Cityam 2010-12-23

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A FORMER New York state attorney
has said the lawsuit filed against Ernst
& Young (E&Y) for allegedly assisting
Lehman Brothers’ financial fraud is
likely to be based on strong evidence
and have a high chance of success.
Attorney general Andrew Cuomo's
office “will have made sure they have
a slam dunk for a settlement at the
very least,” lawyer and former state
prosecutor Stuart Meissner told City
A.M. last night.
US lawyers have“typically got sig-
nificant email correspondence to
back up the attorney general’s case,”
Meissner said, largely as it has only
limited resources and attorneys at its
disposal so must be highly selective
about the cases it pursues.
Ernst & Young faces a civil com-
plaint of misleading investors about
Lehmans’ financial health, by filing
clean audits despite being aware that
the bank was using an accounting
loophole, Repo 105, to remove billions
of dollars of risky assets from its bal-
ance sheet at the end of each quarter.
Ernst & Young has rebuffed the
complaint, issuing a statement today
saying it would “vigorously defend
itself against the civil claims alleged”.
“There is no factual or legal basis
for a claim to be brought against an
auditor where the accounting for the
underlying transaction is in accor-
dance with the Generally Accepted
Accounting Principles,” it said.
Meissner said the case may also have
implications for other auditors of
banks that subsequently failed or
received bailouts.
“It is certainly a shot across the bows
of any large public auditing firm
auditing financial services firms,” he
said, as it showed they could be prose-
cuted not just by civil litigants, but by
the attorney general.
Meissner was a New York state attorney
on financial cases under Eliot Spitzer.
BY ALISON LOCK
ENFORCEMENT

Cabinet secretary Gus O’Donnell (l) said that he was satisfied with Jeremy Hunt’s position (r) Pictures: REX
CULTURE secretary Jeremy Hunt’s
suitability for taking over the media
regulation brief was called into
question yesterday as cabinet secre-
tary Gus O’Donnell said that he had
taken legal advice regarding Hunt’s
impartiality.
Hunt has found himself thrust
into the controversy surrounding
business secretary Vince Cable after
David Cameron transferred all of
Cable’s responsibilities relating to
regulation of the media to him.
The changeover means that Hunt
will be responsible for deciding
whether News Corporation’s proposed
buyout of Sky is allowed to go ahead.
But he was embroiled in a row over
his past expression of support for
News Corp, in light of Cable’s demo-
tion over his hostility to the firm. Hunt
has in the past spoken in favour of
Murdoch, saying that he has “probably
done more to create variety and choice
in British TV than any other single per-
son”.
Shadow business secretary John
Denham said that Hunt’s praise for
Murdoch makes him unsuitable for
his new role: “It is very hard to see how
any decision Jeremy Hunt makes will
enjoy complete confidence,” he said.
In a letter addressing Denham’s con-
cerns, O’Donnell said that he had been
forced to take into account Hunt’s past
comments on News Corp in consulta-
tions with lawyers over the transfer of
powers.
In the remarks Denham cited, Hunt
said: “We would be the poorer and
wouldn’t be saying that British TV is
the envy of the world if it hadn’t been
for Murdoch being prepared to take
that commercial risk (by investing in
Sky).”
But O’Donnell said that he was ulti-
mately “satisfied that those state-
ments do not amount to a
pre-judgment of the case in question”.
It also emerged that Hunt had met
privately with News International
chief executive James Murdoch upon
his appointment as culture secretary.
There were reports yesterday that
News Corp is now so confident that
the buyout will be passed by regulators
that it has cancelled a planned adver-
tising campaign aimed at promoting
the bid.
Lord Fowler, the veteran conserva-
tive, said that the News Corp bid for
Sky should be decided by an independ-
ent body.
Meanwhile, Cable was under contin-
ued pressure to quit in the wake of his
remarks that he is “at war with Rupert
Murdoch”. He was stripped of his regu-
latory powers over the media due to
the remarks but MPs on both sides of
the House have called for him to
resign.
Backbench Tory MP Christopher
Chope told City A.M. that Cable has “dis-
credited his position. The Prime
Minister and deputy prime minister
recognise that he’s a failure and nor-
mally what happens is if you’re a fail-
ure then you’d get the boot”.
Jeremy Hunt declined to comment
yesterday.
MORE LIB DEM MPS EXPOSED: P2
HUNT UNDER PRESSURE
OVER MURDOCH LINKS
BY JULIET SAMUEL
POLITICS

US attorney general
Andrew Cuomo’s office
is pursuing a civil
complaint against
auditor Ernst & Young
www.cityam.com Issue 1,291 Thursday 23 December 2010 FREE
Top lawyer: US has a strong case against E&Y
BUSINESS WITH PERSONALITY
















MERRY XMAS &
A HAPPY NEW YEAR
CITY A.M. WILL RETURN ON 4 JANUARY 2011












News
2 CITYA.M. 23 DECEMBER 2010
BAA chief will
give up bonus
BAA chief Colin Matthews will relin-
quish his 2010 bonus, following criti-
cism of the operator’s handling of bad
weather at Heathrow airport.
Matthews refused to confirm the
amount of money involved when he
announced his decision yesterday, but
company accounts put his total earn-
ings including bonus at £944,000 for
last year.
Despite Heathrow’s second runway
reopening yesterday, two thirds of
flights using the airport are still facing
delays, and Matthews admitted that
the response had been insufficient.
“Passengers have been hugely disrupt-
ed,” he said in a statement. “I want to
focus entirely on getting them where
they want to be.”
Gatwick airport, which BAA sold to
Global Infrastructure Partners last
year, has fared better during the
recent cold weather. The operators
have put this down to increased invest-
ment in snow-clearing equipment
used by airports in Switzerland, with
six new snowploughs ordered from
Zurich in the past month.
As BAA denied that a shortage of de-
icer was to blame for the delay in clear-
ing runways, UK road officials warned
that more than half of the country’s
salt stocks had already been used, and
that rationing could be introduced to
maintain supplies.
BY ELIZABETH FOURNIER
TRANSPORT

Happy Christmas to all our readers
AS another year draws to a close we at
City A.M. have good reason to feel for-
tunate about the way things turned
out in 2010.
Firstly, it was a sensational year for
news, both financial and political.
In the financial sphere, there was
the takeover of Cadbury by Kraft,
which brought all sorts of calls at the
end of it for a reform of the City’s
takeover rules.
Then there were the deals that did
not go ahead, like BHP’s hostile bid
for Potash and the Prudential’s bid for
AIA.
As we showed by the people we
included in the CityJet/City A.M. Power
Hundred it was the year that the City
truly got back to work after the peri-
od of the credit crunch .
Politically, 2010 has been a truly
dramatic year, with the general elec-
tion ending in a stalemate and ulti-
mately a coalition government.
For us, it was a historic occasion
since we published our first ever after-
noon edition on the day after the elec-
tion vote, with reporters working
through the night here to give read-
ers our insight into the results and
what they meant for the City and the
financial markets.
Also in 2010 we held our first annu-
al awards ceremony, attended by
more than 450 people, at which Lord
Coe made a truly inspiring speech
about London and the run-up to the
Olympic Games in 2012. The event
attracted a host of high profile figures
from the City and was generally con-
sidered a success.
And most recently we have been
extending the distribution of City A.M.
so that more of our readers get the
chance to see the newspaper at the
beginning rather than the end of
their journeys.
Last, but not least, the newspaper,
now in its sixth year, is currently mak-
ing a profit, thanks to the tremen-
dous support of our advertisers and
sponsors. So a big thanks all round,
most of all to our readers whom we
hope enjoy the best of health over
christmas and the New Year.
As we head into 2011 much of the
early focus of the financial markets
will be on the effects of the public sec-
tor cuts on the private sector and the
economy as a whole. As a newspaper
we don’t believe the economy will
take a nosedive, all things being
equal. But given that all things are
rarely equal, any number of events
could derail the success of the auster-
ity programme.
I’ll be looking with interest at the
direction the Labour party takes. The
present government does not think it
needs a Plan B in case its measures
fail to grow the economy but it is cru-
cial for Labour that it gets in place an
economic Plan that provides the pub-
lic with an alternative to current poli-
cy. Otherwise opponents – and there
are many, of course – have nowhere to
head but to demonstrations and
protest marches (of which there will
be plenty).
Observing the paucity of ideas from
the opposition now on the economy,
it seems hard to believe that for a
large part of the party’s 13 years in
power it rubbed along with the busi-
ness community rather well and that
for much of that period the UK was a
good place to do business in.
Today Ed Miliband’s party looks
sidelined, content to watch on as the
Lib Dems and Tories fight amongst
themselves but as yet offering very lit-
tle of their own. It’s time to do some-
thing about it. If the economy takes a
wrong turn now, we could be heading
for an election sooner than we think.
[email protected]
FURTHER lurid comments emerged
from Liberal Democrat ministers’
secretly-taped conversations yesterday.
Ministers criticised Prime Minister
David Cameron and chancellor
George Osborne's privileged back-
grounds and described them as
untrustworthy, new exerpts from
conversations with undercover
Telegraph reporters revealed.
Deputy leader of the House David
Heath, said Osborne had “a capacity
to get up one’s nose” and had “no
experience of how ordinary people
live,” while local government minis-
ter Andrew Stunell said he did not
know where the Prime Minister stood
on the “sincerity monitor”.
“I don’t want you to trust David
Cameron,” care minister Paul Burstow
said. The revelations were the third
day of embarrassment for the govern-
ment after comments from Vince
Cable threatening to bring down the
coalition were published.
BY ALISON LOCK
POLITICS

More Lib Dems exposed
David Heath, deputy leader of the House, has been recorded criticising George Osborne
NEWS | IN BRIEF
The Power Hundred draw results
Congratulations to seven of our readers
who have each won a pair of flights from
CityJet airport after taking part in our
competition to help choose the
CityJet/City A.M. Power Hundred, pub-
lished yesterday. The winners are: Paul
Schofield, Andrew Burke Walsh, Michael
Ellis, David Doumani, Natalia Poupar,
Alice Burden and Natalie Block. There
were 176 valid entries in total.
The readers’ entries for the three most
powerful people in the City looked
remarkably similar to our own choice,
with Bank of England governor Mervyn
King topping our list.
US GDP growth revised upwards
American GDP growth was revised only
slightly upwards for the three months to
September, it was revealed yesterday.
Compared to the same time the previous
year, the economy grew by 2.6 per cent,
up just 0.1 per cent from the previous
estimate. Economists had expected a
larger revision, yet weak consumer
spending deflated the figures. And the
number of US home sales for November
also showed lower than expected
growth – 4.68m sales. ECONOMICS: P8
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 David Crow
Night Editor Katie Hope
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
Sports Editor Frank Dalleres
Art Director Craig Gaymer
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
www.pcc.org.uk
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Distribution helpline
If you have any comments about the distribution
of City A.M. Please ring 0207 015 1230, or email
[email protected]
BAA chief Colin
Matthews will forgo
his 2010 bonus
following disruption
at Heathrow airport
PATTEN TOPS LIST TO CHAIR BBC
TRUST
Six people are on the shortlist to be
the next chairman of the BBC Trust,
according to two insiders who have
seen the document. Lord Patten, for-
mer Conservative party chairman
and the last governor of Hong Kong,
is clear favourite. But Sir Howard
Davies, director of the London School
of Economics, might be preferred if
the BBC were to be subject to more
stringent reforms, the pair said.
ONION CRISIS ADDS TO INDIAN PM’S
WOES
Manmohan Singh, India’s Prime
Minister, already under fire over a
multibillion-dollar telecoms corrup-
tion scandal, suddenly has a more
down-to-earth problem on his plate –
the skyrocketing price of onions.
Their price at India’s retail vegetable
markets has doubled from Rs35
($0.78) per kg to Rs80 in the past few
days, angering consumers already
feeling the pinch from a year of food
price inflation and rising fuel prices.
WALL STREET POISED FOR EARNINGS
HIT
Wall Street’s fourth-quarter results
are set to be dogged by sluggish trad-
ing activity as Europe’s economic
woes and rising competition deprived
banks such as Goldman Sachs and
Morgan Stanley of a key source of
profits, executives and analysts said.
Lacklustre earnings in fixed income
trading in the past two quarters of
2010 after a robust first half will put
pressure on banks to pay smaller
bonuses to traders. Last year, as the
financial crisis receded, star traders
in the bond, foreign exchange and
commodities markets received large
pay-outs on the back of surging prof-
its. Several analysts have already cut
their fourth quarter profit forecasts.
LET RIVALS JOIN THE WHITEHALL
CLUB, FOX WARNS DEFENCE ELITE
Liam Fox has demanded that Britain’s
most powerful grouping of defence
companies become more representa-
tive and less “clubby” or risk being
frozen out of government circles.
The defence secretary is understood
to be concerned that while the
Defence Industries Council has access
to the highest levels of his ministry, it
represents only nine of the 9,000
companies in the sector.
TYCOON SET TO TEST APPETITE FOR
REDBACK
Hong Kong’s wealthiest tycoon is
poised to test the city’s appetite for
renminbi-denominated shares with a
10bn renminbi (£977m) of stock in a
REIT as the former British colony
seeks to make itself the global launch
pad for the Chinese “redback”.
UK ECONOMY COULD CONTRACT IN
2011, WARNS BANK OF ENGLAND'S PAUL
FISHER
A senior Bank of England official has
warned that the economy may suffer
another period of contraction in 2011,
more than a year after the recession
officially ended. Paul Fisher, executive
director of markets and a member of
the Monetary Policy Committee
(MPC), warned: “It’s not impossible
that we would see a quarter of nega-
tive growth.”
RECORD £10BN DROP IN UK EXPORTS
BLAMED ON BANKER BASHING
Official figures show the biggest ever
drop in UK exports of financial servic-
es – down by £10bn or one fifth in a
year – according to a leading econo-
mist who blames banker bashing crit-
ics in government and the media. Tim
Congdon has based his analysis on
Central Statistical Office figures.
WALGREEN PROFIT RISES 19 PER CENT
Walgreen’s earnings rose 19 per cent
as the drugstore operator benefited
from cost controls and its slowing of
new-store openings. The US’s largest
drugstore chain has seen its monthly
results mostly buck the sector’s gen-
eral weakness, with pharmacy opera-
tions that far outpaced its rivals.
AIG NEARS CHOICE OF BUYER FOR
TAIWAN LIFE INSURER
Directors of American International
Group are expected to confer todayto
try to agree on a preferred bidder for
its Taiwan business, according to peo-
ple familiar with the situation. That
choice likely will be announced next
week, the people said. AIG has been
struggling to raise more than $2bn by
selling Nan Shan Life Insurance. The
company has been winnowing the
list of suitors based on who is likely to
win approval from a local regulator
WHAT THE OTHER PAPERS SAY THIS MORNING
TWO of Europe’s biggest alternative
equity trading venues are in exclusive
talks, it was announced yesterday, in
a sign that the sector is starting to
consolidate.
BATS Global Markets, which oper-
ates the third-largest US stock
exchange and Europe’s second-
biggest alternative trading platform,
is in talks to buy Chi-X Europe,
Europe’s second-largest stock
exchange. The two platforms com-
bined would create the biggest
exchange in Europe by volume.
In a statement, the companies said
they had “entered exclusive negotia-
tions regarding the potential sale of
Chi-X Europe to BATS Global Markets”.
Chi-X, which facilitated trading of
€372.2bn (£315.4bn) turnover in the
third quarter of this year, has been
effectively up for sale since August
when it announced a third party had
enquired about buying it.
The exchange, established in 2007,
hired London-based investment bank
Lexicon Partners to advise it and
reportedly discussed a takeover deal
with US exchange Nasdaq and the
NYSE Euronext among other bidders
before settling on BATS.
Sources told City A.M. that a
takeover of Chi-X Europe should be
welcomed by shareholders, as neither
exchange is currently profitable, due
to the competition for trades between
up to 40 alternative platforms in
Europe. “They don’t make any money
so it would make sense for the two to
consolidate,” one said.
BATS Europe has a weekly turnover
of about €10-15bn and about a 12 per
cent market share of FTSE100 trading,
data from technology provider
Fidessa shows, while Chi-X Europe
has about a 25 per cent share of
FTSE100 trading. BATS’ US exchange
has weekly turnover of about $15-
20bn, according to Fidessa’s data.
Equity trading in Europe has frag-
mented since European regulation
removed national stock exchanges’
monopolies over where stocks could
be bought and sold in November 2007.
Alternative trading venues have
flourished, but their high running
costs and the limit on total trading
volumes mean they are “fighting
for a shrinking pool,” and many
have an “unsustainable” model, the
source added.
Chi-X Europe
and BATS in
exclusive talks
ASTON Martin is in talks with
Daimler over a potential partnership
that would see the British luxury car-
maker design and build the German
company’s Maybach brand.
Aston Martin, renowned for mak-
ing vehicles driven by James Bond, is
expected to take engine technology
from Daimler in exchange for build-
ing cars – potentially halving the cost
of developing the new car.
Daimler has already commissioned
a mock-up of the new car which
could feature at the Frankfurt Car
Show in 2011.
Daimler manufactures the upmar-
ket Mercedes-Benz car range from fac-
tories in Germany and the US.
Despite sluggish sales, Daimler
recently denied rumours that it was
planning to drop the Maybach.
Aston Martin joins
Daimler on new car
FORMER BP chief Lord Browne is con-
sidering buying businesses from his
former firm as BP divests assets to
raise cash for its US lawsuit.
Riverstone, the US private equity
house at which Browne is now a part-
ner, is reportedly considering bids for
BP businesses being auctioned.
Assets include its Canadian natural
gas liquids processing facilities worth
$2bn (£1.3bn), recently put up for sale.
The move would mark a return to
managing assets that Browne man-
aged during his tenure at BP’s helm,
Sky News reported yesterday. Browne
is credited with building BP into a
global energy player before handing
it over to Tony Hayward in 2007.
There is no guarantee that
Riverstone will make any formal bids,
the report said.
The assets have been put up for sale
to raise an estimated $30bn for use as
BP fights a $21bn US government law-
suit resulting from the Gulf of Mexico
oil spill this year. BP announced last
week that it will sell oil-producing
blocks in Pakistan to a Hong Kong
investor, UEG, for $775m, in a move
that will take its total raised to $22bn.
New York-based Riverstone, which
specialises in energy investments, has
also reportedly been mulling a bid for
Shell-owned oil fields in Nigeria.
Lord Browne’s US fund is mulling
a bid for auctioned BP assets
BY ALISON LOCK
FINANCIAL MARKETS

ENERGY

BATS chief execu-
tive Joe Ratterman
(l) and Alasdair
Haynes (r), chief
executive of Chi-X
Europe, are now in
exclusive talks
BY KATIE HOPE
AUTOMOTIVE

News
3 CITYA.M. 23 DECEMBER 2010
NORTHERN Foods yesterday con-
firmed it had been approached by
rival Boparan Holdings about a pos-
sible cash takeover offer, less than a
month after it agreed to a merger
with Irish food manufacturer
Greencore.
Boparan, the owner of Harry
Ramsden’s restaurants and the
biggest chicken producer in Europe,
has been granted access to Northern’s
financials after writing to the compa-
ny last week.
Ranjit Boparan, the millionaire
behind the interest, has hired
Rothschild to advise on a possible
offer. He has increased his sharehold-
ing in Northern Foods from less than
three per cent to 6.6 per cent since
the Greencore merger was
announced on 17 November.
The current merger represents a nil
premium to shareholders, which sev-
eral insiders said would likely be bet-
tered if a rival proposal does emerge.
Northern and Greencore both
released statements reiterating their
boards’ support for the existing deal
to create a new firm, Essenta. An EGM
to approve the deal is scheduled for
31 January.
Northern Foods bounced up 4.1 per
cent to close at 63p yesterday, while
Greencore fell 6.5 per cent to €1.25.
Boparan eyes
Northern bid
BY MARION DAKERS
M&A

AUSTRALIA’S Qantas Airways plans to
return more of its Airbus A380 super-
jumbos to service after disruption
caused by the blow-out of a Rolls-
Royce engine on one of its jets last
month.
The carrier said it will have five
A380s in service by the end of the
week as it prepares to handle peak
traffic at the start of the Southern
hemisphere holiday season.
Qantas was forced to ground its six
superjumbos after a Rolls Trent 900
engine on one of its A380s partly dis-
integrated mid-flight on 4 November,
forcing an emergency landing.
Qantas will have four of its older
A380s in service this week and will
also add a new A380 to the fleet. It
added that another new superjumbo
is expected to arrive in January.
One of its older A380s remains
under inspection while the aircraft
involved in the November incident is
being repaired.
Qantas has threatened legal action
against Rolls to secure compensation
for costs incurred as a result of the
engine failure on the Singapore to
Sydney flight.
Air regulators said that checks
imposed on all A380s run by Qantas,
Lufthansa and Singapore Airlines
were being reduced after investiga-
tors moved closer to identifying the
cause of the accident.
Qantas to put more A380s
back in the air after accident
BY PHILIP WALLER
AVIATION

News
4 CITYA.M. 23 DECEMBER 2010
BATTERSEA REDEVELOPMENT GETS OKAY
MAYOR of London Boris Johnson gave the go-ahead yesterday for the redevelopment of
Battersea Power Station and its surrounding area. The new scheme is part of a wider
£5.5bn development that involves an extension to the Northern Line and the construction
of thousands of homes, plus retail and office space. The proposal will now go before the
secretary of state for communities and local government. Picture: GETTY
46
50
54
58
62
4Nov 25Nov 17Dec 28Sep 19Oct
ANALYSIS l Northern Foods
p
63.00
22 Dec
Management should stick to Plan A
RANJIT Boparan’s plan to bid for
Northern Foods might be audacious, but
the odds are stacked against it. An
already-planned merger between
Northern Foods and Irish rival Greencore
is still the best deal on the table.
The marriage of Northern and Greencore
– the two leading chilled players in the
UK market – would bring significant
benefits; cost synergies are expected to
total some £40m. However, the main
advantage would be the extra clout that
the pair could expect as the number one
player in private label ready meals.
Currently, the market is too fragmented;
smallish firms lack the scale required to
extract a decent return from increasing-
ly powerful supermarkets.
As a specialist in raw – rather than pre-
pared – chicken, Boparan’s 2 Sisters food
would be a less suitable partner; the syn-
ergies would be smaller and the bargain-
ing power less strong. It could also
struggle to swallow Northern’s £140m
pension deficit, which is one of the key
parts of its merger structure with
Greencore. For that reason, manage-
ment should stick with Plan A.
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Do you:
BRITISH Land confirmed its deal with
Oxford Properties to build the
Cheesegrater skyscraper yesterday,
bringing the £340m project closer to
fruition after it was sidelined during
the recession.
British Land has kicked off the
50:50 joint venture by contributing
the site on Leadenhall Street, worth
£90m, and expects to spend a further
£125m. The FTSE 100 firm will act as
lead development manager.
Planning consent, demolition and
initial work has already been complet-
ed, and the 736ft (224m) tower is
scheduled for completion in mid-
2014.
The developers of the wedge-shaped
building, which has been designed by
Rogers Stirk Harbour and Partners,
are yet to sign up a pre-let tenant,
although there are already thought to
be several companies interested in
taking space.
The companies said yesterday a
range of occupiers from the insur-
ance, financial, professional and cor-
porate business sectors have
expressed an interest in the 610,000
square feet of office space available.
Oxford Properties, the real estate
arm of the Ontario Municipal
Employees Retirement System pen-
sion fund, manages C$16bn (£10.3bn)
of real estate around the world. It is
an investor in the Watermark Place
development next to Cannon Street
station.
Oxford Properties’ senior managing
director in Europe, Paul Brundage,
said: “In investment terms, this proj-
ect is consistent with Oxford
Properties’ strategic goals and is fur-
ther evidence of our long-term com-
mitment to, and confidence in, the
London market.”
British Land chief executive Chris
Grigg added that the Leadenhall
Building “will provide the City of
London with a unique combination of
iconic architecture with world-class
public and office spaces”.
Shares in British Land, the UK’s
largest real estate investment trust
with £8.9bn of assets under manage-
ment, closed up 1.3 per cent at 529.5p.
Cheesegrater
project gets
the go-ahead
BY MARION DAKERS
PROPERTY

Gi eves & Hawkes are proud to
announce t he openi ng of our
temporary outpost
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Thursday 10am - 7pm









L L
s g n i
GREEK lawmakers last night
approved a 2011 austerity budget
that imposes yet more cuts on the
nation, hours after thousands took
to the streets shouting “We can’t
take it anymore.”
The bill targets a budget deficit
of 7.4 per cent of GDP next year,
down from about 9.4 per cent this
year, through more spending cuts
and tax increases. This would put
Greece in line with the terms of the
bailout that saved it from bank-
ruptcy in May.
“We will do whatever it takes to
succeed,” Prime Minister George
Papandreou told lawmakers just
before the vote. “We will change
this country.”
Public transport ground to a halt
in the capital yesterday as about
3,000 protesters rallied peacefully
in front of parliament against wage
cuts in the public sector and other
steps aimed to stem the crisis that
has shaken the Eurozone.
The new spending cuts and tax
rises in next year’s budget build up
on an estimated six percentage
points reduction of deficit in 2010.
But Greece is still set to miss its
2010 fiscal targets and the meas-
ures have failed to calm fears about
its ability to pull itself out of crisis.
Five Greek banks were told yes-
terday by Fitch Ratings that their
credit rating could be downgraded
to junk status, a day after sovereign
ratings were put under the same
watch.
The move would bring Fitch’s rat-
ings in line with Moody’s and
Standard & Poor’s, which already
have sub-investment grade ratings
on the country, and both are on
review for further downgrades.
Greek 10-year bonds fell 0.198 in
price to bid 67.367, yielding 12.217
per cent. The spread of Greek
bonds over German bunds widened
slightly to 9.26 per cent.
Greece approves new austerity
package amid downgrade threats
BY HARRY BANKS
EUROZONE

Retailers hit
back over
BBC claims
THE British Retail Consortium (BRC)
has branded a withering attack on
supermarket expansion broadcast
on the BBC’s Panorama last night as
“misleading”.
Programme makers indicate that
the UK’s major grocers are growing
more quickly than ever, suggesting
that one of Tesco, Asda, Sainsbury’s
and Morrisons effectively gets plan-
ning permission for a new store
“every working day of the year”.
But BRC director general Stephen
Robertson said that it was “ridicu-
lous to portray healthy business
growth as something sinister” and
welcomed the jobs their expansion
had brought.
BBC research suggests that cam-
paigners are concerned for the
health of local high streets, and
reports that planning permission for
577 UK supermarkets was approved
in the past two years, with at least
480 of these developments by the so-
called Big Four.
Sainsbury’s has dramatically
increased its floor space this year.
But the BRC has figures from retail
research organisation Verdict, which
show that overall grocery retail floor
space has increased relatively slowly
over the last 10 years at between one
and two per cent every 12 months.
“Supermarkets should be praised
for the contribution they make to
jobs, the economy and local commu-
nities, and the figures do not
include closures,” Robertson added.
BY JOHN DUNNE
RETAIL

AMERICAN APPAREL DENIES WRONGDOING
DOV Charney, chief executive of American Apparel, yesterday denied assertions that the
US clothing retailer had withheld crucial financial information from Deloitte & Touche,
which resigned as its independent accountant in July. American Apparel has faced criti-
cism over lax financial controls and poor management. Picture: REX
News
6 CITYA.M. 23 DECEMBER 2010
THE Irish government will apply
to the High Court today to pump
€3.7bn (£3.15bn) of state cash into
Allied Irish Banks (AIB), according
to reports.
Finance minister Brian Lenihan
has said he will inject fresh capital
into the country’s second-largest
lender before the end of the year
to bring its core tier one capital
ratio to eight per cent.
The move will mean that the
government will have almost full
ownership of what was once
Ireland’s largest listed lender.
Under an EU and IMF agreement,
AIB needs nearly €10bn to bring its
core tier one capital ratio to 14 per
cent by the end of February.
Irish government aims to shore up
AIB with an extra €3.7bn state cash
IRISH ECONOMY

485
495
475
465
505
515
525
4Nov 25Nov 17Dec 28Sep 19Oct
ANALYSIS l British Land
p
529.50
22 Dec
GROWTH in the middle of the year
was slightly less than previously esti-
mated, the Office for National
Statistics (ONS) revealed yesterday.
The economy expanded by 0.7 per
cent in the third quarter of 2010, and
by 1.1 per cent in the second. Yet the
ONS revised both levels down by 0.1
per cent on their November estimates.
The declines “are nothing to be too
concerned about,” according to
Andrew Goodwin, economist at the
Ernst and Young Item Club. “Growth
at that level is certainly not to be
sniffed at -- six months ago we would
have happily taken that,” he added.
And investment for the three
months to September grew by 3.4 per
cent on the previous quarter, a huge
rise from the previous estimate of 0.6
per cent – driven largely by business
investment, which totalled £30.2bn.
“We expect to see a steady recovery
in investment in the quarters ahead,”
said Hetal Mehta of Daiwa Capital
Markets.
And personal savings were healthier
than expected. On average households
saved five per cent of their disposable
income, up from November’s estimate
of 3.5 per cent, while households’ dis-
posable incomes grew by 1.1 per cent.
“The higher level of saving is com-
forting,” said Philip Shaw of Investec.
“It gives households a bigger buffer of
unspent disposable income to with-
stand next year’s spending cuts and
any further increases in costs such as
food prices.”
“The UK recovery is still strong and
confirms our assessment that the
economy will be able to cope with the
deficit cutting programme without a
major relapse,” said David Kern of the
British Chambers of Commerce.
However, there was also an increase
in less sustainable elements of growth,
such as stockbuilding. Growth in stock-
building for the three months to
September tripled, to 0.3 per cent.
And the contribution of govern-
ment expenditure fell by 0.4 per cent
in the third quarter, a downward revi-
sion from the previous estimate,
which showed a 0.6 per cent rise.
Although on Tuesday the ONS
released figures for November show-
ing an surge in government spending,
sending the deficit back to worrying
levels for chancellor George Osborne.
Yet economists at least remain confi-
dent of private sector performance.
“Manufacturing is still growing at a
strong pace,” said Chris Williamson of
Markit. “It is likely to lead the economy
going into 2011, taking advantage of
rising demand in key export markets
such as the US, Germany, France,
China and the Middle East.”
Pace of UK’s
growth starts
to slow down
BY JULIAN HARRIS
UK ECONOMY

NET migration will not fall by much
next year despite the Conservatives’
pledge to reduce it to “tens of thou-
sands,” the Institute for Public Policy
Research (IPPR) said today.
And the government’s measures
to restrict immigration face legal
challenges from opponents and
attacks from business groups.
Entrepreneurs and investors will
no longer be able to enter the UK on
“Tier 1” applications, the govern-
ment suddenly declared yesterday.
“The early closure of the current
route will be an extra hurdle for
business ahead of the permanent
cap,” responded Baroness Jo
Valentine of London First.
The government wants to reduce
the annual number of non EU eco-
nomic migrants to 21,700.
But last week the High Court
upheld a challenge to the current
cap on non EU immigration.
And immigration from within EU
peripheral countries is likely to
increase, the IPPR said.
“The cap on skilled migration
from outside the EU could hurt the
economic recovery,” it said.
Crisis for government migration cap
BY JULIAN HARRIS
UK ECONOMY

Economics
8 CITYA.M. 22 DECEMBER 2010
WILL THE WEATHER AFFECT YOUR HOLIDAY PLANS?
Interviews by Tom Chatfield
“No, I don’t think it will.
I’ll be fine this
Christmas. I’m staying
at home so the weath-
er doesn’t affect my
plans.”
MARTIN ZETTER |
LLOYDS
ALAN DIXON |
INTER HANNOVER
JACK MANDUIT |
DELOITTE
“I’ll be absolutely fine,
I am at home this
Christmas. It’s getting
to work that is hard!”
“Hopefully the weather
won’t affect my plans. I
am coming into London
from the south east so
the weather could
affect the trains.”
ECONOMIST VIEWS: ARE YOU CONCERNED BY
THE DOWNWARD REVISIONS? Interviews by Julian Harris

HOWARD ARCHER | IHS GLOBAL INSIGHT
While disappointing, it does not fundamentally change
the picture that economic activity held up well in the third
quarter after robust growth in the second quarter.

Chancellor George Osborne hopes the economy will continue to recover

PHILIP SHAW | INVESTEC
Well the broad picture remains the same, which is that
GDP growth was impressively robust over the second quarter
and third quarter of the year.


VICKY REDWOOD | CAPITAL ECONOMICS
The raft of UK data do little to improve the prospects
for the economy next year, although the detail contained both
encouraging and worrying aspects.

P
i
c
t
u
r
e
:

M
i
c
h
a

T
h
e
i
n
e
r
/
C
i
t
y

A
.
M
.
INFLATION “could well reach four per
cent by the spring” – according to the
Bank of England’s Monetary Policy
Committee (MPC) minutes, released
yesterday.
The forecast is higher than the rate-
setting body predicted just one
month earlier, yet interest rates are
unlikely to be increased in the short
term, after eight of the committee
maintained their opposition to a
hike.
Andrew Sentance remains the only
member proposing a rise in rates, by
0.25 per cent, with Adam Posen the
only member to propose more quanti-
tative easing.
Yet the MPC is more hawkish than
before, according to the minutes,
released yesterday, from its meeting
in early December.
The minutes hint that even the
seven of the nine members who voted
to hold policy steady now believe
inflation may endure. Its medium-
term target for annual prices rises is
two per cent.
The minutes said that “most” of
those MPC members who thought
the current policy stance appropriate
“considered that the accumulation of
news over recent months had proba-
bly shifted the balance of risks to
inflation in the medium term
upwards”.
This marks a subtle shift from
November’s minutes, in which only
some MPC members thought risks to
inflation expectations had risen.
The minutes said MPC members
were ready to act if the balance of
risks changed significantly.
MPC forecasts
inflation to hit
four per cent
UK ECONOMY

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bank’s £500m outlay, but the £2.7m
restaurant will do its best to serve the
influx of new bankers. It will feature not
only a full Scottish menu along the lines
of its Bishopsgate and Belgravia branch-
es, but is also boasting of plans to build
“the world’s largest whisky bar, with a
selection of over 1,000 whiskys”.
The Scotch drinkers will need a decent
accompaniment for their glasses, to be
supplied in the form of a cigar shop fea-
turing a range of Cuban cigars and a
1000-foot, heated smoking terrace and
walk-in humidor.
MERRY RISK-MAS
You’ve got to applaud the effort. In a des-
perate attempt to make insurance festive,
Lloyds of London has announced the
appointment of a “Christmas risk officer”.
“The new CRO, Mrs Santa Claus, is
believed to be unhappy about the
appointment but accepts that someone
has to do it,” said Lloyds in a release on
Tuesday, calling Father Christmas’ deliv-
ery strategy “an inherently hyper-risky
business model”.
The Capitalist understands that Claus
will be responsible for polishing Rudolf’s
nose on misty nights and making sure it is
lit with the right wattage.
“Santa’s reputation is based on him
s uc c e s s f ul l y
making every
delivery on
time, on the
day,” says a consultant. “He
misses a delivery; he loses the franchise.”
And so on. Time for a holiday,
methinks.
WE NEED YOU
Do you enjoy lunching, partying and
meeting the best and brightest in the
City? If so, City A.M. wants you to become
the new Capitalist.
We’re looking to hire someone who’s
already familiar with the ebb and flow
of City life, with its constant stream of
parties, champagne receptions and
galas.
You will already know some of the
City’s biggest characters, and will need
to quickly learn the names and faces of
the rest.
You don’t need formal experience as a
journalist, but must have a knack for
picking up gossip, an eye for the comic
and curious and potential as a witty
wordsmith.
Those interested should apply by writ-
ing a sample article for the Capitalist
page, based on a good party or an inter-
esting snippet of news, along with a CV
and covering letter.
Applications should be sent to
[email protected]
TEMPERS
FLARE AT
PWC CAROL
SERVICE
YOU might think that playing the organ
at the office Christmas carol service is a
pretty uncontroversial activity.
Not so for a professional organist (as
they’re called) engaged for
PricewaterhouseCooper’s annual festive
singsong. The stage was set, the decora-
tions tweaked and the set list compiled
when all went awry.
It seems that Philip Mills, the organis-
er of the event and a director in the
firm’s legal division, had a very defini-
tive vision of how it should all go down.
The problem being that the organist did
as well.
Details are hard to come by, but we
understand that the two had “a creative
difference” about the mist machine that
had been hired to give the event an
atmospheric feel.
The result was a full-on strop by our
organ player, who was so incensed by
Mills cramping his style that he stormed
out five minutes before the show was
due to start, leaving the choir of two
dozen PwC workers without their
Christmas accompaniment.
What to do, as the first of the 200
attendees filed in through the beautiful-
ly arranged mist?
Luckily, a hero was on hand: PwC con-
sulting expert Charles Hildebrandt
bravely stepped up to the plate. He had-
n’t played an organ in seven years, but a
quick read-through of the score, and he
settled in for a flawless concert.
The audience was none the wiser –
until now.
CANARY WHARF COUP
It’s not just JP Morgan planning a big
investment in Canary Wharf real estate.
Boisdale restaurant, the smokers’ haven,
known for its extensive range of
cigars for sale, is also
opening up shop in the
Square Mile’s rival
locale, with a branch
coming to Cabot Place in
April.
It might not be on the scale of the
A back-up organist
from PwC’s consulting
arm saved the day
Pictures:
GETTY, REX, SXC
The Sunday Jazz Brunch is served from
12.00 am to 5.00 pm.
Live jazz is performed 1.00 pm - 3.00 pm.
Bookings: 020 7730 6922 or
[email protected].
Boisdale of Belgravia,
15 Eccleston Street,
Belgravia, London SW1W 9LX
Tel: 020 7730 6922 Fax: 020 7259 1257
www.boisdale.co.uk
OPEN AFTER THE
CHRISTMAS PERIOD
BOISDALE OF
BELGRAVIA
SUNDAY JAZZ BRUNCH
Santa’s deliveries: a “hyper-risky business model”
It is
understood
the organist
and the
organiser had
a “creative
difference”
about the
mist machine
CITY EYE
A businessman
stands at the top of
the Gherkin sky-
scraper in the City.
Picture: Rex
The Capitalist
10 CITYA.M. 23 DECEMBER 2010
EDITED BY
JULIET SAMUEL
GOT A STORY? EMAIL
[email protected]
SUPPORT services group Mouchel has
rebuffed a £119m takeover approach
from building company Costain.
Mouchel, which was the target of
an unsuccessful takeover attempt
by former rival VT Group last year,
said Costain’s 105.8p per share pro-
posal significantly undervalued the
business.
Costain, which made its approach
on 2 December, said Mouchel rejected
the all-share offer on 6 December and
there were currently no discussions
taking place between the pair.
Costain chairman David Allvey said
he believed there was a “compelling
strategic rationale” behind combin-
ing the two businesses.
He said the deal would create
value for both companies’ share-
holders by bringing together two of
the UK’s premium brands in con-
sulting, construction and care,
which would have a combined
order book of more than £4bn.
He said the deal would create sig-
nificant savings, would improve earn-
ings and dividend income and would
provide the potential for a re-rating of
the combined business.
Mouchel’s shares rose 23.5p to
96.5p while Costain’s stock dropped
by a penny to 205p.
Mouchel, whose operations range
from highway maintenance to con-
sulting for local authorities, has been
hit hard by government cutbacks.
Earlier this month it embarked upon
a strategic review of its business.
Rival support services firm VT
Group, which is now part of defence
group Babcock, tried to buy Mouchel
last year before dropping its interest
to try to fight Babcock’s takeover bid.
Costain is boosting consultancy
and maintenance operations along-
side building and engineering.
At the end of June, 14 per cent of its
£2.5bn order book was in operations
and maintenance.
Under the terms of the deal,
Mouchel shareholders would own
about 48 per cent of the combined
group.
Mouchel says
no to £119m
takeover bid
BY PHILIP WALLER
SUPPORT SERVICES

News
11 CITYA.M. 23 DECEMBER 2010
INVESTEC is acting as financial advis-
er and broker to Costain while RBS
Hoare Govett is representing Mouchel.
Charles Batten, James Rudd and
David Anderson at Investec act for
Costain and Neil Collingridge, Sara
Hale, Stephen Bowler and John
MacGowan at RBS Hoare Govett repre-
sent Mouchel.
Stephen Bowler is an executive
director at RBS Hoare Govett focus-
ing on oil and gas and mid-cap busi-
nesses. He specialises in domestic
and cross-border M&A, equity fund
raisings and listings of UK compa-
nies.
Bowler was a manager at Touche
Ross from November 1995 to
November 1999 and joined RBS in
December 1999.
Bowler is a veteran of several deals
such as a £350m fundraising by pri-
vate equity lender Intermediate
Capital last year.
Bowler and RBS colleague John
MacGowan advised Dana Petroleum
on its £1.8bn takeover by Korean
National Oil Corp.
MacGowan also advised the oil
explorer on its £270m purchase of
Dutch oil company Petro Canada
Netherlands in June and guided
plumbing specialist BSS on its pur-
chase by builders’ merchant Travis
Perkins.
INVESTEC
RBS HOARE
GOVETT
40
120
80
160
4Nov 24Nov 15Dec 27Sep 15Oct
ANALYSIS l Mouchel Group
p
96.50
23 Dec
The UK will pay for US net neutrality rules
T
HE US Federal Communications
Commission (FCC) announced
on Tuesday that it would
enforce the controversial princi-
ple of net neutrality in the US. The
issue of whether or not it has the
legal mandate for this statement will
no doubt bring on a multitude of law-
suits, as Republican federal commu-
nications commissioner Robert
McDowell said over the weekend. But
what, if anything, does this mean for
the UK and the EU in general?
Net neutrality is a confused term
that means all internet traffic should
be treated equally by internet service
providers (ISP). That sounds like a
good idea, but in practice ISPs use
traffic management every day to
ensure timely delivery of email to one
customer and video streaming to
another. Without traffic manage-
ment, the internet as we know it
today would suffer from greater con-
gestion and issues with content deliv-
ery. Net neutrality attempts to
regulate the internet, but by impos-
ing limits on the way ISPs do business
it risks making it harder to use.
Both the EU and UK support a light
touch approach to internet regula-
tion. They believe transparency in
both business offerings and practices
will leave room for innovation and
investment in next generation inter-
net technology. That stance isn’t
expected to change immediately, but
the FCC’s announcement will
inevitably influence decisions and
discussions as the 2009 Telecom
Directive is implemented next year
for all EU member states.
Meanwhile, US ISPs changing how
they do business will impact the UK
in a variety of ways. First, content cre-
ators like the BBC and ITV (which use
many small production companies
from London) won’t be able to strike
deals with ISPs in the US because the
FCC has banned ISPs from doing so to
differentiate their content offerings.
There is also now no guarantee
that the BBC’s international iPlayer,
due to launch next year, will not face
programmes delivered with delays or
severe buffering because all content
will have to be treated the same.
Major ISPs with an international
presence in the UK and the EU will
now have to invest in managing the
FCC rules in the US.
This will mean slower innovation,
fewer jobs created and less invest-
ment in their international business,
as ISPs review their internal processes
and put more time and effort into
achieving “neutrality”.
Though this might sound grim, the
good news is that the FCC hasn’t
applied such strict measures to wire-
less broadband. So in the US we will
see more investment in wireless
broadband, the fruits of which will
benefit their businesses in the UK and
the EU as well.
Dominique Lazanski is technology policy
analyst for the Taxpayers’ Alliance
BUSINESS COMMENT
DOMINIQUE LAZANSKI
Saxo Bank A/S is authorised by Finanstilsynet, the Danish Financial Supervisory Authority.
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MINING group Rio Tinto could
announce its A$3.8bn (£2.5bn) offer
for Riversdale Mining today, before
time runs out on Riversdale’s trad-
ing suspension on the Australian
stock exchange.
Talks between the two companies
were ongoing yesterday, with Rio
understood to be offering around
A$16 a share for Mozambique-
focused Riversdale.
Riversdale could instead
announce a longer suspension from
the stock exchange this morning if a
deal is not finalised before the mar-
kets open, in accordance with
Australian trading rules.
Rio entered talks with Riversdale
at the start of the month, when Rio
was said to have offered A$15 a
share. The new offer represents a
13.5 per cent premium to
Riversdale’s share price before the
talks were announced.
If Rio succeeds, the purchase will
boost its presence in the coking coal
market, in which rival BHP Billiton
already has a large holding.
Meanwhile, Rio was yesterday
linked to Russian diamond miner
Alrosa, with Russian media report-
ing that the London-listed giant was
looking to spend $400m (£259.9m)
on a 49 per cent stake in the firm.
A spokesperson for Rio declined to
comment on either company yester-
day, while Riversdale also declined to
comment. State-owned Alrosa was
unavailable for comment.
Rio Tinto gets ready to offer £2.5bn to
take over Australia’s Riversdale Mining
FORMER Hewlett Packard (HP) chief
executive Mark Hurd is fighting to
keep private the letter that led to his
resignation from the technology
giant and has triggered an investiga-
tion by the Securities and Exchange
Commission into his departure.
The eight-page letter, in which for-
mer HP contractor Jodie Fisher is
believed to have accused Hurd of sex-
ual harassment, is currently under
seal in Delaware’s Court of Chancery
as part of a shareholder suit filed
against HP over the executive’s exit.
The law firm for the shareholder
suit said last month it would publi-
cise the letter, but Hurd’s lawyers
have filed a motion to keep the letter
private.
Hurd has denied having an inap-
propriate relationship with Fisher.
His spokesman said on Monday
that “Mark acted properly in all
respects.”
After leaving HP, Hurd joined rival
Oracle as a co-president.
Ex-HP boss Hurd in bid to
keep Fisher letter private
TECHNOLOGY

CARLYLE Group is in talks to buy
AlpInvest Partners, one of the world’s
largest private equity investors with
more than €40bn (£34.1bn) under
management.
Buying AlpInvest, which manages
the private equity investments for
Dutch asset managers APG and PGGM
Investments, would help Carlyle
diversify its businesses as it prepares
to follow rivals Blackstone Group and
Kohlberg Kravis Roberts to a public
listing.
Carlyle, one of the world’s largest
buyout firms with $97.7bn under
management and investments in
companies such as Dunkin’ Brands,
has been considering an initial public
offering for years and is expected that
to file papers to go public late next
year.
“On a broad level you can under-
stand the motivation,” said Josh
Lerner, a Harvard Business School
professor specialising in private equi-
ty. “Private equity has many virtues
but one of the downsides is that it
tends to be a pretty cyclical business --
it has a boom-bust flavor.”
It is believed that a deal for
AlpInvest could be reached in the first
quarter, although talks have not offi-
cially been made public yet.
A sale of the firm has been in the
works for several months, according
to media reports. APG and PGGM
each own 50 per cent of AlpInvest.
Carlyle is in
talks to buy
AlpInvest
PRIVATE EQUITY

DUBAI’S DP World yesterday moved
to cut its debt and focus on emerging
markets by selling 75 per cent of its
Australian port operations for $1.5bn
(£970m) to private equity firm Citi
Infrastructure Investors (CII).
DP World – considered one of the
more profitable units of debt-laden
Dubai World – said yesterday that it
will keep 25 per cent of DP World
Australia and will retain earnings by
continuing to manage the operations.
The ports operator, which said it
had a net debt of $5.9bn, was exclud-
ed from Dubai World’s $25bn debt
restructuring plan.
Creditors gave the plan final
approval in October, a milestone in
the Gulf emirate’s attempt to dig itself
out of an estimated $115bn debt hole.
DP World chief executive
Mohammed Sharaf said all the pro-
ceeds will go to reducing net debt and
he had no plans to sell other assets.
DP World has been mulling
options for the port since 2008.
DP World cuts debt with
$1.5bn Australian port sale
M&A

SHARES in microchip manufacturer
ARM Holdings jumped yesterday on
reports that Microsoft is working on a
new version of Windows for tablet
computers that would use the UK
firm’s processors.
The electronics giant is expected to
use the Consumer Electronics Show in
Las Vegas in January to unveil the soft-
ware.
ARM’s shares surged 36.75p to a
nine-year high of 440.25p – a rise of
nine per cent.
An ARM spokesman said: “ARM’s
position is that we never comment on
speculation about our products.”
ARM chips are already used in prod-
ucts that use Windows operating sys-
tems such as the Windows Phone and
satellite navigation technology using
Windows software.
But it is understood it would be the
first time they would be used in a prod-
uct such as a tablet computer using
Windows software.
Microsoft is thought to be hoping to
use the technology to regain an advan-
tage lost to rivals Apple and Google in
the pad and smartphone markets.
It only became clear that ARM-
designed chips were used in Apple’s
iPad following its launch in April after
technology enthusiasts had taken the
iPad apart and identified the parts.
Microsoft took out a licence on ARM
technology in July, allowing it to use its
designs for its own purposes.
The two companies have co-operated
since 1997 but the new licence was
seen as an expansion of their links.
Broker RBS said Windows Phone 7
runs exclusively on Arm, but Windows
7 runs exclusively on Intel’s architec-
ture. The broker said it believed ARM
chips in a Windows tablet computer
may pave the way for them to be used
in notebook, desktop and server com-
puters.
ARM surges on Microsoft deal
BY PHILIP WALLER
TECHNOLOGY

BY MARION DAKERS
MINING

News
13 CITYA.M. 23 DECEMBER 2010
PROPERTY and casualty insurer Catlin
published its losses linked to the New
Zealand earthquake yesterday, which
were $10m (£6.5m) more than previ-
ously thought.
The Lloyd’s of London insurer said
the quake in September leaves it
exposed to around $45m of claims,
net of reinsurance – $10m more than
the group’s earlier figures.
The firm said it has reviewed all its
insurance contracts and collected
data from brokers and clients to
arrive at the sum.
The vast majority of the loss is due
to property reinsurance contracts
written by underwriting hubs in
London and Bermuda, Catlin said.
Catlin currently puts the total
insured losses resulting from the
earthquake at between $5.5bn and
$6bn.
The magnitude seven earthquake
on New Zealand’s South Island
demolished shops and homes when it
struck in the early hours of 4
September.
The quake brought down power
lines and bridges, and wrecked roads
and building facades but did not
result in any deaths.
In its November interim manage-
ment statement, Catlin said claims
from the quake were “not material”.
Earlier this year the firm’s profits
were dented by $180m losses arising
from the Chilean earthquake and the
Deepwater Horizon explosion.
The Lloyd’s market saw its profit
cut in half to £628m in the first half of
the year thanks to the spate of disas-
ters. The group’s total claims ratio
stood at 98.7 per cent of premiums for
the period, up from 91.6 per cent a
year ago.
London-listed shares in Catlin
closed down 1.25 per cent at 369.9p
yesterday, giving the firm a market
cap of £1.34bn.
Catlin reveals
losses for New
Zealand quake
BY MARION DAKERS
INSURANCE

ANALYST VIEWS: WHAT DO THE NEW ZEALAND
LOSSES MEAN FOR CATLIN? By Marion Dakers

BEN COHEN | COLLINS STEWART
It looks manageable from the annual estimates, so the
figures shouldn’t change. It seems like Catlin is heading off
questions about the quake before they arrive.

Catlin chief executive Stephen Catlin said losses from the New Zealand quake would total $45m

NICK JOHNSON | NUMIS SECURITIES
The loss is relatively small scale at 7p per share after
tax. Catlin is so far one of the few UK stocks to have pub-
lished an estimate for the New Zealand earthquake.


JOANNA PARSONS | RBS
I’m not surprised to see the New Zealand losses
going up. It will probably affect Catlin’s figures but I don’t
think it will have a fundamental impact.

340
320
360
380
4Nov 24Nov 14Dec 27Sep 15Oct
ANALYSIS l Catlin
p
369.90
23 Dec
NIKE shares fell almost six per cent
yesterday after it posted future orders
results that missed analysts’ expecta-
tions and said it may have to raise its
prices.
The world’s largest sportswear firm
said a jump in cotton costs could trig-
ger a rise in the price of its goods.
Orders for Nike shoes and clothing
for delivery between December and
April were $7.7bn (£4.98bn), a rise of
11 per cent.
Analysts said Wall Street was
expecting a figure of 12 or 13 per
cent.
“They didn’t beat rising expecta-
tions for future orders and that’s why
the stock’s down,” said Jon Fisher,
portfolio manager with Fifth Third
Asset Management, which owns Nike
shares.
Nike executives repeated com-
ments from the previous quarter that
rising cotton, labour and transport
costs would hurt profit margins in
the second half of the year despite ris-
ing demand.
They said the cost pressures would
ease over the next 12 to 18 months as
the world economy picked up.
Chief executive Mark Parker said:
“As supply and demand find a new
normal in the recovering economy,
our industry is going to experience
margin pressure due to rising input
costs.” Nike’s shares closed 5.8 per
cent lower at $86.78.
Nike in price
rise warning
as costs jump
BY JOHN DUNNE
RETAIL

News
14 CITYA.M. 23 DECEMBER 2010
Bank of Tokyo-Mitsubishi
Andrew Jameson has been appointed
to head Structured Finance, Europe,
Middle East and Africa (EMEA)
following BTMU’s acquisition of a port-
folio of project finance assets from RBS
comprising loans and related assets of
approximately £3.3bn and principally
consists of natural resources, power
and other infrastructure assets in
EMEA. Jameson takes over the role
from Stephen Crane.
Sucden Financial
Andy Wilkins from BBVA Global
Markets has been appointed to head
Sucden Financial’s new service geared
towards institutions to capture broker-
age opportunities in the Delta One and
Equity derivatives and finance arena
with effect from 3 January 2011.
At BBVA Global Markets, Wilkins
established the Spanish banks’ Equity
options business in London.
Nomura
Nomura, the global investment bank,
has appointed Sir Andrew Cahn as vice
chairman of public policy EMEA, effec-
tive from April.
Sir Andrew is currently chief execu-
tive of UK Trade & Investment, a role to
which he was appointed in 2006. He
will step down at the end of the year.
Prior to his current role, he worked for
BA as director of government and
Industry Affairs from 2000 to 2006.
AstraZeneca
Baroness Shriti Vadera is to join the
pharmaceutical company’s board of
directors as a non-executive director,
with effect from 1 January 2011. She
will also become a member of the
board’s audit committee.
Baroness Vadera has recently
undertaken a number of advisory
roles, including senior adviser to the
Korean Presidency of the Group of
Twenty (G20), adviser to Temasek
Holdings, Singapore as well as an
adviser to the government of Dubai.
CITY MOVES | WHO’S SWITCHING JOBS Edited by Victoria Bates
KKR
Kaveh Samie is joining KKR as managing direc-
tor and head of Middle East and North Africa
to support the firm’s growth strategy in the
region. Previously, Samie was a managing
director and head of equities for HSBC Middle
East & North Africa. The appointment takes
effect from 6 January 2011. Samie will work
closely with ambassador Ford M. Fraker, chair-
man of KKR Middle East and North Africa.
+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
82
78
90
86
94
4Nov 24Nov 15Dec 27Sep 15Oct
ANALYSIS l Nike
$
86.78
23 Dec
BEST OF THE BROKERS
ANALYSIS l First Group
355
365
375
385
395
405
19 Oct 4 Nov 17 Dec 25 Nov 28 Sep
p
398.00
22 Dec
FIRST GROUP
Morgan Stanley rates the transport group
“equalweight” with a target price of 420p.
The broker has raised its target price from
385p following a review of the transport
sector, in which it has also boosted target
prices for rivals Go-Ahead, National
Express and Stagecoach. It predicts a
modest outlook for the industry in 2011.
ANALYSIS l Randgold Resources Ltd.
5,600
6,000
6,400
6,800
15Oct 4Nov 14Dec 24Nov 27Sep
p
5,500.00
23 Dec
RANDGOLD RESOURCES
Goldman Sachs has a “sell” rating on the
miner with a 12-month target price of
£62.50. The broker has taken Randgold off
its conviction sell list, but has maintained
its rating due to uncertainty surrounding
the Cote d’Ivoire where the firm has major
operations. It adds that Randgold trades at
around 2.9 times price to net asset value.
ANALYSIS l Sports Direct
126
132
138
144
150
19Oct 4Nov 17Dec 25Nov 28Sep
p
162.00
22 Dec
SPORTS DIRECT
Citigroup rates the retailer “buy” with a
raised target price of 200p, up from 165p,
to reflect better than expected first half
results. The broker notes the firm’s recent
news that wholesale gross profit is now
expected to cover the cost base in its
brands division, which drives a 1.5 per cent
increase in Citi’s full-year EBITDA forecasts.
To appear in Best of the Brokers email your research to [email protected]
JOHN Lewis yesterday warned that
the first quarter of trading in the new
year will be tough but said that
things will pick up later in 2011.
The retailer, considered a bell-
wether for how the retail sector has
been performing, is relying on strong
Christmas sales – boosted by electron-
ic gadgets like the iPad as well as
items like coffee machines.
Sales director Nat Wakeley said the
company had seen sales hold up rela-
tively well in a tough climate.
“We expect a tough start to the
year. After Christmas there will prob-
ably be a bit of a dip with things get-
ting better later in the year,” he said.
He said the retailer’s Olympic
shop – which includes sports gear
designed by Stella McCartney and col-
lectibles to commemorate London’s
2012 games – would help to boost
sales as the games get closer.
John Lewis admits that 2011 trading will be tough
RETAIL

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7LIÀQELWHV
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I
N THE United States, there is an
exchange-traded fund (ETF) for every-
thing you ever wanted to trade and
plenty more that you had never even
considered. While the likes of ophthalmol-
ogy and nanotech ETFs have not yet made
it across the pond, European investors
should certainly be satisfied with the
range of ETF products on offer. If you are
after diversified exposure to a sector or an
index, then you are likely to find an ETF
that will meet your needs. They don’t quite
track a portfolio of nanotech stocks, but
here are four of the more esoteric funds on
offer for UK investors.
1PRIVATE EQUITY
Deutsche Bank’s db x-trackers listed its LPX
MM private equity ETF almost two years
ago on 17 January 2008 and it now has just
over €103m in assets under management
(AUM). Traditionally, private equity is an
illiquid asset class and has been difficult
for retail investors to access.
The ETF tracks an index operated by
Basel-based LPX, a member organisation of
listed private equity firms. It is designed to
reflect the risk and return characteristics
of the 25 global most liquid listed private
equity companies covered by LPX. The
index is diversified across regions, invest-
ment styles and currencies and there is a
cap of 10 per cent for any single con-
stituent. The total expense ratio (TER) is
quite high at 0.7 per cent a year.
2ASIAN PROPERTY
There has been plenty in the press about
an Asian property bubble but if you think
these concerns have been overdone,
there’s an Asian property ETF for you.
BlackRock’s iShares offers a FTSE
EPRA/NAREIT Asia Property Yield Fund,
which offers exposure to listed real estate
companies and real estate investment
trusts (REITS) from developed Asian coun-
tries such as Hong Kong and Australia,
which have a one-year forecast dividend
yield of 2 per cent or greater. This year the
ETF has risen 24.03 per cent, underper-
forming the underlying index by 0.49 per
cent after the TER of 0.59 per cent has been
taken into account.
3LEVERAGED CURRENCY PAIR ETPS
Think the Aussie dollar has further to rise
against the US dollar? ETF Securities offers
a triple leveraged long Aussie, short US
dollar exchange-traded currency ETF. It
tracks a Morgan Stanley FX index, which
aims to reflect three times the daily per-
centage change between the two curren-
cies, plus generates a collateral yield on
the cash invested. The exchange-traded
currency is 100 per cent collateralised and
they are all backed by currency transac-
tions entered into with counterparties. It
has a management fee of 0.98 per cent.
4ASIAN CONSUMER
The rise of the middle classes in emerging
Asia has been one of 2010’s big themes
and this is unlikely to change next year.
For investors seeking exposure to the
Whatever you
want to invest
in, there’s an
ETF available
There’s more to these products than index
trackers. Traders can now access a whole
range of markets, writes Jessica Mead
You can invest in
Asian property
through ETFs
Picture: GETTY
Spain: better to be safe than sorry
Check exposure to
Iberian financials,
says Donata Huggins
I
T IS still too soon to say whether the
Spanish government’s austerity
budget will be enough to calm the
markets and quell fears that an econ-
omy twice the size of Greece, Ireland and
Portugal combined will need a bailout.
But even if the legislation does resolve
Spain’s problems, exchange-traded fund
(ETF) investors with exposure to Europe
still need to be concerned. While it is
extremely important that Spain sorts out
its public finances, the real crisis for
investors lies in the health of the Spanish
banking sector.
Safe in the knowledge that Spain only
makes up a sliver of their exposure to
Europe, investors might be less on edge.
However they should not rest so easy.
The chart to the right shows the levels of
international investment in Spanish
banks. Europe as a whole could take a
substantial hit if the Spanish banks do
not take action on the bad loans made to
the construction industry during the
housing market bubble.
Morningstar data shows that there are
23 ETFs offering exposure to European
financials with combined total net assets
under management close to €1.7bn. All of
these funds could suffer quite substantial-
ly if the Spanish banks were to come
under fire.
These ETFs have exposure in different
ways. Nine of the 23 are tracking indices
offering exposure to European banks
(accounting for 67 per cent of net assets);
eight are tracking indices exposed to
insurance stocks (accounting for 7 per
cent of assets); six are tracking indices
exposed to the whole financial sector –
both banks and insurance – which
accounts for the remaining 27 per cent of
assets.
Ben Johnson, Morningstar’s director of
ETF research says that if the crisis were to
occur, these ETFs will be at the very epi-
centre of the crisis and will suffer
severely. He strongly urges investors to
examine the sector breakdown of their
Europe ETF to avoid any nasty surprises:
“So often you see people treating their
ETFs like cans they pick off the shelf in
the supermarket. They don’t read the
label, so they end up getting something
very different from what they thought
they put in their cart.”
While the problems of the Spanish
banking sector are not as extreme as
those recently experienced in Ireland, the
market operates in tunnel-vision, boorish-
ly focusing on one problem at a time.
Should it turn to Spain, the banking sec-
Are you brave enough
to take on the Spanish
market?
Picture: GETTY
ANALYSIS l Foreign bank exposure to Spanish debt (dollar bn)
200
180
160
140
120
100
80
60
40
20
GER FRA UK NDL US ITA IRE POR JPY BEL SWI AUT SWE
S
o
u
r
c
e
: M
o
r
n
in
g
s
t
a
r
USDbn
16
Markets&Investment| Listed Products
CITYA.M. 23 DECEMBER 2010
DB X-TRACKERS LISTS GLOBAL SECTOR ETFS
Deutsche Bank’s ETF division db x-trackers
yesterday announced that it had launched 10
global equity sector-based ETFs, listed on the
London Stock Exchange (LSE). All 10 prod-
ucts will track the various MSCI World sec-
tor indices, which give access to developed
world equity sectors. This launch enhances
db x-trackers’ offering of sector ETFs – the
provider already has European equity sector
ETFs available. These new products are avail-
able in both sterling and dollar share classes
and carry a total expense ratio (TER) of 0.45
per cent.
US ETF AND ETP ASSETS EXCEED $1 TRILLION
Assets under management held in US-listed
ETFs and exchange-traded products (ETPs)
broke through the $1 trillion milestone for
the first time on 16 December, according to
BlackRock research. As of 16 December, in
the US there were 894 ETFs with assets of
$887.2bn from 28 providers on two
exchanges. This compares to 772 ETFs with
assets of $705.5bn, from 29 providers on
two exchanges at the end of last year.
BlackRock says that there are another 828
ETFs in the pipeline while only 49 have delist-
ed in 2010.
ETF TRADING JUMPS ON THE LSE
There was a sharp increase in both the value
and volume of ETFs and exchange-traded
products (ETP) traded on the LSE in
November. Value traded and volume were up
37 per cent and 15 per cent respectively from
October, according to data published earlier
this week by the exchange. In a year-on-year
comparison, the value traded in November
2010 is more than double that of the same
period in 2009. In terms of the number of
trades, the iShares’ FTSE 100 ETF was the
most popular in November followed by ETF
Securities’ physical gold ETF.
LISTED PRODUCT NEWS
BY JESSICA MEAD
Deutsche Bank lists global sector ETFs Picture: REX
growth of the middle class in the devel-
oping world, Lyxor ETF launched its
range of Asia ex-Japan sector ETFs in
September this year. With an AUM of
$48.7m, its emerging Asia consumer
staples sector ETF tracks the MSCI AC
Asia ex-Japan consumer staples TRN
index.
The ETF has a fifth of assets exposed
to China. Its largest holding is Wilmar
International, an agribusiness group
listed on the Singapore exchange.
The ETF has a TER of 0.65 per cent.
Lyxor says it is in the process of
applying for UK distributor status,
which would make investors liable for
capital gains tax (CGT) at 18 or 28 per
cent on profits.
A
LTHOUGH BSkyB and News Corp
have been in the news recently
because of political upheavals, the
big decision has been announced
and News Corp has received EC approval
for a £7.8bn buyout of BSkyB. BSkyB’s
shares have already jumped in response to
the news, confirming investor approval.
Along with strong promotions such as three
months of free Sky broadband, this is a sign
that there could be further upside to its
price. Capital Spreads quotes 740.6p-741.9p
for BSkyB’s shares.
Microsoft’s share price has been on a
steady upward trend since the turn of the
month. This is possibly in anticipation of its
new operating system, which is scheduled
to be launched in January. The system will
run on chips that require less power, so
they can be used in products like smart
phones and tablets. Along with its financial
results due on 27 January, investors in the
IT giant may see a further push into the
new year. Capital CFDs quotes $28.05-
$28.10.
PartyGaming shares have slumped near
their 2010 lows and sit on a strong sup-
port at the 210p level following an earn-
ings update earlier this week. The firm said
that although earnings should be in line
with expectations, poker revenues had fall-
en. The 20 per cent sell-off this month
seems a bit excessive and with the support
holding, this might be a stock to put in
your stocking for 2011. Spread Co offers a
spread on PartyGaming of 210.24p-
211.06p.
The seasonally-named US-listed petro-
chemicals refiner Holly Corporation con-
tinues to find new highs for the year, with
the stock clearly finding support off the
back of the improving economic outlook
for 2011. While it may be wallowing well
below the 2007 highs, continuing demand
for refined products will provide cheer
while its low price-earnings (p/e) ratio is
also attracting interest. The current IG
Index price on Holly Corporation is $39.21-
$39.29.
The Turkish benchmark index has seen
no shortage of volatility in recent years
with annual moves of 50 per cent in either
direction being far from unusual. Selling in
the last couple of months has taken the
shine off what could have otherwise been a
bumper 2010 for the index. However, the
volatility is unlikely to disappear any time
soon as the country continues to build on
its key location between Europe and Asia.
The current IG Index price for the Turkey
30 index (December 2010 contract) is
81,400-81,525
Jessica Mead
THE
TIPSTER
FURTHER UPSIDE FOR
BSKYB AFTER BUYOUT
Rupert Murdoch’s
approved takeover
has boosted BSkyB’s
shares
Picture: REUTERS
tor will no doubt feel the hit.
There are methods, however, for
hedging against this. José Garcia-Zarate,
a European ETF analyst with
Morningstar, says: “The obvious first
port of call would be to roll out a short
Spain strategy, choosing Spanish-
centric equity ETFs such as the BBVA
Accion Ibex 35, Amundi MSCI Spain or
Lyxor Ibex 35.” These are all heavily
exposed to the banking sector.
While we can’t know yet whether the
market will turn its attention to Spain’s
troubles, or how the Eurozone crisis
will play out in 2011, investors with
European exposure should examine the
sector breakdown of their ETF carefully,
looking closely for European financials
– just in case.






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at www.rbs.co.uk/markets or
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CITYA.M. 23 DECEMBER 2010
17
Bullish mood helps
to drive Wall St up
T
HE S&P 500 rose yesterday to its
highest level since the collapse
of Lehman Brothers, led by bank
stocks that have leapfrogged
other sectors in December.
The banks – epicentre of the credit
crisis two years ago – led indexes high-
er as a December run helped keep the
market's year-end rally afloat. The
KBW Bank Index rose 1.9 per cent, led
by regional institutions.
“The financial sector is unique in
that it has spent two consecutive
years in the performance base-
ment,"”said Lawrence Creatura, port-
folio manager at Federated Clover
Investment Advisers in Rochester,
New York.
“Today financials look a little bit
more investable than they did 18 or
24 months ago because the price is
right and some risk has has been
extracted.”
The S&P 500 has risen for five ses-
sions in a row but gains have been
modest and on light volume. The
benchmark’s relative strength index
points to a pullback in the near term,
but for now investors don't seem wor-
ried. The CBOE Volatility Index,
known as Wall Street’s fear gauge, fell
6.3 per cent to 15.45, its lowest closing
level since July 2007.
Bank of America rose 3.1 per cent
to $13.38 and JPMorgan Chase
climbed 2.8 per cent to $42.16, giving
the greatest boost to the Dow indus-
trials.
Regional banks outpaced their larg-
er counterparts after recent merger
activity in the sector boosted hopes
for more M&A to come. Hancock
Holding agreed to buy Whitney
Holding on the heels of last week’s
takeover of Marshall & Ilsley by Bank
of Montreal.
The KBW regional bank index was
up 3.7 per cent and is now up 19.4 per
cent for the month. Whitney Holding
surged 28.8 per cent to $14. United
Bankshares jumped 4.6 per cent to
$29.80 after KBW raised its price tar-
get to $28 from $23.
The Dow Jones industrial average
added 26.33 points, or 0.23 per cent,
to 11,559.49. The Standard & Poor’s
500 Index gained 4.24 points, or 0.34
per cent, to 1,258.84. The Nasdaq
Composite Index edged up 3.87
points, or 0.15 per cent, at 2,671.48.
The S&P 500 climbed above
1,255.08 where the index closed just
days after Lehman filed for bankrupt-
cy in September 2008. For the year,
the index is up 12.9 per cent, includ-
ing a 6.6 per cent December run.
Energy shares rose as crude oil
futures settled 0.7 per cent higher at
$90.48 a barrel. Chevron added 0.7
per cent to $89.89. Walgreen rose
after the drugstore chain posted high-
er profit.
B
RITAIN’S leading share index
pushed higher yesterday, sup-
ported by gains from banks as
reports China is ready to buy
Portuguese bonds eased European
debt concerns.
At the close, the FTSE 100 was up
31.69 points, or 0.5 per cent, at
5,983.49, edging ever closer towards
the 6,000 level last seen in June 2008.
The blue chip index has gained 8.2
per cent in December, on track for its
biggest monthly percentage gain
since July 2009.
“It’s just a pretty broad-based mar-
ket rally as Christmas approaches. Of
course, volumes are very low and it’s
really just tidying up at the year-end,”
said David Morrison, market strate-
gist at GFT Global.
Trading volumes were 62 per cent
of the 90-day average.
Banks were the best performing
blue chips as a sector, rallying as wor-
ries about exposure to European debt
eased after the Jornal de Negocios
daily reported that China is ready to
buy €4 to 5bn of Portuguese sovereign
debt to help it ward off pressure in
debt markets. Royal Bank of Scotland
was the strongest lender, up 1.3 per
cent, while Lloyds Banking Group
gained 0.7 per cent.
Strength in heavyweight miners
and oils also provided a prop for blue
chips as commodity prices firmed,
with Eurasian Natural Resources 2
per cent higher.
ARM Holdings was the top blue
chip riser, up 9.1 percent on reports
Microsoft is working on a new version
of its core Windows operating system
for devices such as tablets, marking
the first time that the software would
run on processors designed by the
British firm.
Both Microsoft and ARM declined
to comment.
BSkyB took on two per cent, having
earlier touched its highest since
March 2004, as prospects improved of
regulatory approval for News
International’s bid to buy the pay-TV
operator.
Carnival rose 5.3 per cent as bro-
kers raised target prices and esti-
mates for the world’s largest cruise
operator following its fourth-quarter
results on Tuesday.
And British Airways rebounded 1.9
per cent as travel services limped back
towards normal in parts of Europe
after ice and snow caused widespread
chaos.
Oil prices also pushed higher –
above $90 a barrel again, hitting two
year highs as crude inventories
declined by more than expected by
5.3m barrels as a result of the cold
weather, while gold prices continued
to push marginally higher around
the $1,369 level after the IMF com-
pleted its recent gold sales.
Investors are entering 2011 in a rel-
atively bullish mood, raising equity
holdings to a 10-month high, increas-
ing exposure to high-yield credit and
cutting back on government debt, a
Reuters polls showed yesterday.
US blue chips were 0.1 per cent
higher by London’s close as above-
forecast US existing home sales data
countered a below-estimate final
reading for third-quarter US GDP.
British GDP data was also a depres-
sant, with the economy growing by
less than expected in the third quar-
ter, while the second quarter reading
was lower than first reported.
And the Bank of England’s
Monetary Policy Committee retained
its three-way split at December's
meeting, with growing worries about
rising medium-term inflation risks.
“The Santa Rally continues. Despite
the thin volumes currently out there,
London’s leading index is still mak-
ing gains in the run up to the holi-
days,” said Ben Critchley, sales trader
at IG Index.
Banks give FTSE a boost as
pre-Christmas rally continues
THELONDON
REPORT
THENEW YORK
REPORT
ANALYSIS l FTSE
5,700
5,800
5,900
6,000
5,600
4Nov 15Oct 27Sep 24Nov 14Dec
5983.49
23 Dec
Markets &Investment
18 CITYA.M. 23 DECEMBER 2010
3i Group 330 -5.25 335.25 250
3i Infrastructure 121 1 121.50 100.75
A.B. Foods 1160 11 1160 819
Aberdeen Asset.Man. 202.50 0.50 205 112.75
Admiral Group 1547 -6 1693 1114
Aegis Group 140.50 0.75 145.50 103.50
Afren 144.25 1.50 144.25 79
African Barrick Gold 591 -4 670 503
Aggreko 1516 -8 1685 882
Alliance Trust 374.25 -0.75 375 293.50
Amec 1159 -9 1168 733.50
Amlin 405 3 433 357.25
Anglo American 3310 37.50 3310 2254
Antofagasta 1605 11 1605 761
Aquarius Platinum 341.25 -3.75 458 227
ARMHoldings 440.25 36.75 440.25 173.25
Ashmore Group 345 -2.75 383.75 218
Ashtead Group 171 2 171 76
AstraZeneca 2955 1.50 3385 2732
Atkins (WS) 718.50 -9 792.50 556.50
Autonomy 1546 18 1975 1271
Aveva Group 1604 2 1604 980.50
Aviva 395.25 0.25 423.50 294.25
AZ Electronic Materials SA (WI)302 2.50 302 249
Babcock International 564 0.50 635 492.75
BAE Systems 332.75 -2.25 388.75 294.75
Balfour Beatty 317 1.25 317 229.75
Barclays 267.50 -0.75 383.25 255.25
Barratt Development 87.75 1 142 70
BBA Aviation 214 -0.25 217.25 158
Bellway 662 21 826 511
Berkeley Grp Hldgs 902.50 3 932.50 742
Betfair Group 970 -24 1550 970
BG Group 1323 6 1333.50 984
BHP Billiton 2606 22 2606 1684.50
BlackRock Mining 806.50 7 806.50 492
BlueCrest AllBlue 170 2.25 174.50 156.25
Booker Group 60 0 60.25 38.75
BP 470 -2.50 655.50 303
Brit Insurance 1038 -3 1045 728
British Airways 273.50 5.25 286 184.25
British Amer.Tob 2505 20 2505 1959
British Empire Tst 496 3 498.50 396.50
British Land 529.50 7 529.50 418.25
Britvic 480.50 -4 518 389
Brown (N.) Group 296.50 2 301.75 206.50
BSkyB 743 14.50 743 524.50
BT Group 187.75 2 187.75 110
Bunzl 738 2 777 616.50
Burberry Group 1144 2 1156 581
C&WComms 52.75 0.75 63.75 44.25
C&WWorlwide 68.75 -0.50 100 60.50
Cairn Energy 416.75 1.75 493.25 318.25
Caledonia Inv. 1897 -13 1910 1512
Capita Group 705 -1.50 826 635.50
Capital & Counties 146.75 0.25 157 100
Capital Shop Centre 418 1.25 420 301
Carillion 382 8.25 382 273
Carnival 3059 154 3059 2037
Catlin Group 370 -4.75 393 320
Centamin Egypt 173 0.50 197 106.75
Centrica 338 1 346 264
Charter 834 5 848.50 567
Chemring Group 2905 -54 3663 2598
Close Brothers 855.50 7 861.50 664
COBHAM 207.75 1.25 276 192.25
Colt Telecom 132.75 1.25 142.50 109
Compass Group 588 4 588.50 425
Cookson Group 659.50 15 659.50 367.50
Croda International 1580 -15 1610 751
Daily Mail & Gen 570 1.50 570 414.25
Davis Service 426.50 2.50 435 360.25
De La Rue 837 0 1005 549.50
Debenhams 70.25 -0.50 80 53
Derwent London 1528 -8 1605 1208
Diageo 1208 9 1208 1000
Dixons Retail 23 -0.25 38 22.75
Domino’s Pizza 547.50 -10 560.50 293.25
Drax Group 383.50 6.50 444 326.25
DS Smith 205.50 0.75 210 104
Dunelm 540 2.50 550 325.25
easyJet 428.50 -0.50 496.50 348.50
Edin.Inv.Tst. 455 2.75 464.25 364
Electrocomponents 270.50 0.75 279.50 161.75
Enquest 140 -0.75 146.50 89.25
Essar Energy 583 -2 586 383
Eurasian Nat Res 1051 20 1266 818
Euromoney Inst. 699 12 727 435.75
Experian Group 812.50 -0.50 813.50 572
Ferrexpo 408 0.75 408 186.50
FirstGroup 398.25 2.25 426 336
For.&Col.Inv.Tst 310 1.25 310 251.50
Fresnillo 1602 8 1605 669.50
G4S 255 -0.50 283.50 237.75
Genesis E.m.f. 549 2 549 399
GKN 222.75 4 222.75 102
GlaxoSmithKline 1260 4 1339.50 1095
Great Portland Est. 356.50 2.75 364 279
Greene King 478.50 -7.75 491.50 376.25
Halfords Group 452.75 2 550 372.75
Halma 361.50 1 366.50 223
Hammerson 422.50 0.25 434.50 336.25
Hargreaves Lansdown 592 15 592 276.50
Hays 129.50 2 129.50 88.50
Henderson Group 137 4 151.75 112.75
Heritage Oil 434 8 581 296.75
Hikma 815 20 829.50 510
Hiscox 377.50 2.50 377.50 311
Hochschild Mining 624.50 9.50 658 234
Home Retail Group 190.50 0.50 295.50 190
Homeserve 453 -2 487.50 326.25
HSBC Holdings 669.50 6.50 740.50 596.25
Hunting 717 9.50 724 439.50
ICAP 537.50 1.50 539.50 294
IG Group 509 -2.50 553 362.50
Imagination Tech 371.75 -6 441.75 215
IMI 942 -0.50 948 518
Imperial Tobacco 2001 19 2154 1753
Inchcape 354.50 2 368 237
Informa 417 4 448 304.50
Inmarsat 678 -7.50 821 606.50
InterContinental Htl 1266 11 1266 887
Intermediate Cap.Grp 333 1 351 240.50
International Pers Fin 367 2 367 183.25
International Power 444.50 -0.50 445 284.50
Intertek Group 1861 -1 2000 1150
Invensys 360 2.75 360 230.25
Investec 519 2.50 562 417.75
ITV 72.50 1 74.25 48.25
Jardine Lloyd 608.50 0.50 609.50 459
John Wood Group 552.50 -2 554.50 293
Johnson Matthey 2085 8 2085 1446
Jupiter Fund Man 303.50 1 310 180.25
Kazakhmys 1633 21 1633 965
Kesa Electricals 160.50 -1.50 174 99.25
Kingfisher 258 -0.25 259 198.50
Ladbrokes 124.50 -1 162.75 123.50
Lancashire 550.50 7 647 424
Land Securities 665.50 2.50 696.50 545
Legal & General 99.50 0.75 106.25 69.75
Lloyds Banking Grp 69 0.50 77.50 46.50
Logica 131.50 2.25 148 101.75
London & Stamford Property Ltd. 131 0.25 132
110.25
London Stock Ex. 852.50 12.50 852.50 544
Lonmin 1946 31 2157 1355
Man Group 301.50 5 327.50 202
Marks & Spencer 373 3 427.50 323.50
Meggitt 374.75 -0.75 375.50 251.50
Melrose 312 4.50 312 162
Mercantile Inv Tst 1096 5 1096 828
Michael Page 565.50 12 565.50 346.50
Micro Focus 393.50 -12.50 546.50 276
Millennium& Cop. 565 6.50 570 365
Misys 329 11.50 329 201.50
Mitchells & Butlers 347.50 1.25 360 247.50
Mitie Group 232 0.50 241 188.75
Mondi 513.50 4 557.50 323.75
Monks Inv.tst. 357 -2 363 271
Morrison (Wm) 267.50 1 306.25 257.50
Murray Int.Tst 951 -1 952 736.50
National Express 245 1.50 259.50 189.50
National Grid 573.50 9.50 613.25 484.25
Next 1971 7 2344 1817
Northumbrian Water 336.50 -0.75 361.50 252.75
Ocado Group 167 3 170 123.50
Old Mutual 123 1.25 145.25 97.25
PartyGaming 208.25 -3.75 334.50 206
Pearson 1026 5 1051 855
Pennon Group 646 5 646 483
Persimmon 416.50 4 507.50 336.50
Petrofac 1580 24 1580 876.50
Petropavlovsk 1119 -4 1365 852
Phoenix Group Hldgs 625.50 15.50 758 557.50
Premier Farnell 289.25 0 304.50 171.50
Premier Oil 1965 -12 1977 1017
Provident Financial 868.50 9.50 974 728.50
Prudential 674.50 -0.50 675 487.50
PZ Cussons 401 4.50 409 234.75
QinetiQ Group 130 -1.50 167 96.75
Randgold Res 5500 10 6655 4209
RDS ‘A’ 2118.50 15 2118.50 1624
RDS ‘B’ 2109.50 16 2109.50 1554
Reckitt Benckiser 3600 3 3655 3037
Reed Elsevier 530.50 -2 563 460.50
Regus 85 0 120 66
Renishaw 1264 1 1306 545
Rentokil Initial 98.25 0 138.50 87.75
Resolution 235.75 0.50 349 211.25
Rexam 335 1.50 346.75 276.50
Rightmove 793 -8.50 810 488
Rio Tinto 4579.50 42.50 4579.50 2812
RIT Capital Partners 1233 -7 1240 971.50
Rolls-Royce Group 647 -3 654.50 473.50
Rotork 1807 -7 1895 1186
Royal Bank of Scot 40.75 0.50 58 28.50
RSA Insurance Grp 127 1.50 136.50 114.75
SABMiller 2291 12 2291 1650
Sage Group 275.75 1 289 220
Sainsbury (J) 377 1 395 313
Schroders 1884 56 1884 1116
Schroders NV 1482 47 1482 929.50
Scot.& Sth. Energy 1233 30 1233 1010
Scottish Mortgage 708 -1 709 475
SEGRO 293.50 -3 352 250.25
Serco Group 584.50 -1 651 494.25
Severn Trent 1491 30 1491 1072
Shaftesbury 440.50 -6.50 460 349.25
Shire 1527 10 1567 1199
SIG 122.75 0.25 137.75 90.75
Smith & Nephew 667 6 696.50 537.50
Smiths Group 1255 -15 1285 980.50
Soco International 364.50 1.50 484.25 292
Spectris 1326 6 1326 706.50
Spirax-Sarco 1953 3 1987 1205
Spirent 149.50 -0.50 160.25 97.25
Sports Direct 162 8.50 162 92.25
St James’s Place 267.75 1.25 292 204.25
Stagecoach Group 215.25 5.50 224 160.75
Standard Chartered 1766 1 1950 1351.75
Standard Life 215.50 0.50 236 173
Supergroup 1232 -29 1638 535
TalkTalk 166.75 0 168.25 108.50
Talvivaara Mining 575 6 581 342.50
Tate & Lyle 535.50 2 544.50 388.75
Taylor Wimpey 29.75 0.50 44 22.25
Telecity Group 480.25 -0.50 532.50 360
Templeton Emrg. 665 9.50 685 471.50
Tesco 432 0.75 454.50 377.50
Thomas Cook Group 186.25 -0.50 272 171.75
Travis Perkins 1031 7 1031 664.50
TUI Travel 241.50 2 308.50 190
Tullett Prebon 384.25 1.25 417.25 262
TullowOil 1279 11 1369 991.50
UK Commercial Prop 84.75 0.25 85 72.75
Ultra Electronics 1706 4 1895 1265
Unilever 1982 0 2015 1688
United Utilities 597.50 5.50 628.50 488.25
Utd Business Media 691 10 691 409.75
Vedanta 2504 31 2934 1839
Victrex 1473 -17 1522 799
Vodafone Group 169.50 -0.50 175 129.50
Weir Group 1798 -13 1861 698.50
WellstreamHoldings 790 1.50 793 436
WH Smith 501.50 2.25 523 398.25
Whitbread 1821 7 1821 1266
WilliamHill 166 0.50 216.50 155.50
Witan Inv Trust 517 3 517 410
WOLSELEY 2032 34 2032 1223
WPP Group 791.50 -3 794.50 572.50
Xstrata 1521 15 1521 845.75
LONDON’S TOP 250
LONDON TOP 250 BY MARKET CAPITALISATION
POWERED BY
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T
HINK of a job interview and you
probably imagine something like
the more frightening parts of The
Apprentice, where you are confront-
ed with a panel of beady-eyed people who
fire questions at you. But for many City
jobs an integral part of the process is
meeting in a social situation, either a
meal or a drink in a bar, perhaps with
important contacts. It might be tempting
to think of these events as jollies, but they
are anything but.
“Accept first that you are being assessed
every moment you are with the potential
employer and their staff,” says executive
coach Jenny Rogers in her book Job
Interview Success. “Even if more junior or
peripheral staff do not have a formal vote
in the process, their opinions will be can-
vassed.” So how do you deal with the so-
called “trial by canape”?
1Remember that you are being watched.
If you treat a waiter rudely, people will
assume that is how you will treat junior
Be on your best behaviour when
potential employers invite you to
a party, writes Jeremy Hazlehurst
Surviving trial by canape
Careful – you are
being watched
I
T’S a busy time for us, the run up to
Christmas, because we have six companies
coming in for their carol concerts, big banks
and law firms, and the local school also
comes. Midnight mass on Christmas eve is the
big one for us, and that is mostly for locals, we
get about 150 or 200 and most of them walk or
cycle here. We can have 20 or 30 nationalities in
a service, people come from all across Europe,
America and we get some Bangladeshis too –
we even have a song in Bangladeshi. My
favourite Christmas song this year is probably
Hark the Herald, although I also quite like that
one by Mariah Carey, All I Want for Christmas Is
You.
For me our work at this time of year is about
gathering people together and pointing them to
God. Christmas leaves a lot of people dis-
traught, and we are picking up a lot of that
stuff. We also do charitable work at Christmas,
there is an initiative called Food Bank in Tower
Hamlets, they collect food from the supermar-
ODD JOBS
REV ANDY RIDER, VICAR AT CHRIST CHURCH SPITALFIELDS
I
F you’ve ever watched TV hospital dra-
mas, you’ll know that scene where the
crash cart comes through the door
and the doctor checks for the patient’s
vital signs. Just as people have vital signs, so
do projects. Assessing them quickly is a
vital skill, and immediately gives you a view
on whether something is likely to succeed
or fail.
Projects have six vital signs – the goal,
the plan, the leader, what we’ll call supply
and demand, contingency and risk. They’re
not equally important. Think of the goal
and the plan as being scored out of 20. The
leader and the supply and demand can be
scored out of 10, and the contingency and
risk out of five. This allows you to quickly
give a project a score out of 70 and to assess
its likely success.
The Goal (20). What are you trying to
achieve? Do you know precisely what’s
within the scope of your project and what’s
outside it? Score high if you do. If there’s
any kind of doubt, uncertainty or ambigui-
ty, score low.
The Plan (20). There should be a plan
with about 6-12 high level blocks each
resulting in a milestone – something that
can be clearly demonstrated to have been
achieved. Then each of these blocks should
be broken down into detailed jobs. For each
job you should have figured out not just
how long it’s going to take but how much
work is involved. Three people working full
time for a day is one day in duration but
three days of work. Score low if your plan is
not like this. Also score low if the goal
scored low – if you don’t know what you’re
trying to do, you can’t have a plan to do it.
The Leader (10). There should be some-
body who shepherds your project forward,
making sure that the jobs are getting done.
Score 10 if there is, 0 if there isn’t.
Supply and Demand (10). Let’s say you’ve
figured out the amount of work to be done
and it’s 100 days. This is the demand. Then
there had better be a hundred days worth
of people to do the work. This is the supply.
This reflects the rather obvious fact that
jobs don’t get done if there aren’t people to
do them. The closer you come to supply =
demand, the higher the score.
Contingency (5). There had better be con-
tingency in your plan for the things that
will inevitably go wrong. Contingency can
be – for example – having a cushion of time
or some extra money in the budget to cover
those unexpected things that will
inevitably occur. The more contingency,
the higher the score.
Risk Analysis (5). Somebody had better
have analysed what could go wrong on
your project, how likely those things are to
happen and the effect if they do. Score 5 if
they have, 0 if they haven’t.
If the total score is under 40 and your
project is at an early stage then that’s fine.
The low individual scores will tell you the
things that have to be fixed. If the result is
under 40 and your project has been run-
ning for a long time, you should be very,
very afraid.
Fergus O’Connell’s What You Need to Know about
Project Management is published in January by
Wiley
How to evaluate
a new project in
five minutes flat
FERGUS O’CONNELL
staff. If you order the most expensive
thing on the menu, you look like a prima
donna. They are assessing both the way
you behave socially, which is important in
many jobs, but also how you get on with
your potential colleagues. This is a “poten-
tially stressful situation disguised as a
social event.” Be an active guest, introduce
yourself to people, make small talk and
don’t become a liability who the host has
to mollycoddle.
2Choose your small-talk carefully. By all
means moan about London Transport, but
avoid stories about arriving in the nick of
time – it hardly inspires confidence about
your punctuality. Don’t moan about the
venue, the food or the guests – you will
look like a habitual whinger. Don’t spend
too much time chatting to other candi-
dates and avoid the temptation to huddle
with them – it might be reassuring, but
meeting these people is not the reason
that you are there.
3 Circulate. “Don’t overstay your wel-
come with one person or group – the
point of the event is to mingle with as
many people as possible,” says Rogers.
When it’s time to move on, politely shake
hands with the person you are chatting to,
say it’s been nice to meet them and then
move at least a quarter of the room away
to speak to somebody else. Be comfortable,
enthusiastic and self-confident.
4Don’t over-sell yourself. “Remember,
these events are not interviews in dis-
guise,” writes Rogers. “Their purpose is
entirely to assess your social skills and to
give you a little low-key exposure to some
of the people who might be future col-
leagues.” Do not brag about your skills,
give speeches about your qualifications, or
be falsely modest. Keep talk about work
straightforward and brief, and try to turn
things back to a more normal social con-
versation.
5Watch your manners. This is especially
important at restaurant events. If you are
invited to a one-on-one meal, with your
potential boss and their boss, for example,
then you are close to landing the job, so
don’t sabotage yourself at the last
moment. Only order wine if your host
does, and restrict yourself to one glass,
whatever the host does. Avoid messy food.
Be careful how you hold your cutlery –
Rogers says she knows one employer who
rejected a candidate because “he held his
knife like a working class oik”. Afterwards,
write a handwritten note saying you
enjoyed the meal and reiterating your
interest in the job.
kets and then we help to distribute it to the
people who are the most in need.
My favourite part of Christmas is coming
out of church at the end of the midnight serv-
ice on Christmas Eve at one o’clock in the
morning.
You can stand on the steps of the church
and look across to the City where the lights
are low and it’s a serene and quiet moment.
There’s a stillness in the air and you can feel
the spirit of that first Christmas day.
City Focus| Careers
GETTING BACK
INTO THE SWING
VISIT THE CANARY
WHARF GOLF LAB, P20
19
I
T’S Christmas time again so isn’t it
time you knew a thing or two about
Champagne? Danny Hodrein certain-
ly does. Or rather, he does now. Danny
is a “flavourist” at taste consultancy F&F
Projects (think science boffin in a white
coat) who, until this latest project, spent
most of his time making our crisps taste
nicer and our orange juice last longer.
Then, along came a strange request
from G. H. Mumm, the Champagne house,
who asked him to subject six of its vin-
tages to a “gas chromatograph” analysis in
order to provide a molecular breakdown
of the key ingredients in six different vin-
tages.
A challenge was then set for Iain
Graham, the executive chef of Urban
Caprice, the upmarket caterers, to develop
a perfect food match for each of the
Champagnes based solely on an analysis of
those identified molecules, in their purest
form, rather than by deploying the more
familiar sommelier’s approach of having a
good old swirl and sniff.
Danny showed us Mumm’s de Cramant
as his first case in point. This 100 per cent
Chardonnay Champagne is a delicious,
A gas chromatograph analysis
with your Champagne? It does
help, finds Jeremy Brier
A chemical approach
is effective, but no
more so than the
good old swirl and
sniff.
Picture: GETTY
Lifestyle
20 CITYA.M. 23 DECEMBER 2010
Learn to enjoy
your bubbly the
molecular way
creamy fizz bottled at lower pressure than
usual to leave softer bubbles to melt in the
mouth. On the molecular spectrum, it
was clear that it was bursting with ethyl
isobutryrate, ethyl-2-methyl butyrate and
delta-Decalactone.
Well, that’s interesting, we thought. But
wait, it actually was. As it turns out, the
first two molecules in their gaseous form
smell distinctly light and fruity and the
latter molecule was all buttery and
creamy. And who knew that a molecule
could smell buttery? So Graham was
quickly able to get to work, and after
much cogitation and discussion, he paired
the Champagne with some perfectly ten-
der scallops, sitting on a creamy cauli-
flower puree and some bright strips of tart
apple. It worked beautifully when we tast-
ed it with the Champagne: the gorgeous
delicacy of the bubbles cuddling up to the
sweet scallops and leaving a charming
embrace on the palette. The appliance of
science.
It succeeded with other vintages too.
The butyl caprylate in the Mumm Rosé
smelt of perfume and mangoes in its pure
form and Iain was quick to match this
with rosy slices of tuna sashimi and a trop-
ical fruits salsa. Again, when tested, it was
clear that a pleasing partnership had
been built between the dry, fruity
Champagne (made with 60 per cent pinot
noir and long on the aftertaste) and the
sweetness of the salsa, full of fiery red
chili to give the experience texture and
tang. Likewise, Mumm’s Demi-Sec – a
delicious, golden yellow Champagne
made with 55 per cent Pinot Meunier –
showed up a relative abundance of
diethyl succinate on the chromatograph
which in its gaseous form smelt richly of
almonds and caramel. Graham paired
the drink with a stunning dessert of
apple and caramel discs, arranged with
soft pillows of gingery cake.
In the end, the molecular analysis
worked well but did not give rise to sur-
prising combinations and I doubt this
method provides any great benefit over
and above ordinary approaches. However,
going deeper into the drink’s carbonic
core was a vibrantly original way of tast-
ing. The experience of Champagne’s con-
stituent parts as little, aromatic
molecules facilitated an understanding
of the natural essence of the drink in a
stark new way that allowed an easy
recognition of matching essences in the
accompanying dishes.
It’s probably not any time soon that
you will be subjecting your Christmas
fizz to a gas chromatograph analysis. But
if you did, you wouldn’t be disappointed.
For more information, see www.champagne-
assembly.co.uk
Get into the swing of the new year
City A.M.’s sport editor Frank Dalleres visits a golfing boot camp in Canary Wharf
N
EW YEAR’S resolutions don’t have to
make you miserable. While giving
up smoking might make you live
longer, and brushing up that CV
could put another rung of the career
ladder in sight, neither are going
to put a smile on your face
while you do them. Honing
your golf swing, on the other
hand, is another nagging item
on to-do lists the world over. But
this one can actually claim to be fun.
Now, the more perceptive golf fol-
lowers reading this piece may be wise-
cracking to themselves: “Not in this
weather, pal”. And it’s true, traipsing
through 18 holes in temperatures nudg-
ing cryogenic is marginally less enjoy-
able than root canal treatment. So
thank the Lord for simulators, where
technique can be perfected without
losing extremities to frostbite.
With this in mind, and only the
most rudimentary of swings in my
armoury, I accepted an invitation to
try the Golf Lab in Canary Wharf.
There, coaches are on hand to decon-
struct your technique and analyse it
with the kind of fastidious attention
to detail Ian Poulter employs when decid-
ing what to wear each morning. Only here
the results are to everyone’s liking.
Driving at a virtual fairway might lack
something in authenticity, but more than
makes up for it in the range and precision
of technology on hand to tell you precisely
where you are going wrong. It will tell you
if you’re hooking the ball or slicing it, how
far you can slug it on average, map out the
trajectory of each and every one of your
shots and tell you the speed with which
club meets ball.
The really useful bit, however, is that
cameras set up at different angles record
you as you thin the ball into the canvas.
Luckily they don’t capture the wince
etched on your face or the expletives you
mutter in the immediate aftermath. The
recordings are the used to pinpoint which
parts of your action are a little too stiff, or
not aiming right. Are your arms keeping
that triangular shape into stage two? Well
they should be.
Thankfully, William, my coach for two
invaluable lessons, was on hand to explain
how wretched my attempts were, in the
most sympathetic terms of course. He then
set about, with my recordings, talking me
through which aspects I needed to adjust in
order to achieve a purer swing and -- more
importantly -- hit the ball further and
straighter more often. Because after all,
that is the point.
While Lee Westwood can rest easy for the
time being, I emerged from my sessions
with a much improved swing -- and have
the video footage to prove it. With introduc-
tory lessons from as little as £23, it needn’t
break the bank either.
And for those wanting to practice on a
more regular basis, Golf Lab members can
drop by and use the simulators seven days a
week for £88 a month (includes a free les-
son every month). Not bad for the satisfac-
tion you’ll reap over the summer. For more
info on the Golf Lab in Canary Wharf go to
www.reebokclub.co.uk.
Left: Legend Lee
Westwood in action.
Below: Frank takes
a swing: a still
from the video
of his lesson.
Picture:
ACTION
IMAGES
The Demi-Sec, a golden yellow Champagne,
showed up a relative abundance of diethyl
succinate on the chromatograph
Luckily, the cameras don’t capture the wince on your
face or the expletives you mutter in the aftermath
T
E
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S
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EASTENDERS
BBC1, 7.30PM
Lauren decides to use Stacey’s murder
confession to get rid of her once and for
all, while Glenda accuses Peter of being
the one who pushed her down the stairs.
BEING RONNIE CORBETT
BBC2, 9PM
Documentary charting the comedian’s
long career, featuring interviews with
the man himself, plus Rob Brydon,
Catherine Tate and Bruce Forsyth.
STREET MARKET CHEFS
CHANNEL5, 7.30PM
Amanda Lamb heads to York, where
RAF cooks James Wilmot and Ian Mark
go head to head to create a two-course
meal using free-range Yorkshire pork.
BBC1
SKY SPORTS 1
7pmLive Darts 12amRingside
1amLive NFL 4.30amPremier
League World 5am-6am
Ringside
SKY SPORTS 2
7pmATP Tour Uncovered
7.30pmPremier League World
8pmThe Rugby Club 9pm
Ringside 10pmTime of Our
Lives 11pmThe Rugby Club
12amPowerboating 12.30am
ATP Tour Uncovered 1am
Premier League World 1.30am
The Rugby Club 2.30am
Ringside 3.30amPowerboating
4amThe Rugby Club 5am
Powerboating 5.30am-6am
ATP Tour Uncovered
SKY SPORTS 3
7pmRace World 8pmFed Cup
Tennis 9pmWWE: Late Night –
Raw11pmWWE: NXT 12am
Race World 1amPoker 3am
Judo 4am-6amPremiership
Years
BRITISH EUROSPORT
7pmBest Battles Bikes 8pm
MotoGP 9pmBest Battles
Bikes 10pmBoxing 11pmPoker
12.05am-12.30amWATTS
ESPN
7pmNBA Basketball 9pmNBA
Tonight Roundtable 9.30pm
German Football 10pmMMA
Live 10.45pmUFC Unleashed
11.45pmESPN Kicks Extra
12amNBA Action 12.30am
Press Pass 2010 1amLive
College Football 4.30amESPN
Kicks Extra 4.45amNBA
Action 5.15am-6amMMA Live
LIVING
7pmCSI: Miami 8pmJenni
Falconer’s Secret Santa 9pm
Criminal Minds 10pmChuck
11pmCriminal Minds 12am
CSI: Crime Scene Investigation
1amCSI: Miami 2amCSI:
Crime Scene Investigation 3am
Charmed 4.40amBoston Legal
5.30am-6amHome Shopping
BBC THREE
7pmThe World’s Strictest
Parents 8pmDon’t Tell the Bride
9pmEastEnders: The Greatest
Weddings 10pmEastEnders
10.30pmRussell Howard’s
Good News 11pmFamily Guy
11.45pmLee Nelson’s Well
Good Show12.15amMongrels
12.45amAmerican Dad!
1.25amLittle Britain Abroad
2.25amTwo Pints of Lager and
a Packet of Crisps 3.25am
Russell Howard’s Good News
3.55amMongrels 4.25amLee
Nelson’s Well Good Show
4.55am-5.25amTwo Pints of
Lager and a Packet of Crisps
E4
7pmHollyoaks 7.30pmFriends
9pmThe Big Bang Theory
9.30pmHowI Met Your Mother
10pmPeep Show12.10am
Scrubs 1.10amPeep Show
2.55amReno 911! 3.20am
What About Brian 4amBeing
Erica 4.45am-6amSwitched
HISTORY
7pmThe Universe 8pmIRT
Deadliest Roads 10pmTrue
Horror: Dracula 11pmAncient
Aliens 1amTrue Horror: Dracula
2amThe Crusades: Crescent and
the Cross 3amDecoding the
Past 5am-6amDinosaur Secrets
DISCOVERY
8pmHow Do They Do It?
8.30pmHow It’s Made 9pm
Wheeler Dealers 10pmSwamp
Loggers 11pmDeath Machines
12amBear Grylls: Born
Survivor 1amDeadliest Catch
2amChris Barrie’s Massive
Machines 3amWorld War Two:
The Complete History 3.50am
Stephen Hawking’s Universe
4.40amDays That Shook the
World 5.30am-6amHow Does
That Work?
DISCOVERY HOME &
HEALTH
7pmA Baby Story 8pm10
Years Younger 9pmI’m
Pregnant and Addicted
9.30pmI’m Pregnant and
Anorexic 10pmThe Girl with
Eight Limbs: A Bodyshock
Special 11pmHospital Sydney
12amI’m Pregnant and
Addicted 12.30amI’m
Pregnant and Anorexic 1amThe
Girl with Eight Limbs: A
Bodyshock Special 2am
Hospital Sydney 3am10 Years
Younger 4amBaby Tales 5am-
6amA Baby Story
SKY1
7pmFILMFather of the Bride
Part II 1995. 9pmLittle
Crackers 9.30pmA League of
Their Own Christmas 10.30pm
Little Crackers 11pmGot to
Dance: Preview Show12am
Justin Lee Collins: High Diver
1amRoad Wars 2.40amOops
TV 3.05amBite Size Brainiac
3.15amThe Dresden Files
4.10amSell Me the Answer
5.05am-6amAre You Smarter
Than a 10 Year Old?
BBC2 ITV1 CHANNEL4 CHANNEL5
S
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E
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I
T
E
&
C
A
B
L
E
TVPICK
6pmBBC News
6.30pmBBC London News
7pmThe Nativity
7.30pmCHOICE EastEnders;
BBC News
8pmHow Science Changed Our
World
9pmNew Tricks
10pmBBC News
10.25pmRegional News
10.35pmThe Impressions Show
with Culshaw and Stephenson
11.05pmFILMSurviving Christmas
2004. 12.30amFILMOoh, You Are
Awful 1972; Skiing Weatherview
2.10amSign Zone: Panorama: Carry
On Banking! 2.40amSign Zone:
Countryfile Winter Special
3.35amSign Zone: The Normans
4.35am-6amBBC News
6pmCelebrity Eggheads
6.30pmYellowstone: Summer
returns to the American
national park.
7.30pmAre You Being Served?
8pmThe Two Ronnies
Christmas Special 1984
9pmCHOICE Being Ronnie
Corbett
10pmThe Two Ronnies: The
Studio Recordings
10.30pmRonnie Barker:
A Bafta Tribute: Hosted by
Ronnie Corbett.
11.30pmThe Goodies
12amMedium
12.40amMedium
1.25amBBC News 4.35am-6am
Close
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale
7.30pmBond of Brothers:
Tonight
8pmEmmerdale
8.30pmCoronation Street
9pmLive: Celebrity Who
Wants to Be a Millionaire?
10.15pmITV News
10.45pmLondon News
10.50pmCarols at Christmas:
11.50pmFILMJesus Christ
Superstar: Musical, starring Ted
Neeley 1973; ITV News
Headlines
1.45amFILMLorenzo’s Oil: Drama,
starring Susan Sarandon. 1992.
4am-5.30amITV Nightscreen
6pmHollyoaks
6.30pmHollyoaks
7pmChannel 4 News
7.55pm4thought.tv
8pmChristmas with Gordon
9pmThe House That Made Me
10pm8 Out of 10 Cats
Christmas Special
10.50pmAlan Carr: Chatty
Man
11.55pmFrankie Boyle’s
Tramadol Nights
12.30amThe Morgana Show
1amKing of the Hill 1.25amFILM
Lantana: Drama, starring Geoffrey
Rush. 2001. 3.25amFILMBoy on a
Dolphin: Romantic drama, starring
Sophia Loren and Alan Ladd. 1957.
5.15am-6amOne Tree Hill
6pmMonkey Life
6.25pmLive from Studio Five
7pmFive News at 7
7.30pmCHOICE Street Market
Chefs; Five News Update
8pmDemolition: The
Unsinkable Ship: The scuttling
of a 40-year-old US naval ship;
Five News at 9
9pmFILM300: Fantasy war
adventure, starring Gerard
Butler 2006; Five News Update
11.20pmThe Gadget Show’s
Christmas Stocking
12.15amSuperCasino
3.55amPoker 4.45amHouse
Doctor 5.10amMichaela’s Wild
Challenge 5.35am-6amMichaela’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
13 10
28 15
12 17
20 12 6
12 37
35
22 13
11 8 9
10 29
27 16
10 26
7
16
9
7
33
34
11
14
7
13
27
12
28
4
22
16
21
15
30
22
15
6
4
10
15
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
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 Miscellaneous
unspecified
objects (5)
4 Birds’ bills (5)
7 Larva of a butterfly
or moth (11)
8 Alone (4)
11 Children’s outdoor
toy (6)
14 Clandestine (6)
17 Weapons (4)
21 Set of questions
evaluating
knowledge (11)
22 Military vehicles (5)
23 Fillip, incentive (5)
DOWN
1 Fires from a job (5)
2 Up to a time that (5)
3 Gardening tool used
for digging (4)
4 Groom’s partner (5)
5 Map book (5)
6 Drinking tube (5)
9 Single number (3)
10 Scull (3)
11 Took a chair (3)
12 Period of time (3)
13 Direct (3)
14 Aroma (5)
15 Range of mountains (5)
16 Departs (5)
18 Govern (5)
19 Musical compositions
with words (5)
20 Charles ___, English
essayist (1775-1834) (4)
N
O
A
E
I T
H
S
L


4
4


4
4

S H A R P A S H E N
T S A H N
A P S H O R T L Y
T H I G H I I
U R A B R E A S T
E D I T A K I T E
S Y N O N Y M L E
N D A T E I N
C A N D O U R R A
M L S O G
B O G E Y H E N C E
9 8 7 5 9 4
2 6 3 1 4 4 8 1
1 7 2 3 6 1
6 8 9 7 3 1 2
5 2 4 9 7 5 8
6 3 1 8 2
3 7 5 1 2 6 7
1 9 4 2 9 8 5
8 4 9 7 6 2
7 9 3 2 3 5 4 1
8 5 1 1 2 9
2 8 6 9 4 1 3 7 5
1 4 5 7 6 3 2 8 9
3 9 7 8 5 2 1 4 6
6 1 3 5 2 4 7 9 8
5 7 8 3 1 9 4 6 2
4 2 9 6 7 8 5 1 3
9 3 1 4 8 5 6 2 7
8 6 4 2 3 7 9 5 1
7 5 2 1 9 6 8 3 4
WORDWHEEL
The nine-letter word was
DREADLOCK
Lifestyle | TV&Games
21 CITYA.M. 23 DECEMBER 2010
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email [email protected]
Sport
22 CITYA.M. 23 DECEMBER 2010
Results
SPORT | IN BRIEF
FA chief wants English boss
FOOTBALL: New Football Association
chairman David Bernstein has declared
his intention to hire an Englishman as
Fabio Capello’s successor. Bernstein
beat ex-Arsenal director David Dein to
the role yesterday and used his first
interview to discuss the national team.
“If he was English that would be prefer-
able for obvious reasons and I think
there is a national desire for that,” said
Bernstein, chairman of Wembley
Stadium since 2008.
Attwood facing Six Nations ban
RUGBY UNION: Gloucester and England
second row Dave Attwood is facing a
lengthy ban after being cited for stamp-
ing. La Rochelle complained about
Attwood’s clash with Petrisor Toderasc
during the French side’s 24-18 Amlin
Challenge Cup win on Sunday. President
Vincent Merling said: “Some of his teeth
are smashed. It’s very serious.”
Attwood, 23, played in two of England’s
autumn internationals but, if found
guilty, could miss the Six Nations.
The transfer market will flicker back into life in
January. With London clubs battling at both ends
of the top flight, City A.M. assesses their options
l
BUDGET: £25-30m, hypothetically, but not expected to be stretched
l
AREAS OF WEAKNESS: A leaky defence is sorely missing Thomas Vermaelen,
and with his return date still unknown the clamour is growing for Arsene Wenger
to sign another centre-back
l
TARGETS: Everton defender Phil Jagielka, the subject of a failed bid in the sum-
mer, and highly-rated Bolton centre-half Gary Cahill
l
LIKELIHOOD OF BUYING: Notorious penny-pincher Wenger has hinted he will
avoid any major activity in the January market, despite the obvious shortcomings
of his squad. Teenage Japanese forward Ryo Miyaichi is set to join, however
FULHAM
l
BUDGET: £10m-15m looks like the limit of Mohamed Al-Fayed’s generosity
l
AREAS OF WEAKNESS: As their position suggests, the garden isn’t looking par-
ticularly rosy for Mark Hughes’ side. Having said that, they’ve only conceded 20
goals, one less than Arsenal. They’ve missed the goals of Bobby Zamora, however
l
TARGETS: Man City outcast Roque Santa Cruz would provide goals, while Aston
Villa’s Stephen Ireland and Tottenham’s David Bentley are able creators
l
LIKELIHOOD OF BUYING: Fulham’s three main targets all enjoyed the best spells
of their respective careers under Hughes, and would more than likely jump at the
chance to work with him again
CHELSEA
l
BUDGET: £50-60m if Roman
Abramovich shows appetite
l
AREAS OF WEAKNESS: All aspects of
the once-invincible team have been in a
desperate malaise since early November,
but of particular concern to Carlo
Ancelotti will be an injury-riddled
defence – John Terry and Alex have
both been lengthy absentees – and a
forward line that has gone from fear-
some to toothless in a matter of weeks
l
TARGETS: Long-term target David
Luiz, Benfica’s Brazilian centre-back,
is said to be on the radar again, while
Real Madrid defender Pepe’s con-
tract dispute has alerted England’s
top sides, and the Portuguese
would be a useful addition. Up
front, Manchester City target Edin
Dzeko looks likely to leave
Wolfsburg, and Chelsea have been
credited with an interest.
Ancelotti is said to want
Tottenham’s Luka Modric, but
has virtually no chance of sign-
ing him mid-season
l
LIKELIHOOD OF BUYING:
Abramovich is rumoured to be
ready to loosen the purse
strings and provide an injec-
tion of fresh talent, but a
return to the largesse of old is
not expected. Ancelotti will
argue that a faltering title
charge demands additions
London’s festive sporting highlights
WITH the weather having potentially
put paid to any pre-planned foreign-
based festive frolics, City A.M. has hero-
ically rescued Christmas by pointing
you in the direction of some of the
sporting highlights the capital will be
hosting.
FOOTBALL
Pivotal games at the top and bottom
of the Premier League will be staged
in London this weekend.
On Boxing Day, basement boys
West Ham travel to Craven Cottage to
take on a Fulham side who are only a
place outside the relegation zone on
goal difference. Meanwhile, also in
west London, Championship paceset-
ters QPR will be looking to arrest
their recent slide against fellow high-
flyers Swansea. The following
evening, Arsenal have the opportuni-
ty to end their woeful recent form
against the top flight’s elite sides
when they entertain champions
Chelsea at Emirates Stadium. On New
Year’s Day the Hammers will again be
involved in a relegation six-pointer
when Mick McCarthy’s Wolves come
to town, while over at White Hart
Lane the north versus west London
derby between Spurs and Fulham
promises to be an entertaining
encounter.
RUGBY UNION
All eyes will be on Wembley come
Boxing Day when Gavin Henson is
likely to make his eagerly awaited
comeback.
The two-time Welsh Grand Slam
winner is set to end his 21-month self
imposed exile from the sport and
make his Saracens debut in front of
an anticipated 50,000 fans at the
famous old venue against Wasps.
The following afternoon stuttering
London Irish will be looking for a
much needed win at Harlequins. The
Exiles then host Bath on New Year’s
Day and the following afternoon sees
the visit of Newcastle to Wasps.
HORSE RACING
Jump racing has suffered more than
most at the hands of the weather
recently. The early indications are
that Boxing Day’s famous King
George meet will go ahead, however.
The astonishing Kauto Star will be
aiming to clinch a fifth win in the
King George VI Chase – he’s already
an odds-on shot with Long Run the
likeliest candidate to cause an upset.
The other Grade 1 race on the card,
the William Hill Christmas Hurdle, is
shaping up to be a three-way fight
between Binocular, Starluck and
Khyber Kim.
ARSENAL
WINDOW OF
OPPORTUNITY
ENGLAND batsman Kevin Pietersen
claims he won’t be holding back on
the verbals, despite his attempts at
sledging backfiring in the third
Ashes Test.
Pietersen and James Anderson
attempted to get under the skin of
the previously wayward Mitchell
Johnson in Perth, but the Aussie
paceman responded with a devastat-
ing spell of hostile swing bowling
which ripped the heart out of
England’s top order in the first
innings.
Johnson subsequently revealed
that England’s jibes only served to
fire him up, but that won’t prevent
Pietersen from stirring things again
when hostilities are renewed in
Melbourne on Boxing Day.
“I’ve played against Australia I
don'’ know how many Test matches
– and believe me, the first time I
played and the second time I came
out here, the likes of Warne and
McGrath there were some pretty big
verbal contests,” he said.
“I haven’t seen or heard anything
different [in Perth] from what’s hap-
pened in the first two Tests, let alone
last year in England.
“It’s England v Australia, an Ashes
series. Blokes get the red mist occa-
sionally; you’re allowed to do that –
things happen.
“You’re playing for that little urn.
It’s historic; it’s huge. But there’s
nothing that's been overboard, and if
things go overboard match referees
deal with stuff like that. There’s not
been anything close to it.”
Johnson’s nine wickets at the
WACA were in stark contrast to his
none for 170 in the drawn first Test
in Brisbane, and Pietersen admits
England were taken aback by his dra-
matic resurgence.
“He took us by surprise, for sure,”
Pietersen admitted.
“He bowled well, really, really well,
and had a good game of cricket - and
we're going to have to prepare our-
selves for that swinging ball.”
Pietersen advocates seasonal sledging
Pietersen admits he
sees red out in the
middle
Picture: PA
CITYA.M. 23 DECEMBER 2010 23
ENGLAND supporters fear their num-
bers will be depleted for the potential-
ly decisive fourth Ashes Test as snow
chaos prevents fans from flying out to
Australia.
A record crowd of more than
90,000 is anticipated for the match in
Melbourne, which begins on Boxing
Day and could see England retain the
urn with victory.
But the Barmy Army, England’s
biggest fan group, says it is concerned
that the ongoing disrup-
tion to services out of
Heathrow could
reduce the tourists’
support at the
MCG (right).
“It’s a fear if
some fans don’t
make it out,” a
spokesperson for
the Barmy Army
told City A.M. “We
want everyone who
has booked and paid to
be able to get out here.
It’s really sad if fans are
trying to get out here
and can’t because of
the weather. It seems
really unfair for
those who have
been planning this
all year.”
The fourth and
fifth Tests are tradi-
tionally the most
popular because
they fall over the
Christmas holidays and
form the climax of the
series. “We know lots of fans have
recently booked up for Melbourne,”
the spokesperson added.
“I know some people are travelling
out in the next few days so I’m sure
some will face a backlog. I’ve certain-
ly heard of people having trouble get-
ting home – some have been stuck in
Singapore.”
The Barmy Army sold more than
1,000 packages for the series and its
representatives are set to meet with
their partners, the Cricket Australia
Travel Office, today in a bid to resolve
any transportation issues.
BY FRANK DALLERES
CRICKET

THE ALL-ROUNDER |
CONDITIONS, STATS AND BANTER
STAT OF THE DAY
If further proof were needed that
Kevin Pietersen is an adocate of the
‘attack is the best form of defence’
theory, it comes in the form of this
little nugget. KP has attacked more
deliveries per balls faced than any
other batsmen in this Ashes series.
He plays an attacking shot 65 per
cent of the time.
KATICH EYES FIFTH TEST
Injured Australia opener Simon
Katich has revealed he is set to
make a shock return in time for the
fifth Ashes Test, increasing the
pressure on Phillip Hughes to find
form in the Boxing Day meeting in
Melbourne. Katich damaged his
Achilles tendon during the second
Test defeat to England in Adelaide
and was initially expected to miss
the rest of the summer. But Katich
said: “I'm doing all the rehab and
pulling up well from the strength
work so the physio’s pretty happy
with where I’m at and actually
thinks I'm ahead of schedule.
Normally it takes a couple of
months to settle down but it’s set-
tling down pretty quickly.”
Weather woes likely to deplete Barmy Army at MCG
England batsman admits
he won’t bite his tongue
in the pivotal fourth Test,
writes James Goldman
A smile
Registered charity no. 1068298
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TOTTENHAM
l
BUDGET: £20-30m, thanks to their
Champions League run
l
AREAS OF WEAKNESS: One of the best-
equipped squads is not short of numbers, but
freakishly injury-prone defenders may demand
investment in cover. Harry Redknapp also
appears to fancy some striking reinforce-
ments, with Robbie Keane seemingly on
his way out of White Hart Lane (again)
l
TARGETS: Newcastle and England
target man (left) Andy Carroll’s
excellent season has caught
Redknapp’s eye. West Ham cap-
tain Scott Parker and
Everton’s Steven Pienaar are
more likely arrivals, the
latter because his con-
tract is set to expire in
the summer
l
LIKELIHOOD OF
BUYING: Players
may need to leave as
well but it seems
inconceivable that
Redknapp, with the title
race more open than ever,
won’t at least try to strengthen
his hand
l
BUDGET: £10-£15m at a push
l
AREAS OF WEAKNESS: West Ham fans
would likely point at Avram Grant, the man
entrusted with spending the club’s cash in
January, as the main factor in their miserable
season. Other than Scott Parker, there seems
a shortage of fighters – that needs addressing
l
TARGETS: Tottenham’s Robbie Keane and
Monaco’s Dieumerci Mbokani are strike tar-
gets, while Gary O’Neil of Middlesbrough and
Jamie O’Hara of Spurs would add midfield
bite. Aston Villa’s Steven Sidwell looks a sure
bet to sign for around £1m
l
LIKELIHOOD OF BUYING: Survival will
hinge on how, rather than if, Avram Grant
spends in January. Keane would represent
something of a coup, but already wages look
like a stumbling block. O’Hara thrived under
Grant at Portsmouth; he’s likely to be avail-
able and would compliment Parker nicely
WEST HAM

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