Barclays) to pay the value of a
specified index minus any fees to the
owner. Uwe Becker of Barclays says that
the chief attraction of an ETN, as opposed
to an ETF, is that there is no tracking error.
An ETF is created by a provider to mimic
the actual index and sometimes there are
slight slippages. An ETN is different – the
provider owes the holder of the note the
performance of the index, irrespective of
whether they hedge themselves or not.
The risk is that you have to rely on the fact
that the issuer, such as Barclays, is able to
pay you at any time you choose to redeem
your ETN. The benefit is that they give you
access to a wide range of markets such as
commodity indices.
IN FOCUS | EXCHANGE-TRADED NOTES (ETN)
Getting a grip on listed products
This product is available from RBS and
isn’t nearly as scary as it sounds. But it is
a long-term investment. The life of the
product is five years and each year has a
trigger point, which, if reached, adds a
6.75 per cent “coupon” to your final pay-
out. For example, in the first year if the
FTSE 100 is equal to or above 80 per
cent of the starting level, then it auto-
matically redeems early and you would
receive 6.75 per cent plus your original
investment. If on the final valuation date
the index is at or above 60 per cent of
the level when the product was issued,
then you will receive 33.75 per cent of
the total issue price, plus 100 per cent of
your original investment. But if the FTSE
is trading at 59 per cent of your entry
level, then you would only receive 59 per
cent of your original investment.
IN FOCUS | UK DEFENSIVE AUTOCALL
These products have been knocking
around for a while and are popular in
Europe. Now the UK is catching on too.
RBS offers a Synthetic Zero on the
FTSE 100. It’s also a long-term invest-
ment and expiry date is six years. It will
pay you 9.25 per cent for every year
that the FTSE 100 is 50 per cent higher
than your entry level. What is good
about this product that the 50 per cent
level is constant throughout its lifetime,
so you win as long as the index is 50
per cent higher than your entry level – it
doesn’t scale higher each year. Societe
Generale also has a large selection of
Synthetic Zero products that track a
wide variety of indices and stocks,
including mining giants Rio Tinto and
BHP Billiton, with a variety of strike
prices.
IN FOCUS | SYNTHETIC ZERO
These tend to track an underlying index,
such as the FTSE or the S&P 500. The
beauty of an ETF is two-fold: first you
pay low fees to get exposure to an entire
index compared to buying each individ-
ual stock through a broker; second, you
can buy short ETFs, so if you think the
FTSE will fall in the coming weeks, then
you could use an ETF to take a short
position. The issuer tries to mimic the
underlying index, but be aware that
sometimes the issuer’s portfolio can
slightly slip out of line with the underly-
ing index, which is called a tracking
error. You receive the performance of
the issuer’s portfolio, so the tracking
error is important. You need the issuer
to remain solvent but your investment is
backed by an actual portfolio of assets
unlike an ETN.
IN FOCUS | EXCHANGE-TRADED FUNDS (ETFS)
Investment | Listed Products
19 CITYA.M. 26 AUGUST 2010
averse, there are a range of autocalls and
accelerated tracker products (see story
on left hand page). For example, RBS’s
UK Accelerated Tracker 3 product has a
potential payout at expiry of two times
any positive gain in the FTSE 100 and
investors’ capital is protected providing
the index has never fallen to or below 65
per cent of its initial level.
Post-crisis, we’re still a long way from
market normality, whatever that might
turn out to be. You can still keep your toe
in the water, but don’t get swept away.
ANALYSIS l FTSE 100 Index
Source: Digital Look
Sep09 Nov Jan10 Mar May Jul
6000
5800
5600
5400
5200
5000
4800
4600
D
ESPITE the yawning deficit in
Britain’s public finances, 10-year gilts
have been finding favour thanks to
the ongoing theme of risk aversion.
The flight from equities has seen yields
dropping dramatically in recent days.
Although attention is now focusing on a
break-out, this could struggle to find sup-
port unless bargain hunters move back into
equities. The current IG Index December
2010 spread on the long gilt is 12502-
12506.
There have been a number of comments
over recent weeks about the renewed pos-
sibility of a slide back into recession,
encouraging further risk aversion among
investors. The US dollar-yen currency pair
hit a new 15-year low of ¥83.57 on
Monday – will it continue its slide against
the yen should US GDP data disappoint on
Friday? City Index was offering a spread on
dollar-yen of ¥84.57-¥84.60.
Miners such as Kazakhmys, which pub-
lishes its interim results today, have taken a
bashing recently. But analysts still appear
to be feeling positive about the London-list-
ed stock and an upbeat statement in July
means the firm could still have a long way
to climb. Cantor Index offers a spread of
1,085.16p-1,089.84p.
Promethean World, which supplies
interactive white boards to schools, has
seen its share price fall by 40 per cent
from its high of 211.50p in June to lows of
114.60p yesterday. The government’s
potential cuts to education spending budg-
ets have hit the firm hard and not even
first-half figures, which saw revenues rise
35 per cent, have been able to stop the
slide. Will there be even further to fall?
ShortsandLongs.com has a rolling spread
of 122.7p-124.7p.
Advertising giant WPPreported results
earlier this week and the recovery across
most markets delighted analysts. Chief
executive Sir Martin Sorrell was cautious
about the outlook, prompting some profit-
taking. This simply represents a better level
at which to buy. Spreadex offers 631.80p-
633.70p Jessica Mead
THE
TIPSTER
RISK AVERSION BOOSTS
BONDS, HITS MINERS
A mine belonging to
Kazakhmys, which
publishes interim
results today
investors should exercise thorough due dili-
gence before investing in ETFs or passive
funds by checking an ETF’s index suitability, its
stock lending policy, the vehicle structure and
whether it is geared or not. For example,
swap-backed ETFs expose you to fundamental
credit risk with the swap counterparty, which
TCF feels any investors are largely unaware of.
The rise of ETFs that offer leveraged returns,
short exposure and active management is
seen by TCF as cause for concern and only
really suitable for the most sophisticated
investors.
SOCGEN LAUNCHES WHEAT WARRANTS
Recent volatility in the agricultural markets
has prompted Societe Generale’s listed prod-
ucts team to launch four wheat covered war-
rants, of which three are call warrants. The
shortest warrants expire on 26 November
with a strike price of $8 while the put warrant
has the same expiry, also with a strike of $8.
The call warrant returns a profit if the price of
the underlying exceeds $8. The remaining two
call warrants will expire in February 2011 with
strike prices of $9 and $10, indicating demand
to bet on rising food prices.
New ways to trade
wheat
PICTURE: Reuters
ETP TURNOVER 10PC OF EQUITY ACTIVITY
The latest figures from BlackRock’s
exchange-traded fund (ETF) division show
that exchange-traded product turnover
was 10.45 per cent of equivalent equity
market activity but was down 8.8 per cent
on the previous week at €10bn. Country-
related products saw the greatest turnover
at €2.1bn, an increase of 1.8 per cent on
the previous week. The fixed income area
had the highest increase in turnover, up 10
per cent on the previous week, while
regional turnover fell by 26 per cent.
RBS SEMINAR ON FALLING MARKETS
Flat or falling markets present traders with
a real challenge to make profits but it is
possible to make some money even when
the markets aren’t moving up or down.
RBS is holding a seminar next Tuesday
between 5.30pm and 6.30pm to show you
how its listed products range can help you.
Its range runs from Autocalls and
Synthetic Zeros to put covered warrants,
catering for all levels of risk. The seminar
will be held at RBS’s HQ at 250
Bishopsgate. To register, call 0800 121
6286 or email [email protected].
TCF ADVISES DUE DILIGENCE WITH ETFS
Low cost passive asset manager TCF
Investment warned this week that
LISTED PRODUCT
NEWS
LONDON’S TOP 250 Trade these shares from £1.50 with Interactive Investor - www.iii.co.uk
3i . . . . . . . . . . . . . . . . . . . . . . . .254.10 –5.60 314.80 246.90
3i Infrastructure . . . . . . . . . . . . . 113.10 –0.10 115.00 89.35
A.B. Foods . . . . . . . . . . . . . . . .1047.00 –4.00 1096.00 785.50
Aberdeen Asset Man . . . . . . . . . .133.00 +0.10 155.60 111.00
Admiral . . . . . . . . . . . . . . . . . . .1512.00 +39.00 1556.00 1003.00
Aegis . . . . . . . . . . . . . . . . . . . . . 110.70 –2.20 137.30 96.60
Afren . . . . . . . . . . . . . . . . . . . . . .96.60 –2.50 111.00 60.50
African Barr Gold . . . . . . . . . . . .567.00 –0.50 685.00 520.50
Aggreko . . . . . . . . . . . . . . . . . .1346.00 –83.00 1639.00 596.00
Alliance Trust . . . . . . . . . . . . . . .307.60 –1.30 352.70 286.40
AMEC . . . . . . . . . . . . . . . . . . . . .848.50 –24.00 937.00 720.50
Amlin . . . . . . . . . . . . . . . . . . . . .408.50 +3.70 437.60 350.80
Anglo American . . . . . . . . . . . .2254.00* –66.00 3015.50 1846.50
Antofagasta . . . . . . . . . . . . . . . .977.50 –34.50 1100.00 699.50
Aquarius Platinum . . . . . . . . . . .261.90 –1.20 490.00 211.50
ARM Holdings . . . . . . . . . . . . . . .331.80 +1.80 370.00 123.30
Arriva . . . . . . . . . . . . . . . . . . . . .773.00 +0.50 782.50 428.20
Ashmore . . . . . . . . . . . . . . . . . . .283.10 –1.10 311.20 211.60
Astrazeneca . . . . . . . . . . . . . . .3230.00* –3.50 3376.00 2668.00
Atkins(Ws) . . . . . . . . . . . . . . . . .676.50* –20.50 801.00 532.50
Autonomy Corp . . . . . . . . . . . .1560.00 –7.00 2012.00 1272.00
Aveva . . . . . . . . . . . . . . . . . . . .1400.00 +12.00 1419.00 805.00
Aviva . . . . . . . . . . . . . . . . . . . . .375.30 –6.60 474.00 290.20
Babcock International . . . . . . . . .492.80 –8.20 660.50 482.10
BAE Systems . . . . . . . . . . . . . . .299.10 +0.80 389.90 294.20
Balfour Beatty . . . . . . . . . . . . . . .235.10 +0.50 328.85 228.60
Barclays . . . . . . . . . . . . . . . . . . .298.00* –11.15 394.25 253.40
Barratt Development . . . . . . . . . . .91.45 –1.20 193.31 89.10
BBAAviation . . . . . . . . . . . . . . .180.50 –12.10 220.00 136.60
Beazley . . . . . . . . . . . . . . . . . . . . 111.90* +0.70 125.80 95.25
Bellway . . . . . . . . . . . . . . . . . . . .513.00 –7.50 927.50 510.00
Berkeley . . . . . . . . . . . . . . . . . . .805.00 +1.00 984.00 735.00
BG . . . . . . . . . . . . . . . . . . . . . .1059.00* –15.50 1248.00 966.90
BHP Billiton . . . . . . . . . . . . . . .1767.00 –36.00 2346.00 1527.50
BlackRock Mining . . . . . . . . . . . .557.00 –3.00 654.50 420.00
Bluecrest Allblue GBP . . . . . . . . .167.40 +0.20 169.00 137.10
Booker . . . . . . . . . . . . . . . . . . . . .43.50 –0.75 49.50 34.75
BP . . . . . . . . . . . . . . . . . . . . . . .375.15 –2.35 658.20 296.00
Brit Insurance . . . . . . . . . . . . . . .952.00 +5.50 1017.00 709.00
British Airways . . . . . . . . . . . . . .208.70 –6.80 255.80 172.40
British Amer. Tob . . . . . . . . . . .2181.00* –20.50 2335.50 1832.00
British Empire Tst . . . . . . . . . . . .422.50 –2.60 467.90 338.50
British Land . . . . . . . . . . . . . . . .449.40 +1.70 531.00 416.00
Britvic . . . . . . . . . . . . . . . . . . . . .475.50 –1.10 518.00 324.80
Brown(N.) . . . . . . . . . . . . . . . . . .221.00 –0.50 284.30 204.80
BSkyB . . . . . . . . . . . . . . . . . . . .704.50 –3.50 732.00 521.00
BT . . . . . . . . . . . . . . . . . . . . . . .132.60* –2.60 151.00 108.40
Bunzl . . . . . . . . . . . . . . . . . . . . .682.00 +3.00 784.50 570.00
Burberry . . . . . . . . . . . . . . . . . . .820.50 –28.00 891.50 457.70
Cable & Wire Comms . . . . . . . . . .57.90 –1.25 150.00 53.00
Cable & Wire Wwide . . . . . . . . . . .62.75 +0.10 94.80 60.05
Cairn Energy . . . . . . . . . . . . . . . .449.40 +3.90 497.60 306.80
Caledonia Invs . . . . . . . . . . . . .1545.00 –5.00 1759.00 1496.00
Capita . . . . . . . . . . . . . . . . . . . . .700.50 –2.00 829.50 661.00
Capital & Counties . . . . . . . . . . . 116.80 +0.30 125.40 99.60
Capital Shopping Centres . . . . . .325.40 +0.70 580.00 300.10
Carillion . . . . . . . . . . . . . . . . . . .298.20 +7.00 361.90 263.90
Carnival . . . . . . . . . . . . . . . . . .2037.00* –27.00 2937.00 1804.00
Catlin . . . . . . . . . . . . . . . . . . . . .334.00 –6.50 394.60 303.20
Centamin Egypt . . . . . . . . . . . . .169.80 +2.40 174.75 80.00
Centrica . . . . . . . . . . . . . . . . . . .324.90 +4.20 333.10 232.50
Charter Intl . . . . . . . . . . . . . . . . .567.00* –28.00 855.50 560.50
Chemring . . . . . . . . . . . . . . . . .2617.00 +19.00 3711.00 2033.00
Chloride Group . . . . . . . . . . . . . .374.00 +0.80 390.50 138.60
Close Bros . . . . . . . . . . . . . . . . .670.00 –9.00 806.50 657.00
Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p)
Cobham . . . . . . . . . . . . . . . . . . .207.80 –0.90 278.60 199.90
COLT Group . . . . . . . . . . . . . . . . 111.00 +2.00 144.20 107.70
Compass . . . . . . . . . . . . . . . . . .516.50 +3.00 574.50 322.40
Cookson . . . . . . . . . . . . . . . . . . .412.30 –13.50 616.00 347.60
Croda Intl . . . . . . . . . . . . . . . . .1230.00 –26.00 1361.00 607.00
Daily Mail ‘A’ . . . . . . . . . . . . . . . .441.30 –11.20 539.00 371.80
Dana Petroleum . . . . . . . . . . . .1806.00 +1.00 1817.00 968.50
Davis Service . . . . . . . . . . . . . . .364.00 +0.90 442.30 356.00
De La Rue . . . . . . . . . . . . . . . . . .689.50 –3.50 1021.00 666.50
Debenhams . . . . . . . . . . . . . . . . .56.05 –0.05 90.00 51.95
Derwent London . . . . . . . . . . . .1383.00 +9.00 1490.00 1077.00
Dexion Absolute . . . . . . . . . . . . .135.60 –0.80 148.00 121.10
Diageo . . . . . . . . . . . . . . . . . . .1066.00 –10.00 1176.00 930.50
Dimension Data . . . . . . . . . . . . .120.00 –0.30 125.50 56.50
Domino’s Pizza . . . . . . . . . . . . . .409.80 +0.80 431.30 231.10
Drax . . . . . . . . . . . . . . . . . . . . . .385.50 –4.60 496.50 321.50
DSG Intl . . . . . . . . . . . . . . . . . . . .24.00 +0.25 39.75 23.32
Dunelm . . . . . . . . . . . . . . . . . . . .381.30 +1.30 438.40 250.70
Easyjet . . . . . . . . . . . . . . . . . . . .352.30 –3.50 499.90 308.50
Edinburgh Inv Tst . . . . . . . . . . . .392.40 –2.10 412.40 327.40
Electrocomponents . . . . . . . . . . .205.70 –1.20 245.00 142.90
EnQuest . . . . . . . . . . . . . . . . . . . 116.30 +0.70 125.90 87.35
Essar Energy . . . . . . . . . . . . . . .395.70 –0.40 475.90 358.50
Eurasian Nat Res . . . . . . . . . . . .827.00 –3.50 1276.00 776.00
Euromoney Inst Inv . . . . . . . . . . .590.00 +12.00 630.00 258.00
Experian . . . . . . . . . . . . . . . . . . .606.00 –10.50 664.50 489.00
F&C Comm Prop . . . . . . . . . . . . . .89.50 –0.50 96.80 79.00
Ferrexpo . . . . . . . . . . . . . . . . . . .278.20* –11.80 396.20 138.00
FirstGroup . . . . . . . . . . . . . . . . .343.50 –3.20 448.80 331.20
Foreign & Col Inv Tst . . . . . . . . . .263.80* –2.10 297.20 232.70
Forth Ports . . . . . . . . . . . . . . . .1288.00 +2.00 1425.00 1020.00
Fresnillo . . . . . . . . . . . . . . . . . . .997.50* –2.50 1139.00 583.00
G4S . . . . . . . . . . . . . . . . . . . . . .247.10 –1.00 285.70 210.00
Genesis Emerging Mkts Fd . . . . .462.00 –11.20 484.00 370.00
GKN . . . . . . . . . . . . . . . . . . . . . .138.50* –1.80 155.00 100.20
GlaxoSmithKline . . . . . . . . . . . .1205.50* +5.50 1347.00 1088.00
Great Portland Estates . . . . . . . .310.70 –3.30 332.10 236.60
Greene King . . . . . . . . . . . . . . . .403.80* –0.80 504.00 372.50
Halfords . . . . . . . . . . . . . . . . . . .485.70 +0.70 562.50 324.00
Halma . . . . . . . . . . . . . . . . . . . . .270.00* –4.70 298.70 192.00
Hammerson . . . . . . . . . . . . . . . .352.20* –1.80 460.30 332.20
Hargreaves Lansdown . . . . . . . .392.00 –9.20 408.40 229.00
Hays . . . . . . . . . . . . . . . . . . . . . . .89.15 –1.35 119.00 82.50
Henderson . . . . . . . . . . . . . . . . .121.00 –2.10 157.80 112.10
Heritage Oil . . . . . . . . . . . . . . . . .305.00* –14.40 585.00 298.20
Hikma Pharma . . . . . . . . . . . . . .734.50 +5.50 746.00 440.00
Hiscox . . . . . . . . . . . . . . . . . . . .360.80 +9.80 369.30 299.60
Hochschild Mining . . . . . . . . . . .326.00 +5.50 370.60 220.00
Home Retail . . . . . . . . . . . . . . . .212.10 –3.10 336.50 208.50
Homeserve . . . . . . . . . . . . . . . . .436.10 –3.60 488.20 435.40
HSBC Hldgs . . . . . . . . . . . . . . . .631.50* +1.60 766.80 595.20
Hunting . . . . . . . . . . . . . . . . . . .554.00 –15.50 659.50 429.10
ICAP . . . . . . . . . . . . . . . . . . . . . .396.20 –3.90 478.30 291.70
IG . . . . . . . . . . . . . . . . . . . . . . . .508.50 +7.00 510.50 291.00
Imagination Tech Gp . . . . . . . . . .338.00 –1.00 362.00 149.75
IMI . . . . . . . . . . . . . . . . . . . . . . .664.50 –9.00 786.00 393.30
Imperial Tobacco. . . . . . . . . . . .1819.00 –16.00 2159.00 1706.00
Inchcape . . . . . . . . . . . . . . . . . . .253.20 –10.00 347.00 235.00
Informa . . . . . . . . . . . . . . . . . . . .372.00* –7.60 439.40 263.30
Inmarsat . . . . . . . . . . . . . . . . . . .661.00 +6.00 831.00 503.00
Intercontl Hotels . . . . . . . . . . . . .999.50 –17.50 1244.00 721.00
Intermediate Capital . . . . . . . . . .275.40 –0.70 332.00 233.50
Intertek . . . . . . . . . . . . . . . . . . .1675.00 –23.00 1770.00 1136.00
Intl Power . . . . . . . . . . . . . . . . . .366.50 –4.20 384.10 248.20
Invensys . . . . . . . . . . . . . . . . . . .234.70 –6.70 350.30 232.30
Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p)
Investec . . . . . . . . . . . . . . . . . . .461.20 –5.40 565.00 411.50
ITV . . . . . . . . . . . . . . . . . . . . . . . .55.35 –1.70 71.75 41.04
Jardine Lloyd Thompson. . . . . . .577.00 –4.50 604.50 420.70
Johnson Matthey . . . . . . . . . . .1550.00 –29.00 1814.00 1302.00
JPMorgan Emerg Mkts . . . . . . . .522.00 –9.00 549.00 397.00
Kazakhmys . . . . . . . . . . . . . . . .1073.00 –30.00 1634.00 901.50
Kesa Electricals . . . . . . . . . . . . .129.60 +0.30 162.00 98.45
.LQJÀVKHU . . . . . . . . . . . . . . . . . .198.50 –2.60 255.00 196.50
Ladbrokes . . . . . . . . . . . . . . . . .131.40* –0.60 174.29 114.60
Lancashire Hldgs . . . . . . . . . . . .525.50 +3.50 545.00 416.70
Land Securities . . . . . . . . . . . . . .603.00 +5.00 743.50 543.00
Legal & General . . . . . . . . . . . . . .89.40 –1.35 97.00 66.90
Lloyds Banking Gp . . . . . . . . . . . .66.00 –1.41 77.61 45.30
Logica . . . . . . . . . . . . . . . . . . . .108.20 –1.70 149.10 100.80
London Stk Exchange . . . . . . . . .641.50 –7.00 949.50 540.50
Lonmin . . . . . . . . . . . . . . . . . . .1477.00 –21.00 2198.00 1336.00
Man . . . . . . . . . . . . . . . . . . . . . .206.60 +0.10 373.60 199.60
Marks & Spencer . . . . . . . . . . . . .334.20 –3.80 412.70 321.90
Meggitt . . . . . . . . . . . . . . . . . . . .265.10* –3.30 331.00 202.20
Melrose . . . . . . . . . . . . . . . . . . .212.50 –6.50 251.50 139.30
Mercantile IT . . . . . . . . . . . . . . . .907.50 –8.50 1002.00 822.50
Michael Page Intl . . . . . . . . . . . . .385.80 –9.80 461.50 309.90
Millen & Copthorne . . . . . . . . . . .482.70* +2.90 514.50 321.40
Misys . . . . . . . . . . . . . . . . . . . . .269.90 –0.40 281.70 173.90
Mitchells & Butlers . . . . . . . . . . .284.40 –4.60 343.90 228.30
MITIE . . . . . . . . . . . . . . . . . . . . .188.70 –2.90 281.70 187.80
Mondi . . . . . . . . . . . . . . . . . . . . .447.00 –9.60 491.30 278.00
Monks Inv Tst . . . . . . . . . . . . . . .292.10 –1.30 321.20 242.10
Morrison Wm . . . . . . . . . . . . . . .289.70 +0.50 306.30 255.00
Murray Intl Tst . . . . . . . . . . . . . . .837.00 –9.50 893.50 667.50
National Express . . . . . . . . . . . . .221.20 –3.00 258.60 155.86
National Grid . . . . . . . . . . . . . . .533.50 –1.00 607.65 474.80
Next . . . . . . . . . . . . . . . . . . . . .1932.00 –12.00 2360.00 1601.00
Northumbrian Water . . . . . . . . . .327.90* +7.30 341.30 225.20
Old Mutual . . . . . . . . . . . . . . . . .122.90 –4.10 130.20 86.85
Pace . . . . . . . . . . . . . . . . . . . . . .207.90 –2.10 243.80 145.00
Partygaming . . . . . . . . . . . . . . . .255.70 –4.30 339.70 205.80
Pearson . . . . . . . . . . . . . . . . . . .937.00* –2.00 1069.00 715.50
Pennon . . . . . . . . . . . . . . . . . . . .565.00* +5.00 613.00 440.40
Persimmon . . . . . . . . . . . . . . . . .347.30 –0.80 534.50 335.90
Petrofac . . . . . . . . . . . . . . . . . .1355.00 –37.00 1428.00 849.00
Petropavlovsk . . . . . . . . . . . . . . .976.00 +11.00 1370.00 675.50
Premier Farnell . . . . . . . . . . . . . .215.00 –4.80 252.60 140.60
Premier Oil . . . . . . . . . . . . . . . .1480.00 –54.00 1610.00 984.00
Provident Financial . . . . . . . . . . .824.50 +2.50 986.00 795.00
Prudential . . . . . . . . . . . . . . . . . .547.00* –13.50 665.00 475.70
PZ Cussons . . . . . . . . . . . . . . . .339.80* –9.80 373.20 210.50
Qinetiq . . . . . . . . . . . . . . . . . . . .104.90 +0.20 179.10 103.50
Randgold Resources . . . . . . . . .5740.00 +10.00 6600.00 3456.00
Reckitt Benckiser . . . . . . . . . . .3130.00* –35.00 3667.00 2765.00
Reed Elsevier . . . . . . . . . . . . . . .514.50* –6.50 566.00 435.40
Regus . . . . . . . . . . . . . . . . . . . . . .66.05 –1.00 125.50 64.05
Renishaw . . . . . . . . . . . . . . . . . .850.00 +10.50 915.50 457.00
Rentokil Initial . . . . . . . . . . . . . . . .91.85 –1.55 140.20 91.35
Resolution . . . . . . . . . . . . . . . . .246.60 +0.90 264.80 220.10
Rexam . . . . . . . . . . . . . . . . . . . .293.00 –2.90 348.80 252.80
Rightmove . . . . . . . . . . . . . . . . .596.50 –2.50 729.00 456.90
Rio Tinto . . . . . . . . . . . . . . . . . .3105.00* –56.50 4104.00 2262.50
RIT Capital Partners . . . . . . . . . 1124.00 –7.00 1215.00 927.00
Rolls Royce . . . . . . . . . . . . . . . .553.00 –4.50 631.50 434.50
Rotork . . . . . . . . . . . . . . . . . . .1507.00 –29.00 1569.00 939.50
Royal Bank Of Scot . . . . . . . . . . . .42.99 –1.11 58.95 28.25
Royal Dutch Shell A . . . . . . . . .1703.00* –16.50 2068.50 1621.00
Royal Dutch Shell B . . . . . . . . .1642.00* –9.50 1997.50 1550.00
RSA Insurance . . . . . . . . . . . . . .122.30* –1.10 142.00 114.10
Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p)
SABMiller . . . . . . . . . . . . . . . . .1847.00 –23.00 2090.00 1394.00
Sage . . . . . . . . . . . . . . . . . . . . . .239.30 –4.20 260.50 208.20
Sainsbury(J) . . . . . . . . . . . . . . . .360.50 –2.60 373.00 307.60
Schroders . . . . . . . . . . . . . . . . .1330.00* –38.00 1450.00 1029.00
Schroders N/V. . . . . . . . . . . . . .1071.00* –25.00 1185.00 864.00
Scot. & Sthrn Energy . . . . . . . . . 1126.00* –1.00 1206.00 357.50
Scottish Mortgage . . . . . . . . . . . .571.00 +2.50 623.50 441.00
SEGRO . . . . . . . . . . . . . . . . . . . .275.00 –1.10 403.10 244.00
Serco . . . . . . . . . . . . . . . . . . . . .586.50 +27.00 656.50 440.90
Severn Trent . . . . . . . . . . . . . . .1301.00 +13.00 1358.00 939.50
Shaftesbury . . . . . . . . . . . . . . . .409.00 +5.00 426.50 341.70
Shire . . . . . . . . . . . . . . . . . . . . .1387.00 –31.00 1526.00 999.00
Smith & Nephew . . . . . . . . . . . . .545.00 –7.00 700.50 505.50
Smiths . . . . . . . . . . . . . . . . . . . 1135.00 –3.00 1242.00 771.50
SOCO Intl . . . . . . . . . . . . . . . . . .437.40 –4.10 476.60 380.60
Spectris . . . . . . . . . . . . . . . . . . .880.00 +10.50 949.00 612.00
Spirax-Sarco Eng . . . . . . . . . . .1562.00 –1.00 1617.00 947.00
Spirent Comms . . . . . . . . . . . . . .125.10* –2.90 135.90 74.05
Sports Direct Intl . . . . . . . . . . . . .103.50 –0.20 134.00 81.80
SSL Intl . . . . . . . . . . . . . . . . . . . 1160.00* — 1190.00 536.00
St James’s Place . . . . . . . . . . . . .253.00* –1.50 296.90 203.40
Stagecoach . . . . . . . . . . . . . . . . .170.00 –0.60 204.90 126.20
Standard Chartered . . . . . . . . . .1661.00* –26.50 1927.00 1351.00
Standard Life . . . . . . . . . . . . . . .199.00* –4.10 237.00 170.00
SuperGrp . . . . . . . . . . . . . . . . . .952.00 –20.50 1100.00 499.00
TalkTalk . . . . . . . . . . . . . . . . . . .123.60 –1.10 147.10 106.60
Talvivaara Mining . . . . . . . . . . . .391.80 –9.70 501.50 341.40
Tate & Lyle . . . . . . . . . . . . . . . . .412.40 +0.50 509.00 388.00
Taylor Wimpey . . . . . . . . . . . . . . .24.95 –1.16 54.90 24.29
Telecity . . . . . . . . . . . . . . . . . . . .465.00 +7.60 485.00 311.30
Templeton Emrg Mkts . . . . . . . . .539.00 –4.50 598.00 398.00
Tesco . . . . . . . . . . . . . . . . . . . . .402.70 +0.20 454.90 366.30
Thomas Cook . . . . . . . . . . . . . . .181.20 +0.60 277.20 172.30
Tomkins . . . . . . . . . . . . . . . . . . .322.70 +1.20 325.70 155.00
Travis Perkins . . . . . . . . . . . . . . .747.00 –16.00 915.00 647.50
TUI Travel . . . . . . . . . . . . . . . . . .198.60 –3.00 313.90 189.20
Tullett Prebon . . . . . . . . . . . . . . .371.00 –1.20 436.20 261.20
Tullow Oil . . . . . . . . . . . . . . . . .1238.00 –59.00 1375.00 979.50
UK Commercial Prop . . . . . . . . . . .77.50* +0.50 84.90 68.75
Ultra Electronics . . . . . . . . . . . .1616.00* –5.00 1718.00 1198.00
Unilever . . . . . . . . . . . . . . . . . .1688.00* –4.00 2024.00 1610.00
United Utilities . . . . . . . . . . . . . .565.50 +1.00 620.00 429.00
Utd Business Media . . . . . . . . . .547.00 –6.50 579.50 408.30
Vedanta Resources . . . . . . . . . .1839.00 –43.00 2967.00 1616.00
Victrex . . . . . . . . . . . . . . . . . . .1080.00 –13.00 1320.00 681.00
Vodafone . . . . . . . . . . . . . . . . . .149.40 –0.45 155.50 126.50
Weir . . . . . . . . . . . . . . . . . . . . . 1130.00 –7.00 1275.00 599.00
WH Smith . . . . . . . . . . . . . . . . . .406.50 +2.90 551.00 392.20
Whitbread . . . . . . . . . . . . . . . . .1368.00 –11.00 1645.00 992.50
William Hill . . . . . . . . . . . . . . . . .166.90 –1.10 217.80 160.50
Witan Inv Tst . . . . . . . . . . . . . . . .429.20 –1.00 487.00 380.00
Wolseley . . . . . . . . . . . . . . . . . .1223.00 –16.00 1742.00 1155.00
Wood Group (John) . . . . . . . . . . .345.60 –4.30 411.70 277.00
WPP . . . . . . . . . . . . . . . . . . . . . .633.00 –11.50 744.00 489.00
Xstrata . . . . . . . . . . . . . . . . . . . .976.10 –13.50 1344.50 765.50
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 stages comeback
as bargain hunters move in
U
S stocks staged a comeback yes-
terday, breaking a four-day los-
ing streak by major indexes, as
key technical support triggered
bargain hunting that offset weak eco-
nomic data.
The S&P 500 index sagged as much
as one per cent after data showed new
single-family home sales slumped to a
record slow pace in July. But positive
momentum grew through the ses-
sion after the benchmark S&P 500
bounced back from a breach of the
1,040 level.
The Dow Jones industrial average
rose 19.61 points, or 0.20 per cent, to
10,060.06. The Standard & Poor’s 500
Index added 3.46 points, or 0.33 per
cent, to 1,055.33. The Nasdaq
Composite Index gained 17.78 points,
or 0.84 per cent, to 2,141.54.
The KBW bank index briefly hit
42.70. The index finished down 0.4
per cent at 43.41.
The Nasdaq fared better than the
other two main indexes, boosted by
Apple.
But the market’s gains may prove
to be short lived. The S&P’s 14-day
moving average fell below its 50-day
moving average.
About 8.14bn shares traded on the
New York Stock Exchange, the
American Stock Exchange and
Nasdaq.
Advancing stocks outnumbered
declining ones on the NYSE by 1,832
to 1,167, while on the Nasdaq,
advancers beat decliners 1,676 to 977.
B
RITAIN’S top share index fell to
a seven-week closing low yester-
day on growing unease that the
global economy may slip back
into another recession following fur-
ther weak economic data from the
United States.
New orders for long-lasting US
made goods rose far less than expect-
ed in July and, excluding transporta-
tion equipment, posted their largest
decline in 1-1/2 years, while new US
single-family home sales unexpected-
ly fell last month to set their slowest
pace on record.
Also illustrating concerns over
global growth, the world’s largest
miner BHP Billiton said it was cau-
tious on the short-term outlook and
the economy in China, its biggest cus-
tomer, would slow from recent highs.
Shares in BHP, which reported
bumper results yesterday, fell 2 per
cent, while the sector lost 1.8 per
cent.
However, robust company earnings
helped limit the losses on the FTSE
100, which closed 46.55 points or 0.9
per cent lower at 5,109.40, after trad-
ing as low as 5,070.94.
A one-notch downgrade of Ireland’s
credit rating by Standard & Poor's also
weighed on sentiment as it reignited
concerns over sovereign debt issues at
Eurozone peripheral economies.
Tullow Oil sank 4.6 per cent, the
second biggest faller on the FTSE 100,
after saying development of its
Ugandan oil fields would be delayed
due to a spat between the govern-
ment and its former partner.
Economically-sensitive banks fell
1.1 per cent, with Barclays down 3.6
per cent. As investors sought safer
shelter, the yield on the 10-year
British gilt hit an all-time low of 2.790
per cent. By comparison, the UK blue
chip index offered a dividend yield of
3.54 per cent.
FTSE hits seven-week closing low as
fears over recovery’s strength intensify
THELONDON
REPORT
THENEW YORK
REPORT
3G 13:05
Germany 30 Rolling Spread
1034.6 1035.2 +4.8
5538.5 5540.5 +67.0
884.8 885.2 -15.0
US SP 500 Rolling Spread
US Tech 100 Rolling Spread
Wall Street Rolling Spread
4917.0 4919.0 +45.2
Buy Sell Change Status
>
>
>
>
>
Cash: 20719.24
Margin: 560.00
Unrealised P&L: 92.70
Total Position: 20092.70
GP/USD Rolling Spread
16346 16350 +61 >
UK 100 Rolling Spread
Markets
9599 9605 +24
1644.4 1647.4 +6.6
884.8 885.2 -15.0
US Crude Oil Oct 09 Spread
> 1644.4 1647.4 +6.6
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Markets &Investments
20 CITYA.M. 26 AUGUST 2010
ANALYSIS l FTSE 100 Index
7Jun 25Jun 15Jul 4Aug
5,109.40
25 Aug
5500
5400
5300
5200
5100
5000
4900
4800
4700
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good-bye to the dream. But is there a way
to increase your chances? One way of get-
ting first-hand knowledge is on a “trader
training school.” But are they any good?
As a former trading analyst at an oil
company, it was with heavy heart that I
went along to a course run by Amplify
Trading. I thought these courses were
expensive tosh in out-of-town locations.
But Amplify’s office is just behind Canada
Square. Even if the course is rubbish I will
feel like I am where the action is happen-
ing, I thought. The trading floor wasn’t
quite Goldman Sachs standard, but it cer-
tainly looked professional: desks had mul-
tiple computer screens and phone lines
and there was a squawk box – a loud-
speaker system that is used to channel
market news straight to a trader’s desk.
I was led to my desk and told that I and
the others on the course could trade euro-
dollar, oil and the S&P 500 mini contract
on a simulator. My heart sank. Simulators
were always inferior to real trading sys-
tems and tended to malfunction. Or so I
thought. Technology has moved on. In
front of me were two screens. On the right
were my charts that automatically updat-
ed every minute. Impressive. The screen
on the left was the control centre where I
would make the trades. We could start
trading immediately, so once I realised
how to place a buy or sell order – it was
only slightly more complex then placing a
grocery order online – off I went.
Things started slowly. Oil seemed to
move first, with the S&P and then euro-
dollar following closely behind. After half
an hour I was down $1,000. Time to
change tack. Since I write investment fea-
tures all day, I have a pretty good idea
about themes in the market. But what I
did learn is that when you trade intra-day
you will only make money by reacting to
minute-by-minute price action.
GOOD CAMERADERIE
There was good camaraderie during the
course. An instant messaging system
allowed experienced traders to share mar-
ket tips with everyone else. I found this
useful for generating ideas and also check-
ing what other traders were investing in.
Even so, with half an hour to go, I was still
$2,000 down. I needed to come up with a
plan. Not only did none of the others look
like they had made any losses, I was the
only one with experience of working in
the actual markets. How embarrassing.
Suddenly my competitive streak let
loose. I knew that I wouldn’t make a prof-
it, but I at least had to claw back some of
my losses. I decided on a buy and hold
strategy. I bought all three products when
the market was low in the hope it would
rise in the next 30 minutes. Finally, things
started to go in my direction. The euro
ticked up against the dollar. Oil rose, and
the S&P 500 also moved in my direction.
By the end of the session I was pleading
for just “five more minutes”; I clawed back
half of my euro losses, eradicated my oil
losses and made a slight dent in the S&P
loss. Walking back to the DLR I felt a real
thrill. Because the prices were all in real-
time it didn’t seem to matter that I was
only trading a simulator. I also came away
with a different understanding of the
markets. If you aren’t looking at the charts
and seeing where it is actually going, all
the theory in the world is useless.
Are these courses worth it? About 40
per cent of people who have completed
Amplified’s courses go on to work in
investment banks, but usually in non-trad-
ing jobs. JC Zuidmeer completed Amplify’s
course after he left his role as a product
controller at Morgan Stanley. Although he
loved it, he is back working as a product
controller for another investment bank.
“This is a temporary role, I needed the
cash, but my passion is still trading.”
Amplify has definitely benefited his CV, he
says, and he is continuing to look for a job
in trading.
Manoj Ladwa, senior trader at ETX
Capital, says: “These courses can be useful
since they give new recruits a good idea
about how a market works. But what
makes a good trader is aptitude to take
risk, a quick head for numbers as well as
creativity and these things can’t be
taught.” The sceptics include Fiona
Sandford, director of careers services at
London School of Economics. “I would be
nervous to advise students who are
already in debt to go on a course like this,”
she says. “Banks tend to look at a passion
for trading, not a huge knowledge of it.”
She says there are many ways for to show
your passion for trading – interning at
investment banks in holidays and joining
investment clubs at your university where
you can play simulated trading games.
Personally, I loved the thrill of it. While I
wouldn’t advocate anyone to get into debt
for a course such as this, if you haven’t had
the opportunity while at uni to get into
the trading community, these courses are
certainly one route to doing so.
Kathleen Brooks finds out if trading training
is worth the money for wannabe City boys
The course that turns you into a trader
GCU London – Glasgow Caledonian
University’s specialist postgraduate London
campus – announces a range of professionally
accredited master’s degree programmes.
Banking & Finance:
Executive MBA Financial Services Management
MSc International Banking & Finance
MSc Banking, Finance & Risk Management
MSc Finance Services, Risk & Operations
Risk Management:
MSc Insurance & Risk Management
MSc Public Sector Risk Management
MSc Risk Management
Fashion & Luxury:
MBA Luxury Brand Marketing
MSc International Fashion Marketing
Tourism:
MSc International Tourism Enterprise
Construction Management:
MSc International Project Management
Located in the heart of the City,
GCU London is a leading-edge
learning environment with excellent
industry links and partnerships.
To find out more:
call 0203 369 3000
email [email protected]
or visit www.gculondon.ac.uk
Glasgow Caledonian University is a registered Scottish charity, number SC021474
Study for a
master’s degree
with
professional
accreditation
Open events
Sunday, August 29
11am-3pm and
Wednesday, September 8
4pm-8pm
It could be you.
City Focus| Careers
BACK TO SCHOOL
KIT FOR COOL
KIDS, TOMORROW
21
l Amplify’s four month trading course costs £3,600, a two month
course £1,275 plus Vat. Students will spend two months on the sim-
ulator, then if they are good enough, spend the last two months
trading the actual markets. www.amplifytrading.com
l Schneider Trading Associates offers a free four-week full time
course for those who get selected to take part in its professional
trader programme. You need to have a minimum 2.2 degree to
apply. www.schneidertrading.com/tradercourse/
l TCA Markets has a remote trading programme for trainee traders.
tcamarkets. tradercareers.com
DETAILS | SCHOOLS FOR TRADERS
Olwen, merrily drinking herself to death
in a virtually unfurnished flat, the young
doctor with a disastrous career, the vile
caretaker and his wife. The one person he
doesn’t invite is his girlfriend, as she
might invite her husband. Needless to
say, the party doesn’t go as planned,
thanks to a murder – and the guests’
lives will never be the same again.
Living across the road is a beautiful
Asian woman with bruises all over her,
christened Tigerlily by Stuart. As if super-
natural, she emerges to cast a malevolent
spell over the cast of characters. After the
murder, Tigerlily becomes entwined
with Stuart’s cold-hearted girlfriend and
the other inhabitants of Lichfield House.
As ever with Rendell, there are multi-
ple mysteries here, the stories of myriad
displaced souls are all interwoven, from
a young woman drawn into petty crime,
to the curious activities of the Asian
characters. What emerges is a beautifully
constructed answer to the murder mys-
tery.
The scope of this book is huge, but
under Rendell’s control, it’s also razor
sharp and acutely spine-chilling. It’s not
quite perfect – she’s done this for so long
you get the sense that sometimes she’s
writing from an older place, with the
result that the book can feel a bit dated.
All in all, though, you’re in for a treat.
SHADOWPLAY
BY KAREN CAMPBELL
Hodder, £18.99
hhhii
by ZS
THIS gutsy new book from star-to-be Karen
Campbell is set right in Campbell’s own
stomping ground of Glasgow.
An ex-policewoman herself, Campbell’s
well-drawn star is Anna Cameron, recently
promoted to Chief Inspector in the
Glasgow police. Her new boss is a woman,
but rather than this making Cameron’s
life easier in a traditionally misogynistic
force, she’s wound up with the fearsome JC
Hamilton.
Still, she’s determined to be a brave and
above all, a good cop. But suddenly, every-
thing turns topsy turvy when her mother
goes into a coma in a foreign country and
an old woman disappears from a Glasgow
care-home in deeply suspicious circum-
stances.
The screws only tighten further on Anna
with the gang-related murder of a young
Asian boy and an assault on one of her offi-
cers. All at once, her personal and profes-
sional lives threaten to implode. Can Anna
be both a good cop and a good person? It’s
high time we had a good, gritty British
crime novel by a woman – and here it is.
The angry wannabe queen
Phillipa Gregory’s The
Cousins’ War series is
getting better and
better.
Lifestyle| Books
22 CITYA.M. 26 AUGUST 2010
All hail another royal
corker from Gregory,
says Zoe Strimpel
THE RED QUEEN
BY PHILIPPA GREGORY
Simon & Schuster, £18.99
hhhhi
MEGA-novelist and Tudor historian
Gregory returns to her new series, The
Cousins’ War, with an instantly, electri-
cally gripping story about Margaret
Beaufort. Who? Indeed. Beaufort, the
grandmother of Henry VIII, was merely a
shadowy character on the edge of The
White Queen, Gregory’s previous book
about Elizabeth Woodville, matriarch of
the House of York. But here she takes
centre stage as the heiress to the red rose
of Lancaster. We meet her as a child – a
deeply devout, grandiose nine-year-old
who wishes she could be like Joan of Arc
and believes angels talk to her.
The Red Queen begins when mad King
Henry VI marries the child Margaret to
his half-brother Edmund Tudor, twice
her age. Their son is born just as the wars
are starting, and Beaufort vows that he
will become king. She never surrenders
her belief that her House is the true
ruler of England and that she has a great
destiny before her.
There’s plenty to pity about Margaret
Beaufort. She’s born without much love
from her mother or her (quickly dead)
father, penalised for being a girl. She’s
repeatedly raped by Edmund Tudor in
order to produce an heir: once she does,
the birth is so butchered by midwives
that she becomes infertile.
But make no mistake, Gregory paints
an egotistic, jealous and unscrupulous
person. Unlike Woodville, who spares
barely a thought for the homely
Margaret, Beaufort is completely
obsessed with the beautiful head of her
rival household, whom she believes has
taken her place as the rightful queen.
As usual, Gregory has gone against the
grain. She’s put a nasty character at the
centre of her work, but it doesn’t mean
the book is too sour to digest. On the con-
trary, it’s a riproaring induction to the
period for those who may not have con-
sidered themselves interested in late
Medieval history, and a must-read for
anyone else.
TIGERLILY’S ORCHIDS
BY RUTH RENDELL
Hutchinson, £18.99
hhhhi
by ZS
RUTH Rendell is the grande dame of
mannered, urban mystery, homing in on
precise segments of London and excavat-
ing the sinister secrets and motives lurk-
ing below the surface. Over the years she
has manoeuvred her way through death
among the bohemian middle classes of
Holland Park in its hippy days, and vio-
lence in post-property boom red brick ter-
races, skewering the mannerisms and
fads of the capital at the turn of this cen-
tury and beyond.
Now she brings us a tale of sordid mur-
der in a suburban block of flats – a who-
dunit among neighbours. Stuart Font, a
rakishly handsome but naïve young pro-
fessional, decides to throw a housewarm-
ing party and invite the whole block. And
what odd ducks they are: the 60-year-old
GOING
OUT
TIM BADHAM
Take a world
tour in London
bars and clubs
I
T may still be peak holiday season but in
our cosmopolitan capital you can com-
plete a world tour whenever you like by
taking a glamorous (if slightly less exotic)
journey around London’s more exclusive inter-
national nightlife.
Starting with Japan, the chic Kyashii has
just re-launched on Upper St Martin’s Lane
offering a sophisticated, ultra modern hide-
away in which to enjoy your sake. Above
ground you’ll find a sleek white champagne
lounge and glossy, dark mezzanine bar, while
the restaurant rooms downstairs are posi-
tively Bond-esque with wall-to-wall fish tanks
and futuristic lights. No longer Kingly Club-
owned, the new management has introduced
less exorbitant prices with a reasonable
Japanese and pan-Asian menu and after-
work “Shaker” sessions with two-for-one
cocktails. Well worth re-discovering.
To continue on the tour, for further Asian
influence you could drop into Chinawhite,
Taman Gang or even Funkybuddah (with
Buddha Bar recently departed) and for
African influence there is, of course, the new
Shaka Zulu or the Moroccan classic (but
recently refurbished) Momo on Heddon
Street. Representing the Middle East we have
champagne overflowing at Merah on Wells
Street.
Moving to Europe, for France there‘s the
quirky yet stylish Sketch on Conduit Street
and for Italy, Luxx on New Burlington Street,
along with the still achingly trendy Polpo and
its new little sister Polpetto (confusingly on
top of the French House). The champagne bar
at the effortlessly stylish and refreshingly
Icelandic Texture on Portman Square bridges
the mid Atlantic gap.
Meanwhile, American Bar at the Stafford
is best in class for the USA, with Floridita’s
Cuban passion and the Argentinean Gaucho
bars making a showing for South America
(there’s Sushinho on Kings Road too if you
don’t mind Japanese with your Brazilian).
Mahiki and Kanaloa’s tongue in cheek Tiki-
ness take us round to the South Pacific.
Closer to home it’s hard to beat the cigar bar
at Boisdale for Scottish influence and – for
something less formal – the new Platform
down by London Bridge for good old Blighty,
with its local ciders and farm to table feasts.
If you are looking for a
mish-mash of the interna-
tional Jet Set head
for Maddox or
Cuckoo but there
is also the
brand new
Jet Lounge
on Haymarket for
clientele waiting to depart
to the crazy late-night Jet Black
at a very antisocial hour.
We have, of course, skipped
Australia’s lovely Walkabout pubs
which are only for very special occa-
sions, as I’m sure you know all too well.
Tim Badham is the founder of
Innerplace, London’s leading providers of
VIP entertainment, including film pre-
mieres, fashion shows, launch parties and
members club access.
www.innerplace.co.uk.
A couple of fathers-of-two debate the importance of paternity leave
David and pre-baby Samantha on holiday in Cornwall. Picture: PA
Lifestyle | Debate
23 CITYA.M. 26 AUGUST 2010
Should Daddy David
really take leave now?
A
S experienced a father as
David Cameron may be,
he absolutely needs to be
around in these first
formative weeks not just to
build a relationship with the
baby, but to help his wife and
older children adapt as well.
Crucially, he must establish a
pattern of involvement that
will last long into the future.
Should the situation be dif-
ferent because he’s Prime
Minister? Yes – how can he
pledge to make Britain “the
most family-friendly country in
Europe” without demonstrat-
ing those family values right
now? Those who want him to
lose out on this special time by
remaining at the helm are
short-sighted. Better to hand
over briefly to Nick Clegg than
give rise to the guilt and resent-
ment too often faced by par-
ents in similar situations. I’d
rather the leader of our coun-
try be happy in his own home,
enjoying the stability gained
through sharing parental
responsibilities, than that he’s
turning to public office to
escape the strain of family life.
This is an opportunity for
David Cameron to redefine
himself as a dad while demon-
strating to the world the cru-
cial role that fathers play in the
family. Given what’s waiting
for him at home, I don’t know
why he wouldn’t jump at the
chance to set an example.
Andrew Watson is a commentator on
parenting issues. His guide for new
fathers, Be A Great Dad, is out in
October, and his diary of first-time
fatherhood, Down To Earth With A
Bump, will be published next spring.
P
ATERNITY leave is sup-
posed to be about enjoy-
ing your newborn baby
and helping the mother
out. But in my experience (hav-
ing been through it twice), it’s a
bit different. Mainly, I’ve felt like
a spare part, of little use to any-
one. Paranoid. Restless.
A woman who has just given
birth has no need of the sperm-
donor – she’s got her hands full
enough. Until men grow
breasts, they are pretty irrele-
vant in the very first two weeks.
Mothers and NCT (National
Child Trust) friends are far
more useful, as well as able to
talk babies 24/7. Me – I couldn’t
stop looking at my BlackBerry
and I imagine David Cameron is
the same. Then there’s the ques-
tion of who at the office might
be using my enforced absence
to stitch me up.
All of which leaves me won-
dering why I have to take this
“holiday” now – my children,
my wife and I would all rather
paternity leave kicked in six
months down the line.
Caribbean holiday en famille,
anyone?
Cameron refusing to take
paternity leave would lead to
mass disapproval, even though
I’ll bet he’s dying to get back –
at least while he’s in possession
of a BlackBerry. But what peo-
ple don’t understand is that in
refusing his paternity leave
now, he wouldn’t be setting a
bad example. On the contrary,
he’d be showing an astute
understanding of the role and
place of fathers in the child-
birth saga. Harry Owen is com-
mercial director of CityA.M.
ANDREW WATSON
YES
HARRY OWEN
NO
T
E
R
R
E
S
T
R
I
A
L
DIY SOS: THE BIG BUILD –
BRYNMAWR BBC1, 8PM
New series. Nick Knowles and the team
help a family in the Welsh Valleys,
whose house has been left virtually
uninhabitable after illness.
E NUMBERS: AN EDIBLE
ADVENTURE BBC2, 8PM
Food writer Stefan Gates tries to
uncover the truth about food additives,
beginning with an investigation into
the effects of E-number colours.
BRITAIN’S UGLIEST MODELS
CH FIVE, 11PM
Following the work of an agency that
specialises in unconventional looks.
Company director Marc French tries to
sign the world’s most pierced woman.
BBC1
SKY SPORTS 1
7pm Sky Sports News 7.30pm
ATP Tour Uncovered 8pm Test
Cricket: England v Pakistan.
10pm Time of Our Lives:
Former Arsenal stars
reminisce. 11pm Premier
League World 11.30pm Test
Cricket 1.30am Carling Cup
Football 3am Time of Our
Lives 4am Premier League
World 4.30am-6am Carling
Cup Football
SKY SPORTS 2
6.30pmRace World 7.30pm
Live Greyhound Racing 10pm
Live Poker 12amRace World
1amShow Jumping 2am-
2.30amIAAF Athletix Weekly
SKY SPORTS 3
7pmLive Carling Cup Football
10pmWWE: Late Night – Raw
12amWWE: NXT 12.30am
Golfing World 1amWorld
Hockey Monthly 1.30am-2am
ATP Tour Uncovered
BRITISH EUROSPORT
6.10pmMotoGP 7.35pmLive
UEFA Europa League Football
9.45pmFight Club 11.15pm-
12.15amWorld Superbikes
ESPN
6pmLive UEFA Europa League
Football 8.45pmESPN Kicks
Extra 9pmMotorcycling 10pm
MMA Live 10.45pmESPN
Premier League Kicks 11pm
Goal! 11.30pm30 for 30
12.30amPress Pass 2010 1am
Live NFL 4amSuperleague
Formula 4.30am-5amGoal!
LIVING
7pmFour Weddings: A Sikh
wedding with a modern twist.
8pmPrivate Practice 9pm
Criminal Minds 12amCSI:
Crime Scene Investigation 1am
Charmed 3amCSI: Crime
Scene Investigation 3.50am
The Jerry Springer Show
4.40amNothing to Declare
5.30am-6amHome Shopping
BBC THREE
7pmTotal Wipeout 8pmYoung,
Dumb and Living Off Mum9pm
I Can’t Stop Stealing 10pm
EastEnders 10.30pmThe Real
Hustle: Celebrity Scammers
11pmFamily Guy 11.45pmI
Can’t Stop Stealing 12.45am
Baby Beauty Queens 1.15am
Small Teen, Big World 2.15am
Total Wipeout 3.10amThe Real
Hustle: Celebrity Scammers
3.40amYoung, Dumb and
Living Off Mum4.40am-
5.10amBaby Beauty Queens
E4
7pmHollyoaks 7.30pmFriends
9pmThe Big Bang Theory
9.30pmHow I Met Your
Mother 10pmAccidentally on
Purpose 10.35pmAlan Carr:
Chatty Man 11.25pm
Important Things with Demetri
Martin 11.55pmThe Big Bang
Theory 12.25am-6amUltimate
Big Brother: Live
HISTORY
7pmBritain’s Lost Mega-
Fortress 8pmPawn Stars 9pm
Lost Cities of the Ancients
10pmDecoding the Past 11pm
Hitler’s Private World 12am
Pawn Stars 1amLost Cities of
the Ancients 2amBritain’s Lost
Mega-Fortress 3amBritain AD:
King Arthur’s Britain 4am-5am
The Universe
DISCOVERY
8pmHow Do They Do It?
8.30pmHow It’s Made 9pm
Venom Hunter with Donald
Schultz 10pmRiver Monsters
11pmGreatest Tank Battles
12amBear Grylls: Born
Survivor 1amDeadliest Catch
2amRory McGrath’s Best of
British Engineering 3amWorld
War Two: The Complete
History 3.50amTreasure Quest
4.40amThe American Civil
War 5.30am-6amHow Does
That Work?
DISCOVERY HOME &
HEALTH
7pmPortland Babies 8pm10
Years Younger 9pmI Didn’t
Know I Was Pregnant 10pmI
Have An Embarrassing Medical
Condition 11pmMost Shocking
Autopsies 12amI Didn’t Know
I Was Pregnant 1amI Have An
Embarrassing Medical
Condition 2amMost Shocking
Autopsies 3am10 Years
Younger 4amA Baby Story
5am-6amBringing Home Baby
SKY1
8pmThe Real A&E: A
basketball player is told he may
not walk again. 8.30pmReal
Filth Fighters 9pmLie to Me
10pmNCIS: Los Angeles 12am
Road Wars 1amUK Border
Force 1.50amRoad Wars
2.40amOops TV 3.30amThe
4400 4.20amTop Design
5.10am-6amSell Me the
Answer
BBC2 ITV1 CHANNEL4 CHFIVE
S
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E
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L
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T
E
&
C
A
B
L
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TVPICK
6pmBBC News
6.30pmBBC London News
7pmThe One Show
7.30pmEastEnders; BBC News
8pmCHOICE DIY SOS: The
Big Build – Brynmawr
9pmMistresses
10pmBBC News
10.25pmRegional News
10.35pmFILMThe Mexican:
Comedy thriller, starring Brad
Pitt and Julia Roberts. 2001;
Holiday Weatherview
12.35amSign Zone: Panorama
1.05amSign Zone: Countryfile
2.05amSign Zone: Celebrity
MasterChef 3.05amSign Zone:
n Fogle’s Escape in Time
3.50am-6amBBC News
6pmEggheads
6.30pmRestoration Roadshow
7pmThe Culture Show
at the Edinburgh Festival:
Opera Australia discusses
its production Bliss.
Last in the series.
8pmCHOICE E Numbers: An
Edible Adventure: New series.
Stefan Gates tries to uncover
the truth about food additives.
9pmDigging for Britain
10pmGrumpy Old Men
10.30pmNewsnight: Weather
11.20pmNurse Jackie
11.45pmNurse Jackie
12.15amThe Culture Show at
the Edinburgh Festival
1.15amBBC News
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale
7.30pmNightmare Tenants:
Tonight
8pmEmmerdale
8.30pmCoronation Street
9pmFlorida – Paradise Lost
10pmITV News at Ten
10.30pmLondon News
10.35pmFILMConan the
Barbarian: Fantasy adventure,
starring Arnold
Schwarzenegger. 1982
12.55amThe Zone;
ITV News Headlines
2.55amBritish Touring Car
Championship Highlights 4.15am-
5.30amITV Nightscreen
6pmThe Simpsons
6.30pmHollyoaks
7pmChannel 4 News
7.55pm4thought.tv
8pmLocation, Location,
Location
9pmHurricane Katrina:
Caught on Camera
10pmUltimate Big Brother
11.10pmComing Up: Dip
11.40pmComing Up: Eclipse
12.10amMusic on 4: Album Chart
Show: The Klaxons 12.45amMusic
on 4: 4Play: Imelda May 12.55am
Music on 4: Boardmasters Presents
Seasick Steve 1.10amThe Ascent of
Money 2.05amUltimate Big
Brother: Live 4.35amDispatches:
When Cousins Marry 5.25am-
6.10amCountdown
6pmThe Boss Is Coming to
Dinner
6.25pmLive from Studio Five
7pmFive News at 7
7.15pmCricket on Five:
England v Pakistan.
8pmEgypt’s Lost Queen;
Five News at 9
9pmThe Hotel Inspector
10pmCrimes That Shook
the World
11pmCHOICE Britain’s
Ugliest Models
12.05amSuperCasino
4.05amThe Boss Is Coming to
Dinner 4.30amWildlife SOS
4.55amCounty Secrets 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 24
9 6 14
34 16
10 11
23 17
9 16
13 29
32 4
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21 11
8 33
16 5 3
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9
22
37
11
24
15
7
35
11
13
8
13
17
14
22
6
21
28
11
20
7
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 Divisible by two (4)
3 Less common (5)
6 Leak through (4)
7 Edible leguminous seed (4)
9 Might, possibly (3)
10 Fiasco (7)
12 Came first (3)
13 Gaming cube (3)
14 Sport of shooting arrows
with a bow (7)
15 Feverish cold (3)
16 Vex (3)
18 Cowboy’s hat (7)
20 Source of metal (3)
21 Type of hybrid citrus fruit (4)
22 Finished (4)
23 More docile (5)
24 Underside of a shoe (4)
DOWN
1 Hinge joint in
the arm (5)
2 Not any (4)
3 People sent to locate
and help others (8)
4 Setting straight
or right (9)
5 Be similar in end
sound, eg cat
and mat (5)
8 Latin phrase:
done so often that
it has become
tiresome (2,7)
11 Unmarried man (8)
15 Drift on water (5)
17 Item of cutlery (5)
19 Yours and mine (4)
The nine-letter word
was PARENTING
A
M
S
R
C D
S
A
E
4

4


4
4


C A C T U S D F
O O C R A V A T
L U S T A R C
O T P R A N C E R
S P E L L U A T E
S L U R N N D
A W L M T O N G A
L I O N E S S I L
V A T A B L E
D E N I R O A R
S L P A L L E T
5 2 4 6 9 3 1 7 8
6 1 8 2 7 4 9 5 3
9 7 3 1 5 8 4 6 2
8 5 2 4 6 1 7 3 9
1 6 7 9 3 2 5 8 4
3 4 9 5 8 7 2 1 6
7 9 1 8 4 6 3 2 5
2 8 5 3 1 9 6 4 7
4 3 6 7 2 5 8 9 1
8 9 3 7 1 3 8
6 8 2 9 2 1 5 4
7 1 4 6 5 9 8
1 5 1 2 2 7 1
4 3 2 6 9 1
2 6 1 9 2 9 7 8
8 2 5 7 6 9
8 3 9 5 9 3 6
7 4 8 9 1 3 1
1 2 3 7 8 7 4 9
1 2 8 3 1 2 8
Lifestyle | TV&Games
CITYA.M. 26 AUGUST 2010 24
Sport
25
‘WE WANT REAL MADRID AND
INTER MILAN’
CROUCH COURTS EURO GIANTS AFTER
MAKING TOTTENHAM HISTORY: P27
Alastair Cook boosted his confidence with a century in the last Test. Picture: ACTION IMAGES
FORMER England captain Steve
Borthwick’s prospects of returning
to the national team this autumn
have diminished after he tore a
thigh muscle.
The Saracens skipper is expected
to be sidelined for three weeks by
the quadriceps injury, meaning he
will miss their first two matches of
the new Premiership season.
Borthwick will sit out the opener
against London Irish, which takes
place at Twickenham as part of the
traditional London double header
on 4 September, and the visit of Sale
the following weekend.
That spell in the treatment room
will not help Borthwick fight his
way back into the England set-up
for the autumn internationals.
The 30-year-old lock forward was
surprisingly omitted when England
manager Martin Johnson named
his 32-man elite performance squad
last month. That was despite cap-
taining the team for the first 20
Tests of Johnson’s tenure.
Injury ruled him out of the sum-
mer tour Down Under, where Lewis
Moody impressed as skipper, while
locks Tom Palmer, Dave Attwood
and Courtney Lawes also advanced
their claims.
Injury hits Borthwick England hopes
BY FRANK DALLERES
RUGBY UNION

SPORT | IN BRIEF
Monty: Westwood fit for Ryder
GOLF: European Ryder Cup captain Colin
Montgomerie insists world No3 Lee
Westwood will be fit in time for the Ryder
Cup in October.
Europe’s top player is currently recover-
ing from a torn calf muscle he picked up in
June, but Montgomerie has guaranteed his
participation at Celtic Manor – even if
Westwood is unable to play any competi-
tive golf before the match.
Semenya runs at Commonwealths
ATHLETICS: World 800m champion
Caster Semenya has been named in the
South Africa team for October’s
Commonwealth Games in Delhi following
her return to competition last month.
The 19-year-old, who was out of action
for almost a year while gender tests were
concluded, won her first two comeback
races in Finland and Germany last month
and also triumphed in Berlin on Sunday.
CAPTAIN Andrew Strauss has vowed to
lead by example when England take on
Pakistan in the series showdown at
Lord’s this morning.
The hosts’ batting line-up has come
under scrutiny following two collapses
during their four-wicket defeat at the
Oval last week as Pakistan kept the
series alive at 2-1.
But Strauss is keen to help his side
avoid a repeat of events in the third
Test as England aim to finish the sum-
mer on a strong note ahead of their
Ashes tour of Australia this winter.
“I would like to have scored more
runs than I have done this series, clear-
ly,” said the England skipper, who has
recorded 142 runs in six innings
against Pakistan.
“But it has been tough for the open-
ing batsmen, and the ball has been
swinging around. I would like to get a
score both as a batsman and as a cap-
tain to lead by example.
“I’ve had a couple of starts, a couple
of reasonable innings but I missed out
at the Oval. I generally enjoy batting at
Lord’s so hopefully there’s a good score
there for me.”
England opener Alastair Cook’s posi-
tion at the top of the order was under
scrutiny going into the last match but
he silenced his critics with a confi-
dence-boosting century in the second
innings.
And Strauss, 33, believes dips in form
are simply part of the life of any bats-
man.
“Just as I said about Alastair Cook, as
batsmen you are not going to score
runs every time you bat – otherwise
your name would be Don Bradman.
“You’ve got to realise there are going
to be games when things don’t go your
way. The key is that when you get in,
you cash in.”
Meanwhile, Pakistan captain
Salmaan Butt has set his sights on level-
ing the series at Lord’s.
“I think it would be the most won-
derful thing,” said Butt. “To come from
2-0 down to level the series would boost
confidence for the rest of our futures.”
Strauss: Our
batsmen will
shine at Lord’s
BY MARTIN CAPARROTTA
CRICKET

ENGLAND captain Rio Ferdinand has
leapt to Fabio Capello’s defence, insist-
ing the head coach’s critics have been
too quick to turn against him.
Capello was widely depicted as the
steely general England’s cosseted
underachievers needed during an
unerringly successful march to the
World Cup finals.
But his stock has fallen off a cliff fol-
lowing a disastrous tournament in
South Africa, and his decision not to
step down only appears to have
enraged his detractors further.
The Italian’s popularity in the Press
plummeted to a new low yesterday
when one newspaper portrayed him as
a donkey – complete with photo-
shopped ears – alongside a scathing
report on his latest squad selection.
“You don’t become a bad player
overnight and I don’t think all of a sud-
den our manager became a bad man-
ager overnight,” said Ferdinand, who
missed the World Cup through injury
and will not return for several weeks.
“Before the tournament he was the
best thing since sliced bread, we quali-
fied in great style. All of these so-called
people in the know were saying he is
Sport 26 CITYA.M. 26 AUGUST 2010
BY FRANK DALLERES
FOOTBALL

CITY RUNNER | GARMIN #4MILER
in association with
THE DAY is young, the markets are still
closed and tourists haven’t descended
yet – and that’s just how Holly
Cracknell likes it. Well, that’s when
she prefers to pound the City’s streets
as part of Investec’s in-house assault on
the Garmin #4miler, at any rate.
“I run first thing in the morning
before work, at 7:50am, when there
aren’t many pedestrians about,”
explains Holly, who works in asset
management. “I’m on the bus and run-
ning before I know what I’m doing!
After that Cheapside starts to get quite
busy and it’s hard to maintain my pace
without bumping into people.”
Holly’s route takes her past land-
marks such as St Paul’s and over
Millennium Bridge, London Bridge
and Tower Bridge – bringing a wel-
come buffeting from the breeze.
And her twice-weekly routine has
already paid off; in three weeks she
has shaved four and half minutes off
her total time.
“Health-wise, I’ve really noticed a
difference in six or seven runs,” she
adds. “Every time I run I upload details
to the Garmin Connect site and share
it with a friend. The Forerunner watch
is also great for motivating me,
because I can see the pace I’m doing
and it helps me maintain it.”
Sign up your office for the Garmin
#4miler. For further information visit
www.garmin4milechallenge.co.uk.
Early birds avoid the crowd
EUROPEAN CLIENT MANAGER
HOLLY CRACKNELL
Ferdinand defends Capello
and lambasts fickle critics
Age: 33
Best time: 35min 35secs
Distance: 4 miles
Average pace: 9min/mile
Holly has shaved four minutes off a route that takes in St Paul’s. Picture: GETTY
Results
UEFA CHAMPIONS LEAGUE
PLAY-OFF SECOND LEG
Tottenham...................(2) 4 Young Boys.......................(0) 0
Crouch 5, 61, 78 (pen)
Defoe 32 Att: 34,709
Agg: 6-3.
Ajax...................................(1) 2 Dynamo Kiev...................(0) 1
Agg: 3-2.
Auxerre..........................(1) 2 Zenit St Petersburg....(0) 0
Agg: 2-1.
FC Copenhagen.........(1) 1 Rosenborg.........................(0) 0
Agg: 2-2; FC Copenhagen win on away goals rule.
MSK Zilina....................(1) 1 Sparta Prague................(0) 0
Agg: 3-0.
CARLING CUP SECOND ROUND
Accrington St.............(1) 2 Newcastle..........................(1) 3
Putterill 45 Taylor 36
Hessey 90 Ameobi 48
Att: 4,098 Lovenkrands 67
Everton...........................(2) 5 Huddersfld.........................(1) 1
Fellaini 7, Rodwell 14 Heitinga 40 (og)
Beckford 50 (pen), Saha 77
Osman 85 Att: 28,901
Fulham............................(4) 6 Port Vale ............................(0) 0
Gera 10, 45
Dembele 26
Zamora 36, 66
Dempsey 70 Att: 9,031
CRICKET
LV COUNTY CH’SHIP - DIV ONE (Edgbaston); Essex 90-7 v
Warwickshire.(Trent Bridge); Lancashire 319 (S
Chanderpaul 92, A R Adams 6-79, R J Sidebottom4-79) v
Nottinghamshire 178-4 (53.0 overs). (Taunton); Somerset
287-4 (81.0 overs) (ME Trescothick 128). v Durham. No play
Wednesday due to rain. (Scarborough); Yorkshire 322-9 dec.
(A U Rashid 76, A Lyth 63, D G Cork 5-64) v Hampshire 367-
3 (99.0 overs). DIV TWO: (Derby); Middlesex 228-3 (61.0
overs) v Derbyshire. (Northampton); Northamptonshire 96-
3 (34.5 overs) v Worcestershire. (Grace Road); Surrey 483
(MR Ramprakash 179, G C Wilson 125, J J Roy 76, C W
Henderson 4-119) v Leicestershire 32-0 (12.2 overs).
CLYDESDALE BANK 40 - GROUP A: Sussex v Glamorgan
(Hove); Match abandoned, rain, 1pt each.
TODAY’S DIARY
(Football 7.45pm unless stated)
UEFA Europa League Play-off Round Second Leg
AEK Athens (1) v Dundee Utd (0) (7pm) ..........................................................
Aston Villa (1) v Rapid Vienna (1) ........................................................................
FC Utrecht (0) v Celtic (2) (7.30) ........................................................................
Man City (1) v FC Timisoara (0) ..........................................................................
Motherwell (1) v Odense BK (2) ..........................................................................
The New Saints FC (0) v CSKA Sofia (3) (7.35) ............................................
Trabzonspor (0) v Liverpool (1) (6.30) ..............................................................
Carling Cup 2nd rnd
Birmingham v Rochdale............................................................................................
CRICKET
Fourth Test Match—day 1 of 5: England v Pakistan (Lord’s).
GOLF
European Tour: Johnnie Walker Championship at Gleneagles
(The Gleneagles Hotel, Perthshire, Scotland).
SPORTS EDITORJON COUCH
email [email protected]
Capello has come under fresh fire for dropping youngster Jack Wilshere. Picture: ACTION IMAGES
1
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“Before the World Cup he
was the best thing since
sliced bread,” reasons
vexed England skipper
the Godfather, Don Fabio and what-
not.
“Now they have changed course. Yes,
we didn’t play well at the tournament,
no-one is getting away from that. But
that doesn’t make him a bad manager
overnight, and I think a lot of people
are probably jumping the gun.”
Capello has come under renewed
fire this week for dropping youngster
Jack Wilshere and overlooking the
claims of Andy Carroll and Jack
Rodwell, despite pledging after the
World Cup to blood new talent.
All three have been named in the
Under-21 squad, meaning they will
miss the senior team’s first Euro 2012
qualifier against Bulgaria on 3
September.
But Manchester United defender
Ferdinand added: “It is up to him who
he picks and who he feels is right for
the squad.
“If he sees it right to make changes,
who are we to argue as players? We are
just out there to go and do a job.
“It’s all about England winning, it is
not about individuals. And if that
means some people have to be disap-
pointed by being dropped, so be it.”
PREMIER League heavyweights
Newcastle needed a second-half resur-
gence to avoid an upset at League Two
Accrington.
Ryan Taylor looked to have put the
underdogs in their place when his
long-range strike gave an under-
strength Magpies side the lead late in
the first half. But a spectacular
equaliser from Ray Putterill ensured
the two teams went in level at half-
time and revived a raucous home
crowd’s hopes of a giant-killing.
Shola Ameobi needed less than
three minutes of the second period to
reassert Newcastle’s superiority with
a low shot, however, and Peter
Lovenkrands tapped in a rebound to
extend the lead on 67 minutes.
Putterill saw another effort cleared
off the line and Sean Hessey lashed
home a second for Stanley deep into
stoppage time, but the home side had
to settle for a gallant second-round
defeat.
England striker Bobby Zamora and
Zoltan Gera both netted doubles as
Fulhamrouted League Two Port Vale
6-0 at Craven Cottage. Recent signing
Moussa Dembele notched his first for
the Premier League club, who made
just three changes from the weekend,
while Clint Dempsey completed the
scoring.
Everton also enjoyed easy progress
to round three, with a 5-1 win over 10-
man Huddersfield.
Marouane Fellaini, Jack Rodwell,
Jermaine Beckford, Louis Saha and
Leon Osman all struck against the
League One side, who had Lee Peltier
sent off for a second yellow card. But
Toffees defender Johnny Heitinga had
a night to forget, scoring an own goal
and then missing a penalty.
Magpies dodge giant-killing as ruthless
Fulham and Everton show no mercy
CARLING CUP

Crouch (left) scored a hat-trick while Bale (right) laid on three goals as Spurs eased past their Swiss opponents. Picture: GETTY
TOTTENHAM finally took their place
at the top table of European football
last night – and ensured London has
three clubs in the Champions League
for the first time – but all manager
Harry Redknapp wanted by way of
celebration was a bacon sandwich.
A hat-trick from Peter Crouch and
a goal from strike partner Jermain
Defoe emphatically overturned
Young Boys’ slender first-leg advan-
tage and guaranteed Spurs a place in
the group stage for the first time in
the competition’s history.
Victory rained joy onto a sodden
White Hart Lane and earned the club
a £20m windfall as Redknapp
became the first man to lead the club
into the European Cup since the icon-
ic Bill Nicholson in 1961.
But the east Londoner, whose team
join Chelsea and Arsenal in the last
32, shunned a night of champagne-
fuelled jubilation that few would
have begrudged him in favour of
more homely, quintessentially
English treats.
“I will probably just go home, have
a bacon sandwich and a cup of tea,
that is all I want,” he said. “I always
felt it was possible. Tottenham were a
club which had underachieved for a
long time.”
A third London team in the group
stages will increase hopes that a side
from the capital can lift the
European Cup for the first time – par-
ticularly with the final in May to be
played at Wembley.
But hero Crouch is only looking as
far as the next round, and is eager to
test himself against the continent’s
elite. “That’s why we worked so hard
last season,” he said. “We want mas-
sive games. We want Real Madrid and
Inter Milan.”
Defoe admitted controlling the
ball with his arm before driving
Spurs’ second goal in off the post. “It
was handball for my goal, yes,” he
said. “The linesman didn’t see it,
Hat-tricks for London and Crouch
as Tottenham revel in historic night
Sport | Football
27 CITYA.M. 26 AUGUST 2010
EUROPA LEAGUE | IN BRIEF
No Gerrard or Torres for Reds
LIVERPOOL are without key trio Steven
Gerrard, Fernando Torres and Javier
Mascherano for tonight’s tricky trip to
Trabzonspor.
Captain Gerrard has a back injury and
Torres is rested as a precaution, while
Mascherano remains omitted amid spec-
ulation about a move to Barcelona.
“It’s going to be a very tough ask for
the players in a difficult place,” said
Hodgson, whose side hold a 1-0 lead
from the play-off first leg. “They’re a hos-
tile and fanatic crowd and it’s a difficult
pitch. But if we come through it we’ll
come through it stronger.”
Mancini decides to keep Jo
MANCHESTER CITY outcast Jo has
been welcomed in from the cold by man-
ager Roberto Mancini and could start
tonight’s visit from Timisoara.
The Brazil striker had looked sure to
be sold, but Mancini used him prominent-
ly yesterday in training and
then declared him not for sale.
“I have been able to see Jo close up in
the last two months and what I have
seen makes me think he’s a good player,”
said the Italian, whose team won the
play-off first leg 1-0 in Romania. “We
want to keep him.”
MacDonald not deterred by rout
ASTON VILLA caretaker boss Kevin
MacDonald insists Sunday’s 6-0 mauling
at Newcastle has not put him off taking
the job permanently.
MacDonald maintains he will only
decide whether to put himself forward
after tonight’s visit of Rapid Vienna and
the weekend fixture with Everton.
“It hasn’t changed my stance,” he said.
“Whether it’s damaged my opportunity,
I’ve not thought of it as that yet.”
Villa drew 1-1 in Austria and are with-
out Stewart Downing, Stephen Warnock
and Richard Dunne for the return leg.
BY FRANK DALLERES
CHAMPIONS LEAGUE PLAY-OFF

4
0
TOTTENHAM
YOUNG BOYS
though, and sometimes it goes your
way.”
Winger Gareth Bale was outstand-
ing, setting up three goals, including
Crouch’s first inside five minutes.
Nerves settled, Defoe added a sec-
ond before half-time and Crouch
ended the contest by meeting Bale’s
corner on the hour. A trip on Bale
earned Senad Lulic a red card and
allowed Crouch – the man whose goal
against Manchester City secured
Tottenham’s place in the top four – to
complete his hat-trick with a penalty.
Capital clubs’ feat is rare achievement
LONDON is only the second city ever to
boast three teams in the Champions
League group stages in the same sea-
son. The last time the feat was man-
aged was in 2003-04 when Athens
was represented by Olympiacos,
Panathinaikos and AEK.
Sadly, however, it proved a season
to forget for the sides from the Greek
capital after all three failed to make it
past the group stages.
Panathinaikos were the only one of
the trio able to avoid bottom spot in
their group. Olympiacos were drubbed
7-0 by Juventus while AEK earned just
two points and scored only one goal.
2
3
ACCRINGTON
NEWCASTLE
TLEUNI
Teams prepare to
learn fate in Euro
group stage draw
CHELSEA, Manchester United and
Arsenal will all be among the top
seeds when the draw for the
Champions League group stage takes
place this afternoon.
That will see them avoid big-hitters
such as Barcelona, Bayern Munich,
AC Milan and reigning champions
Inter Milan, who will also be in Pot
One when the groups are decided in
Monaco at 5pm BST.
Tottenham will be drawn from Pot
Three, meaning they will not play
Rangers or the likes of Ajax, Schalke
and Spartak Moscow.
But the team everyone will want to
avoid is Jose Mourinho’s Real Madrid,
who look to be the strongest team in
Pot Two.
Teams cannot be drawn against
other from the same pot or the same
country, so Spurs cannot face any of
their Premier League rivals until the
knockout stage.
The seedings are based on a rank-
ing system calculated using perform-
ances in continental competition over
the last five seasons.
Pot One
Inter Milan
MAN UTD
ARSENAL
AC Milan
Barcelona
CHELSEA
Bayern Munich
Lyon
Pot Two
Werder Bremen
Roma
Benfica
Marseille
Real Madrid
Shakhtar Donetsk
Valencia
Panathinaikos
Pot Three
TOTTENHAM
Ajax
Basle
FC Copenhagen
Rangers
Schalke
Braga
Spartak Moscow
Pot Four
Hapoel Tel Aviv
Rubin Kazan
CFR Cluj
MSK Zilina
FC Twente
Auxerre
Partizan Belgrade
Bursaspor
6-3 on aggregate

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