BUSINESS WITH PERSONALITY
ORACLE BOSS
Issue 1,196 Wednesday 11 August 2010
FED IN RESCUE
BID ON FEARS
OVER GROWTH
US ECONOMY
▲
BY KATIE HOPE
THE US Federal Reserve confirmed
fears of a marked slowdown in the
world’s biggest economy yesterday as
it made its first step towards extend-
ing its emergency monetary policy
regime in a significant policy shift.
The central bank said it would rein-
vest proceeds from its investments in
mortgage-backed securities to buy
longer-term government debt in a bid
to help the faltering economy by
keeping mortgage and corporate loan
rates lower.
The move, dubbed a “light” version
of quantitative easing (QE) by econo-
mists, means the Fed will pump the
estimated $200m to $300m proceeds
from its first $1.2 trillion QE cycle
into Treasury bonds, while maintain-
BarCap to cut hundreds of
jobs in aneffort tocut costs
▲
BANKING
BY MARION DAKERS
BARCLAYS Capital is expected to
announce hundreds of redundancies
as early as today, affecting back office
staff across the firm’s global opera-
tions.
It is understood the layoffs are
intended to cut costs to compensate
for a sharp fall in market activity in
the second quarter.
The investment banking arm was
FTSE 100 ▼5,376.41 -34.11 DOW ▼10,644.25 -54.5
INTERNATIONAL POWER
SEALS £1.4BN MERGER
LONG-AWAITED GDF DEAL P4
ing its balance sheet at close to its
present $2.06 trillion, rather than
gradually allowing it to run down.
The decision is an abrupt U-turn by
Fed chairman Ben Bernanke, who
just last month said he was not plan-
ning specific new measures to sup-
port the economy. But yesterday’s
statement forecast a more gloomy
outlook for the economy with Fed
officials saying the “pace of recovery
in output and employment has
slowed in recent months”. When it
last met in June, it said the recovery
was “proceeding” at a “moderate
pace”. The Fed also reassured markets
that it would keep rates on hold at 0
per cent to 0.25 per cent for an
“extended period”.
Capital Economics analyst Paul
Ashworth said the policy change was
a “largely symbolic gesture, designed
responsible for around 87 per cent of
Barclay’s total earnings last year, with
Bob Diamond’s team raking in a
£3.4bn quarterly pre-tax profit.
However, certain measures of BarCap
Bob Diamond, who runs
BarCap, has surprised
onlookers by the pace at
which he has built up his
empire
NASDAQ ▼2,277.17 -28.52
www.cityam.com
to reassure markets.
The Dow Jones, which fell by 100
points earlier, narrowed its loss within
minutes of the committee’s statement
eventually closing 54.5 points lower at
10,644.25. The Fed’s move came as offi-
cial data showed US business produc-
tivity fell for the first time in one and
a half years in the second quarter.
ANALYSIS l Dow Jones
10,700
10,680 10,644.25
10 Aug
10,640
10,600
10,560
09:30 11:00 13:00 15:00
revenue were down 38 per cent in the
last three months, prompting drastic
action from the group.
Further, the wage bill for the group
reached £5bn in the year, gaining
£1bn in the last year that was mostly
spent within BarCap as it expanded.
Diamond said after the company’s
results announcement last week that
BarCap’s total headcount will end up
higher by the end of 2010.
BarCap declined to comment on
the redundancies last night.
£/$ 1.58 ▼-0.01
SLAMS HP
SAYS LETTING CEO
MARK HURD GO IS
COWARDLY P3
FREE
Airey will leave the firm after overseeing its purchase by Richard Desmond Picture: REX
Dawn Airey heads for
the exit after C5 sell-off
£103.5m. He has pledged to invest up
▲
MEDIA
to £100m a year in new programming
BY STEVE DINNEEN as he attempts to arrest the channel’s
THE CHARISMATIC chief executive decline.
of Channel Five is widely expected A close friend of Airey’s told City
to quit the firm following its pur- A.M. she had privately said she did not
chase by Express owner Richard expect to last more than six months
Desmond. under Desmond.
Dawn Airey is expected to take a Airey has been at Five for 14 years,
senior role at former Five owner RTL after leaving the controller of enter-
after helping it dispose of the loss- tainment position at Channel 4.
making broadcaster. Claire Enders, analyst with Enders
It is understood she will remain at Analysis, said the move is not unex-
Five for several months to oversee pected. She told City A.M.: “There is
the transition. almost always a decision to bring in a
The shock move is understood to fresh face. In this case I expect it to be
be the first step in a radical shake-up someone from within the Desmond
of the board of the embattled terres- empire rather than a TV person.
trial channel. “He will already have earmarked
Job cuts are expected throughout the position to a trusted lieutenant.
the organisation as Desmond “There is a good chance this was
attempts to streamline the broadcast- already decided as part of the sale,
er, which employs 300 people. especially if Airey does take a role at
The Express owner, who made his RTL. I know she has a very strong con-
fortune selling adult magazines, tract so it will be interesting to see
bought Five from RTL in a deal worth how much she walks away with.”
£/¤ 1.20 unc ¤/$ 1.32 unc Certified Distribution
31/05/10 till 04/07/10 is 103,725
 2 News
Bank must restore its credibility
DEPUTY EDITOR’S LETTER
DAVID HELLIER
OF all the people who regulated (or
failed to regulate) the financial servic-
es industry throughout the banking
crisis, Bank of England governor
Mervyn King has emerged as the man
whose authority has perhaps been
most enhanced.
Going into the crisis with an insti-
tution that sets monetary policy and
general supervision, he will emerge,
thanks to chancellor George Osborne,
from a major shake-up of the tripar-
tite system with power over the regu-
lation of the City following the
takeover of the Financial Services
7th Floor, Centurion House,
24 Monument Street,
London, EC3R 8AJ
Tel: 020 7015 1200 Fax: 020 7283 5334
Email: news@cityam.com www.cityam.com
Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor Ben Griffiths
Night Editor Katie Hope
Associate Editor David Crow
Lifestyle Editor Zoe Strimpel
Art Director Darren Soulsby
Pictures
Commercial
Sales Director
Commercial Director
Alex Ridley
Jeremy Slattery
Harry Owen
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editorial content of publications under the Editor’s
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WHAT THE OTHER PAPERS SAY THIS MORNING
HIGH COURT RULES INVESTOR BROKE
BUY-OUT FUND CONTRACT
An important precedent for the pri-
vate equity industry has been set by a
High Court ruling that Robert Adair,
chairman of oil group Melrose
Resources, breached a contract by
refusing to put more money into
Advantage Capital’s buy-out fund.
Adair, who owns more than half of
London-listed Melrose, now faces a
hearing to determine damages.
INVESTOR GROUP SUES HAMPSON
A consortium of private investors led
by Midlands industrialist David Grove
is suing engineering group Hampson
Industries for almost £4m, alleging
“fraudulent misrepresentation”. They
claim that Hampson misled them
concerning the revenues of a sub-
sidiary, Hampson Precision
Automotive, which they bought for
£2.5m cash in June.
Authority. But King, who presents the
Bank of England’s quarterly inflation
report today, is currently coming
under fire in the City for the one
thing his charges should really excel
at: economic forecasting.
In May last year, the Bank’s official
forecasts expected inflation in the
second quarter of this year to come in
at below one per cent. In the event it
registered well above the Bank’s set
target of two per cent at 3.4 per cent.
To make matters worse, the Bank at
the time estimated there was only a
seven per cent probability of inflation
topping three per cent.
Equally forecasts on economic
growth have often proved too opti-
mistic, with the Bank since 1997 on
average predicting growth to be 0.9
per cent too high.
So way off beam have the Bank’s
forecasts been that some economists
are beginning to give them a wide
berth. Says Simon Ward of Henderson
Global Investors: “I’m not sure we
should be giving the Bank’s forecasts
Shoppers fear
for economy
ECONOMY
▲
BY MARION DAKERS
CONSUMER confidence has fallen to
the lowest level since May 2009, amid
rising everyday costs and jitters about
the health of the economy.
Nationwide’s confidence index fell
seven points to 56 today, the third
consecutive monthly drop.
The number of households who
believe their income will be lower in
six months’ time is at the highest
level since the survey began in 2004.
More consumers are delaying big
purchases, and more than one in four
(28 per cent) believe the economic
landscape will be even worse by the
end of the year.
“This is perhaps largely a product
of consumers taking stock of their
personal situation following the
emergency Budget, although fears
OAKTREE IN MCINERNEY TALKS
Oaktree Capital, the US private equity
group, is in talks to take control of
McInerney Holdings, the debt-laden
Irish housebuilder, according to
sources close to the talks. McInerney
Holdings, which has struggled with a
€236m debt pile since the collapse of
the Irish housing market in 2008,
confirmed that it was in advanced
discussions with an investor “regard-
ing a substantial injection of new cap-
ital”.
BUY-OUT GROUPS EYE MORGAN
STANLEY FUND
US private equity firms have
approached Morgan Stanley about
buying a stake in its troubled real
estate funds management business,
according to people familiar with the
matter. KKR and TPG, both private
equity firms that lack a substantial
property operation, have expressed
tentative interest in Morgan Stanley
Real Estate Fund, or MSREF.
much credibility given they’ve been
shown to be very poor over the last
few years.”
None of Ward’s cynicism will pre-
vent today’s event being widely
watched by the financial markets.
They will look for signs of whether
the Bank is more anxious about falter-
ing growth or creeping inflation.
Signs of a slowdown in the housing
market and a downturn in consumer
confidence are increasing anxiety on
growth, whereas rising petrol and
food prices have raised fears of infla-
tion.
The Bank needs to do better at pre-
dicting the future. It will surely get its
policy response wrong if it cannot get
its forecasts right.
RING RING
WHEN Metro Bank recently launched
it made a big deal out of the fact that
it would be dog friendly and that cus-
tomers’ dogs would be welcomed
with bowls of water.
Not being a dog owner this amused
over the state of the job market and
economy as a whole are still playing a
part as the UK continues on its slug-
gish path to recovery,” said
Nationwide’s chief economist Martin
Gahbauer.
The Bank of England is widely
tipped to lower its growth forecasts
while raising inflation projections in
its quarterly Inflation Report today,
confirming to consumers the fragile
state of the UK economy. Bank gover-
nor Mervyn King has recently warned
of a possible slowdown throughout
the Eurozone. ECONOMICS: P13
BoE governor Mervyn
King believes the
Eurozone is at risk of a
double-dip recession
amid slowing growth
ONLINE BANKING HIT BY NEW TROJAN
Online banking customers are being
targeted by international cyber crim-
inals who are using sophisticated
computer viruses to empty their
accounts. A new version of a well-
known trojan virus has stolen
£675,000 from about 3,000 online
customers of an unnamed British
bank, according to an internet securi-
ty company.
PRU HOPES REDUCTION IN AIA COSTS
WILL SATISFY SCALP-HUNTERS
Prudential will try to mollify irate
investors tomorrow by announcing
that it has cut the cost of its failed bid
for AIA by 15 per cent to about £380
million. The insurer is understood to
have convinced some of the 30 banks
that worked on the aborted Asian
acquisition to reduce their final fees.
Credit Suisse, JP Morgan Cazenove
and HSBC were among the advisers.
me but did not stand a chance of
encouraging me to change my bank,
which I have had (like many) since col-
lege days.
But one thing stuck in my mind
after reading my colleague Roger
Baird’s interview with Metro’s Craig
Donaldson the other day; the pledge
from the bank’s chief executive that
calls to the bank would be picked up
after no more than three rings.
That really would interest me.
When I last called to add some televi-
son channels to my VirginMedia pack-
age, I was put through to a series of
voicemails. The last of these admitted
that I would likely be held for some
time and asked me to choose from a
number of music genres, including
Indie and Urban, to make my wait
more enjoyable.
Sorry to sound old-fashioned, but
there really is no substitute for
answering that phone. If Metro Bank
can actually do that, it might go far.
david.hellier@cityam.com
Allister Heath is away
Sir Gus O’Donnell will step down before the end of the parliament in 2015 Picture: GETTY
Top civil servant to quit
POLITICS
▲
BY DAVID CROW
BRITAIN’S top civil servant Sir Gus
O’Donnell will stand down within
the next couple of years, long before
the end of the parliament in 2015.
Sir Gus – known as God in
Whitehall circles because of his ini-
tials and power – considered quitting
immediately after the election but
the Prime Minister convinced him to
oversee the first few years of the coali-
tion government.
CHINA TACKLES £213BN HIDDEN LOANS
IN BANKS
Chinese banks could be hiding off-bal-
ance sheet loans worth about 2,300bn
renminbi (£213bn), according to the
country's authorities. In a move that
could lead to massive unexpected loss-
es for the Chinese banking system, the
China Banking Regulatory
Commission has ordered lenders to
account for the missing loans.
RUPERT MURDOCH FIGHTS TO TAKE
THE SKY OUT OF SKYPE
BSkyB is trying to prevent Skype, the
internet phone company, from contin-
uing to use its name because the first
three letters spell “sky”. It emerged
yesterday that BSkyB has been
ensconced in a legal battle with Skype
for more than five years. But the legal
action over the “Skype” trademark
only became public when Skype men-
tioned it in its IPO document.
CITYA.M. 11 AUGUST 2010
NEWS | IN BRIEF
BP cases to be heard near Gulf
Lawsuits against BP following the Gulf
of Mexico oil leak will be heard in New
Orleans, a judicial panel said yesterday.
BP had argued for the cases to be heard
in Texas, a state traditionally more sym-
pathetic to the interests of oil firms. The
news comes as the oil giant suspended
work on a relief well following predic-
tions of a hurricane.
Aegis eyeing Switzerland base
Security contractor Aegis has set up a
Swiss holding company in a move that
could pave the way for its offices to
move to the tax haven. The firm, which
is privately-owned and currently based
in London, operates in conflict zones
such as Afghanistan.
Probe targets Streetcar deal
The Competition Commission is to inves-
tigate US car sharing firm Zipcar's
acquisition of UK rival Streetcar after
the Office of Fair Trading said that the
combination could threaten competition.
Privately-owned Zipcar, which in June
filed for an IPO worth as much as $75m,
bought Streetcar in April in a deal worth
around $50m.
Sources insisted Sir Gus would
leave on good terms, pointing out he
will have spent over seven years in
charge of Whitehall by the time he
leaves. His predecessor Sir Andrew
Turnbull lasted just three.
The mandarin rose to prominence
as former Prime Minister Gordon
Brown’s favourite civil servant, a sta-
tus that many thought would be
incompatible with a Tory-led admin-
istration. But he impressed David
Cameron with his handling of the
complex coalition negotiations.
DISASTER CLAIMS WEIGH ON
HANNOVER RE’S PROFIT
Germany’s Hannover Re yesterday
reported a 24 per cent decline in net
profit for the second quarter, on
lower income from its own invest-
ments and higher claims from natu-
ral and man-made disasters.The
company said second-quarter net fell
to €159.6 million from €208.7 million
a year earlier.
TWO GROUPS DROP SSANGYONG BIDS
AS DEADLINE PASSES
The deadline for binding bids for a
majority stake in troubled South
Korean carmaker Ssangyong Motor
passed yesterday with at least two of
the six interested parties abandoning
the race.South Korean private equity
fund Seoul Invest and a group led by
French carmaker Renault SA didn't
submit bids by the deadline for a con-
trolling stake in Ssangyong.
CITYA.M. 11 AUGUST 2010 News 3

Oracle slams
Justice dept HP’s corporate
to slash £2bn correctness

from budget
TECHNOLOGY

▲
ORACLE boss Larry Ellison yesterday
laid into Hewlett-Packard after its
chief executive Mark Hurd was forced
to resign following allegations by a
former porn star.
Ellison slammed HP’s board for
▲

POLITICS
BY DAVID CROW
THE SCALE of the cuts to hit the pub-
lic sector were exposed yesterday
the details of his spending settle- ousting close friend Hurd despite
ment. clearing him of sexually harassing
Beasley’s warning that the savings Jodie Fisher, star of movies including
will likely be made within the next 12 Films like Toy Story 3 have delivered big gains for the media giant Picture: REUTERS Sheer Passion and Intimate
to 24 months proves the government Obsession.

Disney gets its fairytale

after the Ministry of Justice (MoJ) said is serious about “front loading” the Ellison said: “The HP board just
it was planning to slash £2bn from its cuts. Coalition sources say this would made the worst personnel decision
£9bn annual budget, leading to tens repair the public finances more since the idiots on the Apple board
of thousands of job cuts and far fewer quickly, allowing the government to fired Steve Jobs many years ago.

ending with $1.3bn profit

prison places.
Ann Beasley, the MoJ’s director-gen-
eral of finance, wrote to senior civil
servants yesterday morning to
announce the savings, warning that
the majority of savings would need to
be made within the next two years.
reduce taxes in the run up to an elec-
tion planned for May 2015.
The letter also suggests justice sec-
retary Ken Clarke has agreed a 25 per
cent reduction in departmental
spending with the Treasury.
Departments were asked to model
▲
“In losing Mark Hurd, the HP board
failed to act in the best interest of
HP’s employees, shareholders, cus-
tomers and partners.
“Publishing known false sexual
harassment claims is not good corpo-
CONSUMER boosted sales in the consumer prod- rate governance; it’s cowardly corpo-

The letter, which was leaked to the
press through the Public and
Commercial Services (PCS) union, pro-
vides one of the first insights into the
wrangling between Whitehall depart-
ments and the Treasury, as the gov-
ernment gears up for the fiercest
fiscal tightening in Britain’s peace-
time history.
It confirms that Clarke held a
“bilateral” meeting with chief secre-
tary Danny Alexander to thrash out
25 per cent and 40 per cent savings,
but Clarke is said to have refused to
prepare for the “doomsday” scenario,
insisting that cuts of that magnitude
were simply untenable. Over £4bn of
the department’s budget is spent on
running prisons and paying legal aid,
meaning both areas will be severely
squeezed. The PCS said it would be
impossible to deliver the savings with-
out cutting 15,000 jobs, and closing
prisons and courts.
BY MARION DAKERS
HIT movies like Toy Story 3 and high-
er advertising sales have lifted quar-
terly profit at Walt Disney by 40 per
cent, the firm said yesterday.
Pre-tax profit for the three months
to 3 July rose to $1.3bn (£820m), from
$954m a year ago, while revenue beat
analyst forecasts by rising 16 per cent
to $10bn.
Spin offs from blockbuster films
uct division, which advanced 19 per
cent to $606m.
Revenue at the firm’s media arm,
which houses sports network ESPN
and broadcaster ABC, rose 19 per cent
to $4.6bn, benefiting from $344m in
turnover held over from last year.
However, the theme parks arm saw
turnover slide eight per cent to
$477m, as holidaymakers spent time
at cheaper resorts following price
rises at Disney destinations.
rate political correctness.”
Ellison said the HP board voted 6-to-
4 to go public with the claims.
HP, however, disputes this. A
spokeswoman said: “As the company
stated previously, the board voted
unanimously for Hurd’s resignation.”
Hurd quit over allegations he
claimed $20,000 (£12,500) of false
expenses, including payments to the
steamy star for work she did not carry
out, expensive meals and travel.

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4 Focus on International Power
Shareholders have got off lightly
THANK god for that. International
Power (IP) shareholders have been
given a welcome reprieve, after the
majority of the company was
snapped up by GDF Suez. Truth be
told, there was trouble ahead for IP
if it decided to go it alone.
Cheer at the new investment
grade credit rating belies the fact
that IP’s debt pile was looking
increasingly troublesome, with pres-
sures mounting from 2012 onwards.
Debt was a particular worry at the
Hazelwood brown coal powerstation
in Australia. It had to restructure its
£415m worth of non-recourse debt
on unfavourable terms and with an
uncomfortably close maturity date
of June 2012, thanks to uncertainty
over Australia’s carbon charging pro-
gramme. IP should now be able to
get more headroom when it renego-
tiates terms in two years’ time.
Similarly, its Italian wind power
assets are looking less attractive,
after the deficit-strapped govern-
ment withdrew a subsidy for renew-
able energy providers.
So while investors might be
underwhelmed by the amount of
potential cost savings, the truth is
that IP would have struggled to
increase its share price to the post-
merger talks level if it had rebuffed
GDF. Investors really have got off
lightly.
ANALYSIS l International Power
p
380
372.60
360 10 Aug
340
320
300
280
19 May 9 Jun 29 Jun 19 Jul
BOTTOMLINE
Analysis by David Crow
IP’s Philip Cox (left) and GDF Suez boss Gérard Mestrallet are now bedfellows Picture: GETTY
International
Power to get
higher rating
▲
ENERGY
BY OLIVER SHAH
INTERNATIONAL POWER (IP) will get
a healthier credit rating through its
long-awaited merger with GDF Suez,
shaving £40m from its annual financ-
ing costs, the firm said yesterday.
IP is confident of improving its
credit rating to “investment grade”,
at least BBB–, meaning it will be able
to borrow at cheaper rates.
The lowered funding charges are
part of £165m of synergies IP is hop-
ing to squeeze from its reverse
takeover by French government-
backed GDF. GDF, which is aiming for
€70m (£58m) of synergies, will roll its
non-European power generation
units into the British company, along
with UK and Turkish assets.
Subject to shareholder and regula-
tory approval, GDF will own just over
two thirds of the post-transaction
group while IP investors will hold the
remainder. IP chief executive Philip
Cox will remain in position, as will
chief financial officer Mark
YOEL ZAOUI
GOLDMAN SACHS
INTERNATIONAL POWER and GDF
Suez hired a raft of investment
bankers to push the merger through.
GDF’s efforts were coordinated by a
Goldman Sachs team led by Yoël
Zaoui, Nick Harper, Robin Rousseau
and Charles-Eduard van Rossum. Zaoui
is a graduate of Stanford Business
School in the US and has worked on
Crédit Agricole’s acquisition of Banque
CITYA.M. 11 AUGUST 2010
Williamson. GDF international vice
president Dirk Beeuwsaert will come
in as chairman, with incumbent Sir
Neville Simms becoming his deputy.
Cox was keen to stress the growth
prospects available by tapping GDF’s
more robust balance sheet. “Very
important in this capital-intensive
industry is the enhanced financial
position of the group,” he said.
One analyst remarked: “It does
make it easier for them. They were
scratching their heads a bit as to how
to take it forward before this.”
The transaction also means invest-
ment bankers and lawyers acting for
the two firms will enjoy a rare August
windfall. Sources who worked on the
deal said the advisers would rake in
up to £50m in fees from the work.
Shares in IP dropped two per cent
to 372.6p as investors registered disap-
pointment at the size of their 30 per
cent stake in the merged company.
The news came as IP said its first-
half pre-tax profit fell by half to
£385m. Stripping out exceptional
items it came to £333m.
Indosuez, Elf Aquitaine’s defence
against a $59bn (£37bn) hostile offer
from Total Fina and Mittal Steel’s
merger with Arcelor.
Also working for GDF were
Grégoire Chertok of NM Rothschild,
BNP Paribas’ Thierry Varene, Ondra
Partners’ Michael Tory and
Blackstone’s famous rainmaker John
“Studs” Studzinski.
Japanese bank Nomura led the
charge for International Power, with
William Vereker, Adrian Mee and
Jason Hutchings leading the team.
In addition, International Power
called on the services of JPMorgan’s
Ed Byers, Mark Breuer and Dwayne
Lysaght, and Simon Smith and
Alastair Cochran of Morgan Stanley.
 6 Consumer News CITYA.M. 11 AUGUST 2010

BUDGET MEASURES SEE CONSUMERS PUTTING OFF HOLIDAYS

Booking volumes were about

10 per cent lower
in the 3 months to
the end of June compared
with last year
Revenue fell to
£3.4m from
£3.6m a year ago
Shares
t10 per cent yesterday

TUI Travel chief

executive Peter
Long said the ash
crisis and Budget
cuts hit bookings

TUI suffers as cuts

dent holiday sales
CONSUMER
▲

TUI chief executive Peter Long 22 per cent.

BY HARRY BANKS
TUI Travel saw its London-listed
shares plunge by almost ten per
cent yesterday after the Thomson
Holidays owner said bookings had
fallen over the third quarter of its
fiscal year.
Europe’s largest travel operator
The Halifax Reward said airspace closures due to the
volcanic ash crisis, coupled with
uncertainty caused by government
said: “The strong booking trends
experienced up until the volcanic
ash disruption in mid-April and
the subsequent rebound in early
May were not sustained in the early
summer period.
“In the UK, the market has
slowed markedly following the
recurrence of airspace closures, the
emergency Budget and subsequent
austerity measures, and the better
than average UK weather, com-
Analyst Richard Hunter at
Hargreaves Lansdown said: “The
current trading position has mar-
ginally improved, although man-
agement remains understandably
cautious for full-year prospects. The
third quarter update follows on
from a first half loss in May.”
ANALYSIS l TUI Travel
270
p
203.00
10 Aug

Current Account. Budget cuts, had hit its business

hard. The good weather in the UK
bined with quiet trading during
the World Cup.”
260
250
also encouraged more people to Bookings in the Netherlands 240
have so-called “staycations” in were also lower than a year earlier,
Make the jump to simple, Britain, leading to a 10 per cent dip
in booking volumes in the three
but those in other key European
markets increased.
230
220

great value banking. months to the end of June com-

pared with last year. Revenue fell to
£3.4m, from £3.6m a year ago.
The company said its winter hol-
iday schedule had started well with
bookings for the last four weeks up
210

19 May 9 Jun 29 Jun 19 Jul

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£5 each month. And moving to us is easy, our Greggs issues warning Jaguar drives
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To find out more, pop into branch, call us
on 0845 122 1425 or visit halifax.co.uk
▲

CONSUMER
INDIA’S Tata Motors swept past
CONSUMER
▲

wheat price. We may have to raise forecasts with a fourth straight

BY JOHN DUNNE
HIGH street bakery Greggs yester-
day warned that customers could
be facing price rises as a result of
the soaring cost of wheat.
The company said the price of its
bread and other items would be
put under review if the wheat
price did not come down from its
current level of £158 a tonne.
However, the group’s warning
came alongside a rise in pre-tax
profits for the first half of the
Pay in £1,000 each calendar month to receive £5 (net)/£6.25 (gross) monthly. Reward paid net of income tax (at
year – up 12.3 per cent on a year
the rate specified by law, currently 20%). Higher rate tax payers may need to pay additional tax on the reward earlier to £18.5m.
Call us, go online or visit one of our branches for more information on all fees and interest rates. Available only to Chief executive Ken McMeikan
personal customers, aged 18 or over and who are resident in the UK. Halifax is a division of Bank of Scotland plc
Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh EH1 1YZ.
said: “Our results are very good but
of course there is concern over the
some prices in our range if it does
not come down, but they will only
be very small rises, maybe a penny
on a sausage roll.”
The wheat price surge has been
triggered by flooding in Pakistan
and a drought in Russia.
McMeikan said the company’s
expansion plans are gathering
pace and that its London operation
is operating particularly well.
“We are opening more shops
and employing more people. We
are offering meal deals which give
our customers more choice and
are very confident about the busi-
ness,” he said, adding that the
group’s new “concept” flagship
stores are thriving.
quarterly profit yesterday, driven
by demand for its luxury Jaguar
and Land Rover brands.
The company’s Jaguar and Land
Rover unit, which Tata bought
from Ford in 2008, is expected to
fuel growth in coming quarters as
demand for luxury brands increas-
es, particularly in emerging
economies. Tata Motors reported a
consolidated net profit of 19.89bn
rupees (£273m) for the quarter to
30 June, swinging back from a
year-ago net loss of 3.29bn rupees.
Revenue rose to 270.56bn rupees
from 164.73bn rupees last year.
The results boosted Tata’s shares
to their highest level in at least two
decades.
CITYA.M. 11 AUGUST 2010 Consumer News 7

Return of business
traveller helps IHG
CONSUMER
▲

BY JOHN DUNNE
INTERCONTINENTAL Hotels (IHG) –
the world’s biggest hotelier – has
heralded a recovery in the hotel
market, helped by the return of the
business traveller, as it beat fore-
casts with a 22 per cent rise in first-
half profits.
The company, which runs more
than 650,000 rooms in over 4,500
hotels worldwide, posted an operat-
ing profit of $219m (£138m) for the
first half of 2010, up from $179m
the previous year and ahead of ana-
lysts’ expectations. Meanwhile the
half-year dividend rose five per cent IHG chief Andrew Cosslett is bullish for 2010 Picture: Micha Theiner/ CITY A.M.
to 12.8 cents a share.
Revenue per available room, or markets seeing growth towards the massively in China while carrying
revpar – a key industry measure – end of the first half. out a massive overhaul of its
grew 7.4 per cent in the second “The economic environment Holiday Inn brand.
quarter of the year, compared with does remain uncertain, however, IHG is carrying out a three-year
a 0.2 per cent rise in the first quar- with short booking windows and revamp of its 3,400-strong Holiday
ter. By July, revpar was up 8.1 per limited visibility.” Inn chain across the globe.
cent. A one per cent increase in Cosslett said that business trav-
revpar improves full-year operating ellers were flocking back as compa- ANALYSIS l InterContinental Hotels
profit by $13m. nies which had reined in their p 1,078.00
Chief executive Andrew Cosslett budgets were now realising that it 1,200 10 Aug
said trading strengthened as the was in many cases a false economy.
first half progressed with Asia lead- He said: “The perception that 1,150
ing the recovery, especially China. business people just go on jollies is
1,100
Room occupancy was higher wrong. A lot of businesses are now
with business travellers returning realising that stopping those face 1,050
in increasing numbers, he added. to face meetings was actually
He said: “Rates are now stabilis- harming their business.”
ing across the world, with most The group has been expanding 19 May 9 Jun 29 Jun 19 Jul

ANALYST VIEWS: WHAT IS THE OUTLOOK FOR IHG AND THE

HOTEL SECTOR AS BUDGET CUTS BITE? Interviews by John Dunne

KEITH BOWMAN | HARGREAVES LANSDOWN

“ Sales momentum has continued to build, with the results broadly reflecting global The Halifax Reward

”
economic trends. China and Asia are leading the way, whilst the recovery in the financial
sector is aiding important destinations such as New York and London. Current Account.
SAM HART | CHARLES STANLEY Make the jump to simple,

“ Long term prospects for the group remain good, given the strong portfolio of hotel great value banking.

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brands, impressive new room pipeline and excellent growth potential in China and other
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s¬a¬FOR¬EACH¬DAY¬YOU¬USE¬YOUR¬ARRANGED¬OVERDRAFT¬ON¬
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Luxury car sales fuel Pendragon rise

s¬!S¬WE¬CHARGE¬FEES¬ON¬THIS¬ACCOUNT¬INSTEAD¬
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of interest, the typical rate is 0% EAR.
!ND¬THATS¬IT¬.O¬INTEREST¬TO¬PAY¬.O¬SET¬UP¬FEE¬
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CONSUMER of £93.9m for the first half, up 2008, about three months earlier
▲

BY HARRY BANKS
LUXURY cars are leading a recovery
in forecourt sales, according to
Pendragon, owner of the Jaguar,
Maserati and Mercedes-Benz spe-
cialist Stratstone chain.
Pendragon saw a 48 per cent rise
in first-half profit to £15.7m.
Stratstone outperformed the mar-
ket with a 20 per cent rise in new
car sales, while total revenues
jumped 24.1 per cent year-on-year.
Pendragon posted gross profits
from £84.4m a year earlier.
Chief executive Trevor Finn said:
“All our premium brands are
bouncing back.
“Stratstone has seen a V-shaped
recovery. It began to decline in June
Pendragon chief Trevor
Finn said prestige
vehicles are flying off
the forecourt as the
economy picks up
than the volume car market, as To find out more, pop
business people became nervous
about their prospects. But now it is into branch, call us
leading the charge on profitability. on 0845 122 1425
“It’s a barometer of business con- or visit halifax.co.uk
fidence – optimism is returning to
the market and business people
feel confident about changing
their cars.”
The firm also sells mass-market
Fords and Vauxhalls through its Call us, go online or visit one of our branches for more information on all fees and interest rates. EAR is the equivalent annual
Evans Halshaw and Chatfields deal- rate. This is the actual annual interest rate for an overdraft. It does not take into account fees and charges. Overdrafts are
repayable on demand. Available only to personal customers, aged 18 or over and who are resident in the UK. Halifax is a
erships. It said prices would remain division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh EH1 1YZ.
stable despite a rise in VAT.
 The Capitalist
8 CITYA.M. 11 AUGUST 2010
BAD TEMPERS AND CHICKEN WINGS
IN OBAMA’S ECONOMIC HOTHOUSE
WHEN Christina Romer, Chair of the
US Council of Economic Advisors, quit
her role suddenly last week, specula-
tion was rife that she had been forced
out due to fighting with colleague
Lawrence Summers. Summers is direc-
tor of the National Economic Council
and before his role as coordinator of US
economic policy, he was president of
Harvard University – until a power
struggle with the faculty cost him the
job. But judging by stories circulating
at Harvard during Summers’ brief
reign, Romer wouldn’t be the first of
his associates to have fallen foul of the
man.
It seems he was known for a certain
social skills deficit while at Harvard.
One particularly widespread tale
involved the famed economist’s con-
duct at a high-powered drinks party,
during which he somehow managed to
EDITED BY
JULIET SAMUEL
GOT A STORY? EMAIL
thecapitalist@cityam.com
get a whole chicken wing caught in his
sleeve. Apparently oblivious, Summers
allegedly continued to prowl the room
with the chicken wing in tow – to the
embarrassment of his fellow guests.
In another incident, he was in no
effort to disguise his bad mood dur-
ing one annual off-the-record visit to
the Harvard student newspaper’s
offices, a meeting that took place
during the turmoil that preceded his
Larry Summers has a track record of angry exchanges
sacking. Before a roomful of under-
graduates, he declared that, if he so
chose, he could supply a full list of ten
“enemies of progress” within
Harvard. Those enemies won, it seems
– he was fired soon afterwards.
Add to this the many stories of blaz-
ing rows with faculty members and
you have a fine picture of the man
Obama has chosen to facilitate con-
structive debate among his economic
advisors. So how’s that economy com-
ing along, Barack?
THE POSH ANALYSTS
Hard times at the Renaissance
Chancery Court hotel in Holborn,
A flag: better than cellotape
where the bosses of International
Power and GDF Suez had to fetch their
own seats to the stage to announce
their merger yesterday. “We have to
bring our own chairs up. But then
we’re not with the posh analysts now,
we’re with the press,” chortled chair-
man Sir Neville Simms. Quite, Neville,
quite – but what those posh analysts
would make of name tags hastily sell-
otaped to the front of the podium The
Capitalist dreads to think.
GREEN – NOT BRITISH LADIES NIGHT
Labour MP Tom Watson is on the gov- Following the publication of the win-
ernment expenses rampage this week,
blogging yesterday under the irate
title: “Why won’t ministers fol-
low through with promis-
es of cutting their
cars?” He offers a
“progress report”
on ministers’
attempts to
adhere to David
Cameron’s plans
to ditch private
use of the pricey
Government Car
Service whenever
possible. Those in
the firing line
included education
secretary Michael Gove,
of whom he wrote “Gove
cuts schools budget and keeps
car”. But Watson’s shot went off-target:
Pictures: REUTERS
The education department was in
touch to assure The Capitalist that the
department will soon be scrapping a
contract for four cars booked in under
the Labour government – and anyway,
“the information is not up-to-date –
the secretary of state has a Toyota
Avensis, not a Jaguar”. So it’s in fashion
to go Japanese now.
But Watson hit home with the for-
eign office: William Hague’s depart-
ment has maintained the use of five
private rides for ministers – three
Toyota Pruises, one Vauxhall Vectra
Diesel and one good old British
Jaguar. Meanwhile, The Capitalist
called up the department for interna-
tional development to check in on
Andrew Mitchell’s car use, to be told
that, like many of his decontaminat-
ed Tory allies, the minister has private
use of a clean, green Toyota Prius.
“But he has said,” the department
clarified, “that he would like to use a
British car.” That’d be a Jaguar then.
MPS BEAT BANKERS
Good news for bankers – kind of. A sur-
vey of 3,000 Londoners by The Co-oper-
ative Bank Current Accounts finds
they are not the most distrusted pro-
fessional in London: bankers came sec-
ond to politicians. Others on the top 10
list include car salesmen, estate agents
and footballers, with most Londoners
asked saying they are more distrustful
than they were a year ago. They blame
their attitude shift on the recession,
bad service and a general sense that
society is becoming more selfish. But if
bankers escaped the ignominy of the
top spot only to claim second, the
news wasn’t much better for The
Capitalist: journalists came in at num-
ber three.
ners of The Capitalist’s hot City guys con-
test yesterday, the inbox has been
inundated with inquiries as to
when the women’s equiv-
alent is coming out –
and why various dif-
ferent guys didn’t
win. Well, you can
only win if you’re
nominated,
guys, and today
is the last
chance to nomi-
nate hot City
women for the
competition, the
results of which
will come out soon.
Email nominations –
with pictures – to
TheCapitalist@cityam.com.
Victoria Bates is away.
CITYA.M. 11 AUGUST 2010
Union attacks
longer hours
plan at HSBC
▲
BANKING
BY STEVE DINNEEN
HSBC HAS come under fire from its
clerical union over claims it will
downgrade the contracts of thou-
sands of its branch managers.
Unite has written to the bank fol-
lowing an announcement yesterday
that it wishes to change the working
week of managers from five days to a
six day week.
HSBC will also reduce manage-
ment sickness absence pay to a maxi-
mum of 26 weeks and halve the
contracted level of benefit.
The bank says the changes are nec-
essary to allow it to change its open-
ing hours to coincide with the times
its customers wish to bank. This
includes rolling out Saturday open-
ing. A spokesman told City A.M. only
managers will be affected by compul-
sory changes.
A Unite spokesman said: “We are
appalled that HSBC has decided to
unilaterally impose changes to the
News 9
Danske Bank
EADS CHIEF SURVIVES ALASKA PLANE CRASH
cuts losses on
loans by half
BANKING
▲
DENMARK’S Danske Bank swung to a
pre-tax profit last quarter after almost
halving loan losses.
The owner of National Irish Bank
and Northern Bank posted a pre-tax
profit of DK937m (£104.5m) for the
second quarter, after a DK828m net
contracts of its staff. These bank man- loss a year earlier.
agers work extremely hard for long “Difficult, albeit gradually improv-
hours and earn salaries as low as ing, macroeconomic conditions in
£19,000 per year. several of the group’s markets contin-
“Any attempt to force through ued to have an adverse effect on
changes to managers’ contracted results,” said the firm in a statement.
hours of work will be fiercely resisted Loan impairment charges totalled
by Unite.” DK3.48bn in the last three months, 47
The union also expressed concerns per cent lower than the same time
over the general treatment of the last year and the sixth consecutive
bank’s management, which it says drop in as many quarters.
are currently denied the right to “Generally, things are moving in
have the union negotiate on their the right direction,” said the firm. “In
behalf. view of the macroeconomic develop-
ment, we look at the rest of 2010 with
ANALYSIS l HSBC cautious optimism.”
670
p 670.00 The bank’s tier one capital ratio fell
10 Aug slightly in the quarter to 13.7 per
660 cent, but is still one of the highest in
the Eurozone.
Standard & Poor’s analyst Frank
640 Braden said: “Despite the better-than-
SEAN O’Keefe, the North American chief of Airbus maker EADS, has survived the plane expected improvement in loan losses,
crash that killed former US senator Ted Stevens, the company said in a statement yester- a large jump in loan impairment
600 day. O’Keefe’s son Kevin was also one of the four survivors of the crash in Alaska, in which charges in Ireland and Northern
five people died. The group were on a fishing trip with other former Senate staff members Ireland highlights the still challeng-
19 May 9 Jun 29 Jun 19 Jul 6 Aug and their children when the plane came down on Monday night. Picture: REUTERS ing operating environment.”
 10 News CITYA.M. 11 AUGUST 2010

FSA opens compensation

door to millions over PPI
sumers, the regulator said it had complaints to identify if there are
▲

REGULATION
BY ALAIN TOLHURST
THE CITY regulator yesterday
unveiled tough new rules on
Payment Protection Insurance (PPI)
complaints that could force banks to
dole out as much as £2.7bn in com-
pensation to nearly 3m people.
Despite the financial services
industry lobbying the Financial
Services Authority (FSA) not to bring
in the new sanctions to protect con-
found an even greater extent of mis-
selling than it had previously
assumed and substantial evidence
that many claims are being dismissed
by lenders.
The financial ombudsman has
received nearly 115,000 complaints
about the controversial product over
the past five years, nearly a fifth of
which have been lodged since April
this year. The FSA said the measures,
which require firms to analyse past
serious flaws in sales practices, must
be adopted by December this year
and warned that it would be “moni-
toring firms closely” to ensure they
adhere to the new rules.
Dan Waters, director of conduct
risk at the FSA, said: “We have worked
hard with the industry to pull togeth-
er a strong package of measures that
we hope will allow the industry to
draw a line under mistakes that have
been made.” FSA director Dan Waters is cracking down on how banks deal with PPI complaints

Anglo Irish is
set for fresh
state bailout
increase to €10.05bn depending on
▲

BANKING
BY HARRY BANKS
ANGLO Irish Bank won temporary
clearance from the EU yesterday for a
fresh bailout of up to €10bn (£8.3bn)
from the Irish government, more
than expected and putting further
pressure on Ireland’s bulging budget
deficit.
Ireland’s finance ministry said
underlying budget trends remained
in line with its targets but it acknowl-
edged that an aid package given to
Anglo Irish in March would probably
increase the government deficit and
so could the latest bailout.
The bank was nationalised last
year after it was hit by deposit and
loan scandals and a property market
crash. The Irish government injected
€4bn in emergency capital into the
bank last year and another €10.3bn
this year.
The EU’s approval yesterday of a
further €8.58bn payment to cover
the bank’s capital needs this year
was higher than €8bn earmarked
earlier.
The EU said the amount could
the price Anglo Irish gets for loans
sold to the National Asset
Management Agency (NAMA),
Ireland’s “bad bank” scheme.
The €4bn bank bailout in 2009
pushed Ireland’s deficit up to 14 per
cent of gross domestic product last
year, the biggest in Europe and far
above an EU ceiling of three per cent.
Analysts say the latest injection
could push the budget shortfall
above 20 per cent this year.
Ireland’s finance ministry said yes-
terday that €8.3bn of capital given to
Anglo Irish in March would “in all
probability” be added to budget
deficit calculations. It said the
accounting of a further €2bn given
in May and the €8.6bn approved yes-
terday was still being examined.
“The underlying deficit is expect-
ed to be in the order of 11.5 per cent
of GDP in 2010, in line with the
budget day target of stabilising the
underlying deficit,” the finance min-
istry said in an e-mailed note, adding
that its annual bond issuance plans
were also unaffected by the latest
bailout.

Boris says government must not

cut spending on employment
average 30 per cent more productive
▲

ECONOMY
BY STEVE DINNEEN
MAYOR of London Boris Johnson has
warned the government not to cut
vital funding that will boost employ-
ment in the capital.
The plea came ahead of unemploy-
ment figures due this morning that
will show one in three working-age
Londoners do not have a job.
Johnson is calling for funding to be
maintained for the London
Development Agency, which he
believes has the power to get
Londoners back to work. He said:
“London is the engine room of the UK
economy, where each employee is on
than those elsewhere. We face a huge
challenge in getting everyone into
work, but the rewards are worth it.
“The government is promising a
new era of localism. London can build
on our successes with investment in a
new generation of innovative, local
and flexible programmes that meet
the needs of Londoners.”
Mayor of London Boris
Johnson says funding
must be maintained at
the London
Development Agency
CITYA.M. 11 AUGUST 2010 News 11

Solid progress for Quintain

despite property downturn
new lettings, acquisitions and spon- modation scheme in Edinburgh for
▲

PROPERTY
BY ALAIN TOLHURST
PROPERTY group Quintain yesterday
said its strategic business plan is well
underway after it achieved two of the
milestones it set itself in June and
added a chunk to its annualised
income in the first quarter of the
year.
The group said it had added £3.5m
to its annualised income since the
end of the last fiscal year, through
sorship deals. It has also acquired
£29m of new assets for Quercus, its
healthcare arm, along with outline
planning consent for a 275 acre
mixed-use scheme in Bristol.
Earlier this month Quintain sold
its 50 per cent stake in the Pier Walk
building in Greenwich to a subsidiary
of DekaBank for £97m, giving a yield
of 5.9 per cent on its investment.
The group has also received record
reservations for its iQ student accom-
the coming year. It has upped capaci-
ty at the accommodation by 635 beds,
a 20 per cent expansion of the portfo-
lio.
Chief executive Adrian Wyatt said:
“While the recovery in the property
sector has yet to become widespread
or gather momentum, our focus on
the fulfilment of our strategy is
unequivocal and we anticipate the
delivery of further milestones before
the end of the calendar year.”

Unilever chief executive Paul Polman has upped his stake in the firm Picture: REUTERS

Unilever CEO
raises stake
as shares fall
▲

CONSUMER GOODS However, the resulting share price

BY ALAIN TOLHURST plunge of over five per cent presented
an ideal opportunity for Polman to
UNILEVER chief executive Paul increase his stake. Under the terms of
Polman has increased his stake in the his contract, the chief executive must
Anglo-Dutch consumer product firm, own shares worth 400 per cent of his
taking advantage of a heavy fall in €1.03m base salary over the next five
the price of the shares last week. years.
Polman has spent over €900,000 He currently owns around €2.9m in
(£748,000) buying Unilever’s company stock.
Amsterdam-listed shares since Friday, Polman joined Unilever in January
bringing his stake up to 84,471 last year from Nestle, where he had
shares, according to Dutch securities been chief financial officer for three
regulator AFM. He also bought 1,000 years.
additional London-listed shares in
Unilever at a cost of over £17,000, ANALYSIS l Unilever
increasing his stock to 55,448 shares.
p
1,950
1,733.00
10 Aug
The costly purchase came despite a
1,900
disappointing performance by
Unilever in the second quarter, when 1,850
it missed expectations with a 3.6 per
cent rise in sales. At the time of the 1,800
results last week, Polman warned of 1,750
an even tougher second half to come,
with more intense competition from 1,700
competitors, rising input costs and a
difficult economic environment. 19 May 9 Jun 29 Jun 19 Jul

YouGov expands further into US

with purchase of research rival
to performance over the next three
▲

CONSUMER
MARKET research firm YouGov has
doubled the scale of its US business
with the $6m (£3.8m) purchase of one
of its Stateside rivals.
The acquisition of Connecticut-
based Harrison Group, for an initial
consideration of $6m, will be funded
from existing cash resources. The
deal includes provisions for further
amounts, estimated at $7m, subject
years. Harrison specialises in concept
evolution, forecasting, branding and
business consulting, and reported
revenues of nearly $10m for 2009.
Chief executive Stephan
Shakespeare said: “Harrison is highly
complementary to YouGov’s existing
US business and this acquisition is
consistent with our strategy of scal-
ing up the group’s commercial mar-
ket research business in the US.”
 12 News
BAA boost as
Heathrow has
record month
▲
AVIATION
BY JOHN DUNNE
THE number of people travelling
through BAA’s UK airports increased
by 0.3 per cent to 10.9m in July.
Heathrow recorded its busiest-ever
month, with 6.7m people making
journeys through the airport – 3.5 per
cent more than last year.
Sunday 18 July was Heathrow’s
busiest-ever day, with 232,000 people
passing through the airport.
Across BAA, the fastest growing
market in July was Europe, with an
increase of 2.9 per cent in passenger
traffic combining both charter and
scheduled flights.
Long-haul traffic was up by 0.5 per
cent but domestic traffic was 4.6 per
cent lower than last year. The main
source of passenger growth at
Heathrow was the European market,
where additional capacity fuelled an
increase of 9.5 per cent.
At Stansted, a near-eight per cent
drop in seats offered produced a sim-
ilar drop of 7.2 per cent in passengers,
while in Scotland additional capacity
helped to produce an overall increase
of 6.6 per cent in passengers travel-
ling to and from Europe. At the indi-
vidual airports, Aberdeen’s traffic fell
by 4.1 per cent, Edinburgh grew by
0.6 per cent and Glasgow recorded a
drop of 3.6 per cent.
Southampton’s July numbers were
down 1.4 per cent, while traffic at
Naples increased by 6.1 per cent in
the month.
BAA, which is owned by Spanish
transport operator Ferrovial, was
forced to sell off Gatwick Airport last
year after regulators ordered its dis-
posal. The company offloaded the air-
port to Global Infrastructure Partners
for £1.5bn in December.
FAST FACTS | BAA
● Heathrow had its busiest month on record in
July with 6.7m people travelling through.
● The number of European passengers shot up
by almost ten per cent.
● 10.9m people went through BAA airports.
CITYA.M. 11 AUGUST 2010
Aerospace firms
bounce back as
orders come in
AEROSPACE
▲
THE aerospace industry is bouncing
back after a tough period following
the recession, according to a report
published today.
The report, compiled by the
Aerospace, Defence and Security
trade organisation, shows that rev-
enues for the UK aerospace industry
swelled 5.4 per cent in 2009 to a com-
bined £22.2bn.
It comes after last month’s encour-
aging Farnborough Air Show, which
Heathrow Airport recorded its busiest ever month in July Picture: GETTY was the second most successful show
ever for new aircraft orders. A total of
ANALYSIS l July 2010 year-on-year passenger growth $47bn (£31bn) of orders were placed
at the show, including a mammoth
London $4.9bn order by General Electric for
Heathrow: area: 60 Airbus A320 aircraft.
The level of orders reflected global
6,705,900 8,731,600 conditions within the industry, show-
▲3.5% ▲0.8%
ing that the civil side is recovering
while defence budgets come under
Stansted: UK total: pressure. But the figures show there
is still strong growth in both sectors
2,025,700 10,946,400 in emerging markets such as China,
▼7.2% ▲0.3%
the Middle East, Brazil and India.
Graham Chisnall, managing direc-
tor for commercial aerospace and
operations at ADS, said: “The aero-
space sector in the UK is in a strong
position. Despite pressures on the
defence budget, the industry is on the
up, especially in the UK, buoyed by
the recovery of the civil sector.”
CITYA.M. 11 AUGUST 2010
British exports are recovering Chinese trade surplus hits
ECONOMICS
▲
BY DAVID CROW
BRITAIN’S trade gap narrowed in June
as exports recovered, but economists
warned overseas demand would not
offset the flagging economy at home.
Exports increased at four times the
pace of imports in June, narrowing the
trade in goods deficit from £8bn in
May to a lower-than-expected £7.4bn,
the Office for National Statistics said.
The overall trade gap, which
includes services, fell to £3.3bn in
June, compared to £3.8bn a month ear-
Rise in house
prices grinds
to sharp halt
ECONOMICS
▲
BY DAVID CROW
THERE was further proof that the
property market is cooling down yes-
terday, after government figures
showed house prices were flat on the
month in June.
Figures from the Department for
Communities and Local Government
(DCLG) showed that seasonally adjust-
ed average prices were unchanged
across the UK in June. That cut the
annual rate of increase to 9.9 per
cent, compared to 10.6 per cent in
May.
The non-seasonally adjusted aver-
age house price now stands at
£210,775, DCLG said.
The downbeat numbers chimed
with pessimistic data from the Royal
Institute of Chartered Surveyors
(RICS), which yesterday reported the
first fall in house prices for a year.
RICS said the balance of surveyors
reporting a rise in house prices
retreated sharply to -8 per cent in July,
compared to +8 per cent in June and
lier.
The figures will provide some cheer
for the coalition government, which
has staked its reputation on bringing
about a private sector, exports-led
recovery.
But economists greeted the figures
with a note of caution, warning that
one positive set of numbers did not
necessarily mean exports would hold
up in the long term.
The British Chambers of Commerce
(BCC) welcomed the news but warned
exporters against complacency.
“This is good news but there is no
+21 per cent in May.
“Expectations for house price
increases have also turned negative,
with 28 per cent more surveyors
expecting prices to fall over the com-
ing months,” RICS said.
Howard Archer, chief UK econo-
mist at IHS Global Insight, said the
numbers confirmed his belief that
house prices would fall by around
three per cent in the second half of
this year, before falling further in
2011.
That means house prices are likely
to be some eight to ten per cent lower
by the end of 2011 compared to mid-
2010 levels, he added.
He said: “It is hard at this stage to
be optimistic about house prices in
2011 as the fiscal squeeze will increas-
ingly kick in, which will hit people’s
pockets and lead to serious job losses
in the public sector.”
House prices started to increase in
the spring of 2009, due to a shortage
of homes being put up for sale. But
the balance of supply and demand
has now been reversed.
Economic News 13
room for complacency. The UK is still
18-month high of $28.7bn
running a large trade deficit and the
challenges facing exporters are sub-
stantial,” said David Kern, chief econo- Shipments to the United States and
▲
ECONOMICS
mist at the BCC. the European Union rose from June
Vicky Redwood of Capital CHINA’S trade surplus unexpectedly levels, defying worries about slowing
Economics was even more pessimistic, ballooned in July to an 18-month demand. But imports posted a sur-
pointing out that the narrowing trade high of $28.7bn (£18.2bn) in July prising decline in apparent response
gap did little more than reverse May’s from $20.02bn in June, handing to a government drive to rein in prop-
sharp widening in the deficit. fresh ammunition to critics who say erty speculation and root out obso-
“We continue to doubt that any Beijing is still not moving swiftly lete manufacturing capacity.
trade boost will be big enough in the enough to allow the yuan to rise. Annual import growth slowed to
near-term to offset the effects of the Exports showed resilience, rising 22.7 per cent from 34.1 per cent in
severe fiscal squeeze on consumers 38.1 per cent from a year earlier to a June, the General Administration of
and the domestic economy,” she added. record high of $145.5bn. Customs said yesterday.
House prices were
flat on the month
in June, fuelling
fears that the hous-
ing market is cool-
ing down
Picture: PA
CITY VIEWS: ARE YOU WORRIED ABOUT FALLING HOUSE PRICES?
Interviews by Alain Tolhurst
EGAN LUDLOW | KENNEDYS
“I think the market will return over time even if prices fall in the short-term. The question is
whether the South East will be affected. I think people in the regions will be affected with ris-
ing levels of unemployment, but the City lives off confidence so it will be interesting.”
MATTHEW CURTIS | IMPACT
“I’m not a house owner so I’ve not been that interested because it doesn’t affect me. But my
brother bought a house two years ago at the height of the bubble and now he’s in negative
equity of about £20,000. So for him and others in his position this news is quite bad.”
SEAN KNOTT | CAREER TALENT
“It may be a rough ride for another few months but the banks are recovering, and we may see
a recovery in house prices on the back of that. Working in recruitment I’ve noticed a dip
in the last few months but I don’t think we will have a double-dip recession.”
 14 News
Chemring buys Roke to shore
up counter-terrorism branch
▲
DEFENCE
BY MARION DAKERS
BRITISH arms group Chemring has
bought engineering company Roke
from Siemens for £55m, it
announced yesterday.
Chemring said the acquisition of
the counter-improvised explosive
devices (IEDs) specialist will take the
group to the forefront of homeland
security and offer entry points to
Chemring chief David Price, inset, wants to break into the surveillance market other markets such as surveillance.
Roke builds counter-IED equip-
ment used by British forces in
Afghanistan. Its turnover last year
was £45.3m, and its order book stood
at £37.2m in May.
Roke’s existing management team
will remain in place following the
sale, and its 300 engineering staff will
double the total number of qualified
engineers employed by the group.
Chemring chief executive David
Price said: “The acquisition of Roke
will substantially enhance our exist-
Interserve is
hit as profits
dip by a third
▲
TECHNOLOGY
BY STEVE DINNEEN
MAINTENANCE and outsourcing firm
Interserve yesterday said first half pre-
tax profit fell 31 per cent compared to
last year, though the firm expects
growth in overseas markets to help
improve earnings in the coming year.
The company, which last year closed
the majority of its pension scheme,
said pre-tax profit for the first half of
2010 was £27.3m, against £40m for the
same period last year.
Profits in the company’s support
services division, which is significantly
exposed to government spending,
were down slightly, but Interserve’s
chief executive Adrian Ringrose said
the business was likely to bounce back.
He said: “What we’re doing is sig-
nalling we are at the low point in that
we are expecting a much stronger per-
formance in that division going for-
ward.”
He added that in the next two to
three years Interserve would benefit
from helping the government meet
efficiency targets, but lack of clarity
over the contents of Downing Street’s
Investment in ...though office
property rises... take-up slows
▲
PROPERTY
CENTRAL London real estate invest-
ment volumes rose sharply during
the second quarter as strong investor
demand was satisfied due to an
increase in stock on the market.
Investment turnover rose 57 per
cent over the quarter to reach £1.9bn,
according to figures from CB Richard
Ellis published yesterday.
German and Middle Eastern funds
showed renewed enthusiasm for
property in the capital, while money
from the US continued to provide the
bulk of investment.
However, take-up is set to slow dur-
ing the rest of the year.
CITYA.M. 11 AUGUST 2010
ing technologies in a number of our
key market sectors and will provide a
growing number of products and
technologies that will allow the
group to enter adjacent attractive,
high growth markets.”
The purchase is one of several
recent expansions for Chemring. Last
month it spent £40m on Allied
Defence, a US ammunition maker,
which was funded by £188m of fixed
interest loan notes agreed last
November.
October spending review provided
uncertainty about the future.
“For us it’s more about helping our
clients drive efficiencies. There may be
pressures on volume short term, we’re
ready for that. We’re ready to flex our
business and look into other interna-
tional markets,” Ringrose said.
Interserve has £4.5bn worth of
orders for which the company has
secured contracts. The firm increased
its interim share dividend to 5.6p
from 5.5p.
Analysts at Panmure Gordon were
positive about the figures but kept
their “sell” recommendation given
concerns about public spending cuts.
ANALYSIS l Interserve
p
225
220 210.00
10 Aug
215
210
205
200
195
19 May 9 Jun 29 Jun 19 Jul
PROPERTY
LONDON-BASED companies took up
just 1.3m square feet of new office
space in the last three months, half
the activity level seen at the start of
the year.
Yet the research from King Sturge
also offers hope for office landlords,
predicting a rise in office-based finan-
cial services jobs in the coming
months that will boost demand.
The research blamed the election
and the Greek debt crisis for discour-
aging big office moves. It added that
several large deals such as Nomura’s
move out of Canary Wharf inflated
figures in previous quarters.
CITYA.M. 11 AUGUST 2010 News 15

Google raided
Saudis grant
WHERE IS THE BLACKBERRY BANNED?
Turkey

Syria
by South Korea
RIM reprieve over privacy
Cyprus
Iraq Iran
Israel Jordan

▲
TECHNOLOGY

on BlackBerry
Kuwait SOUTH Korean police said they raided
Google’s Seoul office yesterday on sus-
picion that the internet giant had ille-
Bahrain gally collected data on users.
Qatar Google has been preparing since
Saudi Arabia late last year to launch its Street View
Egypt service in the country and the data
UAE
TELECOMS Authorities said they will “contin- collection was related to the launch,
▲

BY STEVE DINNEEN
BLACKBERRY maker Research In
Motion (RIM) yesterday won a reprieve
from a threatened ban in Saudi
Arabia as authorities said progress
was being made on addressing their
concerns.
The company’s biggest Gulf market
with 700,000 users, Saudi Arabia had
threatened to ban the service last
Friday before giving RIM until
Monday as it worked with local firms
testing servers.
But the regulator said yesterday in
a statement: “In light of the positive
developments in completing part of
the regulatory requirements from
the service providers, the regulatory
authority has decided to allow the
continuation of the BlackBerry
Messenger services.”
ue working with the service providers
to complete the rest of the regulatory
requirements”.
Saudi Arabia, like neighbours
United Arab Emirates, Kuwait and
others including India, has expressed
concern that BlackBerry’s encrypted
messaging could be used to harm
social and national security interests.
The regulator did not say whether
it had reached an explicit agreement
with RIM to address its national secu-
rity concerns.
If the two sides reach a compro-
mise, analysts expect the regulator to
scrap its planned ban on Messenger,
though they say installing local
servers could still disrupt services for
weeks.
BlackBerry, unlike rivals Nokia and
Apple, operates its own network
through facilities in Canada and the
Oman police said.
The probe in one of Asia’s most
wired countries came as a fresh set-
back to Google, which already faces
investigation over Street View by the
US Federal Trade Commission, a vari-
Sudan ety of probes overseas and class action
lawsuits.
Yemen The Korean National Police Agency
Eritrea BlackBerry
blocked said: “We have been investigating
Google Korea on suspicion of unau-
BlackBerry
thorised collection and storage of
Ethiopia not blocked data on unspecified internet users
Djibouti from wi-fi networks”.
Somalia
Google has said the data was acci-
dentally collected and has grounded
UK. data and communications coming in its Street View cars globally.
Top Saudi operator Saudi Telecom and out of Saudi Arabia would transit Google Street View is a technology
and rival Mobily were not immediate- in addition to RIM’s server in Canada. featured in Google Maps and Google
ly available for comment. The news is a boost to RIM just days Earth that provides panoramic views
RIM and Saudi mobile firms were after it launched its new iPhone killer from various positions along many
testing three servers through which Torch handset. streets in the world.

CITY MOVES | WHO’S SWITCHING JOBS Edited by Victoria Bates in association with

Axa Investment Managers
Axa’s investment management division has
hired Tim Gardener from Mercer as global head
of consultant relations.
Gardener is set to start with the firm in the
autumn and will be a member of the executive
committee.
At Mercer, he has been global chief invest-
ment officer since 2008 and, prior to that, was
head of investment consulting. He spent 33
years in total at the firm.
the Latin American region.
RBC Giammattei was previously at
RBC has appointed Guido Giammattei Rexiter Capital Management, where he
to its global asset management division was an equity analyst and then a port-
as a portfolio manager on the RBC folio manager focused on Latin
Emerging Markets Fund, focusing on American investments.
He has also previously worked at
State Street and HSBC.
Liberum Capital
Liberum, the investment banking group
set up by former Collins Stewart chief
executive Shane Le Prevost, has added
three sales traders to its team.
Mark Edwards, David Thompson and
Paul Somers all join the firm from Man
Financial.
BTIG
The broker dealer has appointed
Michael Nethercott as a director in
equity sales trading.
Nethercott joins from Lighthouse
Financial Group, where he was a mem-
ber of the agency-focused execution
desk. Prior to that, he spent eight years
working for Bear Stearns, where he
helped start up an internal agency-only
desk for the firm’s clients. He started
his career at Olstein & Associates.
First Derivatives
The Aim-listed software and consulting
services group, which provides services
to investment banks and hedge funds,
has hired Patrick Brazel as a non-execu-
tive director.
Brazel is also currently a non-execu-
tive at Brady, which provides trading
and risk management software to the
commodity market, and chairman of
GoldTier Technologies.
He was previously president of
SunGard Capital Markets, leading the
company to become the dominant play-
er in the derivatives trading and risk
management systems market.
BoA Merrill Lynch
The bank’s wealth management divi-
sion, Merrill Lynch Wealth
Management, has appointed Tamer
Rashad as head of Middle East wealth
management and Amir Sadr as head of
the institutional client group and family
office group.
Rashad, who previously worked in
the office of the president and chief
operating officer at Merrill, will be
based in Dubai. Sadr, who will be based
in London, was formerly head of the
Middle East offshore institutional client
group at Merrill.

To appear in CITYMOVES please email your career

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www.boisdale.co.uk
 16 News
NAB happy to
maintain status
quo in the UK
▲
BANKING
NATIONAL Australia Bank (NAB) yes-
terday said it was happy with the sta-
tus quo in the UK and any
acquisitions it made there would
have to meet its financial criteria.
NAB chief executive Cameron
Clyne also told analysts there were no
immediate plans to change the mort-
gage rate despite rising funding costs.
NAB’s UK operations – which
include Yorkshire and Clydesdale
banks – have been a subject of specu-
lation with some reports indicating
Spanish banks have bid for the busi-
ness.
Earlier this week Australia’s compe-
tition regulator agreed to consult the
market on NAB’s proposals to salvage
its $12bn (£7.5bn) takeover of Axa Asia
Pacific.
NAB is hoping its revised offer will
assuage the concerns of the regulator
after its original proposal was reject-
ed in April. The bank wants to secure
its prominent position in the $1 tril-
lion wealth management business in
Australia.
%.'%
#!2%0%!+3#(!,,
3500/24%$"9#)49!-


3%04%-"%2
9OURCHALLENG
Ex
%SCAPETHE#ITYANDACHIEVESOMETHINGAMAZING
*OINlRMSFROMAROUNDTHE#ITYTOCLIMBTHEHIGHEST
Chairman Gian
Marco Moratti
(above)
(Below) chief
financial officer
Corrado
Costanzo
ICBC eyes £889m spend to
take Hong Kong unit private
▲
BANKING
BY HARRY BANKS
INDUSTRIAL and Commercial Bank
of China (ICBC), the world’s most
valuable bank, yesterday said it will
pay shareholders of its Hong Kong
arm a 27 per cent premium to take
it private, as part of an effort to
expand its presence there.
Each ICBC (Asia) shareholder
would receive HK$29.45 (£2.4) per
share, ICBC said in a proposal post-
ed on the Hong Kong exchange, an
exercise that would cost the bank
HK$10.8bn (£889m).
“While ICBC (Asia) is currently
trading at its recent high, we
believe further growth of the busi-
4HEIRCHA BEST OF THE BROKERS
LLENGEx
ANALYSIS l Smith & Nephew
680 p
574.50
660
640
620
600
2%')34%2%$#(!2)49./
Saras swings
back to profit
▲
ENERGY
BY HARRY BANKS
ITALY’S third-biggest oil refiner Saras,
squeezed by weak refining margins,
yesterday said it was cutting produc-
tion by more than 10 per cent to
shore up profit.
Saras is also more than halving cap-
ital spending this year to help keep
debt under control, said chief finan-
cial officer Corrado Costanzo.
The oil price rally to $80 (£50.8) a
barrel is pinching margins for refin-
ers in Europe, where fuel demand
remains lacklustre. Many oil firms
have been looking to sell European
refineries since last year.
“The refining division remains in
difficulty even if there are encourag-
ing signs of improvement,” Saras
chairman GianMarco Moratti said.
Saras is cutting third-quarter out-
put to between 3.3m tonnes and 3.5m
tonnes after a “very weak” start to
refining margins in the period, it
ness may be limited by its status as
a listed company in Hong Kong,”
the banks said in a joint statement.
“After ICBC (Asia) has been priva-
tised, it will have much greater flex-
ibility to take advantage of ICBC’s
resources as the business continues
to develop in the coming years.”
Trade on ICBC (Asia) shares will
resume today after being suspend-
ed on 27 July, the banks said,
adding that the price also repre-
sents a 48.7 per cent premium over
its 90-day running average.
Goldman Sachs and ICBC
International Capital served as joint
financial advisers to ICBC, the bank
said.
The privatisation will allow ICBC
ANALYSIS l ATH Resources
70 p
285.30
10 Aug 9 Aug
68
66
CITYA.M. 11 AUGUST 2010
said. Run guidance for the third quar-
ter had been 3.8-3.9m tonnes.
A Milan-based analyst said the
results were in line with his predic-
tions but Saras’s margin forecast of
an EMC benchmark price of $1 to
$1.50 a barrel for the rest of the year
was weaker than expected.
“The output cut is weighing on the
price and the margin is a bit lower
than the market estimate,” he said.
Italy’s second largest refiner, ERG,
forecast improvement last Friday in
its refining and marketing business
in the second half of the year, but said
the outlook was still challenging.
Saras will invest less than €150m
(£125m) this year, down from €317m
spent in 2009, said Costanzo. “Our
investments in 2011 will not be above
what we did in 2010 and will probably
be below,” he said.“We’re focused on
keeping our gearing under control
and we have the luxury of being able
to postpone a series of investments,”
he added.
to provide additional capital to the
Hong Kong unit, allowing it to com-
pete more effectively against local
players such as HSBC and Bank of
China (Hong Kong).
Shares of smaller banks in the
territory such as Dahsing Bank and
Wing Hung Bank have already risen
on expectations that they could
become potential takeover targets
as ICBC moves to expand its pres-
ence in Hong Kong.
Such expectations stem from a
history of acquiring smaller rivals
to grow its business. ICBC (Asia)
acquired Fortis Bank Asia HK’s
retail and commercial banking
operations in 2004, and China
Mercantile Bank in 2005.
ANALYSIS l Old Mutual
130 p 126.50
10 Aug
125
120
115

MOUNTAINSIN3COTLAND%NGLANDAND7ALESnALLINA 580 64

110
TARGETTIMEOFHOURS
560
62 105
540
&UNDSRAISEDWILLSUPPORT#!2%)NTERNATIONALSOVERSEAS 520 60 100
19 May 9 Jun 29 Jun 19 Jul 6 Aug 19 May 9 Jun 29 Jun 19 Jul 6 Aug 19 May 9 Jun 29 Jun 19 Jul 6 Aug
EMERGENCYWORKANDLONG TERMDEVELOPMENTPROJECTS
THATHELPTHOSEFORWHOMEVERYDAYISANUPHILLSTRUGGLE SMITH & NEPHEW ATH RESOURCES OLD MUTUAL
Evo Securities rates Smith & Nephew Seymour Pierce has flagged its “buy” S&P has a “strong sell” rating on Old
4HISEVENTWILLDEVELOPANDTESTYOURPHYSICAL
shares a “buy” with a price target of recommendation on ATH Resources fol- Mutual shares following half-year results
ABILITYTEAMWORKANDDETERMINATION 695p. In a note in which its analysts lowing the company’s decision to sell the which featured income of £243m com-
#HALLENGE9OURSELF#HALLENGE0OVERTY speculate over what the company plans assets, contracts and intellectual proper- pared with a £92m loss a year earlier.
to do with the cash it is generating, Evo ty of its Regeneration business. It notes S&P warns that while the sale of its US
WWWCARECHALLENGEORGUKPEAKS sees strong earnings growth and inven- ATH was labouring to grow the unit and life operations helped the shares, even
4 tory efficiency as key factors driving this leaves it to move forward as a prof- the positive scenario for Old Mutual will
%CHALLENGE CAREINTERNATIONALORG future cash generation. itable, dividend paying coal producer. need the sale of its NedBank business.

To appear in Best of the Brokers email your research to notes@cityam.com

18 News
RBS poaches Tapner of UBS
to head wealth management
▲
WEALTH MANAGEMENT
ROYAL Bank of Scotland (RBS) has
hired Rory Tapner to head its wealth
management arm just as flagship pri-
Rory Tapner will vate banking arm Coutts faces a regu-
oversee RBS’ latory probe into sales of a savings
wealth manage- product.
ment business. Tapner joins from Swiss bank UBS
Picture: REUTERS where he was chairman and chief
executive of the Asia-Pacific business-
es. He is also a former global head of
investment banking and head of equi-
ty capital markets at UBS. Tapner will
fill a post left vacant by John Baines,
who resigned in February.
The Financial Services Authority, is
probing sales by Coutts of a savings
product to wealthy clients. Last week
RBS reported first-half earnings that
showed operating profit dropped 32
per cent from a year earlier as lower
interest income and rising costs hit
the bottom line. An exodus of bankers
Hannover Re
hit by pricing
pressure fear
▲
INSURANCE
BY HARRY BANKS
HANNOVER Re yesterday joined a
wave of European insurance players
reporting forecast-beating results as
rising premiums amid economic
recovery offset high damage claims.
However, analysts expressed worry
about Hannover’s underwriting per-
formance in the second quarter and
the prospect of reinsurance prices
coming under pressure, contributing
to a fall in Hannover’s shares which
closed six per cent lower at €35.91.
The world’s fourth biggest reinsur-
er yesterday reported net and operat-
ing profit fell by less than expected in
the second quarter from a year-earlier
period that was boosted by one-offs.
Like other industry players such as
Europe’s top three insurers, Allianz,
Axa and Generali, Hannover Re has
benefited from stronger sales of life
insurance and investment products
as consumers shake off memories of
the financial crisis.
Despite stronger-than-expected
damage claims in the first half of the
year, Hannover Re was confident of
achieving its full-year goal of earning
South Africa’s Mondi swings to
a profit in the first half of 2010
▲
COMMODITIES
PAPER maker Mondi again raised
prices for some products and forecast
a strong second half yesterday after
better demand and prices helped it
return to a half-year profit.
South Africa’s Mondi, which is also
listed in London, said business picked
up across all of its paper grades and its
domestic division was also improving.
“Mondi achieved a pleasing result
in the period against a backdrop of
improving market conditions, sup-
ported by a particularly strong per-
formance from the European
uncoated fine paper business,” chief
executive David Hathorn said.
CITYA.M. 11 AUGUST 2010
from the Asian business had caused
some loss of clients and assets under
management in the international
business.
However, in a recent interview the
head of Coutts’ international business,
RBS Coutts, said most of the bankers
had been replaced.
RBS retail chief executive Brian
Hartzer said: “Rory Tapner is a highly
experienced addition to the RBS senior
management team.”
€600m (£501m) in net profit even if
claims in the second half of the year
are in line with the long-term aver-
age, chief financial officer Roland
Vogel told a conference call. “It’s not
in danger,” Vogel said of the target,
adding the usual caveats that there
be no unexpectedly large losses from
financial market turmoil or natural
catastrophes like hurricanes, which
reach peak season in September.
Damage claims in the first half of
the year, at around €408m, were
more than double the prior year peri-
od. Hannover also raised its expected
loss on the Deepwater Horizon oil rig
in the Gulf of Mexico to €89m from a
previous estimate of €40m.
ANALYSIS l Hannover Re
39 € 35.91
38 10 Aug
37
36
35
34
33
32
19 May 8 Jun 28 Jun 16 Aug 5 Aug
Mondi’s headline earnings per
share for the six months to the end of
June rose to €24.8 cents from a loss of
€0.8 cents a year earlier. Headline EPS
is the main profit gauge in South
Africa and strips out certain one-off,
financial and non-trading items.
“Despite cost pressures, the positive
pricing momentum witnessed in
Europe since the beginning of the
fourth quarter of 2009 in most of the
group’s key grades should see the
business continue to deliver a strong
performance in the second half,”
Hathorn said. He warned that outlook
for the South African division was still
uncertain despite steps to improve
profitability.
 Markets&Investment
19

LONDON’S TOP 250 Trade these shares from £1.50 with Interactive Investor - www.iii.co.uk
Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)
3i . . . . . . . . . . . . . . . . . . . . . . . .285.20 –2.10 314.80 246.90 Cobham . . . . . . . . . . . . . . . . . . .226.10 –0.20 278.60 190.00 Investec . . . . . . . . . . . . . . . . . . .475.30* –6.60 565.00 378.20 SABMiller . . . . . . . . . . . . . . . . .1898.00* –7.00 2090.00 1307.00
3i Infrastructure . . . . . . . . . . . . . 112.40 +0.40 115.00 89.35 COLT Group . . . . . . . . . . . . . . . .124.10 –1.90 144.20 113.80 ITV . . . . . . . . . . . . . . . . . . . . . . . .52.80 –0.65 71.75 41.04 Sage . . . . . . . . . . . . . . . . . . . . . .244.60 +0.40 260.50 201.10
A.B. Foods . . . . . . . . . . . . . . . .1040.00 +3.00 1096.00 785.50 Compass . . . . . . . . . . . . . . . . . .525.00 –8.50 574.50 308.10 Jardine Lloyd Thompson. . . . . . .584.50 –8.00 604.50 420.70 Sainsbury(J) . . . . . . . . . . . . . . . .353.00 –1.30 373.00 307.60
Aberdeen Asset Man . . . . . . . . . .137.00 –3.50 155.60 111.00 Cookson . . . . . . . . . . . . . . . . . . .480.00 –7.70 616.00 347.60 Johnson Matthey . . . . . . . . . . .1696.00 –37.00 1814.00 1302.00 Schroders . . . . . . . . . . . . . . . . .1402.00 –27.00 1450.00 957.00
Admiral. . . . . . . . . . . . . . . . . . .1495.00 –11.00 1520.00 965.50 Croda Intl . . . . . . . . . . . . . . . . .1288.00 –32.00 1355.00 581.00 Kazakhmys . . . . . . . . . . . . . . . .1241.00 –32.00 1634.00 803.50 Schroders N/V. . . . . . . . . . . . . . 1135.00 –29.00 1185.00 804.50
Aegis . . . . . . . . . . . . . . . . . . . . . 117.90 –1.50 137.30 89.00 CSR . . . . . . . . . . . . . . . . . . . . . .334.50 –1.60 524.00 331.90 Kesa Electricals . . . . . . . . . . . . .134.00 +1.10 162.00 98.45
Afren . . . . . . . . . . . . . . . . . . . . . .96.65 –1.40 111.00 52.50 Daily Mail ‘A’ . . . . . . . . . . . . . . . .485.20 –17.80 539.00 330.00 .LQJÀVKHU . . . . . . . . . . . . . . . . . . 211.60 –3.00 255.00 196.50 Scot. & Sthrn Energy. . . . . . . . . 1140.00* –5.00 1206.00 357.50
African Barr Gold . . . . . . . . . . . .549.00 –9.00 685.00 520.50 Dana Petroleum . . . . . . . . . . . .1700.00 –12.00 1729.00 968.50 Ladbrokes . . . . . . . . . . . . . . . . .139.40 –6.40 174.29 114.60 Scottish Mortgage. . . . . . . . . . . .595.50 –1.50 623.50 439.70
Aggreko . . . . . . . . . . . . . . . . . .1557.00 –20.00 1639.00 558.50 Davis Service . . . . . . . . . . . . . . .387.00 –6.30 442.30 354.00 Lancashire Hldgs . . . . . . . . . . . .516.50 –0.50 545.00 416.70 SEGRO . . . . . . . . . . . . . . . . . . . .273.80 –2.90 403.10 244.00
Alliance Trust . . . . . . . . . . . . . . .319.60 –2.10 352.70 281.00 De La Rue . . . . . . . . . . . . . . . . . .797.00 — 1021.00 725.50 Land Securities . . . . . . . . . . . . . .612.50 –8.00 743.50 543.00 Serco . . . . . . . . . . . . . . . . . . . . .543.00 –4.50 656.50 405.10
AMEC . . . . . . . . . . . . . . . . . . . . .900.50 –12.50 937.00 693.50 Debenhams . . . . . . . . . . . . . . . . .60.90 –1.80 91.65 51.95 Legal & General . . . . . . . . . . . . . .89.90 –0.35 94.70 61.50 Severn Trent . . . . . . . . . . . . . . .1344.00 +6.00 1358.00 929.50
Amlin . . . . . . . . . . . . . . . . . . . . .424.70 –4.00 436.20 336.30 Derwent London . . . . . . . . . . . .1386.00 –13.00 1490.00 1041.00 Lloyds Banking Gp . . . . . . . . . . . .75.12 +0.14 77.61 45.30 Shaftesbury . . . . . . . . . . . . . . . .405.00 –2.90 426.50 341.70
Anglo American . . . . . . . . . . . .2473.50 –60.50 3015.50 1777.50 Dexion Absolute . . . . . . . . . . . . .137.00 –0.30 148.00 121.10 Logica . . . . . . . . . . . . . . . . . . . . 116.90 –2.00 149.10 100.80 Shire. . . . . . . . . . . . . . . . . . . . .1498.00 +27.00 1526.00 975.50
Antofagasta . . . . . . . . . . . . . . .1021.00 –26.00 1100.00 680.00 Diageo . . . . . . . . . . . . . . . . . . . 1102.00 –3.00 1176.00 918.00 London Stk Exchange . . . . . . . . .658.00* –6.50 949.50 540.50 Smith & Nephew . . . . . . . . . . . . .574.50 +4.00 700.50 465.80
Aquarius Platinum . . . . . . . . . . .260.00 –13.50 490.00 211.50 Dimension Data . . . . . . . . . . . . .121.60 –0.90 125.50 55.00 Lonmin . . . . . . . . . . . . . . . . . . .1560.00 –30.00 2198.00 1330.00 Smith(Ds) . . . . . . . . . . . . . . . . . .142.70 –1.30 150.20 75.90
ARM Holdings . . . . . . . . . . . . . . .317.00 –1.20 370.00 120.50 Domino’s Pizza . . . . . . . . . . . . . .420.00* –0.70 431.30 229.00 Man . . . . . . . . . . . . . . . . . . . . . .222.90 –3.70 373.60 199.60 Smiths . . . . . . . . . . . . . . . . . . . 1148.00 +24.00 1186.00 764.00
Arriva . . . . . . . . . . . . . . . . . . . . .772.00 — 782.50 428.20 Drax . . . . . . . . . . . . . . . . . . . . . .385.00 –3.00 496.50 321.50 Marks & Spencer. . . . . . . . . . . . .342.10 –5.70 412.70 321.90 SOCO Intl . . . . . . . . . . . . . . . . . .465.60 –0.10 476.60 380.60
Ashmore . . . . . . . . . . . . . . . . . . .285.10 –0.90 311.20 211.60 DSG Intl . . . . . . . . . . . . . . . . . . . .26.46 –0.59 39.75 23.32 Meggitt . . . . . . . . . . . . . . . . . . . .280.50 –4.80 331.00 189.90
Astrazeneca . . . . . . . . . . . . . . .3348.00* +43.00 3376.00 2668.00 Dunelm . . . . . . . . . . . . . . . . . . . .397.50 +5.60 438.40 250.70 Melrose . . . . . . . . . . . . . . . . . . .231.50 –3.40 251.50 122.90 Spectris . . . . . . . . . . . . . . . . . . .930.50 –1.00 949.00 561.00
Atkins(Ws) . . . . . . . . . . . . . . . . .789.00 –1.00 801.00 532.50 Easyjet . . . . . . . . . . . . . . . . . . . .379.90 –12.60 499.90 308.30 Mercantile IT . . . . . . . . . . . . . . . .967.00 –5.00 1002.00 822.50 Spirax-Sarco Eng . . . . . . . . . . .1555.00 –4.00 1617.00 929.00
Autonomy Corp . . . . . . . . . . . .1636.00 –13.00 2012.00 1215.00 Edinburgh Inv Tst . . . . . . . . . . . .403.50 –2.40 412.40 315.60 Michael Page Intl. . . . . . . . . . . . .396.90 –5.60 461.50 289.10 Spirent Comms . . . . . . . . . . . . . .132.80 — 135.90 68.55
Aveva . . . . . . . . . . . . . . . . . . . .1340.00 –19.00 1375.00 805.00 Electrocomponents . . . . . . . . . . .222.00 –0.50 245.00 142.90 Micro Focus . . . . . . . . . . . . . . . .419.00 –2.70 550.00 300.90 SSL Intl . . . . . . . . . . . . . . . . . . . 1162.00* –2.00 1190.00 522.50
Aviva . . . . . . . . . . . . . . . . . . . . .385.20 –4.80 474.00 290.20 EnQuest . . . . . . . . . . . . . . . . . . . 113.00 +2.70 121.40 87.35 Millen & Copthorne . . . . . . . . . . .489.00 –12.00 514.50 297.90 St James’s Place . . . . . . . . . . . . .284.50* –4.50 296.90 194.40
Babcock International . . . . . . . . .558.00 –6.50 660.50 463.00 Essar Energy . . . . . . . . . . . . . . .403.40 –10.90 475.90 358.50 Misys . . . . . . . . . . . . . . . . . . . . .265.00 — 281.70 173.90 Stagecoach. . . . . . . . . . . . . . . . .167.50 –2.90 204.90 126.20
BAE Systems . . . . . . . . . . . . . . .326.90 +2.30 389.90 294.20 Eurasian Nat Res . . . . . . . . . . . .965.50 –16.50 1276.00 731.00 Mitchells & Butlers . . . . . . . . . . .315.80 –8.80 343.90 228.30 Standard Chartered . . . . . . . . . .1831.00 –15.00 1927.00 1340.00
Balfour Beatty . . . . . . . . . . . . . . .262.90 –4.90 328.85 228.60 Euromoney Inst Inv . . . . . . . . . . .615.00 –2.00 630.00 245.00 MITIE . . . . . . . . . . . . . . . . . . . . .205.90* –3.90 281.70 195.20 Standard Life . . . . . . . . . . . . . . .216.40 +1.20 237.00 170.00
Barclays . . . . . . . . . . . . . . . . . . .333.65 –1.35 394.25 253.40 Experian . . . . . . . . . . . . . . . . . . .634.00 +2.50 664.50 489.00 Mondi . . . . . . . . . . . . . . . . . . . . .469.10 –10.60 488.00 262.30 SuperGrp . . . . . . . . . . . . . . . . . .976.00 –11.50 1030.00 499.00
Barratt Development . . . . . . . . . .101.40 –5.80 193.31 89.10 Ferrexpo . . . . . . . . . . . . . . . . . . .301.80 –7.50 396.20 138.00 Monks Inv Tst . . . . . . . . . . . . . . .294.70 –1.20 321.20 240.00 TalkTalk . . . . . . . . . . . . . . . . . . .126.40 –1.50 147.10 106.60
BBA Aviation . . . . . . . . . . . . . . .199.60 –2.00 220.00 136.60 FirstGroup . . . . . . . . . . . . . . . . .367.80* –5.50 448.80 331.20 Morrison Wm . . . . . . . . . . . . . . .279.50 +1.00 306.30 255.00 Talvivaara Mining . . . . . . . . . . . .425.10 –7.60 501.50 341.40
Beazley. . . . . . . . . . . . . . . . . . . . 117.00* — 125.80 95.25 Foreign & Col Inv Tst. . . . . . . . . .274.50 –2.90 297.20 229.50 Murray Intl Tst . . . . . . . . . . . . . . .856.00* –4.50 893.50 632.00 Tate & Lyle . . . . . . . . . . . . . . . . .440.20 –10.20 509.00 367.10
Bellway. . . . . . . . . . . . . . . . . . . .606.50 –31.50 927.50 554.00 Fresnillo . . . . . . . . . . . . . . . . . .1062.00 –13.00 1139.00 539.50 National Express. . . . . . . . . . . . .232.50 –6.20 258.60 155.86
Berkeley . . . . . . . . . . . . . . . . . . .805.00 –22.50 989.50 735.00 G4S . . . . . . . . . . . . . . . . . . . . . .264.40 +0.90 285.70 209.30 National Grid . . . . . . . . . . . . . . .538.50* –0.50 607.65 474.80 Taylor Wimpey . . . . . . . . . . . . . . .30.75 –1.41 54.90 24.29
BG . . . . . . . . . . . . . . . . . . . . . .1019.50* — 1248.00 966.90 Genesis Emerging Mkts Fd . . . . .471.00 –3.80 484.00 370.00 Next . . . . . . . . . . . . . . . . . . . . .2024.00 –24.00 2360.00 1601.00 Telecity . . . . . . . . . . . . . . . . . . . .441.00 +5.20 458.90 311.30
BHP Billiton . . . . . . . . . . . . . . .1991.50 –47.00 2346.00 1481.00 GKN . . . . . . . . . . . . . . . . . . . . . .143.30 –4.80 155.00 100.20 Northumbrian Water . . . . . . . . . .338.30 –0.50 341.30 219.90 Templeton Emrg Mkts . . . . . . . . .546.50 — 598.00 390.00
BlackRock Mining . . . . . . . . . . . .575.00 –11.00 654.50 413.00 GlaxoSmithKline . . . . . . . . . . . . 1177.00* +25.00 1347.00 1088.00 Old Mutual . . . . . . . . . . . . . . . . .126.50 –1.10 130.20 85.80 Tesco . . . . . . . . . . . . . . . . . . . . .406.25 +1.75 454.90 361.20
Bluecrest Allblue GBP . . . . . . . . .166.00 +0.40 167.90 136.20 Great Portland Estates . . . . . . . .310.20 –3.70 332.10 236.60 Pace . . . . . . . . . . . . . . . . . . . . . .212.20 –2.80 243.80 145.00 Thomas Cook . . . . . . . . . . . . . . .183.90 –14.60 277.20 172.30
Booker . . . . . . . . . . . . . . . . . . . . .43.75 –0.37 49.50 33.00 Greene King . . . . . . . . . . . . . . . .435.00 –14.90 504.00 372.50 Partygaming . . . . . . . . . . . . . . . .288.60 –2.40 339.70 205.80 Tomkins . . . . . . . . . . . . . . . . . . .322.40 –1.00 325.70 155.00
BP . . . . . . . . . . . . . . . . . . . . . . .419.35 –13.40 658.20 296.00 Halfords . . . . . . . . . . . . . . . . . . .470.00 –5.10 562.50 324.00 Pearson . . . . . . . . . . . . . . . . . . .997.50 –7.50 1069.00 695.00 Travis Perkins . . . . . . . . . . . . . . .844.00 –19.50 915.00 647.50
Brit Insurance . . . . . . . . . . . . . . .993.50 –5.50 1017.00 709.00 Halma . . . . . . . . . . . . . . . . . . . . .279.90* — 298.70 186.60 Pennon . . . . . . . . . . . . . . . . . . . .606.00 –3.00 613.00 434.40 TUI Travel . . . . . . . . . . . . . . . . . .203.10 –22.50 313.90 201.00
British Airways . . . . . . . . . . . . . .227.40 –6.00 255.80 161.00 Hammerson . . . . . . . . . . . . . . . .375.80 –4.10 460.30 332.20 Persimmon . . . . . . . . . . . . . . . . .373.40 –19.40 534.50 340.20 Tullett Prebon . . . . . . . . . . . . . . .381.60 — 436.20 261.20
British Amer. Tob . . . . . . . . . . .2224.00 –28.50 2335.50 1832.00 Hargreaves Lansdown . . . . . . . .376.70 +1.80 387.00 214.00 Petrofac . . . . . . . . . . . . . . . . . . 1311.00 –7.00 1372.00 816.00 Tullow Oil . . . . . . . . . . . . . . . . .1271.00 –9.00 1375.00 979.50
British Empire Tst . . . . . . . . . . . .438.40 –1.60 467.90 338.50 Hays . . . . . . . . . . . . . . . . . . . . . . .92.60 –0.90 119.00 88.05 Petropavlovsk . . . . . . . . . . . . . .1048.00 –35.00 1370.00 601.00 UK Commercial Prop. . . . . . . . . . .74.80* –0.20 84.90 65.25
British Land . . . . . . . . . . . . . . . .453.80* –5.10 532.00 416.00 Henderson . . . . . . . . . . . . . . . . .135.90 +0.70 157.80 110.60 Premier Farnell . . . . . . . . . . . . . .242.10 –1.20 252.60 140.60 Ultra Electronics . . . . . . . . . . . .1675.00 –4.00 1684.00 1198.00
Britvic. . . . . . . . . . . . . . . . . . . . .485.20 –4.90 518.00 324.80 Heritage Oil. . . . . . . . . . . . . . . . .450.00 +4.00 587.00 368.70 Premier Oil . . . . . . . . . . . . . . . .1545.00 –12.00 1610.00 984.00
Brown(N.) . . . . . . . . . . . . . . . . . .237.90 –1.20 284.30 204.80 Hikma Pharma . . . . . . . . . . . . . .719.00 +1.00 746.00 440.00 Provident Financial . . . . . . . . . . .835.50 –2.00 986.00 795.00 Unilever . . . . . . . . . . . . . . . . . .1733.00 +17.00 2024.00 1580.00
BSkyB . . . . . . . . . . . . . . . . . . . .709.50 –2.50 732.00 521.00 Hiscox . . . . . . . . . . . . . . . . . . . .356.00 –7.00 369.30 299.60 Prudential . . . . . . . . . . . . . . . . . .582.50 –4.50 665.00 455.00 United Utilities . . . . . . . . . . . . . .601.50 –1.00 606.00 429.00
BT . . . . . . . . . . . . . . . . . . . . . . .146.40 +0.10 151.00 108.40 Hochschild Mining . . . . . . . . . . .312.00 –9.10 370.60 220.00 PZ Cussons . . . . . . . . . . . . . . . .345.40 +3.80 373.20 210.10 Utd Business Media . . . . . . . . . .564.00 –7.00 579.50 408.30
Bunzl . . . . . . . . . . . . . . . . . . . . .688.50 +4.00 784.50 527.00 Home Retail . . . . . . . . . . . . . . . .232.20 –2.30 336.50 208.50 Qinetiq . . . . . . . . . . . . . . . . . . . .120.60 –2.00 179.10 113.90 Vedanta Resources . . . . . . . . . .2480.00 –103.00 2967.00 1616.00
Burberry . . . . . . . . . . . . . . . . . . .858.00 –4.50 891.50 440.20 Homeserve . . . . . . . . . . . . . . . . .481.70 +0.40 488.20 435.40 Randgold Resources. . . . . . . . .5440.00 +45.00 6600.00 3351.00 Victrex . . . . . . . . . . . . . . . . . . . 1159.00 –29.00 1320.00 613.50
Cable & Wire Comms . . . . . . . . . .61.35* +0.05 150.00 53.00 HSBC Hldgs . . . . . . . . . . . . . . . .670.00 –0.70 766.80 595.20 Reckitt Benckiser . . . . . . . . . . . 3119.00* +12.00 3667.00 2694.00 Vodafone . . . . . . . . . . . . . . . . . .154.10 –0.80 155.50 124.85
Cable & Wire Wwide . . . . . . . . . . .65.15* –1.05 94.80 64.75 Hunting . . . . . . . . . . . . . . . . . . .542.50 –8.50 659.50 423.20 Reed Elsevier . . . . . . . . . . . . . . .541.50* –8.00 566.00 414.00 Weir . . . . . . . . . . . . . . . . . . . . .1242.00 –13.00 1275.00 585.00
Cairn Energy. . . . . . . . . . . . . . . .460.00 –1.00 485.30 306.80 ICAP . . . . . . . . . . . . . . . . . . . . . .388.80* –4.10 478.30 291.70 Regus . . . . . . . . . . . . . . . . . . . . . .73.50 –1.90 125.50 68.65 WH Smith . . . . . . . . . . . . . . . . . .417.90 –6.10 551.00 396.00
Caledonia Invs . . . . . . . . . . . . .1590.00 –20.00 1759.00 1496.00 IG . . . . . . . . . . . . . . . . . . . . . . . .485.80 –2.90 498.90 291.00 Renishaw . . . . . . . . . . . . . . . . . .884.00 –4.00 915.50 420.00 Whitbread . . . . . . . . . . . . . . . . .1441.00 –29.00 1645.00 917.00
Capita . . . . . . . . . . . . . . . . . . . . .710.00 — 829.50 643.50 Imagination Tech Gp . . . . . . . . . .354.00 +3.40 358.30 149.75 Rentokil Initial . . . . . . . . . . . . . . .105.00 –0.50 140.20 94.10 William Hill . . . . . . . . . . . . . . . . .168.20 –3.00 217.80 160.50
Capital & Counties . . . . . . . . . . . 112.80 +0.10 125.40 99.60 IMI . . . . . . . . . . . . . . . . . . . . . . .719.00 –11.00 786.00 357.60 Resolution . . . . . . . . . . . . . . . . .250.30 –6.20 264.80 220.10 Witan Inv Tst . . . . . . . . . . . . . . . .447.20 –2.70 487.00 365.50
Capital Shopping Centres . . . . . .333.60 –0.30 580.00 300.10 Imperial Tobacco. . . . . . . . . . . .1805.00* –17.00 2159.00 1656.00 Rexam . . . . . . . . . . . . . . . . . . . .302.30 –3.60 348.80 227.00
Carillion . . . . . . . . . . . . . . . . . . . 311.10 –3.70 361.90 263.90 Inchcape. . . . . . . . . . . . . . . . . . .293.60 –1.80 347.00 235.00 Rightmove . . . . . . . . . . . . . . . . .624.50 –20.00 729.00 404.50 Wolseley . . . . . . . . . . . . . . . . . .1478.00 –19.00 1742.00 1155.00
Carnival . . . . . . . . . . . . . . . . . .2226.00 –91.00 2937.00 1747.00 Informa . . . . . . . . . . . . . . . . . . . .393.60 –8.60 439.40 250.20 Rio Tinto . . . . . . . . . . . . . . . . . .3387.50 –68.00 4104.00 2205.00 Wood Group (John). . . . . . . . . . .365.10 –8.90 411.70 267.70
Catlin . . . . . . . . . . . . . . . . . . . . .375.10 –1.00 394.60 303.20 Inmarsat . . . . . . . . . . . . . . . . . . .738.00 –1.00 831.00 491.00 RIT Capital Partners . . . . . . . . . 1135.00 –15.00 1215.00 913.50 WPP . . . . . . . . . . . . . . . . . . . . . .691.50 –9.50 744.00 458.80
Centamin Egypt . . . . . . . . . . . . .161.60 –4.90 174.75 80.00 Intercontl Hotels . . . . . . . . . . . .1078.00 –46.00 1244.00 697.50 Rolls Royce . . . . . . . . . . . . . . . .560.00 –3.00 631.50 415.00 Xstrata . . . . . . . . . . . . . . . . . . .1053.00 –32.00 1344.50 713.00
Centrica . . . . . . . . . . . . . . . . . . .323.70 +2.30 324.20 216.90 Intermediate Capital . . . . . . . . . .267.60* +2.00 332.00 233.50 Rotork . . . . . . . . . . . . . . . . . . .1479.00 –11.00 1537.00 933.00 LONDON TOP 250 BY MARKET CAPITALISATION
Charter Intl . . . . . . . . . . . . . . . . .672.00 –8.00 855.50 560.50 Intertek . . . . . . . . . . . . . . . . . . .1724.00 +11.00 1745.00 1079.00 Royal Bank Of Scot . . . . . . . . . . . .48.45 –1.90 58.95 28.25
Chemring . . . . . . . . . . . . . . . . .2844.00 –36.00 3711.00 1996.00 Intl Personal Fin . . . . . . . . . . . . .244.40 –3.10 283.00 128.25 Royal Dutch Shell A . . . . . . . . .1821.50* –1.00 2068.50 1542.00 * Ex-Dividend † Suspended
Chloride Group . . . . . . . . . . . . . .374.00 –0.40 390.50 138.60 Intl Power . . . . . . . . . . . . . . . . . .372.60 –7.40 384.10 248.20 Royal Dutch Shell B . . . . . . . . .1757.00* –3.00 1997.50 1521.00
Close Bros . . . . . . . . . . . . . . . . .688.00 –4.50 806.50 660.50 Invensys . . . . . . . . . . . . . . . . . . .260.00 –9.00 350.30 234.50 RSA Insurance . . . . . . . . . . . . . .133.90 –2.70 142.00 114.10 www.interactivedata.com

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Jitters ahead of Bank’s Inflation Report Fed announcement helps

as miners, banks and energy shares lose curtail Wall Street losses
Miners were big fallers, retracing formers, falling back as recent The Dow Jones industrial average

THELONDON Monday’s gains as base metal prices

fell on demand concerns after weak
Chinese imports data yesterday, and
strength following the first-half
reporting season evaporated.
Royal Bank of Scotland was the
THENEW YORK was down 54.50 points, or 0.51 per
cent, at 10,644.25. The Standard &
Poor’s 500 Index was down 6.73
REPORT ahead of Chinese inflation numbers
due today.
Vedanta Resources, Xstrata, and
worst off, down 3.8 per cent as Credit
Suisse cut its rating to “neutral” from
“outperform” after results last week.
REPORT points, or 0.60 per cent, at 1,121.06.
The Nasdaq Composite Index was
down 28.52 points, or 1.24 per cent, at

B
RITAIN’S top shares were lower Antofagasta were top sector fallers, Europe’s biggest travel firm TUI 2,277.17.

U
yesterday as investors nervously down 3.0 to 4.0 per cent. Travel was the top FTSE 100 faller, S stocks fell yesterday but Tech companies pressured the
awaited the outcome of the “Gravity pulled the market lower, down 10 per cent after it said it closed off their lows after the Nasdaq, with chipmakers Intel and
Bank of England’s quarterly in thin volume as investors hugged expected its full-year profit to be at Federal Reserve said it would Advanced Micro Devices falling on
Inflation Report due today and com- the sidelines awaiting the Fed news,” the lower end of expectations. take new steps to counter a analysts’ downgrades, while Novell
modity shares were hit by demand said Mic Mills, head of electronic trad- Mid-cap peer Thomas Cook fell 7.4 weak recovery. dropped a day after cutting its third-
concerns following weak Chinese data. ing at ETX Capital. per cent, and blue chip Carnival The Dow, which was down about quarter revenue outlook. Intel, a Dow
At the close, the FTSE 100 index Energy shares were lower in Cruises lost 3.9 per cent. 100 points before the Fed's announce- component, lost four per cent to
was down 34.11 points, or 0.6 per London as crude prices fell back Connaught rose 21.8 per cent to ment, briefly turned positive, though $19.82 while AMD lost eight per cent
cent, at 5,376.41, having ended at its towards $80 a barrel. BP shed 3.1 per 13.4p, in a brief respite for the hous- buying interest waned on the Fed’s to $6.83 and Novell sank 3.2 per cent
highest close since 13 May on cent. ing firm after losing more than 90 more pessimistic assessment of the to $5.82. Walt Disney rose 1.4 per
Monday. Banks were also poor blue chip per- per cent of its value since June. economy. cent in extended trading.
 20 Investment | Foreign Exchange CITYA.M. 11 AUGUST 2010

STRONG YEN
IS FUELLED BY
AMERICA
BORIS SCHLOSSBERG
DIRECTOR OF CURRENCY RESEARCH, GFT

I
N AMERICAN baseball when a pitcher hurls the
ball within inches of a batter’s face, the move is
known as a “brushback pitch” and is meant to
convey fear and respect. As the week started in
the currency market, Japanese Finance Minister
Yoshihiko Noda practiced his own version of a
brushback pitch, warning speculators that he was
watching the markets carefully and that “excessive,
disorderly foreign exchange moves would have
adverse effects on the stability of the economy.”
With dollar-yen hovering near the ¥85.00 fig-
ure, Japanese monetary officials are clearly becom-
ing concerned about the unfavourable exchange
rate differentials. Most Japanese corporations can
withstand the current exchange rate levels, but the
fear amongst policymakers is that a decisive break
below ¥85.00 would trigger a quick move towards
¥80.00, which would threaten Japanese profit The ferocious “merlion” – or lion-headed fish – is the mascot of Singapore Picture: GETTY
margins.
In addition to facing a tougher trade environ-

A new dollar safe haven

ment, the Japanese are now also experiencing
problems with their current account surplus. The
latest figures released on Monday showed a con-
traction in the current account surplus to ¥1.36
trillion, compared to the forecast of ¥1.44 trillion.
The reason for the narrowing surplus was a sharp
reduction in its income account due to lower US
Treasury yields. Japan now finds itself in the unen-
viable position of seeing its exports suffer due to Forget the greenback an interest rate hike would be.
The currency’s so-called “managed float”
Liquidity is very flush because the good
prospects for the economy attract a lot of
strong yen appreciation while its income flows
decline due to falling US yields. But the Bank of and target Singapore, adopts a “basket, band and crawling” (BBC)
policy. This means that the MAS first cre-
inflows. Also, against the regional bench-
mark, Singapore has performed well,
Japan is limited in its response. It is highly unlikely
that it will initiate intervention on a unilateral basis, writes Juliet Samuel ates a basket of currencies against which
the dollar is measured. This is weighted by
which also instils confidence.”
Favourable monetary policy and good
and even if it does, intervention in the currency Singapore’s trade dependence on the coun- growth is reflected in most analysts’ bullish
market without a concerted effort from other try. Next, the authority decides upon a mid- stance: Deutsche Bank, Standard Chartered

major central banks is unlikely to succeed.
The Yen’s current strength is solely a function of
US economic weakness. This week the pair could
see a relief rally if the Fed holds off on any addition-
al quantitative easing. But as the week progresses,
attention will once again turn to US economic data
and if trade numbers tomorrow and retail sales on
Friday both miss their mark then the pressure on
dollar-yen to break below the ¥85.00 barrier will
begin to build once again.
Boris Schlossberg and Kathy Lien are directors
of currency research at GFT. Read commentary at
www.GFTUK.com/commentary or e-mail borisand
W
ITH Singapore’s GDP forecast to
grow 11 per cent this year accord-
ing to Standard Chartered, the
Singaporean dollar could be the
closest to a “safe haven” that traders are
likely to find. Although the currency does
not move freely, the Monetary Authority of
Singapore (MAS) has recently signalled that
in order to combat the risks of an overheat-
ed economy, it will allow the dollar to
appreciate. So although the currency is
unlikely to surprise hugely to the upside,
it’s still a good bet for the coming year.
point that is used to calculate the 2 per cent
band within which the currency can move.
And, finally, during the biannual meetings
at which it sets the midpoint, the MAS also
decides whether the midpoint will be
allowed to appreciate, depreciate or stay
neutral.
Because of Singapore’s strong growth
and the threat of inflation – forecast to be
2.9 per cent this year – RBS’s Andy Ji high-
lights that the MAS adopted an aggressive
stance at its most recent April meeting. It
both raised the midpoint around which
Index base 4 Apr 08 =100
and RBS all forecast that further
Singaporean dollar strength lies ahead.
And with Standard Chartered’s end-of-year
forecast for dollar-Singapore dollar (given at
1.35 in July) already reached, it’s likely that
we have a long way to go before we hit the
peak.
ANALYSIS l The Singaporean dollar
moves within a controlled band
2% exchange rate band set by
Monetary Authority of Singapore
100 Band midpoint set by Monetary

Authority of Singapore
kathy@gft.com. For one thing, the dollar will be a good the 2 per cent currency band is calculated, SGD versus currency
basket
proxy for growth as the Singaporean and shifted from holding the midpoint at a 95
authorities attempt to dampen inflation. neutral level to enabling it to appreciate at
Unlike most western economies, a controlled rate (see chart).
Singaporean monetary policy revolves There is no reason to think the authority
90

Source: RBS
around exchange rates rather than interest will change the policy at its forthcoming
rates: because the economy is so export- meeting. Ji says: “Barring any extreme situ-
driven, pushing up the value of the dollar is ation in the global economy, we’re going to
85
a more effective dampener on prices than see a very steady appreciation in the dollar. Jun 01 Jun 03 Jun 05 Jun 07 Jun 09

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CITYA.M. 11 AUGUST 2010 Investment | Foreign Exchange 21

THE
The buck is TIPSTER
THE POUND’S
TIME IN THE
poised to claw SUN IS OVER

W
ITH the pound starting to lose
steam on the back of slightly weak-

back losses er economic data, the recent

strength in sterling crosses may
well be coming to an end. While the pound
looks under threat, look to buy euros around
£0.8300 for a move towards £0.8410. Also,
look to sell sterling-yen around ¥136.80. CMC
But a period of strength, could lead to further Markets’ spread for euro-sterling is £0.8335-
37. CMC Markets’ spread on sterling-yen is
¥135.50/58
weakness down the line, says Kathleen Brooks With concerns about the level of Eurozone
debt easing over recent months, the US dol-
lar has come up against a brick wall, halting

Y
ESTERDAY was like a trip down
memory lane with traders across the
City gripped by the conclusion of the
Federal Reserve’s latest policy meet-
ing. The big news was that the Fed will not
engage in more quantitative easing (QE)
and instead reinvest the proceeds of securi-
ties it already holds on its gigantic $2.3 tril-
lion balance sheet.
So now that investors have resumed
watching the Fed like a hawk, what does
this mean for the greenback? In the near-
term the dollar could actually strengthen,
says Glenn Uniacke, senior dealer at
Moneycorp, the currency specialist:
“Market expectations for a further round of
quantitive easing have not come to light
after this meeting. This shows that expecta-
tions were over-cooked, which could help
the dollar claw back some losses.”
Uniacke says that euro-dollar could re-
trace back to $1.28; currently one euro gets
you $1.32. Michael Hewson from CMC
Markets says that the pound’s failure to
break above the psychologically important
level of $1.60, could see sterling fall to
$1.5520-50 in the coming days, especially
since the Fed did not opt to increase policy
support for the economy.
However, the longer-term picture is less
promising for the greenback. Compared to
the European Central Bank and the Bank of
England, which have pledged to cut the
size of their balance sheets after providing
huge amounts of stimulus during the peak
of the financial crisis, the Fed looks a long
way off from following suit. “Reinvesting
the proceeds of securities it already holds
could amount to $200bn by the end of the
year, no small fry,” says Uniacke.
At this stage the Fed is in wait-and-see
mode. But if economic data continues to
disappoint, then the Fed would be ready to
provide more policy support. As analysts at
Societe Generale note, an addiction to
quantitative easing will undermine the G3
currencies: “Our core currency view is that
G3 FX is a losers’ competition. We remain
biased to sell the yen, euro and dollar
against alternatives that aren’t burdened
by massive deficits and zero rates.” An even
larger deficit in the US would only make
the dollar look uglier than it already does.
But the dollar is not the only currency at
risk. Europe’s fortunes are intertwined
with those of the US. A rebound in US busi-
ness investment, as you can see in the
chart, has coincided with a large increase
in capital goods imports. As Capital
Economics notes, this has helped big capi-
tal equipment exporters such as Germany.
But if the US slows, imports will dry up,
having a knock-on affect on growth rates
for these countries and therefore, the euro.
At the time of writing, the dollar had
conceded more territory against the euro.
any appreciation for the greenback. But
looking past Europe, the dollar’s fortunes
against the Japanese yen gives traders a
potentially interesting medium-term play
over the next few months. The end of 2009
saw dollar-yen move to its worst levels in 15
years. However, the dollar then staged a
rebound, clawing back more than 1,000
points over the next six months. It is early
days, but once again the dollar has started to
show early strength ahead of the big level of
¥85.00. Traders with a medium-term view
may want to consider trading the end-of-
But it may claw back some gains as the The Federal Reserve year contract. IG Index is currently quoting
market “prices out” the possibility of any holds the key to long- dollar-yen for December at ¥85.88-¥86.00.
near-term QE. For now, short-term dollar term dollar The prospect of further stimulus from the
strength could reap profits. The longer- movements Fed has helped to send the dollar down some
term outlook all depends on the Fed, so Picture: GETTY 10 per cent over the last month. Meanwhile,
keep watching. debt problems facing Europe have taken a
back-seat, which has helped euro-dollar to
ANALYSIS l Business investment in the US boosts German exports stage a mini-rally. But can the euro extend
60
50
this period of strength? Capital CFDs quotes
40
a price of $1.3156-$1.3157.
30 Cable has seen some weakening after
20 flirting with the $1.60 level. With data show-
10 ing that the economic recovery may be los-
0 ing momentum and fears mounting that
-10 Investment
growth will slow while inflation remains
-20 in Equipment sticky, sterling could yet come under further
-30 Imports of pressure. ShortsandLongs.com has a spot
capital goods sterling-US dollar spread of 1.5726-1.5729.
-40
Source: Thomson Datastream Kathleen Brooks
-50
1996 1998 2000 2002 2004 2006 2008 2010

FOREX ANALYST PICKS

FOREX STRATEGIST FOREX STRATEGIST FOREX STRATEGIST
ILYA SPIVAK JOHN KICKLIGHTER JOEL KRUGER

My pick: Short New Zealand dollar-US dollar, pending market moves
Expertise: Global macro, classic technical analysis
Average time frame of trades: 1 week-6 months
The New Zealand dollar looks to be carving out a double top below
the $0.74. Prices are now testing below the lower boundary of a
bearish rising wedge formation set from the lows in June, now at
$0.7267. Clear negative divergence on 14-day relative strength stud-
ies bolsters the case for a downside scenario. I will look for confir-
mation on a daily close below this level, eyeing initial targets at
$0.6844 and $0.6579.
My pick: Long dollar-Swiss franc above SFr1.06, short euro-aussie dollar.
Expertise: Combining Fundamental and Technical Analysis
Average time frame of trades: 1 day to 1 week
Congestion in the markets dominated trading last week, with very little
direction to follow, but we seem to be making the effort for direction
this week. The dollar is the big performer so far; and I see euro-dollar
and dollar-franc as interchangeable. The latter, perhaps, has a better
catalyst with a move above SFr1.06, which would allow for a 125 point
stop and a reasonable 200 point first target. Also interesting is a euro-
aussie break below A$1.4335, with a stop at A$1.45, targeting A$1.41.
My pick: Buy dollar-yen at ¥84.00
Expertise: Classic technical analysis
Average time frame of trades: 1 week-6 months
The dollar has been under some intense pressure against the yen
for the last few weeks and is now close to 14-year lows at $84.80.
However, with technical studies starting to look stretched, we do
not see the drop below $84.80 as being sustainable and would
instead look to take advantage of any additional weakness as an
opportunity to build into a core long position. Strategy: buy at
¥84.00 for a ¥100.00 objective with a stop at ¥76.00.
 22 Investment | Fund Management CITYA.M. 11 AUGUST 2010

Investing with a conscience has the

potential for long-term rewards
Pension funds are BP’s oil spill in the
Gulf of Mexico and its
getting even more share price decline,
highlights the benefits
involved. Jessica of socially responsible
investment decisions

Mead finds out why

T
HE need for responsible investment
has never been more relevant in the
wake of the BP Deepwater disaster in
the Gulf of Mexico and multination-
al oil companies' controversial activities in
the Canadian tar sands.
Responsible investment has traditionally
been seen as a domain for militant activists
and students whereby stocks that do not
meet certain environmental, social and
governance (ESG) criteria – for example,
tobacco producers and arms makers – are
excluded. But the investment industry now
talks about fiduciary responsibility rather
than ethical exclusion and it is becoming
more mainstream.
More than 800 institutional fund man-
agers – managing around $20 trillion of
assets – have signed up to the United
Nations’ Principles for Responsible
Investment since they were launched in
2006.
Danyelle Guyatt, global head of research
for responsible investment at Mercer, says
that she has seen an increase in interest in
responsible investing from institutions.
However, the recognition by pension funds
of the need to incorporate ESG issues into
their investment processes is not uniform
across all countries. Colin Melvin, head of
Hermes' Equity Ownership Scheme (EOS),
says: “There is a clear regional bias towards
the big UK, Dutch, Nordic, Australian and
Canadian pension funds wanting an may do this in-house, other smaller institu- Hermes’ Colin Melvin agrees: “It seems we believe we can demonstrate value-
engagement service whereas the tions may outsource the ESG assessment to clear to us that companies with active added.”
Americans and Japanese have to date the likes of F&C or Hermes’ EOS. “We are shareholders tend to do better than those But while equities are key for pension
shown less interest.” In the UK there is a seeing increasing concern from pension that don’t. Calling the directors of a compa- funds, fixed income has become an increas-
strong fiduciary backdrop, expressed most funds on ESG risks including public health, ny to account improves their performance.” ingly important asset class in recent years.
recently in the development of the climate change and corporate governance Consequently, engagement with compa- ESG evaluation for fixed income is still rela-
Stewardship Code, which is now seen as a and these are some of the areas where we nies is the primary way in which pension tively new, but it is growing. Steve
blueprint for a global initiative. are engaging actively with companies,” says funds try to ensure that they fulfil their Waygood, head of SRI at Aviva Investors,
There are a number of ways in which Sandra Carlisle, director for governance fiduciary responsibilities and enhance the says: “There have been more (ESG) man-
funds are improving their ESG capabilities. and sustainable investment at F&C, which value of the company. David Russell at the dates for fixed income in the past two years
Mercer's Guyatt says: “The growth areas was the first asset manager to establish an USS says: “Engagement does a number of than I had seen in the previous eight.”
where we are advising pension funds on ethical fund, known as the Stewardship different things, including reducing risks, For corporate debt, Waygood says that
how to capture new opportunities include Fund, in the UK in 1984. helping identify problems before they hap- they use the same methodology as they
thematic funds, integration of ESG factors Since pension funds are concerned about pen and encouraging change. It is where would for the firm’s equity. For sovereign
into investment decisions and exercising liability matching, performance is a key fac- debt, they bring a variety of indicators
their right as shareholders to vote.” tor. While screening out stocks based on IN FOCUS | RESPONSIBLE INVESTING including Gini coefficients, adherence to
But why are pension funds shifting ESG factors affects the breadth of the invest- the Kyoto Protocol and human rights into
towards ESG investment? David Russell, co- ments, ESG issues can impact the value of an overall assessment of a country's ESG
head of responsible investment at the the stocks – note the vertiginous drop in The UN Principles for Responsible Investment (PRI) were launched in success.
Universities Superannuation Scheme (USS), BP’s share price over recent months. 2006 and now have around 850 signatories, managing over $20 trillion of Pension funds are realising that responsi-
says: “Partially because of the nature of its Mike Taylor, chief executive of the assets. Signatories to the UN PRI commit themselves to incorporating envi- ble investing can lead to better long-term
membership, the fund was under pressure London Pension Fund Authority, says: “If we ronmental, social and governance (ESG) issues into their investment analy- performance, so whether it is through
to look at these issues quite early on.” invest responsibly (in the ESG sense) then sis, develop their engagement capabilities, and seek appropriate disclosure investing directly in ethical funds or adopt-
Depending on the profile of its members, a we will get better returns over the longer- on ESG issues from the entities in which they invest. The number of sus- ing an ESG overlay decision-making strate-
pension fund may be keen to engage on cer- term. It is difficult to prove the returns on tainable funds in the UK now stands at 54 with £5.6bn of assets under gy, they are stepping up their capabilities. It
tain issues. For example, the key issue for a environmental and the social side, but it is management at the end of 2009, an annual increase of 26 per cent, has certainly been a good start, but every-
medical pension fund is public health. this belief that underpins the way we imple- according to the Investment Management Association (IMA). body involved recognises that much more
While some pension funds, such as USS, ment our investment strategy.” still needs to be done.

FUND MANAGEMENT NEWS

BY KATHLEEN BROOKS
NEW INDIAN DEBT FUND TO LAUNCH
ACPI Investments has announced the launch
of one of the first Indian bond funds available
in Europe. The fund is looking for strong rupee
appreciation along with further de-regulation
in the corporate sector to boost returns. It
plans to invest in securities issued by the
Indian government, debt issued by govern-
ment-owned companies and high grade
Indian corporate bonds, all denominated in
rupees, although the fund will be priced in US
dollars. It is targeting a return of 10-12 per
cent per year, with a target volatility of 7 per
Indian debt – the next frontier Picture: SXC cent. The minimum investment is $50,000.
LOW COST IS GOOD FOR PERFORMANCE
Independent fund research firm Morningstar
has published a new report that has found
total expense ratios for mutual funds help
investors to make a better choice about
where to put their money. “Expense ratios are
strong predictors of performance. In every
asset class over every time period, the cheap-
est quintile produced higher total returns than
the most expensive quintile,” Morningstar
analysts wrote. For example, the cheapest
quintile since 2005 in domestic equity funds
returned an annualised 3.35 per cent, versus
2.02 per cent for the most expensive quintile.
CHANGING CONSUMPTION HABITS
The rise of the global consumer, fuelled by
greater urbanisation in emerging markets, is
still a key theme even a post-recessionary
world, according to Peter Kirkman manager
of JP Morgan’s Global Consumer Trends fund.
The fund has performed strongly since 2008,
returning 34.5 per cent, compared to 3.9 per
cent for the MSCI World Index. The fund has
three drivers: demographics, health and well-
ness and aspiration. And it’s not just emerging
markets where he is finding opportunities.
The west’s aging population makes health
providers extremely attractive, Kirkman says.
 City Focus
Boutique firms
flourish in new
legal landscape
Innovative structures will bring lawyers and
clients closer together, says Jeremy Hazlehurst
F
OR millions of years, dinosaurs ruled
the world. They grew ever bigger,
hoovering up increasingly massive
amounts of the local ecosystem to
keep them going. But then there was a
cataclysm and the game changed.
Resources became more scarce and even-
tually evolutionary push came to
Darwinian shove and they lost out in the
battle for survival to small vole-like crea-
tures which were nimbler, nabbed the
food from under their noses and drove the
lumbering behemoths to extinction.
It’s a tale that large international law
firms might well heed. In the past decade
they grew ever bigger, expanded into
many more jurisdictions and practice
areas, winning talent and work. But this
concentration on bulk means that they
are losing ground in niche areas, and bou-
tique firms are stepping in. They are – to
slightly over-extend this metaphor – the
proto-voles of the legal world.
In July a number of boutique law firms
swam out of the primal soup. Dewey &
LeBoeuf’s Frankfurt managing partner
Hanno Berger and a colleague left the firm
to set up a tax boutique. Baker & McKenzie
has lost a number of antitrust lawyers who
went to set up their own firm, taking
clients such as Shell and Proctor & Gamble
with them. And then there’s former SJ
Berwin private equity partner Matthew
Hudson, who has launched a firm called
MJ Hudson with the backing of private
equity money, and which will be working
largely with hedge funds.
The reason this is happening is the
diplodocus-like unwieldiness of the mega-
firms. Stephanie Pautke, one of the
lawyers who left Bakers said the reason for
setting up the boutique was “the strategic
SPEAKER’S CORNER
DIVORCING
COUPLES FACE
DAWN RAIDS
SANDRA DAVIS
MISCHON DE REYA
I
N 177 carefully crafted paragraphs
the Court of Appeal has rewritten
the rules of engagement in matri-
monial finance cases.
Previously, spouses seeking divorce
were permitted a certain amount of lee-
way when gathering financial informa-
tion. Put simply, the courts turned a
blind eye to one spouse helping them-
selves to financial information by rum-
maging through the marital home in
| Law
considerations that the firm had for our
group did not really fit into our strategy as
a team.” As large law firms look to the big
deals, the sorts of work that require long-
term relationship-building start to look
anomalous.
Pautke’s sentiment is echoed by Richard
Turnor, a partner at Maurice Turnor
Gardner, a private client boutique that
spun off from Allen & Overy in May 2009.
The way he puts it is that “as law firms
get bigger and more focused on global
businesses the centrifugal forces increase,
and practice areas and offices that are
non-essential, or which do not need the
infrastructure and its associated costs,
need to spin off in order to remain sus-
tainable and competitive.”
For the lawyers themselves, the benefits Too big to fail?
are clear. Large law firms with lots of prac-
tice areas find it impossible to create a Picture: GETTY
structure that is fair to all the partners
because the ways they work are just so dif-
ferent. A process-driven area might have
30 associates to every parter, making it
fundamentally different to a tax practice,
where there might be a one-to-one ratio.
The overheads in the former are much
higher.
Creating a payment system that is fair
to everybody is tricky, to say the least.
When a firm is putting so much effort
into the bureaucracy needed to adminis-
ter the multiple practices, it starts looking
attractive to let some go. In many cases the
slewing off of a boutique is mutually
agreed, and clients will continue to go to
the parent firm for the legal services the
boutique can’t provide.
So will the global law firms slowly die
out, harried by their speedy little competi-
tors until they fall face down into the
order to find, copy and share docu-
ments detailing the other’s assets.
The case, which involved Vivian
Imerman, Lisa Tchenguiz and her
brothers Robert and Vincent, has
brought an abrupt end to this practice.
Self-help is no longer any help. An indi-
vidual’s privacy is paramount, whether
or not they are believed to be conceal-
ing financial information. The conse-
quences of this decision are that
spouses of (potential) non-disclosers
will have three courses of action avail-
able to them.
FULL AND FRANK
First, if it can be proved that full and
frank disclosure has not been given,
they can ask the court for an enhanced
award from the identified assets. What
remains to be seen is how anyone will
know whether disclosure has been full
and frank when the self-help docu-
ments proving the opposite can no
longer be safely scrutinised by the
lawyers or forensic accountants.
The second option, the Appeal Court
WHAT THE BP FIASCO
CAN TEACH YOU
SEE CAREERS IN
TOMORROW’S CITY AM
mud, like haggard mastodons? Let’s not
get carried away. If you are a global busi-
ness then you probably want a global law
firm as a one-stop shop for your legal
work. Brand matters, too, for a big client.
But if you are small firm with a niche,
then lawyers with specific knowledge of
your area are appealing. Clients often pre-
fer to deal with a boutique – because costs
are lower, so are charges. Savvy clients
such as hedge funds often prefer to work
with boutiques. That makes sense. In
some ways boutique law firms are the
hedge funds of the legal work – small
groups of specialists who want to escape
from the straitjacket that is imposed on
larger firms.
NEXT GENERATION
The most fascinating of the recent bou-
tique launches is that of MJ Hudson,
which is being funded by private equity
money and will work with hedge funds.
It will take advantage of the Alternative
judges said, was to have faith in a sys-
tem that is “sophisticated in detecting
and dealing with dishonest disclosure”
and which ensures that “assets are now
daily uncovered in the family courts
despite the most ingenious efforts of
their owners to cover them up”.
Leaving to one side that this will see
many more families having to litigate
to fully contested final hearings, the
fundamental difficulty is that the
receiving party will often have no per-
sonal knowledge of the existence of
assets that have been salted away.
Regardless of how sophisticated the
courts may be, in the absence of a paper
trail leading to the pot of gold, for
judges to make findings that assets
have been hidden seems a stretch.
Without those findings, tracing assets
and enforcing the resulting court
orders will be nigh on impossible.
Finally, and most controversially,
there is seize, freeze and squeeze.
Applying for and carrying out orders
to search and seize is no mean feat; even
satisfying the evidential burden neces-
23
Business Structures allowed by the Legal
Services Act, and instead of charging its
clients a flat fee for its services, or an
hourly rate, it will instead take a cut of
their profits.
It will, it says, “share in its clients’ risks
by charging a percentage of a successful
fund or transaction”. In addition, the firm
“can further align its fees with its clients’
returns, by investing equity in their funds
and transactions”, “retaining earnings,
paying dividends and attracting external
capital from clients and others.” The firm
says that the LSA will change the model of
the law firm from a “cash flow” one to “an
annuity-based and deeper relationship
with clients”.
As the LSA comes on line, lawyers are
sure to see the opportunities that the new
liberal legal market offers them, and
clients are sure to encourage them. A
deeper partnership with your lawyer is
surely a way of reducing risk. The legal
gene-pool is about to get stirred up.
sary to obtain such an order will general-
ly require the prior engagement of inves-
tigators and forensic accountants. Add to
this the emotional burden for families
and the process becomes extraordinarily
complex and distressing.
SCENE SETTING
Picture the scene. The suspected non-
discloser answers a knock on the door
of the family home. Enter stage left a
battery of lawyers and IT experts armed
with raid boxes. Exit stage right any last
vestiges of civility.
True, such orders are frequently
made in commercial disputes, but the
breakdown of a marriage (particularly
where there are children involved) gives
rise to radically different issues.
The potential for calamity is huge as
family lawyers across the country are
going to have to navigate this new legal
terrain. Co-ordinating forensic, legal
and IT expertise will require a specific
skill set new to many law firms. This is
not the murky world of corporate espi-
onage: this is people’s lives.
 Lifestyle
24 CITYA.M. 11 AUGUST 2010

| Motoring WORDS BY
RYAN BORROFF

A car with a
very high iQ

Toyota’s tiny little dwellers like us. My 1.0 litre VVTi three-
cylinder engine iQ was never going to set
The new iQ is perfect
for city living.
to cruise along at 80mph or so on the M2
without making me feel worried that I
them is a six-foot rugby player then just
slide the front passenger seat forward as
newcomer feels a lot the road alight with its acceleration, and
was never going to be a first choice for a
was going to be blown into the central
reservation by a lorry. This wasn’t how I
there’s space in the footwell to allow for
just this scenario.
bigger than it looks two week family holiday, but for what it is,
I found the iQ to be a remarkably comfort-
felt the first time I drove a smart car.
Somehow you do not feel vulnerable in
Toyota may have set out to create the
perfect city car in the iQ. It didn’t. The
able companion. the iQ, despite it being so small. I lost main problem is expense, it is more than
Inside, the iQ has been cleverly max- count of the number of times I looked £10,000 for a basic model. But Toyota will

M
OST motorists can appreciate
that there’s something outra-
geous about one person com-
muting to the City in a car
designed to carry at least four grown ups
in it. Whichever way you look at it, it’s inef-
ficient, even wasteful. Yet so-called City
cars can be disappointing. They either
don’t have any flexibility so they are just
too damned small, or they are actually
barely any smaller and economical than
the bigger cars they are supposed to
replace.
Toyota’s iQ has been around for a while
and has attracted something of a cult fol-
lowing. A week into living with the car and
I was shocked by the fondness I developed
for it. We live in the centre of town so we
are used to compromising in terms of the
manner in which we move from place to
place. We’re the kind of people that actual-
ly find travelling with as little stuff as pos-
sible thrilling – no small challenge with a
baby – rather than packing everything just
in case, so in a sense iQ was created for City
imised for space. It feels bigger and, essen- over my shoulder, and was surprised to keep a lot of people happy with its new
tially, is bigger than expected. Despite see the rear screen less than a metre away. tot. It’s more fuel-efficient than the four-
being less than 3m long and only 1.7m Clever attention to detail has max- seater eco Fiat Panda and its cooler, but
wide, the interior feels similar in size to a imised space in the iQ. Everything from not as fuel-efficient, as the Smart ForTwo
car in the segment above. This means you the engine and the slim seats to the flat CDI. As a primary car it may be too much
genuinely don’t feel cramped and on the under-floor fuel tank has been artfully to compromise but as a secondary car it’s
road – particularly the motorway – the crafted to shear centimetres off the size. compelling. Oh, and a surprising amount
effect is that the iQ feels like a far bigger It’s designed so that there’s never three of fun too.
car. dials when one will do. Hence there’s just
Sure, with this engine it’s not particu- one dial for the temperature, air con and
larly powerful, but the car was easily able mode in the centre of the dash. THE FACTS:
The seating arrangement is pure logic – TOYOTA IQ2, 1.0 LITRE
two adults can sit comfortably with a cav-
ernous 238 litres-worth of boot space PRICE: £10,995 (not including options)
behind them – to you and me that’s more 0-62MPH: 14.7secs
or less room for a buggy, some bedding TOP SPEED: 93mph
plants, two overnight bags and a three- CO2 G/KM: 99g/km
quarter length mirror. Pick up your pals MPG COMBINED: 65.9mpg
and they can just flip down one or two of
the ultra-slim rear seats. You wouldn’t
want to drive your three best mates to Le THE VERDICT:
Mans in it – and anyway you wouldn’t fit DESIGN hhhhi
your tent into the 30-odd litres of boot PERFORMANCE hhhii
space that would leave you – but for an PRACTICALITY hhhii
across-town trip it’s just perfect. If one of VALUE FOR MONEY hhiii

CAR TALK BY RYAN BORROFF

The facts:
you can afford a Mercedes
The figures:
mercedes-benz.co.uk/offers
For more information on our tailor-made
packages or to book a test drive, visit us online.
NISSAN’S BRAVE NEW WORLD
UK order books for Nissan's LEAF car open on 1 Sep. The
LEAF – which stands for Leading, Environmentally friendly,
Affordable, Family car – has a top speed of 87mph and a
range of 100 miles and should cost £23,990. The price
includes VAT at 20 per cent, as well as the government’s
£5,000 ultra low carbon vehicle incentive. If you're quick
you can reserve a LEAF, the first zero emission all-elec-
tric family car at www.nissan.co.uk/leaf.
VOLVO HEADS EAST
Volvo has just been sold by Ford to its new Chinese
owner, Zhejiang Geely Holding Group Co. for
USD$1.8bn. The Chinese group is one of the fastest-
growing car manufacturers in China and plans to
expand Volvo in China and other emerging markets. At
the helm as new President and CEO will be Stefan
Jacoby, currently the Chief Executive of Volkswagen
Group of America.
FIAT 500 GOES FERRARI
Is your Ferrari too impractical for everyday use? Fiat
has come up with the perfect solution, the
limited edition Abarth 695 Tributo. It boasts Ferrari-
inspired livery, carbon wing mirrors, 0-62mph
in seven seconds and a top speed of 140mph, with the
benefit of swigging just 43.3mpg. Only 152 of
these £29,600 bundles of fun will be available in
the UK.
CITYA.M. 11 AUGUST 2010 Lifestyle | TV& Games 25

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL FIVE

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm Penguin Island;
BBC News
8pm Celebrity MasterChef
9pm The Secret Tourist
10pm BBC News
10.25pm Regional News
10.35pm The National Lottery
Draws
10.45pm A Question of Sport:
Uncensored 11.15pm The League
Cup Show; National Lottery Update
12.20am Sign Zone: Country Tracks
1.15am Sign Zone: My Life 1.45am
Sign Zone: Dragons’ Den 2.45am
Sign Zone: DIY SOS 3.15am Sign
Zone: Put Your Money Where Your
Mouth Is 4am-6am BBC News
6pm Eggheads: Quiz show.
6.30pm Restoration Roadshow
7pm CHOICE This World:
Stolen Brides: The kidnapping
of young women in Chechnya,
Russia.
8pm Coast: The Atlantic shore
of Ireland’s north-west coast.
9pm The Normans: The impact
of the conquest of Britain and
Ireland.
10pm QI: With Jeremy
Clarkson, Vic Reeves and Clive
Anderson.
10.30pm Newsnight: Weather
11.20pm Domesday
12.20am Home Movie
Roadshow Uncut
1.20am BBC News 4am-6am Close
6pm London Tonight
6.30pm ITV News
7pm Emmerdale: Alicia turns
up and tells Leyla to stay away
from their mother’s funeral.
7.30pm CHOICE Live
International Football: England
v Hungary (Kick-off 8.00pm).
10.10pm ITV News
10.40pm London News
10.45pm International Football
Highlights: England v Hungary.
11.45pm iTunes Festival
Highlights 2010
12.40am The Zone: Shopping
and interactive gaming; ITV
News Headlines
2.40am The Jeremy Kyle Show
3.35am-5.30am ITV Nightscreen
TV PICK
6pm The Simpsons 6pm The Boss Is Coming to
6.30pm Hollyoaks Dinner
7pm Channel 4 News 6.25pm Don’t Stop Believers
7.55pm 4thought.tv 6.30pm Live from Studio Five
8pm How to Look Good Naked 7pm Five News at 7
9pm Four Sons Versus Four 7.30pm Escape from A Bridge
Daughters Too Far; Five News Update
10pm Big Brother 8pm Emergency Bikers; Five
11.10pm CHOICE School of News at 9
Comedy 9pm NCIS
11.40pm My Name Is Earl 10pm Law & Order: Criminal THIS WORLD: STOLEN BRIDES
12.10am My Name Is Earl Intent BBC2, 7.00PM
10.55pm Don’t Stop Believers Lucy Ash travels to Chechnya in Russia
12.35am Music on 4: The 11pm K-Ville 12am Poker: The Big
Album Chart Show Spotlight to investigate why many young women
Game IV. 1am SuperCasino 4am
12.50am Music on 4: The Crush The Boss Is Coming to Dinner
are being kidnapped and made to
1.15am Big Brother: Live 4.10am 4.25am Wildlife SOS 4.50am Rough marry men they have never met before.
Beach Volleyball 5am Relentless Guide to Short Breaks 5.05am The
Wakestock 2010 5.30am-6.15am New Tomorrow 5.30am-6am
Countdown Michaela’s Wild Challenge

SKY SPORTS 1 Fighting 3am Poker 4am-5am LIVING E4 DISCOVERY HOME &
SATELLITE & CABLE

7pm Football’s Greatest
7.30pm Live International
Football 10pm You’re on Sky
Sports! 11.30pm FIFA Futbol
Mundial 12am International
Football 2.30am FIFA Futbol
Mundial 3am International
Football 5.30am-6am FIFA
Futbol Mundial
SKY SPORTS 2
6.30pm Golf 7.30pm Live
International Football 10pm
Golf 11pm Champions Tour
Golf 12am Golfing World 1am
European Tour Weekly 1.30am
Inside the PGA Tour 2am Golf
3am Champions Tour Golf
4am-5am Max Power
SKY SPORTS 3
4.30pm Live ECB 40 League
Cricket. Yorkshire Carnegie v
Gloucestershire Gladiators.
10pm Cage Fighting 11.30pm
Watersports World 12.30am
Transworld Sport 1.30am Cage
Watersports World
BRITISH EUROSPORT
6.20pm Show Jumping
8.20pm Riders Club 8.25pm
US Tour Golf 9.25pm Ladies
European Tour Golf 9.35pm
Golf Club 9.40pm Yacht Club
9.45pm Wednesday Selection
10pm International Football
10.45pm euroCRASH! 11pm
European Aquatics
Championships: Pool Talk
11.15pm Swimming 12.15am-
12.30am European Aquatics
Championships: Pool Talk
ESPN
7pm Live International Football
9pm ESPN Kicks 9.15pm
International Football 11pm
DTM Review Show 12am ESPN
Game of the Week 12.30am
Live Major League Soccer
2.30am Press Pass 2010 3am
Eredivisie Review Show 4am-
5am DTM Review Show
7pm Four Weddings 8pm Four
Weddings US 9pm Ghost
Whisperer 10pm Medium
11pm Criminal Minds 12am
CSI: Crime Scene Investigation
1am Charmed 3am Passport
Patrol 3.50am The Jerry
Springer Show 4.40am Maury
5.30am-6am Home Shopping
BBC THREE
7pm Doctor Who 7.45pm
Doctor Who Confidential 8pm
FILM Lara Croft: Tomb Raider
– The Cradle of Life 2003.
9.50pm Small Teen, Big World.
A teenager living with a form of
dwarfism. 10.50pm Family Guy.
Meg’s first kiss is broadcast on
TV. 11.35pm American Dad!
12.20am Mongrels 12.50am
Inn Mates 1.20am Small Teen,
Big World 2.20am The Blind
Me 3.20am Mongrels 3.50am
Inn Mates 4.20am-5.20am
Tulisa – My Mum and Me
7pm Hollyoaks 7.30pm Friends HEALTH
9pm Ugly Betty 10pm FILM
My Best Friend’s Wedding 1997.
7pm Extreme Pregnancy 8pm
10 Years Younger 9pm
12.05am-6am Big Brother: Live Hospital Sydney 10pm Untold
Stories of the ER 11pm The LIVE INTERNATIONAL FOOTBALL
HISTORY Trauma Team 12am Hospital
7pm Conquistadors 8pm How ITV1, 7.30PM
Sydney 1am Untold Stories of
London Was Built 10pm England v Hungary (Kick-off 8.00pm).
Victorians Uncovered 11pm the ER 2am The Trauma Team Coverage from Wembley Stadium,
Marked 12am How London Was 3am 10 Years Younger 4am where the hosts play their first match
Built 2am Conquistadors 3am Extreme Pregnancy 5am-6am since their World Cup exit.
The Roman Empire in the First Bringing Home Baby
Century 4am-5am The Universe
SKY1
DISCOVERY 8pm My Pet Shame: A micro
8pm How Do They Do It? pig with bad breath. 9pm Must
8.30pm How It’s Made 9pm Be the Music: Countdown
Violent Nation 10pm Manhunt: 10pm FILM American Pie
Search for a Killer 11pm Time 1999. Coming-of-age comedy,
Warp 12am Deadliest Catch with Jason Biggs. 11.50pm The
1am Bear Grylls: Born Survivor Real A&E 12.20am Road Wars
2am More Industrial 1.20am Real Filth Fighters SCHOOL OF COMEDY
Revelations Europe 3am 1.50am Oops TV 2.40am Road CHANNEL4, 11.10PM
Weaponology 3.50am Swamp Wars 3.30am The 4400 New series. Teenage comic actors,
Loggers 4.40am Days That 4.20am Project Runway including Son of Rambow star Will
Shook the World 5.30am-6am 5.10am-6am Are You Smarter Poulter, present their take on the
How Does That Work? Than a 10 Year Old? adult world.

COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk

QUICK CROSSWORD
   

SUDOKU KAKURO
4 33 8 7 22 28 
9 5 10
17   
12 8 21
Place the numbers from 1 to 9 in each empty cell so that each 14 16  
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 10 10
20 32
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 13 35
  
above or to the left of it. 15
16 13  
You can only use the digits 1-9
   and you must not use the
37 27 19
45   
same digit twice in a block.
   The same digit may occur 11 13  
9 29 9
   more than once in a row or
column, but it must be in a
34
18
17
  

   separate block. 12
10
22
15
16 17 7
    16 6 11
 

   ACROSS DOWN
1 Assembly of witches (5) 1 Go bad or sour (6)
  
   WORDWHEEL I N
3 Fruit with aromatic pulp
and a large seed (5)
7 Automatic response (6)
2
4
5
Slippery fish (3)
Cockeyed (5)
Was in debt to (4)
Using only the letters in the Wordwheel, you have
   ten minutes to find as many words as possible,
D G 9 Hardy cabbage with 6 High-spirited (9)
coarse curly leaves (4) 8 Distress signal (5)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters D 10 Application (3)
12 Incline (4)
11 Posed for artistic

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
S E 13 Humorously vulgar (5) 14
purposes (3)
City in the United
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
O A 15 Caress gently (3)
17 Prevent from
Arab Emirates on
the Persian Gulf (5)
QUICK CROSSWORD entering (5) 15 Equality (3)
SUDOKU
6 2 7 9 7 4
2 4 3 5 1 1 3 2         
19 Gifted, competent (4) 16 Put trust in, with
$ 1 . / ( ' ( 6 . 6
7 , , , /
1 7 6 7 8 9          21 Epoch, age (3) confidence (4,2)
/ 2 % % < ' 8 1 & ( 8 9 8 3 2 8 3
         22 Steep rugged rock 18 Started (5)
8 7 9 2 4 5 6 1
$ (
6 3 $ 5 5
&
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1 5 5 9
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5 ( 6 7 5
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5 3 9 6 8 1 2
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WORDWHEEL         
25 Hard black wood (5)
Piece of advice (3)
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/ ( $ ' 6 7 + , 1 * 2 1 3 5 2 6 The nine-letter word 26 Country on the Iberian
5 4 3 7 5 9 6 8         
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6 $ ' / <
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was DOODLEBUG         
Peninsula (5)
 Sport
26 CITYA.M. 11 AUGUST 2010

Results
Att: 3,292
CARLING CUP FIRST ROUND
Aldershot.....................(0) 0 Watford...............................(2) 3
Graham 14, 48, Sordell 45
Barnsley........................(0) 0 Rochdale.............................(0) 1
Early Warn-ing for Rangers
as Vale wreck dream start
Att: 4,107 Elding 56
Bradford........................(0) 2 Nottm For ...........................(1) 1
Syers 57 Thornhill 35
Hanson 100 Att: 5,175
AET: Score after 90 mins 1-1.
Brentford......................(2) 2 Cheltenham......................(0) 1
Simpson 31 Jeffers 61
Woodman 35 Att: 2,049
Carlisle...........................(0) 0 Huddersfld........................(0) 1
Att: 3,475 Rhodes 89
Chesterfield ...............(0) 1 Middlesbrough ..............(2) 2
Mattis 68 McDonald 8
Att: 6,509
Barker 45 (og)
Arca 33
Crewe...............................(1) 1 Derby ....................................(0) 0
Att: 3,778
QPR 1
Doncaster ....................(0) 1 Accrington Stanley....(0) 2
Payne 47
Att: 4,603
AET: Score after 90 mins 1-1.
Turner 83
Lindfield 93 PORT VALE 3
Exeter .............................(0) 2 Ipswich...............................(0) 3
Harley 54, 81 Murray 63
▲

Att: 4,520 Norris 73, 99 CARLING CUP FOOTBALL

AET: Score after 90 mins 2-2. BY JON COUCH
Hereford........................(0) 0 Colchester.........................(2) 3
Att: 1,996 Mooney 40, 44, Henderson 65 QUEENS PARK RANGERS were
Leeds................................(3) 4 Lincoln City ......................(0) 0
Howson 2, Becchio 7 brought back down to earth with a
Sam 30, Kilkenny 71 (pen) Att: 12,602 bump following last night after they
Leicester........................(1) 4 Macclesfield.....................(1) 3 crashed out of the Carling Cup to Port
Neilson 35, Fryatt 47, 51 Brown 15, Mukendi 64
Wellens 70 Daniel 83 Vale.
Att: 6,142 Neil Warnock’s men enjoyed a
Milton Keynes Dons(0) 2 Dag & Red...........................(1) 1 dream start to the new league cam-
Ibehre 56, 79 McCrory 13
Att: 3,502 paign with a thumping 4-0 opening
Morecambe.................(1) 2 Coventry ............................(0) 0 day victory over Barnsley at Loftus
Fleming 45, 61 Att: 4,002
Northampton.............(2) 2 Brighton..............................(0) 0 Road on Saturday.
Jacobs 13, Mckay 18 Att: 2,431 But a near full-strength team suc-
Norwich.........................(2) 4 Gillingham..........................(1) 1 cumbed to the League One Valiants
C Martin 26, 90 Palmer 12
Holt 32, 55 Att: 13,068 who cruised into a 3-0 lead through
Oxford Utd...................(4) 6 Bristol Rovers..................(1) 1 Marc Richards’s brace and a goal from
Heslop 18, 90, Green 23 Lines 24 Sean Rigg, before substitute Antonio
Constable 27, 52, Midson 29 Att: 5,008
Peterboro.....................(2) 4 Rotherham.........................(1) 1 German replied for the R’s.
Bennett 34, Boyd 39 Marshall 9 But Rangers weren’t the only
Mclean 60, Mackail-Smith 85 Att: 4,145 Championship team to struggle on a
Plymouth......................(0) 0 Notts County...................(0) 1
Att: 5,454 Spicer 52 night of cup shocks.
QPR ...................................(0) 1 Port Vale.............................(2) 3 David James’ Bristol City twice let
German 62 J Richards 30, 48
Att: 6,619 Rigg 36 slip a lead as they went down 3-2 at Boss Neil Warnock and coach Keith Curle look bemused as QPR crash out of the Carling Cup to Port Vale. Picture: ACTION IMAGES
Scunthorpe.................(0) 2 Oldham.................................(1) 1 cash-strapped League Two side
Forte 65 Bembo-Leta 23 Southend, while last season’s play-off while Doncaster were humbled 2-1 at wins over Wycombe, Cheltenham and control before Jake Robinson, Danny
Woolford 83 Att: 2,602
Sheff Wed....................(0) 1 Bury.......................................(0) 0 semi-finalists Nottingham Forest also home by Accrington Stanley. Swindon respectively. O’Donnell, Matt Harrold and a Yado
Coke 60 Att: 7,390 squandered a lead to League Two A last-minute winner from Alan Lee Charlton, meanwhile, let slip a 3-0 Mambo own goal completed an
Shrewsbury................(2) 4 Charlton..............................(3) 3 opposition, going down 2-1 at League helped George Burley’s Crystal Palace lead to crash 4-3 in a thriller at unlikely comeback.
Robinson 36, Mambo 42 (og) Abbott 25, 28
O’Donnell 61, Harrold 76 Martin 32 Two Bradford. to a 1-0 win at Yeovil, while Millwall, Shrewsbury. Dagenham & Redbridge went
Att: 3,700 Barnsley suffered a 1-0 home defeat Brentford and Leyton Orient were also Two goals from Pawel Abbott and a down 2-1 at Milton Keynes Dons,
Southamptn...............(0) 2 Bournemouth .................(0) 0 by Rochdale, Derby lost 1-0 at Crewe left flying the capital flag with 2-1 Lee Martin strike put the Addicks in while Barnet lost 3-0 at Swansea.
Lallana 63
Oxlade-Chamberlain 86 Att: 17,135
Southend.......................(1) 3 Bristol City ........................(1) 2

Carvalho heads to Madrid in €8m deal

Paterson 31 (pen), 104 McAllister 2
Corr 88 Sproule 82
AET: Score after 90 mins 2-2. Att: 2,940
Stockport.....................(0) 0 Preston.................................(1) 5
Davidson 45 (pen), James 58
Att: 3,724 Hayes 67 (pen), 73, King 89
Swansea ........................(1) 3 Barnet..................................(0) 0
Van der Gun 24, Pratley 72
Kuqi 88 Att: 6,644
Swindon.........................(1) 1 Leyton Orient..................(0) 2
McGovern 35 Jarvis 67 Carvalho first followed Mourinho Football Club can confirm it has last season, but finally got his man
▲

Att: 4,450 Revell 72 FOOTBALL

to Chelsea from FC Porto in a agreed terms with Real Madrid for yesterday after admitting he was one
Walsall ...........................(0) 0 Tranmere ............................(1) 1 BY JON COUCH £19.85m transfer in 2004. the transfer of Ricardo Carvalho. defender short on returning from
Att: 2,253 Goodison 40
Wycombe.....................(0) 1 Millwall................................(1) 1 CHELSEA defender Ricardo Carvalho He soon became a firm favourite “The transfer is subject to a med- the club’s pre-season tour of the
Strevens 76 Harris 26
Att: 3,028 Dunne 105 will link up with former boss Jose with the Stamford Bridge crowd, ical and the player agreeing personal United States.
AET: Score after 90 mins 1-1. Mourinho at Real Madrid for a third forming a solid defensive partner- terms. Carvalho recently told a Spanish
Yeovil...............................(0) 0 Crystal Palace ................(0) 1 time today after the two clubs agreed ship with captain John Terry and “Chelsea would like to thank Riccy newspaper he would love a move to
Att: 3,720 Lee 90
a fee of around €8m (£6.7m). helping the club to three Premier for his six years of service, and we the Bernabeu, saying: “If there was a
The 32-year-old Portuguese centre- League titles, three FA Cups and two wish him well in his future career.” possibility to sign with Real Madrid,
SPORTS EDITOR JON COUCH half will join the Spanish giants on a League Cups. Mourinho almost re-signed I would go there right now, swim-
email sport@cityam.com two-year deal. A Chelsea statement read: “Chelsea Carvalho while boss of Inter Milan ming or running.”.

Sprint star Bolt to sit out rest of the SPORT | IN BRIEF

season with recurring back injury Simmonds leads British 1-2

SWIMMING: Lizzie Simmonds led
Britain to a one-two finish in the 200m
backstroke at the European
Championships in Budapest yesterday.
The London club will return to
Wembley for both their Heineken Cup
match against Leinster on 16 October
and their Aviva Premiership clash with
Wasps on Boxing day.
Gemma Spofforth took silver as Chairman Nigel Wray said: “We are
week when he was comfortably beat- have treatment before resting ahead Simmonds, the world No1 at 200m this delighted and we look forward to two
▲

ATHLETICS
en by Tyson Gay at Stockholm’s of next year. year, sealed gold in a time of two min- more fantastic occasions.”
BY MARTIN CAPARROTTA Diamond League meeting. “I am very disappointed to miss utes 7.04 seconds.
SPRINT superstar Usain Bolt has con- And Bolt acknowledged he needs two of the top meetings on the cir- Earlier in the day, Britain’s Liam Ex-world champ found dead
firmed he will not race again this to be in peak physical shape for next cuit, but trust that it is better for me Tancock battled to bronze in the 100m ATHLETICS: Former 400m world cham-
year after doctors advised him to rest year’s world championships and the not to take any risks this year,” added backstroke. pion Antonio Pettigrew was found dead
up following an injury to his lower London Olympics in 2012. Bolt. “I would like to thank everyone With two golds, two silvers and a yesterday.
back. “Both 2011 and 2012 are very for their support and look forward to bronze, Britain lie second, behind France, Pettigrew, 42, captured the world title
The Jamaican double world record important championship years and I coming back stronger next year.” in the medal table. in 1991 and also formed part of the US
holder was told tightness in his back hope to be back fully fit and healthy,” Agent Ricky Simms said the sprint- 4x400m relay team who were stripped
was “restricting his ability to generate said the 100m and 200m world record er was taking a longer-term view on Saracens set Wembley dates of their 2000 Olympics gold medal after
power in his stride” by a medical holder. the injury. “With a view to his future RUGBY UNION: Saracens will play at he admitted doping.
team in Germany. Bolt was scheduled to run at fur- career we believe further treatment Wembley again this season with two of He was found dead at the University of
The 23-year-old suffered his first ther Diamond League meetings in to loosen his back followed by rest their fixtures set to be held at the nation- North Carolina (UNC), where he had been
100m final defeat in two years last Zurich and Brussels, but will now will be in his best interest,” he said. al football stadium. working as a coach for the last four years.
CITYA.M. 11 AUGUST 2010 Sport 27

Revitalised Woods plans not

to fall back on Pavin wild card
But as he goes in search of his 15th won't be a pick. I would like to be able
▲

GOLF
BY JON COUCH
TIGER WOODS says he will play in the
Ryder Cup – if he is offered a wild
card by USA captain Corey Pavin.
The world No1 questioned if he
wanted to play on the American team
at Celtic Manor in October after card-
ing a career-worst 18 over par total at
the WGC-Bridgestone Invitational in
Akon at the weekend.
Major title at the USPGA
Championship at Whistling Straits,
starting tomorrow, the mindset has
suddenly changed.
Woods lies 10th on the American
points list – just outside the eight
automatic places – and is looking for
a high place finish in Wisconsin to
take the matter out of Pavin’s hands.
Asked if he would accept a captain’s
pick, Woods replied: “Yes. Hopefully I
to play myself onto that team.”
Indeed, Woods insists he can recov-
er from his poor form last week and
launch a bid for a fourth USPGA title
at Wisconsin this weekend.
“One of the great things about this
sport is that no matter how poorly or
how well you play the week before, it
all begins anew,” he said. “We all have
a chance this week and hopefully I
can get it done.” Woods is in buoyant mood ahead of this week’s US PGA Championship. Picture: GETTY

I back Cook
to come good, POLO
INVITATIONAL
insists Flower CVs INFANTRY
HAC
AC
game and might tinker with a couple
▲

CRICKET
BY JON COUCH
ENGLAND team boss Andy Flower is
backing under-fire Alastair Cook to
bat his way out of the firing line in
next week’s third Test with Pakistan.
Vice-captain Cook has averaged just
14 with the bat in four Tests this sum-
mer with a highest score of just 29.
His form has been the only blip in
an otherwise dream summer so far for
England, who cruised into a 2-0 series
lead over Pakistan with a nine-wicket
win at Edgbaston on Monday.
Now, Flower is backing the
Essex batsman to come good in
time to make the
trip Down Under to
face Australia in the
Ashes this winter.
“He has had a
hard time just
recently but all
players will go
through these hard
things over the next few days.
“I’m sure he’ll come good – he’s got
a very good record, he’s only 25 years
old and has a lot of experience now. I
expect him to come good.”
Flower has also leapt to the defence
of Stuart Broad, whose discipline has
been brought into question following
a latest act of petulance at Edgbaston.
The seamer was fined 50 per cent
of his match fee for “throwing the
ball inappropriately” at Zulqarnain
Haider during the third day.
But Flower denies Broad has a bad
attitude and insists he has learned
from the experience.
“I think Stuart Broad’s attitude
is excellent,” he added “He’s com-
bative, aggressive and is a very fine
cricketer.
“He is a confident cricketer
and adds a lot to our side by
doing so. You want people like
him in your side. If you’re talk-
ing about that specific incident, istockphoto.com artist: isaxar.


 +!

times at certain points in he knows he overstepped the
their career,” Flower said. mark and that’s why he
“He is working hard at his accepted the penalty.”

% '$' $,
"!%'&  


Hampshire deliver a right + (&  
"#+* /
!"$)& /
&) 0* ' )
Royal snub to Pietersen ,)!* &$"&
...-&+$(!&+'%!('$'"&-"++"'&$ 
the club very proud. We would, there-
CRICKET
▲

fore, like to stand by them,” said )'* ' +' ! 

 &-'$&+ ,&
HAMPSHIRE have delivered one last
snub to Kevin Pietersen for the
Twenty20 Finals Day.
Pietersen, 30, has played just seven
first-class matches in six years at
Hampshire but has been made avail-
able by England to play in Saturday’s
Rose Bowl showpiece.
But after announcing he is to leave
the county at the end of the season to
spend more time with his family, the
big-hitting batsman has been left out
in the cold by the Royals.
“The players who have got the
Royals to this point have made their
county and everyone associated with
Hampshire chairman Rob
Bransgrove. “We wish Kevin and
England all the very best for the
future.”
Pietersen was magnanimous in
reply, announcing on his ‘Twitter’
feed: “I fully understand Hampshire’s
position in not selecting me for finals
day. “I wish them all the best on the
day. I will be watching the lads.”
England have also released Essex
opener Alastair Cook for the semi-
final with the Royals, and
Nottinghamshire duo Graeme Swann
and Stuart Broad for their clash with
Somerset.
 Sport
28
I would boo
too if I were
watching,
says Gerrard
ENGLAND
HUNGARY
ITV1, ko 8pm
▲
INTERNATIONAL FOOTBALL
BY JON COUCH
STAND-IN skipper Steven Gerrard has
admitted he too would boo England if
he were a fee-paying fan at Wembley
tonight.
Just weeks after leading England’s
dismal World Cup campaign in South
Africa, Gerrard is bracing himself for
an unsavoury reaction from a half-
full stadium for tonight’s friendly
with Hungary.
Gerrard once again takes the arm-
band from injured captain Rio
Ferdinand and yesterday followed the
lead of boss Fabio Capello in publicly
apologising for his side’s pitiful
World Cup performances.
And the 30-year-old knows his side
are in for a ride rough from a nation
still hurting from England’s humiliat-
ing 4-1 second-round exit to Germany.
“I probably would boo,” Gerrard
admitted. “We deserve it. We have to
take it on the chin because we let the
supporters down in the summer.
Hopefully in time we can show we are
a good team. We are desperate to make
the supporters happy in the future.”
Despite his honest admission,
Gerrard is keen to shield Capello’s
new guard from the baying fans and
allow them help kick-start a brand
Bradley hints he’s ready to replace O’Neill at Villa
▲
FOOTBALL
BY JON COUCH
USA coach Bob Bradley was installed
as favourite to become Aston Villa’s
new manager last night after admit-
ting his desire to coach in Europe.
Bradley has been linked with a
move to Villa Park after Martin
O’Neill stepped down as boss on
Monday amid reports of a falling out
with owner Randy Lerner over the
club’s transfer policy.
Lerner is now in the process of
drawing up a list of names to take
over the helm with sources indicating
new era for this England side.
Young Arsenal pair Jack Wilshere
and Kieran Gibbs are both in line for
their first run-outs for the Three
Lions, as is the more experienced
Bobby Zamora, who is expected to
start up front alongside Wayne
Rooney after Darren Bent pulled out
the squad with a back injury.
“Some of these young boys have to
learn quite fast,” said Gerrard. “We
have all been in that situation when
you are young and get thrown in at
the deep end. The important thing is
that the supporters don’t drag these
young fresh faces into the booing.
“If that is what they decide to do it
is important they give it to the players
who went to the World Cup.”
Naturally, Capello hasn’t escaped
criticism either for England’s World
Cup display and has in turn endured
an embarrassing week following the
retirements of Paul Robinson and
Wes Brown.
But Gerrard insists both he and the
rest of the squad have faith in the
manager and insists he should not be
chastised for what happened in South
Africa.
“I have got big faith in this manag-
er,” he said. “It would be stupid and
naive not to still have confidence in
him. In these situations, you cannot
shift all the blame towards the man-
ager. The players have to share it.
“It was obvious to everyone that it
didn't work out at the World Cup, so
we have to listen to the man who has
the experience in those situations
and follow his lead.”
he would like a successor to O’Neill in
place before Villa’s second Premier
League clash of the new campaign, at
Newcastle, on 22 August.
It has been suggested that Lerner
may feel happier with a fellow
American in Bradley alongside him,
but he faces competition from former
England boss Sven-Goran Eriksson,
who is also believed to be keen on a
return to the Premier League.
Bradley, inset, is currently prepar-
ing for USA’s friendly against Brazil
this week, but says he is keeping his
options open with his current con-
tract expiring at the end of the year.
“I’M SURE HE’LL
COME GOOD”
ENGLAND COACH
FLOWER BACKS
UNDER-FIRE COOK: P27
Gerrard leads England out tonight as stand-in skipper.
Joe Cole: Better than Messi
STEVEN GERRARD reckons his new
Liverpool team-mate Joe Cole is even
better than Lionel Messi.
Cole, 28, was a bit-part player in
England’s World Cup campaign and
has been left out of the squad for
tonight’s friendly with Hungary.
But Gerrard, who was a key figure in
persuading Cole to make the switch
from Chelsea this summer, believes the
“I have said over and over as well
that I am always excited about new
and different challenges,” he said.
“Certainly coaching in Europe at
some point is something that I would
love to do.”
Sources close to Eriksson, mean-
while, say the Swede would welcome
the chance of working in England
again after enjoying a one-year spell
in charge of Manchester City in 2008.
A spokesman said: “Of course, Sven
would be interested in this job. He has
always said that he would like to go
back into the Premier League. It is a
big target for him.”
Picture: ACTION IMAGES
playmaker is as good as anyone in the
world when it comes to technical ability.
“Messi can do some amazing things,
but anything he can do Joe can do as
well, if not better,” he said.
“He used to shock us in training by
doing footy tricks with a golf ball that
most players can't even do with a foot-
ball. I really fancy Joe for the [player
of the year] award this season.”
His representative Athole Still,
however, says there had been no con-
tact from Lerner.
“Sven gets associated with a lot of
big jobs but, as we speak, there has
been no contact from Aston Villa.”
O’Neill walked out of his four-year
reign at Villa Park after reportedly los-
ing patience of the club’s sell-to-buy
policy and, in particular, his frustra-
tion at the imminent exit of James
Milner to Manchester City.
But Lerner’s right-hand man,
General Charles Krulak, hit out at the
Ulsterman’s decision to quit last
night, saying he was given full finan-
CITYA.M. 11 AUGUST 2010
Capello calls
up rookie
keeper pair
for Foster
▲
INTERNATIONAL FOOTBALL
BY MARTIN CAPARROTTA
FABIO CAPELLO last night called
upon two players with no Premier
League experience to solve a fresh
goalkeeping crisis.
The Italian was forced to dig deep
into his resources after goalkeeper
Ben Foster withdrew from the squad
after suffering a back injury in train-
ing.
With Paul Robinson announcing
his international retirement on
Sunday, it left Joe Hart as the only
goalkeeper in the squad.
So, Capello acted quickly in calling
up Under-21 pair Scott Loach and
Frankie Fielding to the senior ranks.
In a huge statement of intent,
Capello showed no mercy on World
Cup pair David James and Robert
Green, and also the likes of Scott
Carson and Chris Kirkland, who are
looking to force their way back into
the international arena.
Watford stopper Loach, 22, has just
two seasons of Championship action
under his belt, but has impressed the
England hierarchy in his 12 appear-
ances for the U-21s.
Similarly, Blackburn youngster
Fielding, also 22, is yet to make a first-
team appearance for Rovers and has
only experienced senior football in
loan spells at Wycombe,
Northampton and Rochdale.
Both keepers are likely just to come
along for the ride tonight, but one
man expected to make his England
bow tonight is Fulham striker Bobby
Zamora, who is being tipped to make
a first England start at the age of 29.
“I am lost for words,” said Zamora,
who scored 21 goals for the Cottagers
last season.
“I’m extremely proud to be called
up to play for my country. I’m going
to try to enjoy it all.”
cial backing from the owner during
his tenure. “I can promise everyone
that he knew and understood the
long-range plans for the club and
bought into them,” Krulak said.
“He knew full well about the need
to bring wages in line with revenue –
the same as every Premiership club.
He was absolutely supported by the
owner during his time with the club.
All one needs to do is look at the
money spent.
“The reality is that the wage-to-rev-
enue issue was not addressed and
Martin apparently was unwilling to
help address it. He quit.”