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Issue 1,270 Wednesday 24 November 2010 www.cityam.com FREE

FIRST IRELAND,
THEN NORTH KOREA...
WHAT NEXT?
WORLD ECONOMY
▲

BY JULIET SAMUEL AND STEVE DINNEEN

THE THREAT of all out war between
North and South Korea fanned
flames caused by another day of
political upheaval in Ireland yester-
day, sending markets tumbling.
As markets plunged for a third
successive session, the EU and IMF
last night agreed to extend €85bn in
emergency loans to Ireland ahead of
the publication of its four-year aus-
terity plan today – a precondition
for the financing – in a last-ditch
desperate attempt to prevent the
carnage spreading to Portugal and
Spain.
The rescue package, the details of
which are still being finalised, is
expected to see the level of core tier
one capital – a key indication of
financial health – in the Irish banks
ramped up to 12 per cent from eight
per cent in a bid to bolster confi-
dence in the financial system, and
provide a bigger buffer against
potential future losses.
Bank of Ireland and Allied Irish
Bank will effectively be nationalised
by the move, as the government
injects the additional funds by buy-
ing new shares in them.
The rescue package means no sig-
nificant lender in the Republic will
now be free of state control, with
Bank of Ireland, currently 36 per
cent owned by the government,
now set to be majority owned.
Investors, however, remain wor-
ried the bailout could be jeopar-
dised by the uncertainty in
government. A key vote on the aus-
terity budget – a vital precondition
of the rescue package – is far from
guaranteed, with MPs threatening
to vote it down on 7 December
unless Prime Minister Brian Cowen
falls on his sword.
Some economists yesterday said
that even if Ireland can pass the
necessary austerity measures it may
not avoid defaulting further down
the line.
Ben May of Capital Economics
said that the toxic combination of
spiralling debt and sluggish growth
might mean that Ireland “may well Korean island, leaving
find the benefits of the defaulting two marines dead.
outweigh the costs”. The bombard-
George Magnus, an economist at ment, sparked by
UBS, added: “The [bailout] doesn’t anger in the
solve the problem of the solvency of north over a dis-
the banking system or the need for puted sea bor-
Ireland to restructure its debt... It just der, ranked
kicks the can down the road in the amongst the
same way as happened with Greece”. worst clashes
As the IMF called for calm, ten- between the
sions between North and South two sides
Korea boiled over, after Kim Jong Il since the
rained dozens of shells onto a South Korean war
From left: Protestors outside Irish parlia-
ment yesterday; Smoke rises from North
Korea’s artillery barrage on South Korea.
Below: North Korean leader Kim Jong II
almost 60 years ago.
Markets continued to tumble,
with the Eurostoxx 50 dropping 1.5
per cent to 2,745, the Irish ISEQ 20
index losing two per cent to close at
432, the Portuguese PSI dropping
1.3 per cent to close at 7,623 and the
FTSE 100 losing 1.75 per cent to
close at 5,581.3. Meanwhile, Irish 10-
year gilt yields jumped to 8.4 per
cent, Portuguese 10-year gilt yields
rose over 6.9 per cent and Spanish
10-year note yields topped 4.9 per
cent. The euro dropped from 85.3p
to 84p against sterling. A febrile day
on global exchanges was exacer-
bated when the US Federal
Reserve downgraded its
growth forecasts, casting
further doubt on the health
of the world’s largest econo-
my. The Dow Jones
Industrial Average
dropped 1.3 per cent to
11,036.31.
ALLISTER HEATH: P2;
IRELAND SPECIAL: P10-P11,
INVESTMENT: P21, P24

FTSE 100 t 5,581.28 -99.55 DOW t 11,036.37 -142.21 NASDAQ t 2,494.95 -37.07 £/$ t1.58 -0.02 £/¤ 1.18 +0.01 ¤/$ t 1.34 -0.02 Certified Distribution
04/10/10 - 31/10/10 is 110,406

“Increasingly, the common language of business

is the language of corporate finance.”
Ian Cooper, Professor of Finance

Corporate Finance Programme Portfolio

Daytime and evening formats available
Call +44 (0)20 7000 7051 or email finance@london.edu or visit www.london.edu/cf/ Analyse the complexities. Apply the knowledge.
 2 News
North Korea adds fuel to global fears
EDITOR’S LETTER
ALLISTER HEATH
AS if a sovereign debt crisis were not
enough, along comes North Korea, the
roguest of rogue states, and suddenly
it seems as if South East Asia could be
on the brink of war. North Korea is the
single most evil regime in the world, a
despotic, idiotic and inhumane com-
munist totalitarian state which has
reduced its people to a state of almost
complete misery. Nobody can predict
Pyongyang next move, which is why
there is now such nervousness; a
weakened President Obama is unlike-
ly to be able to do much so the ball is
in China’s court. Whether or not this
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WHAT THE OTHER PAPERS SAY THIS MORNING
CAMERON WOOS NORDIC NATIONS
David Cameron is to host a summit
with leaders of Nordic and Baltic
countries in January, an unusual
move which Downing Street billed as
an opportunity to exchange ideas on
issues such as the green economy,
social cohesion and gender equality.
Cameron’s spokeswoman insisted the
summit was not an attempt by
Britain to forge a new northern
alliance in the European Union of
predominantly liberal, atlanticist
countries, some of which have high
levels of euroscepticism.
CSC IN TALKS OVER £1.6BN PURCHASE
OF TRAFFORD CENTRE
Capital Shopping Centres is close to
agreeing the UK’s largest property
transaction with the purchase of the
£1.6bn Trafford Centre in a deal that
would make John Whittaker, the
northern billionaire, its largest share-
dispute is resolved in a sensible way –
and the maniacs in North Korea suit-
ably slapped down – will tell us a lot
about Beijing’s maturity as an emerg-
ing superpower.
Markets always underestimate
geopolitical risk; economists, analysts
and traders always seem to believe
that rationality will prevail. If only. So
yesterday’s events sent shivers down
everybody’s spine, especially given
that nobody believes Europe’s sover-
eign debt crisis to be over. The assump-
tion instead is that it has just started
and that the euro’s survival is now at
risk. Ireland’s government is teetering;
it remains unclear whether the deal
that has been agreed – an €85bn
bailout, with a plan of action to be
unveiled today – will ever even see the
light of day. At least Brian Cowen sur-
vived a motion of no confidence last
night. The Irish public and opposition
politicians may yet decide that they
would rather play hardball with the
country’s creditors – after all, their
position is not as weak as some may
Fed forecasts
US slowdown
US ECONOMY
▲
BY JULIAN HARRIS
PROSPECTS of an American recovery
are less bright than previously
thought, according to minutes of the
most recent Federal Reserve (Fed)
meeting, released last night.
The Fed expects unemployment for
next year of around 8.9--9.1 per cent,
up from its last prediction of 8.3--8.7
per cent.
Furthermore, its growth forecasts
for 2011 fell to 3--3.6 per cent, down
from 3.6–4.5 per cent.
Despite low inflation, the Fed
expects Core Personal Expenditure
(PCE) of 1–1.1 per cent this year. The
last forecast was for 0.8—1 per cent.
All but one dissenting member
supported monetary policies of quan-
titative easing (QE) combined with
interest rates kept as low as possible.
holder. CSC, the largest retail proper-
ty company in the UK, is in advanced
talks to buy the 1.5m sq ft shopping
centre near Manchester that was
built by Peel Holdings.
WESTINGHOUSE TRIES TECH
TRANSFER DOOR TO CHINESE
NUCLEAR MARKET
Westinghouse Electric has handed
over more than 75,000 documents to
its Chinese customers as the initial
part of a technology transfer deal it
hopes will secure its place in the
fastest-growing nuclear market. The
documents relate to the construction
of four reactors a US nuclear compa-
ny controlled by Toshiba is building.
OPEC CALLS FOR TIGHTER CONTROLS
ON OTC TRADING
The oil market risks “chaos” and glob-
al supplies could be disrupted unless
tighter regulation is imposed on the
trade in oil-based financial instru-
ments, according to Opec’s secretary-
general.
think given that the EU is desperate to
halt contagion to other nations.
When the possibility of war in the
Korean peninsula is added to this hor-
rid mix – an event which, apart from
its horrific impact on human lives,
could dramatically derail the Asian
growth engine – one understands
immediately why everybody is sud-
denly so jittery. Geopolitics had
already started rearing its ugly head
recently, with various failed attempts
at terror attacks and several high
alerts in Germany and France.
So far, none of this has hit the real
economy – yesterday’s purchasing
managers index from the Eurozone
was strong – but with bond yields con-
stantly rising in several European
countries there is bound to be some
sort of impact. Spain’s risk premia hit
their most elevated levels since the
creation of the euro yesterday; this
won’t be good for growth.
Arturo De Frias of Evolution
Securities has crunched the numbers.
Under his worst case scenario in
Yet the minutes reveal intense dis-
cussions over the second phase of
quantitative easing (QE2).
Several members thought further
easing “could cause an undesirably
large increase in inflation”.
QE could provoke “unwanted
downward pressure on the dollar”,
said some members, and might “have
only a limited effect on the pace of
the recovery” and further monetary
stimulus “would be warranted only if
the outlook worsened and the odds of
deflation increased materially,” the
minutes say. ECONOMICS: P16
Lively discussions
occurred at the Fed’s
last meeting chaired by
Ben Bernanke on the
2-3 November
CHINA PREPARES TO GET TOUGH ON
BANKS’ LENDING BINGE
China’s banking industry is days
away from bursting through its 7.5
trillion yuan annual loan ceiling
after three weeks of frenetic lending
and surging house prices, banking
insiders have told The Times. The
£713bn quota breach, which was
described by analysts yesterday as
“inevitable”, will set up a showdown
between China’s powerful financial
sector and a Government in Beijing
straining to anchor inflation expecta-
tions and dam a flood of domestic
and foreign liquidity.
ACTIVIST INVESTOR SET TO TOP
DAIRY FARMERS’ SHARES OFFER
Thousands of small dairy farmers are
not being told about a higher offer
for their shares in National Milk
Records, according to an activist
investor.
Ireland, with unprecedented write-
offs, RBS could lose up to £7bn;
Santander and BBVA would suffer less-
er hits from Portugal (just €4.5bn in
the case of Santander under the
Armageddon scenario). This wouldn’t
be that bad. So the behaviour of banks
across the continent – share prices
have slumped – confirms that
investors are pricing in a much wider
disaster, with contagion to Spain.
Bailing out Greece, Ireland and
Portugal would cost €300bn; doing the
same with Spain would add €350bn to
the bill. While in theory the EU’s econ-
omy is big enough to shoulder such a
sum, there is no way it would be palat-
able to German voters.
We are living in an increasingly
strange dual world: on the one hand,
the global economy is continuing to
recover, with growth in the US acceler-
ating and Asia booming; on the other,
there are huge sovereign and geopolit-
ical dangers. Let us hope the former
force swamps the latter.
allister.heath@cityam.com
Gartmore was put up for sale after the departure of star manager Roger Guy (above)
Swan buys Gartmore stake
FINANCIAL SERVICES
▲
BY MARION DAKERS
THE mystery buyer of shares in
takeover target Gartmore was
revealed yesterday as a vehicle linked
to hedge fund tycoon John
Zwaanstra.
Swan Street Partners LLP said yes-
terday it owns a 4.91 per cent stake in
Gartmore, making it the fourth-
biggest shareholder.
The firm built up its stake anony-
mously through a British Virgin
BRITISH AIRWAYS’ SUSPENSION OF
CABIN CREW MEMBER RAISES FUR-
THER STRIKE FEARS
The prospect of further cabin crew
strikes at British Airways has
increased after Unite expressed “dis-
may and anger” at the suspension of a
staff member at the airline. Unite
allege a “long-standing” member of
the cabin crew, Andrea Molton, has
been suspended by BA for launching a
Christmas collection for suspended
and sacked colleagues.
NEWS CORP MOVES INTO EDUCATION
SECTOR WITH $360M PURCHASE OF
WIRELESS GENERATION
News Corporation, the owner of 20th
Century Fox and newspapers includ-
ing The Times and The Sun, is making
its first foray into the classroom with
the $360m (£228m) acquisition of
Wireless Generation. The group has
bought a 90 per cent stake.
CITYA.M. 24 NOVEMBER 2010
NEWS | IN BRIEF
Train ticket prices to rise in 2011
Rail companies said fares will rise by an
average of 6.2 per cent in January, near-
ly twice the rate of inflation. Passengers
using Southeastern and Southern trains
will be hardest hit, with a 7.8 per cent
average fare rise. Unions were quick to
denounce the price jump, with TSSA
leader Gerry Doherty calling the rises
“simply outrageous”. However
Association of Train Operating
Companies chief executive Michael
Roberts said the taxpayer would still
foot the bill for around half the cost of
running the UK rail network.
3i confirms £130m Stork buy
Private equity firm 3i Group will buy
Netherlands-based materials testing
business Stork Materials Technology for
£130m, the company confirmed yester-
day. The firm said it hopes to grow as
more governments bring in quality test-
ing rules. 3i has already invested in
Trescal, a European calibration and
measurement services firm, and
Inspectorate, a testing and inspection
company, which it sold to French certifi-
cation company Bureau Veritas earlier
this year.
Islands-based company called United
Industrial Services last week, leading
to speculation about the ultimate
buyer.
Swan Street has been named in a
US regulatory filing as a family trust
for Zwaanstra, who founded Asia-
focused hedge fund manager Penta
Investment Advisers and once worked
for George Soros.
Gartmore was put on the block ear-
lier this month in an attempt to stem
losses linked to the departure of star
manager Roger Guy.
FUGITIVE CEO TO PAY $53 MILLION TO
SETTLE US CHARGES
Jacob “Kobi” Alexander, the software
executive who fled the US while fac-
ing charges for backdating stock
options, has agreed to pay more than
$53m to end civil actions by US prose-
cutors and regulators. Mr. Alexander,
the former chairman and chief execu-
tive of Comverse Technology, was
accused in 2006 by federal prosecu-
tors in Brooklyn of engaging in a
scheme to backdate millions of stock
options for himself and others. He
was also accused of secretly awarding
backdated options to favoured
employees.
BEATLES ALBUMS SELLING BRISKLY
Apple says people snapped up more
than 450,000 copies of Beatles
albums plus two million individual
songs during the Fab Four’s first week
on sale through iTunes.
CITYA.M. 25 NOVEMBER 2010
JP MORGAN HUNTS FOR A NEW OFFICE
Firms furious
over plan for “BE SIMPLER THAN
WHAT COULD
migrant cap
▲
POLITICS
BY DAVID CROW
BUSINESS and industry yesterday
reacted angrily to government plans
to cut the number of workers it
allows in from outside the EU by a
fifth, insisting they would stop
Britain from recruiting global talent.
Home secretary Theresa May said
the number of workers entering
Britain from outside the EU will be
capped at 21,700 a year from April
2011.
That compares to around 28,000
economic migrants who entered the
country in 2009, although this figure
was historically low due to the impact
of the financial crisis.
Those allowed to enter without a
job offer will be slashed by 13,000
from last year’s level to 1,000 and per-
mits will be limited to “exceptional
talent” such as scientists, academics
and artists.
The number of workers with job
offers allowed in will be increased by
nearly 7,000 to 20,700, although per-
mits will be restricted to graduate-
level jobs, May said.
Business groups welcomed the
More hedgies Vodafone joins
probed by FSA iPad sales war
▲
FINANCIAL CRIME
MONEY managers SAC Capital
Advisors, Janus Capital Group and
Wellington Management have
received inquiries from the Securities
Exchange Commission (SEC) in the
ongoing Wall Street insider-trading
investigation.
SAC, a giant hedge-fund manager
run by Steve Cohen, received an infor-
mation request while Janus Capital
disclosed the inquiry yesterday in a
filing, saying it would fully cooperate.
Investigators reportedly requested
general information from money
manager Wellington Management.
The firm did not comment.
News 3
JP MORGAN Chase
SAP to pay Oracle
$1.3bn damages
has edged closer to
shelving plans for
a new headquar-
ters in Canary
Wharf, which has
already cost £300m
in fees. The bank is
understood to have $1.65bn in damages, while Germany’s
▲
TECHNOLOGY
singled out the for- BY HARRY BANKS SAP pegged its exposure at a maxi-
mer Lehman mum of $40m. SAP declined immedi-
Brothers building SAP has been ordered to pay Oracle ate comment.
on Bank Street (pic- $1.3bn (£824m) in damages for soft- Europe’s top software maker had
tured) as an alter- ware theft, a federal jury decided yes- previously accepted liability for its
native. JP Morgan terday after a high-profile trial that TomorrowNow subsidiary having
and Canary Wharf captivated Silicon Valley. wrongfully downloaded millions of
Group declined to The verdict saw gasps from a Oracle’s files.
comment. packed courtroom and hugs and The award ended a three-week trial
handshakes among Oracle’s legal in a US district court and was seen as
Picture: PA team. Oracle had sought at least an important industry test case.
”
decision not to limit company trans-
fers for those earning more than
£40,000 a year, but said the planned
SPREADS?
cap had been set too low.
Jo Valentine, chief executive of City
lobby group London First, said: “In
limiting the number of skilled
migrants which business can recruit,
to the numbers they needed at the
NOTHING.
depths of the recession, government
is basically capping economic
growth, capping UK jobs and capping
tax receipts.”
She added: “Government seems to
be saying: ‘if your business is flour-
ishing, please grow it outside the
UK’.”
And Colin Stanbridge, chief execu-
tive of the London Chamber of
Commerce and Industry said the
plans would “deprive London of some
of the brightest and best professionals
in the world”.
Meanwhile, May announced a con-
sultation into student visas, amid
concerns that some entrants are
using them to bypass the immigra-
tion system.
Home office officials suggested
that May might scrap visas for stu-
dents not studying at degree level.
TECHNOLOGY
VODAFONE is in talks to bring a dis-
counted iPad to the market after
rivals Orange and T-Mobile announced
this week they will sell the tablets less
than half price with a contract.
O2 is understood to be less keen to
offer iPads locked to a lengthy con-
tract, especially with an upgrade
rumoured to be due in April.
Meanwhile, Orange has scotched
runours it will fail to rush out its dis-
counted iPads in time for Christmas.
A company spokesman said the
firm is “very confident” of launching
the offer in December. Vodafone and
O2 both declined to comment.
CITYA.M. 24 NOVEMBER 2010 News 5

Bank has been slow to admit

mistakes, says FSA boss Sants
ers the Bank had admitted to errors new role. “The level of communica-

▲
REGULATION
BY DAVID HELLIER
BANK of England governor Mervyn
King faces a tough grilling in front of
MPs tomorrow after the man who is
set to be his new deputy criticised the
Bank for being slow in “fessing up” to
mistakes made ahead of the financial
crisis.
Financial Services Authority chief
executive Hector Sants told lawmak-
but in a “more elaborate and lengthy
process” than the FSA has. “The FSA
had a cleaner, more straight forward
approach to fessing up,” Sants said.
The UK is scrapping the FSA and
handing many of its supervisory pow-
ers to a new prudential regulatory
authority at the Bank, headed by
Sants. Some were surprised that
Sants criticised the Bank’s handling
of the crisis ahead of his shift to his
tion, the level of interest in the cen-
tral bank on financial stability issues,
I think, was recognised by all to be
very low in the pre-2007 period,”
Sants told parliament’s treasury
select committee.
Sants said the FSA was limiting the
amount of new work it was taking on.
“Hector Sants was revealing and
helpful,” said committee chairman
Andrew Tyrie.

Get on your bike on your

City Break to Holland
Prudential chief Tidjane Thiam faces the resignation of three executives Picture: GETTY

Pru loses trio

of top execs
“I felt that it is time for a change and
▲

INSURANCE
BY MARION DAKERS
A TRIO of senior executives at
Prudential have resigned, it emerged
yesterday, potentially unsettling the
company as it tries to rebuild investor
confidence.
Thibaut Le Maire, chief risk officer at
the financial services group, is thought
to have resigned to take a senior role at
HSBC after less than two years at the
firm. HSBC declined to comment.
The Pru’s communication director
Stephen Whitehead announced his res-
ignation yesterday, after just over three
years at the group. A source close to the
company said Whitehead informed
chief executive Tidjane Thiam of his
plan to quit several months ago, and
will work until the end of the year.
Whitehead said yesterday: “I have
enjoyed my time at Prudential enor-
mously. It has been a privilege to have
been part of the leadership team that
guided Prudential through the global
financial crisis and ensured that we
emerged as one of the few winners and
a clear leader.
I look forward to the next challenge.”
Prudential recently announced
internally that Priscilla Vacassin, group
human resources director, has also
resigned. She will continue to work
until a replacement can be found.
Vacassin has worked at Prudential
since 2005, and has previously worked
in HR roles at Abbey National and BAA.
It is not clear where she will work next.
Prudential has not yet found replace-
ments for the three executives, who are
not part of Prudential’s board of direc-
tors.
The senior staff are not thought to
have co-ordinated their departures, but
the news comes less than a month
after Prudential’s US chief and board
member Clark Manning quit.
A Pru spokesperson said the firm
never comments on non-board mem-
bers’ movements.
Prudential provoked ire from share-
holders in June after it abandoned its
$35.5bn (£22.6bn) bid for AIA, the Asian
London to
Amsterdam
life insurance arm of bailout-out US
firm AIG, racking up a £400m bill for
advisory and break fees.

House of Lords slams Big Four from

auditors for role in banking crisis
shot down for arguing the firms played
£
29 .99
single
inc. taxes
▲

FINANCIAL SERVICES
THE HOUSE of Lords yesterday accused
the Big Four auditors of misleading
investors by giving the banks a clean
bill of health before the financial crisis.
The Lords’ economic affairs commit-
tee grilled bosses of Ernst &Young,
Deloitte, PwC and KPMG as part of a
probe into a possible lack of competi-
tion in the financial services market.
Deloitte chief John Connolly was
no part in the downfall of companies
including RBS, which his firm audited.
“That seems to me to be extraordi-
narily self-satisfied in light of what we
know to be the case,” said Nigel
Lawson, a former finance minister.
Auditors are required to state We fly from Gatwick, Luton and Stansted. Price correct as at 9 November 2010. Available to book now for travel
whether a company can last another
year, but Lawson said the firms were between 9 November 2010 and 26 March 2011. Variable charges for hold baggage apply and some payment methods
using loopholes to sign off banks that attract a handling fee. See website for details.
were “on thin ice”.
CITYA.M. 24 NOVEMBER 2010 News 7

Qantas to claim cash from

Rolls-Royce for jet blow-out
make an emergency landing. yesterday, however, from news that

▲
AEROSPACE
BY PHILIP WALLER
ROLLS-ROYCE is facing another claim
for compensation over the blow-out
of an engine on an A380 super-jumbo,
it emerged yesterday.
Australian flag carrier Qantas said
it would join Airbus in claiming com-
pensation from Rolls for the disrup-
tion caused by the accident on 4
November, which forced the Qantas
jet flying to Sydney from Singapore to
Qantas chief executive Alan Joyce
said it would discuss compensation
with Rolls “when the time is appro-
priate”, although he declined to give
details.
Rolls has said its annual profits
would be slightly lower due to the
cost of replacing the part in the Trent
900 engines suspected of causing the
accident, which prompted regulators
to order checks on all A380s.
The jet engine maker got a boost
Qantas plans to start flying its Airbus
A380 super-jumbos again this week.
Qantas, which grounded its A380s
following the incident, said it plans to
resume flying two of the jets between
Sydney and London on Saturday,
although it said its other four A380s
would take some time to return.
Qantas plans to keep the A380 off
high-margin Sydney-Los Angeles
routes, which needs maximum certi-
fied engine thrust, as a precaution.

Sky Germany chief Brian Sullivan says profit is still a long way off Picture: GETTY

Sky Germany
is accused of
hiking figures
loss and we have a long way to go to
▲

MEDIA
BY STEVE DINNEEN turn the business into the profit
engine it can be.”
SKY Deutschland, the German pay-TV Sky Deutschland, which owns
firm which is 49.9 per cent owned by rights to show German Bundesliga
News Corp, faces censure after being matches, has only once made a profit,
accused of overstating its subscriber five years ago.
numbers and earnings. Its share price has dropped from
German media watchdog BaFin €14 three years ago to an historic low
says the firm added 600,000 to its of less than €1. However, sales are ris-
3.6m subscribers in its official reports ing since Rupert Murdoch’s News
in 2007 and 2008. Corp bought into the firm in 2009. Its
The broadcaster has already been losses have also narrowed.
caught inflating its figures, admit-
ting in 2008 it had almost doubled its ANALYSIS l BSkyB 723.00
true number of subscribers. p 23 Nov
Sky Deutschland also overstated
725
its earnings by at least €10m (£8.5m)
in 2008. The firm insists the BaFin
ruling will not affect the operation 715
of the company.
Meanwhile chief executive Brian 705
Sullivan said yesterday the embattled
firm will not turn a profit in the near 695
future. He said: “We still make a huge
23 Aug 13 Sep 1 Oct 21 Oct 10 Nov

SKY FIGURES AT A GLANCE

Stated Actual
subscribers in subscribers in Share price in Share price
2008: 2008: 2007: now:
4.2m 3.6m €14 >€1
Difference:
Difference:
600,000
(14 per cent) €13
 The Capitalist
8 CITYA.M. 24 NOVEMBER 2010
EDITED BY
JULIET SAMUEL
GOT A STORY? EMAIL
thecapitalist@cityam.com

CITY GENTS “All the guys

DON THEIR
TOP HATS
FOR RACES
CITY firms will be flocking to Newbury
Racecourse for its “gentlemen’s day” on
Friday, with the venue reporting a 30 per
cent year-on-year jump in corporate book-
ings from City firms. Firms signing up for
the event include Cushman & Wakefield,
Publicis and Arbuthnot Securities – but
what, you may ask, is a “gentlemen’s day”,
other than a Victorian euphemism?
It is, essentially, a day for dressing in the
finest of tails and having a flutter on
whichever horse takes your fancy, with
champagne and wine aplenty. And to add
to the competitive instincts of the lucky
City folk being entertained, the racecourse
will be running a “best-dressed” competi-
tion, to be judged by a panel including the
fashion blogger Prince Cassius – dubbed
Britain’s “best-dressed man” by GQ.
All participants needs do to enter the
competition is show up in a spiffy outfit,
since there will be designated spotters in
the crowds, with preference given to “tradi-
tional” attire (time to dust off your grandfa-
ther’s top hat). Arbuthnot Securities
director Rob Saunders said that he’s “sure
all the guys will be keen to win the best-
dressed gentleman this year for Q Club
membership, which would go down very
Top jockey Tony McCoy doffs his bowler hat at last year’s Newbury Racecourse “gentlemen’s day”
well in the bragging stakes!”
Women are, alas, excluded from the
dressing competition – the racecourse runs
a “ladies’ day” in August due to women’s
preference for faster flat-racing instead of
racing with jumps.
INCOMMUNICADO
Financial Services Authority head of com-
munications Tom Kelly (picured, top right)
has had a turbulent few months to settle
into his role since April, what with the gov-
ernment partially abolishing the FSA and
all. But after stints as spokesman for Tony
Blair and BAA, he’s surely an old hand at
handling public inquiries?
Perhaps not. It seems that the FSA’s
will be keen
to win the
best-dressed
gentleman of
the year,” says
Arbuthnot
director Rob
Saunders.
comms chief has adopted a curiously reti-
cent policy towards… well, communicat-
ing. Attempts to reach him at his domain
in the FSA – the press office – drew a
blank. Couldn’t he just come to the
phone? The Capitalist wondered. “You have
to go through the press office,” came the
peculiar reply. Would that be the press
office Kelly runs?
When The Capitalist did finally manage to
track him down on his mobile, he had a
brief summary of his position: “I don’t
speak to the press.” Let’s hope he never has
to communicate anything urgent!
IRISH LOVE
Tempers are on the boil in Ireland over the
The FSA’s curiously shy head of comms Tom Kelly
bailout fiasco, and the country’s tabloids
are going to town with their splashes. The
pictures of Prime Minister Brian Cowen giv-
ing yet another lacklustre statement in
front of his Cabinet yesterday provided
ample caption fodder. But while the Irish
Independent went for the rather gentile
“The Long Goodbye”, others weren’t so
kind. The Irish Daily Star instead chose
“Useless Gobshites”.
But it seems that Cowen is no stranger to
this cruel treatment. A friend was in touch
today to point out a longstanding nick-
name for the PM in the Irish press, who’s
from Offaly: BIFFO. We’re told the first two
letters stand for “Big Ignorant”, but what
in the world could come next?
VETERANS’ LUNCH
For those in the mood for swapping stories
of past stock market woes over a good burg-
er today, head to the Bangers Bar & Grill,
where the Stock Exchange Veterans
Association will hold its annual general
meeting at 12.30pm today. Stockmakers of
any age and inclination are invited.
 10 Ireland Focus CITYA.M. 24 NOVEMBER 2010

Cowen faces
fresh calls to
quit as PM
ANALYSIS l Irish 10-year bond yields
8.5 %

8.4

8.3

8.2
POLITICS “There’s serious discontent within the
▲

BY STEVE DINNEEN parliamentary party. It’s now up to

IRISH Prime Minister Brian Cowen
looked every inch the defeated man
yesterday as he was bombarded from
all sides over his handling of the finan-
cial crisis that will eventually lead to
an expected €85bn (£77bn) bailout.
MPs from all parties, including his
own, spent the day plotting how best
to bring about his early demise, as fear
mounted that the four-year austerity
plan, a precondition of the bailout and
due to be published today, could be
voted down on 7 December.
Brussels showed the first signs it is
losing patience with the political
upheaval. Olli Rehn, the EU’s commis-
sioner for monetary affairs, told MEPs
in Strasbourg: “It is essential that
Ireland will pass the budget in the
timeline foreseen and certainly sooner
rather than later because every day
that is lost increases uncertainty. Let’s
adopt the budget, let’s get it out of the
way, and let’s move on.”
Mutinous backbench MPs from
Cowen’s own party were last night
plotting a coup against their belea-
guered leader. Noel O’Flynn said he felt
“betrayed and humiliated” by the PM’s
handling of the crisis, claiming there
were “no excuses” for the government
denying the bailout last week.
Another, John McGuinness, added:
8.2
those who’ve spoken out to take action
to remove that man [Cowen] immedi-
ately.” 23 nov 3:00 5:00 7:00 9:00 11:00
Opposition party Sinn Fein tabled a
motion of no confidence, urging MPs
from all parties to force Cowen to fall ANALYSIS l Euro-dollar
on his own sword before the key budg- 1.380
et vote on 7 December.
The usually combative Cowen was 1.370
forced to make a series of grovelling
phone calls to leaders of the rival par-
1.360
ties, urging them not to vote against
his austerity budget.
1.350
Opposition MPs have demanded to
be consulted on the budget, saying
Cowen’s party will not be in power to 1.340
implement it. With a parliamentary 17 Nov 18 Nov 19 nov 22 Nov 23 Nov
majority of just three and a seat
almost certain to fall at a by election
tomorrow, Cowen is desperate to avoid
a rejection of the bill that would ANALYSIS l Gold price
plunge Ireland into an even greater fis- $
cal crisis. Fine Gael leader Enda Kenny 1,370
later urged Cowen to bring the budget
vote forward to next week, allowing 1,360
Cowen to call a general election in
January. But the Fianna Fáil leader 1,350
rejected the calls, claiming it is essen-
tial Ireland waits until tax information 1,340
is collected before the 2011 budget is
finalised. If Cowen remains in power
until the budgetary process is com- 17 Nov 18 Nov 19 nov 22 Nov 23 Nov
plete an election is likely to be held in
late February at the earliest.

Bank of Ireland faces nationalisation

Booked your as Republic puts its banks up for sale
Christmas party yet?
BANKING against potential future losses. But if the government wants to
▲

Add a little glamour at Addendum BY JULIET SAMUEL
BANK of Ireland and Allied Irish
Banks will effectively be nation-
alised as part of the €85bn (£77bn)
EU/IMF rescue package.
The bailout, the details of which
the Finance Ministry said were still
being finalised last night, are
expected to see the level of core
tier one capital – a key indicator of
financial strength – in the Irish
banks ramped up to 12 per cent
from eight per cent in a bid to bol-
ster confidence in the financial sys-
tem, and provide a bigger buffer
The government is expected to
inject the additional funds by buy-
ing new shares in them, meaning
no significant lender in the
Republic will be free of state con-
trol, with Bank of Ireland, current-
ly 36 per cent owned by the
government, now set to be majority
owned.
The details came as central bank
governor Patrick Honohan said
Ireland’s nationalised banking sys-
tem was for sale. “I have been an
advocate for a number of years for
small countries to have foreign
owners for their banks,” he added.
make a quick sale it will have to take
a heavy loss on its assets. Allied Irish
Bank shares were down 11 per cent
in just one day’s trading yesterday,
during which Bank of Ireland
slumped by 21 per cent.
But any fire sale of the banks will
probably require the government to
break them up and sell off pieces,
according to analysts.
Capital Economics’ Ben May said
yesterday: “You’re unlikely to find
investors who will buy individual
banks as an ongoing entity, but
there may be parts they might be
interested in.”

Private dining packages from £65.00

Greece says it’s on target while Portugal teeters
Restaurant lunch from £24.50
and dinner packages EU ECONOMY installment of its loan. know there could be a problem [for
▲

BY STEVE DINNEEN
Tel: 0207 977 9500
GREECE claimed it is on track to
e-mail: london.events@apexhotels.co.uk meet the fiscal targets laid out in
the terms of its International
addendumrestaurant.co.uk Monetary Fund (IMF) bailout,
despite being on the verge of miss-
1 Seething Lane | London | EC3N 4AX ing the 2010 deficit target.
IMF and EU inspectors said that,
while it would miss its 2010 target
by around 1.5 per cent, the country
had made enough of an effort to
qualify for the next, €9bn (£7.6bn)
IMF mission chief for Greece,
Poul Thomsen said: “The pro-
gramme is broadly on track and
policies are being implemented as
agreed.”
The IMF also moved to reassure
markets spooked by the second
Eurozone bailout being negotiated
in Dublin that Athens would not be
left in the lurch if repayments on
its emergency loan become too bur-
densome. Thomsen said: “What we
are saying to the markets is we
Greece]. Don’t worry about it, if it
proves to be a problem we’ll deal
with it.”
Meanwhile, Portugal teetered
ever closer to the edge yesterday
as it announced its state deficit
has widened, prompting fears it
could be the next Eurozone domi-
no to fall. The beleaguered coun-
try is desperate to avoid an IMF
bailout, with its Prime Minister
adamant it will be able to cut its
budget sufficiently.
 CITYA.M. 24 NOVEMBER 2010
Markets continued to tumble yesterday as
Ireland’s political turmoil added to the confu-
sion over its massive bailout woes.
Ireland’s finance minister
Brian Lenihan
Finance minister Brian Lenihan fielded tough
questions about whether he is likely to garner
enough support for the party’s planned four-year
austerity package due to be published today
Bailout chaos fails
to cheer markets
WORLD ECONOMY
▲
BY JULIET SAMUEL
MARKETS continued to tumble and
peripheral Eurozone gilt yields
jumped yesterday as Ireland’s polit-
ical turmoil added to the uncertain-
ty surrounding its bailout.
The Eurostoxx 50 saw 1.5 per cent
wiped off its value, sliding to 2,745
while the Irish ISEQ 20 index lost
two per cent to close at 432.
In a sign of contagion fears, the
FTSE 100 and Portuguese PSI 20 also
dropped, with the PSI losing 1.3 per
cent to close at 7,623 and the FTSE
Spain successfully auctions short-term bonds
WORLD ECONOMY
▲
BY JULIET SAMUEL
THE Spanish government held a
successful, although expensive,
short-dated bond auction yester-
day, managing to shift €3.26bn’s
worth of debt – at the lower end of
its €3bn-€4bn target range.
But the government had to pay a
premium for the money compared
losing 0.9 per cent to close at 5,600.
The cost of borrowing for
Eurozone economies continued to
climb. Irish 10-year gilts saw their
yield jump up to 8.4 per cent – close
to the nine per cent mark that
prompted an escalation in market
fears last week.
Portuguese 10-year gilt yields
rose over 6.9 per cent and Spanish
10-year note yields topped 4.9 per
cent.
The cost of insuring Irish debt
also rose again yesterday, with five-
year credit default swaps (CDS) on
Irish gilts rising 26 basis points to
to its last auction in October,
reflecting fears of a contagion
effect from the Irish crisis.
It was forced to pay a rate of 1.7
per cent on three-month notes and
2.1 per cent on six-month bonds,
significantly up from rates even a
month ago, which were 0.95 per
cent and 1.28 per cent respectively.
The high yields prompted fears
that although the Spanish govern-
Ireland Focus 11
CITY VIEWS: AFTER THE IRISH BAILOUT DO YOU THINK WE WILL HAVE
TO RESCUE ANY MORE EUROPEAN ECONOMIES?
Interviews by Matthew West
ANDREW COLEMAN | LLOYDS OF LONDON
“I think it is very likely that we will have to bail out another European country on
the back of the bailout to Ireland although I don’t think we should. But we will
because of the Eurozone. As part of Europe its probably just something we
have to do I don’t think we’ve got much choice although I’d prefer it
if we did. ”
ROBERT WEBB | R K HARRISON INSURANCE BROKERS
“We seem to be bailing out everyone at the moment. We bailed out Greece, now
Ireland so I think it sets a bad precedent. But its pretty much out of our hands
anyway as the European Union decides. So we are going to be footing the bill for
the other European countries that have got themselves in trouble
instead of sorting out our own problems first. ”
ANDREW BITMORE | TALBOT UNDERWRITING
“It is a reasonable probability that in the next twelve months we will have to bail
out another European country like Spain or Portugal. There will be some contagion
from Ireland and the likes of Spain and Portugal are going to suffer more than
anyone else. But it will be a big test of our commitment to the EU
whether we decide to bail out any other countries.”
zoo
THE
As seen on ITV’s
555bps (a cost of €555,000 to insure
€10m of debt). Five-year CDS on
Portuguese debt also jumped, by
28bps to 486bps.
“Help us give
And the euro’s movements con-
firmed the run of bad news for
Europe. The single currency
dropped from 85.3p to 84p against
sterling yesterday and from $1.36 to
$1.34 versus the dollar.
endangered animals
The continued slide in stocks
reflects fears both that Ireland will
not be able to pass the necessary
austerity measures and that the
worldwide a future.”
bailout won’t solve the country’s Dan Simmonds, Senior Mammals Keeper
underlying insolvency problems.
ment successfully reached its sale
target amount, the punitive yields
are unsustainable in the long-term.
Arbuthnot Banking Group econ-
omist Ruth Lea said that the
bailout was aimed to “control con- Support our work by donating online, visiting
tagion” in the sovereign bond mar-
kets from Ireland to Portugal and, our zoos or becoming a ZSL member.
crucially, to Spain. “But bailouts for
these countries cannot be ruled
Registered Charity in England & Wales: no 208728 zsl.org/thezoo
out,” she warned.
 12 News
NEWS | IN BRIEF
Russia nears WTO membership
Russia has entered the final stage of its
17-year-bid to join the World Trade
Organisation and outstanding issues
should be resolved in the coming months,
economy minister Elvira Nabiullina said
yesterday. The comments indicate that
the largest economy still outside the 153-
member WTO could join the body that
regulates world trade in the course of
2011.
Extra holiday for Royal wedding
The UK is to have a three-day week
ahead of the royal wedding, it was
announced yesterday. Prince William
and Kate Middleton’s nuptials are set to
take place on Friday 29 April, the week
after Easter and ahead of the May Day
holiday, giving the country two succes-
sive four-day weekends. The TUC wel-
comed the extended holidays, but other
bodies including the Federation of Small
Business warned that some firms would
struggle to cope with so much down-
time.
Chrysler in $840m investment
Chrysler said it is looking to invest
$843m (£529m) to improve its Indiana
plants. It said the improvements would
push its total investment in US facilities
to nearly $3bn since the carmaker
emerged from a government-funded
bankruptcy under the management con-
trol of Italy’s Fiat in June 2009.
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and available at time of print. Other terms and conditions apply. †Local call charges apply.
Kurt Geiger has seen sales soar, along with heel heights Picture: VISMEDIA
L PRICES.
IG dismisses €25m
Kuala Lumpu
r case from Echelon
299 *
LEISURE
▲
BY KATIE HOPE
BROKERS yesterday urged investors
£
739** to take advantage of any fall in IG
Group’s share price following the
news that three former clients of
bankrupt Scottish firm Echelon
Lumpur to: Wealth Management are suing the
spread betting firm for more than
from
£
47 *** €25m (£21.2m).
Echelon, a Glasgow-based con-
from
£
44 *** tracts for difference (CFD) broker
which went into liquidation in
October 2008, used IG group’s trad-
ing unit IG Markets to hedge its
exposures.
Clients of Echelon were covered
by the Financial Services
Compensation Scheme, which paid
out losses up to £48,000.
British government backs probe into
the impact of high frequency trading
▲
TRADING
THE government yesterday said it
was backing a study of how high-
frequency trading (HFT) may shape
London as a financial centre over
the next decade.
“The project will look ahead to
developments in financial mar-
kets, with a prominent focus on
high frequency trading,” financial
secretary to the Treasury Mark
Hoban said in a speech.
HFT involves the use of comput-
ers by investors to dart in and out
of markets and exploit tiny
Sales of super-high
heels lift sales at
Kurt Geiger stores
RETAIL
▲
BY ALISON LOCK
LUXURY shoe brand Kurt Geiger has
reported a 25 per cent rise in turnover
in the nine months to November this
year, as ladies have flocked to buy its
coveted 120mm-high heels.
Sales of its highest heels quadrupled
compared with a year earlier, it said in
its third quarter trading update.
Sales of red and lace-detailed shoes
have also doubled, the statement said.
Shearling boots, a key catwalk trend
of this season, have seen sales soar 50
per cent on the same period last year.
And last week’s like-for-like sales,
from 15 November, jumped 30 per
cent on purchases of party shoes for
the festive season.
The company anticipates strong
Christmas trading across the business
as fashionistas mimic catwalk trends.
IG yesterday dismissed the claim
as “speculative” and “without foun-
dation” pledging to “defend itself
vigorously.” It said it did not expect
the case to have any material impact
on the group.
Brokers Numis and Panmure
Gordon were equally dismissive of
the case yesterday, reiterating their
“buy” ratings and both suggesting
investors capitalise on any share
price weakness.
“This is a speculative claim which
may not even go to trial. Buy into
any weakness following today’s
news,” said Panmure Gordon ana-
lyst Vivek Raja.
Numis analyst James Hamilton
also said he expected the case to be
dismissed without reaching court,
but pointed that even if it did reach
changes in share prices.
HFT has grown sharply over
recent years to account for about a
third of trading volumes in Britain
to about three-quarters of all share
dealing in the United States.
The London Stock Exchange,
which is losing market share to
low-cost rivals, has hired a technol-
ogy specialist to attract business
from HFT firms.
Regulators are already worried
about the fact that so much vol-
ume passes through just a few
lightly regulated and thinly capi-
talised firms.
CITYA.M. 24 NOVEMBER 2010
Like-for-like sales performance
improved ten per cent in the first three
quarters on the previous year.
The company said international
sales rose 45 per cent and now account
for a tenth of its total turnover.
It plans to open more than 32 over-
seas stores over the next five years,
bringing the total to 50 by 2016.
New stores are planned for Russia,
Turkey and Malaysia to add to existing
shops in Moscow and Dubai.
Kurt Geiger opened its first store on
Bond Street in 1963 and now owns a
stable of brands including Miss KG and
Carvela. It is also a major seller of high-
end third-party brands such as Gucci,
Prada and Jimmy Choo.
Acquired in 1985 by House of Fraser,
Barclays Private Equity led a manage-
ment buyout in 2005 and in 2008 pri-
vate equity group Graphite Capital led
a further buyout valued at £95m.
court that the cost was immaterial.
“IG held £22m of cash balance as
of 31.05.2010 and so a €25m loss
would have next to no impact on
the group. Any share price weak-
ness should be seen as a buying
opportunity,” he said.
IG’s shares yesterday closed 1.3
per cent lower at 490.9p.
ANALYSIS l IG Group 490.90
p 23 Nov
540
520
500
480
23 Aug 13 Sep 1 Oct 21 Oct 10 Nov
The UK study will look at how to
avoid “technology-led economic
instabilities”.
A group of experts will help
guide the project, including Andy
Haldane, director of financial sta-
bility at the Bank of England.
The UK project will also look at
how computer-generated trading
will affect financial stability, share
price formation and liquidity, com-
petition, trading costs and the
future role and location of capital
markets. City watchdog the FSA is
due to give its latest thinking on
HFT tomorrow.
CITYA.M. 24 NOVEMBER 2010 News 13

Global market slump

to lift insurance fees
INSURANCE er customer fees, the report said. world, with firms holding nearly
▲

BY MARION DAKERS
INSURANCE companies could be
forced to raise premiums to make
up for lower investment returns, a
report by Swiss Re said yesterday.
Tighter regulatory standards such
as Solvency II and uncertainty in the
equities market have pushed insur-
ance firms to invest their takings in
safer but less lucrative products
such as bonds, said the authors of
the study. Bond yields could remain
at current historic lows “until the
global economy truly recovers”.
In the long term, insurance firms
will make up the profit shortfall
caused by modest returns with high-
“Higher insurance prices would
adversely impact policyholders, as
some consumers and businesses
would scale back coverage, or forego
it entirely,” warned Raymond
Yeung, senior economist at Swiss Re
and co-author of the report.
Solvency II, a European regime for
insurers that comes into force at the
end of 2012, will set a benchmark
for capital holdings and force com-
panies to undertake a risk-based
measure of its assets. Swiss Re warns
that firms could rely on sovereign
bonds instead of testing the bound-
aries of the new framework.
Insurance companies remain
among the biggest investors in the
$23 trillion (£14.5 trillion) of assets at
the end of 2009.
Firms have begun a switch to
emerging markets, commodities,
inflation-indexed bonds and proper-
ty in place of equities, said the
report. However, around $5.9 tril-
lion, or just under a quarter, of total
assets owned by insurance firms are
still in the United States.
Life and non-life insurers tend to
differ in their investment choices,
co-author David Laster said: “Non-
life companies hold proportionally
more cash and equities, while life
companies hold more loans and
fixed income instruments and less
cash.”

Champion Trader -
Day 3 l Week 4
IHG to focus on
Time is running out if you plan to play and catch the leaders with just over a week
left. It was a difficult week predicting the markets with many of our early leaders
India and China
suffering set backs. alsonsove our outright leader also manged to increase their
account the most this week with over £70,000 profit taking the £1,000 prize.
rhona45 was runner up in the week with just over £56,000 and lurks dangerous-
▲

LEISURE
ly in third.
INTERCONTINENTAL Hotel Group
It is free and a £7,000 prize pot still available. (IHG) yesterday announced plans to
expand its operations in emerging
User Name Account Value % Difference markets.
IHG said it hopes to cash in on rock-
1 Gekko1981 £171,538.79 1615 eting GDP in China, India and the
Middle East by opening hundreds of
2 alonsove £127,523.66 1375 new hotels. The firm will treble its
presence in India by opening 150 new
3 rhona45 £122,970.14 1129 hotels by 2020, and has plans for an
almost eight-fold increase in the
4 jasonkhan £122,395.07 1123 number of available hotel rooms in
China to 360,000 by 2030. This will
5 shidong £120,654.69 1120 mean more than doubling the num-
ber of employees worldwide.
6 sbwilliams £88,629.21 786 IHG, which disappointed investors
earlier in the month with lower than
7 urosbric3 £73,197.78 631 expected quarterly earnings, also said
it will open 38 hotels in the Middle
8 shak_1 £51,267.46 412 East within five years.
Chief executive Andrew Cosslett
9 wallabies £44,452.05 344 told investors: “Hotel companies need
to anticipate trends at least 10 to 20
10 tellme £30,428.34 204 years ahead and we know the world is
going to be on the move like never
To register and the full standings, visit www.intertrader.com/champion before.”
 14 News
Irish crisis hits reputation of high street banks
BRAND INDEX
STEPHAN SHAKESPEARE
A
S THE news continues to be
dominated by tales of Ireland’s
financial woes it seems that all
high street financial institu-
tions are being made to suffer.
NEWS | IN BRIEF
Blackstone calls Dynegy deal off
Standard & Poor’s lowered its rating on
Dynegy to “sell” from “hold” after the energy
company and Blackstone Group announced
they would abandon their merger agreement
ahead of a shareholder meeting where the
proposal was expected to fail. “We think the
absence of buyers during a 40-day shopping
period under the prior deal is indicative of
market interest,” wrote S&P Utilities analyst
Two tracking metrics produced by
YouGov BrandIndex demonstrate a
significant correlation between wide-
ly publicised financial crises and sig-
nificant downturns in the public
perception of the high street banks
and savings sector.
BAILOUT HITS HIGH STREET
In the wake of the current bailout cri-
sis the overall BrandIndex “Index”
score for the high street banking and
savings sector – which combines six
measures of brand health including
value, reputation and likelihood to
recommend – fell to a low of -0.4 on
19 November in comparison to a sum-
Christopher Muir in a note. Muir cut his tar-
get price to $4.50 (£2.85) on the idea that
there is some remaining takeover appeal.
In a statement, Blackstone said it was disap-
pointed by opposition from Seneca Capital
and the activist investor Carl Icahn to its
final proposal of $5 a share. Blackstone origi-
nally offered to acquire Dynegy for $4.50
per share. Dynegy shares yesterday fell 17
cents, or 3.3 per cent, to $4.97.
.com
mer high of 2 in August, though
there has been limited recovery since.
GREEK DEBT KNOCKED INDEX
This mirrors a trend seen back in
April when the Greek bailout crisis
dominated the news and the index
score reached a low of -0.8.
Moreover, the BrandIndex
“Quality” score, which gives a more
direct sense of how the public rates
the performance of a brand irrespec-
tive of its price, and which gives
insight into how people think the
high street finance firms are perform-
ing at their job, has also suffered sub-
stantially. From a summer high of 2.8
RECKITT BENCKISER APPOINTS CFO
RECKITT Benckiser has named Liz Doherty as its new chief financial officer
(CFO). She will join in January and have a period of handover with Colin Day,
the outgoing CFO. Doherty was CFO at Australia’s Brambles Industries for two
years and before that group international finance director at Tesco.
Nationwide profits
up after cost cuts
BANKING
▲
BY ALISON LOCK
NATIONWIDE Building Society’s
profits rose 26 per cent to £147m in
the first half of 2010, from £117m
the previous year, as it cut costs
and reduced loan impairment
charges.
Pre-tax profits rose 83 per cent to
£259m in the six months to 30
September 2010, from £143m in
the same period in 2009.
Impairment charges on loans
and advances to customers fell 44
per cent to £179m from £317m a
year earlier, while bad commercial
property loans fell 47 per cent to
£95m.
But the group has admitted the
current low interest rates have hit
at the end of August, the “quality”
score fell to 0 on the 22 November.
When broken down further, the
BrandIndex scores also demonstrate a
significant London/UK divide, with
current scores amongst Londoners on
the 19 November being 3.6 and 0.9 for
“quality” and “index” respectively in
contrast to 0.4 and -0.4 for the rest of
the UK – indicative perhaps of the
greater numbers of Londoners work-
ing in finance.
UK POPULATION IMPATIENT
Opinion seems to be polarising, with
the larger portion of the UK popula-
tion growing short of patience with
margins and honouring its low
mortgage rate cost it £300m in the
past six months compared to other
market rates.
Chief executive Graham Beale
said “the majority” of its existing
mortgage customers are still on a
rate capped at two per cent above
the Bank of England base rate.
Nationwide said it continued to
lend despite a weak mortgage mar-
ket, achieving an 8.5 per cent mar-
ket share and gross residential
mortgage lending of £6bn.
And it reported a significant
recovery in savings deposits, with
£400m in net retail deposits com-
pared to £6.1b outflows the previ-
ous year. It also diversified its
income base into non-mortgage
and savings products.
CITYA.M. 24 NOVEMBER 2010
the financial industry and judging all
by the travails of some.
Stephan Shakespeare is co-founder and
chief executive of YouGov.
ANALYSIS l BrandIndex score for high
2.0 street banks and savings
Index score
1.0
0.0
-1.0
11/11/10 16/11/10 21/11/10
J Crew attracts
£1.8bn private
equity interest
▲
US M&A
BY HARRY BANKS
J CREW, the US fashion retailer, has
agreed to a $2.86bn (£1.8bn) buyout
by two private equity firms, although
some analysts and bankers expect it
could command a higher bid.
Under the proposed deal, former
investor TPG Group and Leonard
Green & Partners would buy the com-
pany for $43.50 a share, a premium of
more than 15 per cent compared with
J Crew’s share price before the deal
was announced.
Millard Drexler will continue as
chairman and chief executive officer
and maintain a significant equity
investment in J Crew. TPG first
bought J Crew in 1997 and took it
public in 2006. It sold its stake after
the IPO.
“It’s still a bargain. You are getting
an amazing premium retailer... You
have got Mickey Drexler running the
place, and he is gold,” said Patty
Edwards, chief investment officer of
Trutina Financial, which owns J Crew
shares.
J Crew shares closed 16.4 per cent
higher at $43.82 yesterday.
It opened 260,000 new current
accounts and 120,000 new credit
card accounts in the first half, 61
per cent up from last year and 88
per cent up on the one before.
Meanwhile Nationwide’s cost
cutting drive has seen it close its
network of agency offices and a
number of branches.
Beale said customer demand for
equity-linked alternatives to tradi-
tional savings products, plus inno-
vative products, drove a 14 per cent
increase in sales of investment and
protection products and an overall
increase in non-interest income of
more than 20 per cent.
“These results... demonstrate
both the resilience of our business
model and the strength of our cus-
tomer franchise,” he said.
CITYA.M. 24 NOVEMBER 2010
Housebuyers hit by
fewest mortgage
loans for 19 months
MORTGAGES
▲
BY JULIAN HARRIS
MORTGAGE approvals hit a 19-month
low in October, according to figures
released yesterday by the British
Bankers’ Association (BBA).
The number of mortgages fell for
the fifth consecutive month, sinking
to 30,766 – the lowest since March
2009, down from 31,058 in September.
Lending for house-buyers is now
half the level of before the crisis. Until
August 2007, the BBA’s monthly fig-
ures would regularly hit 60,000.
October’s approvals are down 26.9 per
cent on the previous year, according to
IHS Global Insight’s Howard Archer.
The weakness of the UK housing
market was further reflected by a fall
in gross mortgage lending to £7.6bn,
the lowest total since February 2001
and 16.1 per cent lower than a year
Eurozone unharmed
by Irish debt crisis
EU ECONOMY
▲
BY JULIAN HARRIS
EUROZONE countries received a
boost yesterday, as new data
showed better than expected
prospects for economic growth.
Fears over peripheral economies
such as Ireland and Portugal have
not affected the 16-country curren-
cy area, with growth in output ris-
ing to a three- month high.
The surprise results, compiled by
Markit’s Purchasing Managers’
Index (PMI), “point to a quarterly
rise in Eurozone GDP of about 0.5
per cent” according to Jennifer
McKeown of Capital Economics.
Meanwhile, German GDP
growth of 0.7 per cent was con-
firmed yesterday, for the three
Jobs fears persist despite better
than expected US economic growth
▲
US ECONOMY
GROWTH in the US was higher
than previously thought, it was
announced yesterday.
GDP growth was revised to 2.5
per cent for the three months to
September, up from two per cent,
said the US Federal Reserve (Fed).
The rise was beyond the expecta-
tions of economists, who had pre-
dicted a slightly smaller rise.
The Fed revealed that less drag
from net trade, and greater con-
sumption were largely responsible
for the boost in the figures.
ago.
While net lending for house pur-
chases edged up to £1.7bn (from
£1.5bn in September) this is still below
the monthly average for 2010, which
exceeds £2bn. Prior to the credit
crunch, net lending would hit £6bn in
some months.
The figures pour more misery on
the housing market after mortgage
data from earlier this month showed a
similar decline. Approvals were down
two per cent on September according
to chartered surveyors e.surv.
Yet there is not equal doom and
gloom across the market. “Beneath
the surface there is a real two-speed
market in operation,” explained
e.surv’s Richard Sexton. “Approvals are
up for the most expensive properties.
The flip side is that approvals for
cheaper properties have fallen dramat-
ically.”
months to September. The figure
confirms solid growth in spite of
falling from the exceptionally high
second quarter growth of 2.3 per
cent. “In contrast to widespread
notions, the main engine of real
GDP growth has been domestic
demand,” said Frank Engels of
Barclays Capital Research.
Strong German growth was also
behind the Eurozone’s positive PMI
results, raising concerns that core
European economies are disguis-
ing poor performance in peripher-
al countries.
While data on peripheral coun-
tries is not yet available, Chris
Williamson of Markit confirmed:
“The periphery continues to strug-
gle with extremely tough condi-
tions. Growth outside of France
Growth in consumption was
revised up from 2.6 per cent to 2.8
per cent.
In a sign of US consumers
becoming more confident in their
finances, the rise in consumption
was the highest since the first quar-
ter of 2006, according to Paul
Dales, US Economist for Capital
Economics. The figure “suggests
that household spending may be
starting to gain some traction,” he
said.
However, the news came as US
housing data for October showed a
slight decline. Home sales fell 2.2
Economic News 15
NEWS | IN BRIEF
Japan jump won’t dent deflation
Growth in Japan was stronger than
expected in the three months to
September, it was revealed yesterday.
Yet Capital Economics warns that the
jump is temporary, predicting that
Japan will continue to suffer a pro-
longed slump. Japanese Consumer Price
Index (CPI) figures are expected on
Friday, with economists expecting a fall.
Polish rates in 17-month freeze
Poland’s benchmark interest rate was
kept unchanged yesterday, for the sev-
enteenth consecutive month, according
to the country’s Narodowy Bank Polski.
The Monetary Policy Council voted to
keep rates at 3.5 per cent, sticking to its
“wait and see” policy in spite of inflation
remaining at a 34-month low.
French business growth slows
There was mixed news for France yes-
terday as business leaders signalled a
slight decline in the economic outlook, in
spite of positive growth figures released
by Markit (see left). While the French
Purchasing Managers’ Index (PMI) rose
above the Eurozone average in
November, the INSEE business climate
index fell to 100 points, down from 104
in the previous month, and not in line
with its long-term average. The fall “sug-
gests some deceleration in the pace of
the recovery” according to Laurence
Mortgage approvals fell again in October. Picture: Micha Thiener/ CITY A.M Boone of Barclays Capital Research.
Pro-DLX3
and Germany appears to be stag- Built for business
nating at best.”
Manufacturing jobs growth was
the fastest in almost fifteen years,
while French output growth accel- • Carries all your business and overnight essentials
erated for the first time in four
months.
Elsewhere in Europe, there were • Cabin baggage compliant*
mixed results for Norway and Italy.
Norwegian GDP increased by 0.9 • Robust armoured nylon construction
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“total GDP” – that which includes • Find out more at www.pro-dlx3.co.uk
offshore energy -- was down 1.6 per
cent, far worse than expected.
In Italy consumer confidence
defied forecasts by edging upwards
in November. Yesterday the
European Commission announced
that consumer morale had surged
to its highest level in almost two
years across the Eurozone.
per cent on the previous month,
worse than economists’ predic-
tions.
The US economy is still facing an
uphill struggle, according to Dales.
In spite of improved GDP figures,
the economy is “not growing fast
enough to reduce significantly the
unemployment rate or to prevent a On sale now at:
slide into deflation,” he said.
Although unlike the UK and
other European countries, the US
is not exposed to the crisis in * Model shown, Mobile Office 50cm. Check with your airline before you travel. © Samsonite 2010.
Ireland. “US exports to Ireland are
worth less than 0.1 per cent of US
GDP,” he added.
 16 News CITYA.M. 24 NOVEMBER 2010

Intermediate Capital on the

hunt for banking sector assets
up further opportunities for deals ing profits as gains made on its
▲

FINANCIAL SERVICES
BY HARRY BANKS
BUYOUT lender Intermediate Capital
Group said it would stay on the look-
out for investment opportunities as
banks, weakened by the debt crisis,
look to shed assets.
In August, Intermediate Capital
bought a €1.4bn (£1.2bn) portfolio of
European loans from Royal Bank of
Scotland, and the company said yes-
terday that the sector would throw
next year.
“We’ll look at opportunities in the
banking sector in general,” chief exec-
utive Christophe Evain said, adding
the situation in Ireland, whose banks
have been battered by the country’s
sovereign debt crisis, “might become
interesting”.
The company, which specialises in
providing mezzanine financing, said
it was also targeting growth in its
fund management division and ris-
investments boosted its first half.
Pre-tax profit for the six months
ended 30 September rose to £105.1m,
against £97.7m in the previous six
months, and more than 10 times the
year-earlier figure.
Finance director Philip Keller said
the company’s second-half perform-
ance would be “fairly similar” to that
of the first half, but added that it
might not make the same level of cap-
ital gains.

M&B boss Adam Fowle said the firm had performed well despite “challenging conditions”

M&B boosts
its profits but
holds dividend
22 Ha Ha Bar and Grill sites for
▲

LEISURE
BY ALISON LOCK £19.5m.
It has also reduced net debt by
PUB and restaurant group Mitchells & almost £300m, to £2.3bn, cutting its
Butlers boosted full-year pre-tax prof- interest bill by £13m to £147m.
its by 26 per cent to £169m, but a Analysts reacted positively to the
£300m property write-off pushed it to results, with both Evolution
a pre-tax loss, it reported yesterday. Securities and KBC Peel Hunt recom-
The owner of bar brands such as All mending the share as a “buy”.
Bar One, O’Neill’s, and Harvester saw “The company now has a very
1.1 per cent revenue growth to strong strategy,” said Paul Hickman of
£1.98bn over the year, but recorded KBC Peel Hunt.
an overall £84m loss, down from a He added: “There’s a lot of brand
£4m profit the previous year, due to strength there; it is much more
the writedown. focused than before.”
As a result, it will not reinstate its However, shares fell about 2.6 per
dividend again this year, after sus- cent to 344.6p.
pending it in 2008 due to difficult
trading conditions. It will not commit ANALYSIS l Mitchells & Butlers
to paying one in 2011. 360 p
“We have delivered a very good set
of results in challenging economic 344.60
340 23 Nov
conditions,” said chief executive
Adam Fowle.
The group is eight months into a 320
restructuring to turn it from a drink-
led to a food-led business, which will 300
focus on the casual dining market.
In the past year it has sold 49 of its
non-core “wet-led” pubs and bought 23 Aug 13 Sep 1 Oct 21 Oct 10 Nov

Eastern Platinum in bid to raise

£185.1m for South African mine
▲

MINING
MINER Eastern Platinum is raising
about £185.1m to fund exploration in
South Africa, hitting its shares.
Vancouver-based Eastern is plan-
ning to sell 195m shares at C$1.55
(96p) each to fund the first part of its
Eastern Limb platinum project in the
Bushveld complex, the source of
about 70 per cent of global platinum
metal supplies.
The company has also granted an
over-allotment option of up to 15 per
cent of the shares sold in the offering.
Shares in the group fell 10.25p to 97p.
Canaccord Genuity Corp and UBS
Securities Canada are leading under-
writers including GMP Securities,
Goldman Sachs Canada, Raymond
James Ltd and Paradigm Capital.
The offering is expected to close on
or about 8 December.
CITYA.M. 24 NOVEMBER 2010
De La Rue set
on Cobbold as
its new chief
▲
FINANCIAL SERVICES
BY MATTHEW WEST
BANK note printer De La Rue is on the
verge of appointing the group presi-
dent of power company Choride, Tim
Cobbold, as its new chief executive.
The appointment process is not yet
complete and it could still be a few
weeks before De La Rue makes an
announcement but negotiations are
believed to be at an advanced stage.
Sources close to De La Rue con-
firmed to City A.M. the company was
in the final stages of talks with its pre-
ferred candidate. De La Rue has been
searching for a new chief since James
Hussey left in August after printing
irregularities discovered at one of its
plants threatened one of its biggest
contracts.
De La Rue said yesterday it was still
uncertain as to whether one of its
biggest customers, believed to be
Reserve Bank of India, would renew
its contract after losing nearly a fifth
of revenue and halving profit in the
first half of the year due to faulty
paper production.
Suspending production at its
Overton plant in Hampshire in the
summer cost the company £35m
although this was in line with a prof-
it warning issued in September.
“We have not heard whether we
will continue supplying this cus-
tomer,” it said.
First-half revenue was down 17 per
cent at £209.2m, while profit before
tax was £23.8m, down from £48m at
the same time last year. The company
also admitted there remained uncer-
tainty over its full-year results.
ANALYSIS l De La Rue
p tation in the banknote market is paramount.
720
5,57.50.00
680 23 Nov
640
600
23 Aug 13 Sep 1 Oct 21 Oct
Focus on De La Rue 17
TIME LINE | THE FALL OF
● 1/1/2009
DE LA RUE
James Hussey replaces Leo Quinn as
chief executive of De La Rue.
●20/5/2009
De La Rue reports a modest rise in pre-
tax profit of 5.4 per cent to £96.1m,
reaping the benefits of a restructuring
De La Rue executive chairman Nicolas Brooks admitted uncertainty remained
programme introduced by Quinn and cot-
inued by Hussey. The company also
announces a five year extension to its
ANALYST VIEWS: WHAT DO YOU MAKE contract to print notes for the Bank of
OF DE LA RUE’S POSITION? Interviews by Matthew West
England.
● 21/7/2010
ADRIAN KEARSEY | EVOLUTION SECURITIES De La Rue shares tumble 15.9 per cent
after concerns are raised over quality
“
and production irregularities come to
light at its factory in Overton, Hampshire.
The shares offer an attractive yield supported by a
strong balance sheet. However, there is insufficient clarity on ● 12/8/2010
”
how long it will take for earnings to recover. The consensus De La Rue chief executive James Hussey
is likely to fall towards the bottom of the range. quits the firm after 27 years in what is
thought to be a last ditch bid to save a
JONATHAN JACKSON | KILLIK & CO contract with the Reserve Bank of India
believed to be worth up to 25 per cent of
“
the company’s profits.
The shares have fallen 40 per cent since the produc-
● 7/9/2010
tion irregularities in July. Although this may turn out to have A subsequent investigation finds some
”
been an over-reaction and a great buying opportunity, repu- employees deliberately falsified impor-
tant paper test results, leading to investi-
gations by both the police and Serious
Fraud Office. Shipments believed to be
PAUL JONES | PANMURE GORDON part of a contract with the Reserve Bank
“
of India are suspended.
The outlook is very uncertain with a number of ● 23/10/2010
important questions still to be answered: Will bank note vol- De La Rue says it is close to appointing a
”
10 Nov
umes return? Will deliveries to the Bank of Ireland resume? new chief executive.
What will the effect on margins for new orders be?
 18 News CITYA.M. 24 NOVEMBER 2010

Profit flow slows at Severn Delays may hit Sterling

business by four per cent by 2015. to inadequate returns for investors.
Energy’s Kurdistan well
▲

UTILITIES
But more water use helped to offset Severn’s chief executive Tony Wray
BY PHILIP WALLER the impact of the cuts, higher costs said Woodford had told it there were

PRICE cuts and higher costs stemmed
the flow of profits at Severn Trent,
but the water firm said an inflation-
busting dividend rise in the next four
years showed its confidence.
Severn, which supplies water and
sewage services to about 3.7m homes
in the Midlands and mid-Wales, said
profits fell 16 per cent to £158m on
1.9 per cent higher revenue of
£867.9m in the six months to 30
September.
The regulator is forcing Severn to
cut household bills in its regulated
and a £16m depreciation charge.
The group plans to increase its div-
idend by retail price inflation plus
three per cent for the next four years.
Finance director Mike McKeon said:
“We chose three per cent because
we’re confident about the perform-
ance of the business in the next four
years.”
Invesco Perpetual fund manager
Neil Woodford sold his £100m stake
in the company last month. He is
understood to have said the water sec-
tor’s regulatory regime was leading
better options elsewhere, but other
investors had bought his shares.
“What is important in future price
reviews is a fair and appropriate rate
of return on debt and equity,” he said.
Severn has opened an operations
centre in Coventry with the loss of
275 jobs, saving £10m a year.
Wray said 2011 would be tough,
with government spending cuts pos-
sibly hitting jobs and making it more
difficult for people to pay bills.
“We’ll be under significant cost
pressure,” he said.
▲
OIL & GAS
INVESTORS yesterday pulled out of
Sterling Energy after the oil and gas
explorer revealed potential delays in
drilling a well in Kurdistan.
Shares in Sterling dropped 11.9 per
cent to 53.75p after the group, which
focuses on the Middle East and Africa,
said gas had accidentally escaped into
a well it was drilling in its Sangaw
north block, in which it has a 53.3 per
cent stake.
Sterling, which is targeting reser-
voirs deeper in the well, said work to
remove the gas had damaged drilling
equipment.
It said work to remove the dam-
aged equipment and the gas from the
well would be challenging and it did
not know how long it would take.
Sterling said the entry of gas into
the well was encouraging, but did not
show whether it contained signifi-
cant hydrocarbon deposits.
“Sterling will make a further
announcement at the appropriate
time,” the company said in an update.

Biggest IPO
HomeServe’s BEST OF THE BROKERS
ANALYSIS l Mitie Group
p

198.60
MITIE GROUP
RBS says Mitie’s interim results were four
per cent higher than expectations, but that in Norway
boss in £70m
210 23 Nov
the next six months are critical, since new

200
contracts would justify a substantial step
up in Mitie’s bid costs. RBS’ reduced fore-
cast and target price assumes that these
since 2001
share sell-off
contracts are not secured. Wins would
catalyse upgrades and a rerating, RBS says.

▲
190 RBS reiterates its “buy” rating but reduces INSURANCE
its target price from 290p to 270p. NORWEGIAN non-life insurer
23 Aug 13 Sep 1 Oct 21 Oct 10 Nov Gjensidige launched its long-awaited
initial public offering (IPO) yesterday,
ANALYSIS l Carclo CARCLO likely to be the biggest float in
4.8 per cent following the announce- p 194.00 Norway since oil company Statoil
Brewin Dolphin says technical plastic and
▲

INSURANCE
BY HARRY BANKS
THE chief executive of British insur-
ance group HomeServe yesterday said
he was selling almost £70m of his
shares – around a third of his stake –
denting the company’s share price
despite a rise in first-half profits.
Richard Harpin, chief executive
since 2004, intends to sell 16m shares
worth some £68m based on yester-
day’s opening price and equivalent to
five per cent of the company.
The transaction takes his holding
from 17 per cent to 12 per cent.
Proceeds from the placing will be
used to diversify his financial portfo-
lio, said Harpin, who insisted he
remained committed to the group he
founded.
He added: “There are lots more
opportunities in the countries that we
are already in and opportunities in
due course to open up additional geog-
raphies. I absolutely love [Homeserve]
and am committed for the long term.”
Harpin told reporters on a confer-
ence call yesterday, adding that he was
confident of signing additional US
partners in the future.
HomeServe shares fell as much as
ment, before closing down one per
cent at 422.00p.
The shock sale came as the provider
of cover for broken boilers and burst
pipes delivered first-half results show-
ing it was on track to meet full-year
targets.
Policies in HomeServe’s core UK
market, which accounts for the bulk
of its revenues, increased to 7.2m in
the first six months of the year com-
pared with 6.8m a year earlier.
Growth was faster in the US, where
gross policy sales rose 36 per cent to
over 800,000 during the period.
HomeServe said in June that it had the
potential to reach up to 20.3m house-
holds in the country.
ANALYSIS l Homeserve
500 p
422.00
23 Nov
460
420
To appear in Best of the Brokers email your research to notes@cityam.com
23 Aug 13 Sep 1 Oct 21 Oct 10 Nov
23 Nov
220 floated in 2001.
engineering firm Carclo’s interim results
Gjensidige said the indicative price
have highlighted an encouraging underlying range was 54-64 Norwegian crowns
200 performance with the promise of a per share. That would value it at 27-
stronger second-half as medical/optical 32bn Norwegian crowns (£2.79bn-
markets remain strong and supercar light- £3.3bn).
180 Up to 200m shares will be sold, a
ing improves after some programme source close to the deal said, which
delays. Brewin ups its price target to 240p, would mean proceeds from the share
160
reflecting increasing confidence in the sale of 10.8-12.8bn crowns.
firm’s value and moves to “buy” from “hold”. The Gjensidige Foundation, which
owns Gjensidige, has said it will sell
23 Aug 13 Sep 1 Oct 21 Oct 10 Nov 25-40 per cent of its shares in the IPO.
Analysts have said the listing of
ANALYSIS l Provident Financial PROVIDENT FINANCIAL Norway’s largest property and casual-
p
880 Evolution Securities expects Provident’s ty insurer was a step towards a possi-
investor day to build on the analysis of the ble tie-up with fellow Norwegian
775.00 impact on home credit of the recent insurer Storebrand, in which
840 23 Nov Gjensidige has a 24.3 per cent stake.
Comprehensive Spending Review. Colour Storebrand, which specialises in
may also be given on how the company has life insurance, said last year it had
800 traded over the last month, it believes. tried and failed to merge with
Gjensidige.
However, Evolution doesn’t expect anything
specific on funding. “Provident remains a Gjensidige has talked for years
760 about listing. Its previous attempt to
cheap, lower beta play,” it says. Reiterates list on the Oslo bourse was aban-
its “buy” rating. doned during the global financial cri-
23 Aug 13 Sep 1 Oct 21 Oct 10 Nov sis.
The book building and order peri-
od for the IPO was expected to end 9
December, Gjensidige said.

CITY MOVES | WHO’S SWITCHING JOBS Edited by Juliet Samuel in association with

iShares
The exchange-traded funds platform of
BlackRock, iShares, has promoted David
Gardner to the newly created role of head of
sales for Europe, the Middle East and Africa
(EMEA). He will be based in London and report
to EMEA managing director Joe Linhares.
Gardner has worked at iShares for a decade in
locations across Asia and the US. He has been
promoted from his role as head of sales for
northern Europe.
Detica tancy Detica. He will be responsible for
Kevin Rutledge has been appointed as heading up SmartReach, a group of
head of energy and utilities at consul- companies that aims to supply the gov-
ernment’s smart meter programme and
will be in charge of Detica’s cyber secu-
rity services. He moves over from HCL
AXON and has 15 years’ experience and
has previously worked at Wipro
Technologies.
JP Morgan Asset Management
Mark Riggall has joined JP Morgan
Asset Management on the international
sales team. As head of strategic
alliances, he will report to Simon
Littmoden and will focus on developing
the firm’s cross-border company rela-
tionships. Riggall has 25 years’ experi-
ence in financial services and moves to
JP Morgan from Jupiter Asset
Management.
Mills & Reeve
Richard Hanson has joined national law
firm Mills & Reeve as a partner in the
real estate disputes practice, so that
the number of partners now stands at
93. Hanson will be moving from
Eversheds in London, where he headed
the firm’s London and Cambridge real
estate dispute team. He is also a trustee
and co-founder of the charity Blind in
Business.
Ruffer
Investment manager Ruffer has
appointed David Benson as investment
director, with responsibility for absolute
return for pension funds. He has worked
as a fund manager at Societe Generale
Asset Management, as an engagement
manager for McKinsey and as business
development director at Deutsche Asset
Management.
Logica Business Consulting
Logica has appointed Melba Foggo as a
managing partner of sustainability serv-
ices and business consulting. Foggo
moves over from Ernst & Young and will
be in charge of providing advice to
clients on business efficiency. She will
report to Amanda Mesler, chief executive
officer of Logica Business Consulting.

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updates and pictures to citymoves@cityam.com morganmckinley.com
CITYA.M. 24 NOVEMBER 2010
Caledonia manages
to trump FTSE by
5pc in its first-half
INVESTMENT
▲
BY ALISON LOCK
UK investment trust Caledonia
Investments outperformed the FTSE
All-Share Index by five per cent in its
first half 2010 results, it said yesterday.
Net asset value per share rose by 3.5
per cent to 2,105p from 2,034p while
the index fell 1.5 per cent over the
same period, the firm said in its inter-
im results statement.
It has raised its interim dividend by
4.7 per cent to 11.1p per share and
remains confident it can continue its
unbroken 43-year record of increas-
ing dividends in its full-year results.
Chief executive Will Wyatt said:
“There’s been a general good tick up
in the market and we’ve had some
nice recovery in our unquoted portfo-
lio, a lot of which is industrial-based.”
Caledonia’s share price remained
Spotify could miss
Christmas US launch
TECHNOLOGY
▲
BY STEVE DINNEEN
SPOTIFY’S US launch is being met
with increasing scepticism by ana-
lysts.
The music streaming service said
this week it will press ahead with
its plans to launch in the US before
Christmas, despite announcing a
full-year loss of £16.7m for 2009.
“I’d be very surprised if they
manage to pull this off in the time-
frame they are talking about,” Ben
Rumley of Enders Analysis told City
A.M. “They have been talking about
a US launch for a very long time
now but negotiations are moving
very slowly. The stumbling blocks
are the same as they were six
months ago, I can’t see what has
Investors are right to be cynical
HOW times have changed. During
the boom years, venture capital-
ists were lining up to give billions
of dollars to internet start-ups.
The theory was that if you threw
enough cash at these fledgling
firms, some of it would stick to
the next Google or Facebook.
Losses that ran into the millions
of dollars were the norm.
That’s why Spotify is more than
a little irked at all the recent nay
saying, which followed news that
it posted a £16.7m loss in 2009. Its
fans argue that losses are to be
expected at this stage in the
game: Spotify is trying to revolu-
tionise digital music sales – and
that doesn’t come cheap.
Such bullishness doesn’t ring
true. Venture capital is thin on
broadly the same in the six months to
30 September at 1,627p, up from
1,625p at 31 March.
It invested £49m in the first half,
including £25m of new investments
into companies such as banknote
printer De La Rue and Indian fund
IAP Gateway to India, as well as £24m
of follow-on investments. It realised
£60m from existing investments.
Unquoted investments performed
strongly, rising 11.1 per cent, while its
listed portfolio rose 2.5 per cent.
Caledonia is currently trading at
around a 19 per cent discount to earn-
ings, which analysts consider wide.
The firm’s outlook is cautious and
it aims to increase liquidity above its
current two per cent net cash level.
“At the end of the day we will con-
tinue to try to grind out positive
results and if we do that the perform-
ance and the share price will come,”
Wyatt said.
changed.
“The US is a nice headline place
to launch but it isn’t necessarily
right for this business. There have
been other players over there for
almost eight years who have seen
little success. Despite their losses
last year, the business in Europe is
growing. There is a feeling it
should concentrate on Europe
before attempting a US launch.”
There is speculation the firm
may attempt to press ahead with a
low-key launch, which may
exclude tracks owned by one or
more of the big four US labels.
Spotify says it is still in negotia-
tions with all four.
The firm said in accounts
released this week that it is in
negotiations for extra funding to
the ground, and Spotify is in des-
perate need of extra cash – it fin-
ished 2009 with £14m in cash and
assets, versus £21.46m of liabili-
ties.
In the glory years, venture capi-
talists would have made hay by
selling to an old-fashioned media
conglomerate; the likes of Rupert
Murdoch’s News Corp and Time
Warner were desperate to buy dig-
ital businesses of every hue just to
keep up with the times.
Not so any more. With just a
few exceptions, most of these ven-
tures have been a disaster. Earlier
this month, News Corp president
Charles Carey warned that losses
at the social network it bought for
$500m in 2005 were “neither
acceptable nor sustainable”. And
News 19
West End shops
go traffic-free
this weekend
RETAIL
▲
REGENT Street and Oxford Street will
be vehicle-free between 10am and
6pm this Saturday, allowing millions
of Londoners to indulge in Christmas
shopping on foot.
Stores are offering up to 50 per cent
off and opening as early as 8am, as
they compete for the attention of an
anticipated two million shoppers.
By VIP Day (“Very Important
Pedestrians”) many consumers will
have received their last pay cheques
before Christmas.
Promoters of the event are predict-
ing that sales will exceed £250m
across the weekend.
Retailers hope that special offers
will tempt people into splashing out
for the holiday period — and in partic-
ular before VAT increases to 20 per
cent in the New Year.
Shops will be creating a festival
atmosphere with free hot drinks,
while Aquascutum is offering 30 per
cent off all products, plus carol
Christmas shopping kicks off with Saturday’s VIP day in the West End Picture: GETTY singers and mince pies.
support its growth plans.
Despite gathering a subscriber
base of more than 10m – around
five per cent of whom pay for the
premium service – Spotify has
been dogged by rumours it will col-
lapse under the weight of its royal-
ty payments. This was highlighted
by auditor Ernst & Young, which
noted “material uncertainty which
may cast significant doubt about
the group’s ability to continue as a
going concern.”
Spotify chief
exec and founder
Daniel Ek has said the
US launch is critical
to Spotify’s future
AOL recently sold Bebo, the social
network it bought for $850m in
2008 while it was still part of
Time Warner, for less than $10m.
Few media companies want to fol-
low in their footsteps.
The fact remains that the
amount Spotify must pay in royal-
ties to labels and publishers
(£18.82m in 2009) is growing
faster than subscription revenues
(£6.81m) and advertising sales
(£4.51m). As the service adds more
users, it will have to pay more roy-
alties, pushing the break even
point ever further into the future.
david.crow@cityam.com
BOTTOMLINE
Analysis by David Crow
 Markets&Investment
20 CITYA.M. 24 NOVEMBER 2010

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 . . . . . . . . . . . . . . . . . . . . . . . .303.40 –6.60 328.30 246.90 Compass . . . . . . . . . . . . . . . . . .527.50 –11.50 574.50 399.60 Kazakhmys . . . . . . . . . . . . . . . .1391.00 –49.00 1634.00 955.50 Sainsbury(J) . . . . . . . . . . . . . . . .356.40* –5.40 397.00 307.60
3i Infrastructure . . . . . . . . . . . . . 117.50 –0.60 118.50 97.00 Cookson . . . . . . . . . . . . . . . . . . .527.50 –5.50 616.00 364.80 Kesa Electricals . . . . . . . . . . . . .166.10 — 172.40 98.45 Schroders . . . . . . . . . . . . . . . . .1578.00 –11.00 1670.00 1096.00
A.B. Foods . . . . . . . . . . . . . . . .1057.00 –18.00 1113.00 790.00 Croda Intl . . . . . . . . . . . . . . . . .1432.00 –15.00 1540.00 735.00 .LQJÀVKHU . . . . . . . . . . . . . . . . . .248.30 –0.90 255.00 196.50 Schroders N/V. . . . . . . . . . . . . .1252.00 –10.00 1330.00 912.50
Aberdeen Asset Man . . . . . . . . . .173.40 –4.60 191.60 111.00 Daily Mail ‘A’ . . . . . . . . . . . . . . . .557.00 –8.50 576.00 401.70 Ladbrokes . . . . . . . . . . . . . . . . .126.70* –1.80 164.60 120.00 Scot. & Sthrn Energy. . . . . . . . . 1155.00 –12.00 1206.00 1006.00
Admiral. . . . . . . . . . . . . . . . . . .1509.00 –11.00 1721.00 1003.00 Davis Service . . . . . . . . . . . . . . .394.00 –5.90 442.30 356.00 Lancashire Hldgs . . . . . . . . . . . .628.50 –5.50 650.00 416.70 Scottish Mortgage. . . . . . . . . . . .633.00* –8.50 684.00 475.00
Aegis . . . . . . . . . . . . . . . . . . . . .131.70 –1.20 137.30 103.10 Debenhams . . . . . . . . . . . . . . . . .70.10 –0.60 85.75 51.95 Land Securities . . . . . . . . . . . . . .645.00 –6.50 705.00 543.00
Afren . . . . . . . . . . . . . . . . . . . . .125.10 –1.80 135.90 77.00 Derwent London . . . . . . . . . . . . 1411.00 –38.00 1633.00 1183.00 Legal & General . . . . . . . . . . . . . .91.30 –3.50 107.50 69.05 SEGRO . . . . . . . . . . . . . . . . . . . .283.80 –9.60 357.90 244.00
African Barr Gold . . . . . . . . . . . .522.50 –14.50 685.00 520.50 Dexion Absolute . . . . . . . . . . . . .138.30 –0.10 148.00 131.20 Lloyds Banking Gp . . . . . . . . . . . .63.35 –0.58 79.15 45.30 Serco . . . . . . . . . . . . . . . . . . . . .550.50 –8.00 656.50 491.20
Aggreko . . . . . . . . . . . . . . . . . .1479.00 –11.00 1698.00 727.50 Diageo . . . . . . . . . . . . . . . . . . . 1164.00 –20.00 1240.00 988.00 Logica . . . . . . . . . . . . . . . . . . . .120.60 –1.70 149.10 100.80 Severn Trent . . . . . . . . . . . . . . .1450.00 –9.00 1475.00 981.50
Alliance Trust . . . . . . . . . . . . . . .345.20 –5.30 363.00 292.80 Dixons Retail . . . . . . . . . . . . . . . .25.14 –0.02 39.50 23.07 London Stk Exchange . . . . . . . . .752.50 –2.50 864.50 540.50 Shaftesbury . . . . . . . . . . . . . . . .434.30 –3.00 465.00 348.00
AMEC . . . . . . . . . . . . . . . . . . . . 1131.00 +1.00 1166.00 728.00 Domino’s Pizza . . . . . . . . . . . . . .522.00 — 535.50 278.20 Lonmin . . . . . . . . . . . . . . . . . . .1688.00 –46.00 2198.00 1344.00 Shire. . . . . . . . . . . . . . . . . . . . .1531.00 –2.00 1552.00 1139.00
Amlin . . . . . . . . . . . . . . . . . . . . .375.50 –2.60 437.60 357.30 Drax . . . . . . . . . . . . . . . . . . . . . .371.70 –2.60 451.80 321.50 Man . . . . . . . . . . . . . . . . . . . . . .274.50 –14.00 353.00 199.60 SIG . . . . . . . . . . . . . . . . . . . . . . . 115.60 –2.20 142.10 89.55
Anglo American . . . . . . . . . . . .2833.50 –55.50 3069.00 2210.00 Dunelm . . . . . . . . . . . . . . . . . . . .501.50 –5.50 543.50 319.40 Marks & Spencer. . . . . . . . . . . . .371.40* –6.20 431.40 321.90 Smith & Nephew . . . . . . . . . . . . .581.00 –4.50 700.50 532.00
Antofagasta . . . . . . . . . . . . . . .1317.00 –58.00 1482.00 755.50 Easyjet . . . . . . . . . . . . . . . . . . . .438.70 –6.60 499.90 339.80 Meggitt . . . . . . . . . . . . . . . . . . . .331.60 –3.00 345.70 234.50 Smith(Ds) . . . . . . . . . . . . . . . . . .184.90 — 187.30 103.00
Aquarius Platinum . . . . . . . . . . .313.30 –13.70 490.00 211.50 Edinburgh Inv Tst . . . . . . . . . . . .423.90* –10.70 466.80 348.00 Melrose . . . . . . . . . . . . . . . . . . .285.10 –7.90 306.80 160.00 Smiths . . . . . . . . . . . . . . . . . . . 1120.00 –15.00 1297.00 930.00
ARM Holdings . . . . . . . . . . . . . . .379.70 –4.00 419.50 150.60 Electrocomponents . . . . . . . . . . .259.10 –7.90 271.90 159.50 Mercantile IT . . . . . . . . . . . . . . . .978.00 –19.00 1029.00 822.50 SOCO Intl . . . . . . . . . . . . . . . . . .348.00 –6.50 510.00 287.40
Ashmore . . . . . . . . . . . . . . . . . . .352.00* –7.60 400.50 215.00 EnQuest . . . . . . . . . . . . . . . . . . .129.70 –1.80 138.50 87.35 Michael Page Intl. . . . . . . . . . . . .467.70 –7.20 507.50 326.00 Spectris . . . . . . . . . . . . . . . . . . 1175.00 –43.00 1234.00 653.00
Ashtead . . . . . . . . . . . . . . . . . . .124.00 –4.40 135.60 61.25 Essar Energy . . . . . . . . . . . . . . .494.30 –16.70 566.50 358.50 Micro Focus . . . . . . . . . . . . . . . .334.90 –5.90 550.00 272.20
Astrazeneca . . . . . . . . . . . . . . .3010.00 –45.00 3389.50 2701.50 Eurasian Nat Res . . . . . . . . . . . .874.00 –24.00 1276.00 801.00 Millen & Copthorne . . . . . . . . . . .512.50 –12.00 585.00 329.20 Spirax-Sarco Eng . . . . . . . . . . .1800.00 –44.00 1888.00 1064.00
Atkins(Ws) . . . . . . . . . . . . . . . . .713.00 –15.00 801.00 549.50 Euromoney Inst Inv . . . . . . . . . . .695.00* –5.00 714.00 383.00 Misys . . . . . . . . . . . . . . . . . . . . .286.70 –6.80 300.00 196.60 Spirent Comms . . . . . . . . . . . . . .147.40 –1.40 158.30 90.45
Autonomy Corp . . . . . . . . . . . .1351.00 –44.00 2012.00 1319.00 Experian . . . . . . . . . . . . . . . . . . .725.50 –9.50 763.50 559.00 Mitchells & Butlers . . . . . . . . . . .344.60 –9.20 363.60 242.50 Sports Direct Intl . . . . . . . . . . . . .130.40 –1.90 154.30 89.85
Aveva . . . . . . . . . . . . . . . . . . . .1548.00 –27.00 1578.00 930.00 Ferrexpo . . . . . . . . . . . . . . . . . . .356.00 –15.20 401.60 177.50 MITIE . . . . . . . . . . . . . . . . . . . . .198.60 –4.50 245.90 187.60 SSL Intl . . . . . . . . . . . . . . . . . . . 1164.00 — 1190.00 660.50
Aviva . . . . . . . . . . . . . . . . . . . . .383.30 –9.50 428.70 290.20 FirstGroup . . . . . . . . . . . . . . . . .374.00 –7.10 428.40 331.20 Mondi . . . . . . . . . . . . . . . . . . . . .471.00 –17.00 562.00 304.70 St James’s Place . . . . . . . . . . . . .242.70 –4.10 298.00 203.40
Babcock International . . . . . . . . .522.00 +8.50 645.50 489.00 Foreign & Col Inv Tst. . . . . . . . . .289.60 –3.70 300.00 250.00 Monks Inv Tst . . . . . . . . . . . . . . .332.00 –5.40 349.70 265.00 Stagecoach. . . . . . . . . . . . . . . . .199.00 –5.40 226.10 144.10
BAE Systems . . . . . . . . . . . . . . .338.80* –7.10 389.90 288.10 Fresnillo . . . . . . . . . . . . . . . . . .1425.00 +21.00 1480.00 647.00 Morgan Crucible . . . . . . . . . . . . .233.50 –9.20 254.90 142.90 Standard Chartered . . . . . . . . . .1737.00 –49.00 1975.00 1316.50
Balfour Beatty . . . . . . . . . . . . . . .271.80* –3.70 304.80 228.60 G4S . . . . . . . . . . . . . . . . . . . . . .241.30 –5.90 285.70 238.70 Morrison Wm . . . . . . . . . . . . . . .271.60 –1.40 307.10 255.00 Standard Life . . . . . . . . . . . . . . .212.60 –3.40 238.00 170.00
Barclays . . . . . . . . . . . . . . . . . . .264.25* –5.75 394.25 253.40 Genesis Emerging Mkts Fd . . . . .512.50 –8.00 542.50 383.00 Murray Intl Tst . . . . . . . . . . . . . . .890.00 –15.00 938.50 720.00 SuperGrp . . . . . . . . . . . . . . . . .1428.00 –32.00 1490.00 499.00
Barratt Development . . . . . . . . . . .70.95 –3.85 145.00 70.95 GKN . . . . . . . . . . . . . . . . . . . . . .187.50 –4.10 196.90 100.40 National Express. . . . . . . . . . . . .231.70 –8.00 261.30 164.80 TalkTalk . . . . . . . . . . . . . . . . . . .154.50 +0.70 161.00 106.60
BBA Aviation . . . . . . . . . . . . . . .194.90 –1.50 220.00 145.90 GlaxoSmithKline . . . . . . . . . . . .1226.00* –21.50 1347.00 1088.00 National Grid . . . . . . . . . . . . . . .574.00 –7.00 607.65 474.80 Talvivaara Mining . . . . . . . . . . . .509.00 –19.00 597.00 341.40
Berkeley . . . . . . . . . . . . . . . . . . .789.50 –16.50 917.50 735.00 Great Portland Estates . . . . . . . .329.00* –8.60 368.60 265.40 Next . . . . . . . . . . . . . . . . . . . . .2055.00 –8.00 2361.00 1816.00 Tate & Lyle . . . . . . . . . . . . . . . . .519.00 –4.50 539.00 388.00
BG . . . . . . . . . . . . . . . . . . . . . . 1185.00 –24.50 1302.50 966.90 Greene King . . . . . . . . . . . . . . . .443.10 –9.60 484.00 372.50 Northumbrian Water . . . . . . . . . .344.50 –3.30 364.00 240.50
BHP Billiton . . . . . . . . . . . . . . .2268.00 –51.50 2500.00 1678.00 Halfords . . . . . . . . . . . . . . . . . . .420.30 –2.40 562.50 370.10 Ocado Grp . . . . . . . . . . . . . . . . .138.80 –2.20 169.00 120.90 Taylor Wimpey . . . . . . . . . . . . . . .24.25 –1.05 46.34 22.12
BlackRock Mining . . . . . . . . . . . .693.50 –17.50 737.50 490.00 Halma . . . . . . . . . . . . . . . . . . . . .330.90 –7.00 345.50 221.80 Old Mutual . . . . . . . . . . . . . . . . .123.00* –1.50 146.90 95.30 Telecity . . . . . . . . . . . . . . . . . . . .438.80 –7.90 546.00 327.60
BlueBay . . . . . . . . . . . . . . . . . . .482.00* — 495.00 251.00 Hammerson . . . . . . . . . . . . . . . .391.40 –8.10 437.70 332.20 Partygaming . . . . . . . . . . . . . . . .236.00 –2.00 339.70 205.80 Templeton Emrg Mkts . . . . . . . . .627.00 –20.00 688.00 470.00
Bluecrest Allblue GBP . . . . . . . . .174.20 +0.20 174.50 151.90 Hargreaves Lansdown . . . . . . . .489.80 –6.20 502.50 260.00 Pearson . . . . . . . . . . . . . . . . . . .933.50 –5.50 1069.00 812.00 Tesco . . . . . . . . . . . . . . . . . . . . .418.25* –3.60 454.90 368.40
Booker . . . . . . . . . . . . . . . . . . . . .54.70* –1.30 56.25 37.50 Hays . . . . . . . . . . . . . . . . . . . . . .105.60 –2.20 125.30 82.50 Pennon . . . . . . . . . . . . . . . . . . . .624.00 –4.00 644.00 476.80 Thomas Cook . . . . . . . . . . . . . . .187.50 –4.90 277.20 167.50
BP . . . . . . . . . . . . . . . . . . . . . . .428.75 –2.25 658.20 296.00 Henderson . . . . . . . . . . . . . . . . .123.00 –3.10 157.80 112.10 Persimmon . . . . . . . . . . . . . . . . .338.40* –12.60 520.00 335.90 Travis Perkins . . . . . . . . . . . . . . .840.00 –12.00 915.00 647.50
Brit Insurance . . . . . . . . . . . . . .1035.00 –1.00 1052.00 709.00 Heritage Oil. . . . . . . . . . . . . . . . .362.20 –12.20 585.00 295.90 Petrofac . . . . . . . . . . . . . . . . . .1427.00 –33.00 1545.00 900.00 TUI Travel . . . . . . . . . . . . . . . . . .209.00 +1.00 313.90 189.20
British Airways . . . . . . . . . . . . . .264.00 –1.70 290.00 180.20 Hikma Pharma . . . . . . . . . . . . . .758.50 –15.50 813.00 480.00 Petropavlovsk . . . . . . . . . . . . . .1066.00 +23.00 1370.00 834.00 Tullett Prebon . . . . . . . . . . . . . . .342.40 –12.10 427.00 261.20
British Amer. Tob . . . . . . . . . . .2379.00 –33.00 2490.50 1832.00 Hiscox . . . . . . . . . . . . . . . . . . . .345.00 –4.00 371.60 299.60 Phoenix Group . . . . . . . . . . . . . .660.50 –8.00 775.00 550.50 Tullow Oil . . . . . . . . . . . . . . . . . 1168.00 –30.00 1375.00 979.50
British Empire Tst . . . . . . . . . . . .475.40 –4.90 497.00 338.50 Hochschild Mining . . . . . . . . . . .550.50 –14.00 591.50 220.00 Premier Farnell . . . . . . . . . . . . . .287.00 –9.20 300.00 150.80 UK Commercial Prop. . . . . . . . . . .74.80* –1.20 84.90 71.50
British Land . . . . . . . . . . . . . . . .479.70 –7.50 525.00 416.00 Home Retail . . . . . . . . . . . . . . . .203.10* –2.90 316.30 201.70 Premier Oil . . . . . . . . . . . . . . . .1840.00 –41.00 2032.00 984.00 Ultra Electronics . . . . . . . . . . . .1610.00 +5.00 1903.00 1198.00
Britvic. . . . . . . . . . . . . . . . . . . . .488.40 –14.10 518.00 367.50 Homeserve . . . . . . . . . . . . . . . . .422.00 –4.00 502.00 405.40 Provident Financial . . . . . . . . . . .775.00* +9.00 983.50 725.50 Unilever . . . . . . . . . . . . . . . . . .1826.00* –48.00 2024.00 1662.00
Brown(N.) . . . . . . . . . . . . . . . . . .285.00 –5.00 308.00 204.80 HSBC Hldgs . . . . . . . . . . . . . . . .643.90* –9.90 752.00 595.20 Prudential . . . . . . . . . . . . . . . . . .590.50 –10.00 665.00 475.70
BSkyB . . . . . . . . . . . . . . . . . . . .720.00 –4.00 737.00 521.00 Hunting . . . . . . . . . . . . . . . . . . .610.00 –15.00 663.50 429.10 PZ Cussons . . . . . . . . . . . . . . . .373.20 –3.80 406.80 231.70 United Utilities . . . . . . . . . . . . . .617.50 –9.50 634.50 470.00
BT . . . . . . . . . . . . . . . . . . . . . . .161.90 –1.40 170.10 108.40 ICAP . . . . . . . . . . . . . . . . . . . . . .450.40 –11.90 501.50 291.70 Qinetiq . . . . . . . . . . . . . . . . . . . . 112.60 –1.10 179.10 96.00 Utd Business Media . . . . . . . . . .628.50 –10.50 692.00 408.30
Bunzl . . . . . . . . . . . . . . . . . . . . .703.50* –7.50 784.50 614.00 IG . . . . . . . . . . . . . . . . . . . . . . . .490.90 –6.50 560.00 312.60 Randgold Resources. . . . . . . . .6070.00 +65.00 6755.00 4126.00 Vedanta Resources . . . . . . . . . .2120.00 –101.00 2967.00 1795.00
Burberry . . . . . . . . . . . . . . . . . .1008.00 –21.00 1065.00 555.50 Imagination Tech Gp . . . . . . . . . .317.10 –5.30 445.00 200.00 Reckitt Benckiser . . . . . . . . . . .3499.00 –85.00 3667.00 3019.00 Victrex . . . . . . . . . . . . . . . . . . . 1195.00 –37.00 1355.00 753.00
Cable & Wire Comms . . . . . . . . . .44.76* –0.80 150.00 44.71 IMI . . . . . . . . . . . . . . . . . . . . . . .837.00 –9.00 860.00 483.10 Reed Elsevier . . . . . . . . . . . . . . .530.00 –5.50 566.00 454.60 Vodafone . . . . . . . . . . . . . . . . . .162.95* –3.15 179.90 126.50
Cable & Wire Wwide . . . . . . . . . . .64.90 –0.45 94.80 60.05 Imperial Tobacco. . . . . . . . . . . .1951.00 –50.00 2159.00 1728.00 Regus . . . . . . . . . . . . . . . . . . . . . .74.50 –0.40 125.50 64.05 Weir . . . . . . . . . . . . . . . . . . . . .1661.00 –44.00 1750.00 660.00
Cairn Energy. . . . . . . . . . . . . . . .367.90 –0.90 497.60 306.80 Inchcape. . . . . . . . . . . . . . . . . . .332.00 –5.70 358.00 235.00 Renishaw . . . . . . . . . . . . . . . . . 1135.00 –59.00 1250.00 479.00 Wellstream Hldgs . . . . . . . . . . . .729.00 –6.00 810.00 429.70
Caledonia Invs . . . . . . . . . . . . .1745.00 –7.00 1833.00 1496.00 Informa . . . . . . . . . . . . . . . . . . . .405.10 –13.30 450.50 263.30 Rentokil Initial . . . . . . . . . . . . . . . .89.20 –3.55 140.20 89.10 WH Smith . . . . . . . . . . . . . . . . . .476.60 +1.20 551.00 392.20
Capita . . . . . . . . . . . . . . . . . . . . .656.50 –17.50 829.50 655.00 Inmarsat . . . . . . . . . . . . . . . . . . .670.00 –11.50 831.00 603.50 Resolution . . . . . . . . . . . . . . . . .226.80 –4.00 280.50 220.10 Whitbread . . . . . . . . . . . . . . . . .1677.00* –28.00 1807.00 1260.00
Capital & Counties . . . . . . . . . . .142.50 –2.50 159.00 99.60 Intercontl Hotels . . . . . . . . . . . . 1116.00 –22.00 1244.00 803.00 Rexam . . . . . . . . . . . . . . . . . . . .309.60 –4.10 348.80 271.40 William Hill . . . . . . . . . . . . . . . . .156.90* –1.10 217.80 156.30
Capital Shopping Centres . . . . . .355.50 –6.40 523.50 300.10 Intermediate Capital . . . . . . . . . .327.80 –8.10 352.80 233.50 Rightmove . . . . . . . . . . . . . . . . .750.00 –15.50 830.00 456.90 Witan Inv Tst . . . . . . . . . . . . . . . .469.90 –5.50 492.00 397.30
Carillion . . . . . . . . . . . . . . . . . . .336.20 –6.50 361.90 272.00 Intertek . . . . . . . . . . . . . . . . . . .1753.00 –46.00 1964.00 1136.00 Rio Tinto . . . . . . . . . . . . . . . . . .4070.00 –115.00 4477.50 2751.00
Carnival . . . . . . . . . . . . . . . . . .2558.00* –47.00 2937.00 1963.00 Intl Personal Fin . . . . . . . . . . . . .308.70 –6.90 340.90 181.40 RIT Capital Partners . . . . . . . . . 1153.00 –21.00 1215.00 940.00 Wolseley . . . . . . . . . . . . . . . . . .1725.00 –29.00 1837.00 1155.00
Catlin . . . . . . . . . . . . . . . . . . . . .338.50 –5.50 394.60 303.20 Intl Power . . . . . . . . . . . . . . . . . .421.10 –12.10 439.20 268.80 Rolls Royce . . . . . . . . . . . . . . . .598.50* +8.00 661.50 466.10 Wood Group (John). . . . . . . . . . .467.50 –11.00 492.60 279.60
Centamin Egypt . . . . . . . . . . . . .184.50 +0.30 202.80 103.50 Invensys . . . . . . . . . . . . . . . . . . .318.90* –10.10 350.30 224.90 Rotork . . . . . . . . . . . . . . . . . . .1606.00 –17.00 1906.00 1101.00 WPP . . . . . . . . . . . . . . . . . . . . . .715.50 –17.50 758.50 562.50
Centrica . . . . . . . . . . . . . . . . . . .321.40 –8.10 347.00 252.00 Investec . . . . . . . . . . . . . . . . . . .497.10 –11.40 565.00 411.50 Royal Bank Of Scot . . . . . . . . . . . .40.05 +0.21 58.95 28.25 Xstrata . . . . . . . . . . . . . . . . . . .1270.00 –29.00 1462.50 832.50
Charter Intl . . . . . . . . . . . . . . . . .675.50 –18.00 855.50 563.50 ITV . . . . . . . . . . . . . . . . . . . . . . . .67.70 –0.70 73.00 46.77 Royal Dutch Shell A . . . . . . . . .1961.50* –41.50 2106.50 1621.00 LONDON TOP 250 BY MARKET CAPITALISATION
Chemring . . . . . . . . . . . . . . . . .2855.00 –10.00 3711.00 2551.00 Jardine Lloyd Thompson. . . . . . .571.50 –6.50 604.50 420.70 Royal Dutch Shell B . . . . . . . . .1932.00* –45.50 2071.00 1550.00
Close Bros . . . . . . . . . . . . . . . . .798.50 –14.50 834.00 657.00 Johnson Matthey . . . . . . . . . . .1840.00 –38.00 1999.00 1435.00 RSA Insurance . . . . . . . . . . . . . .122.70* –1.70 137.40 114.10 * Ex-Dividend † Suspended
Cobham . . . . . . . . . . . . . . . . . . .195.80 –4.10 278.60 195.80 JPMorgan Emerg Mkts . . . . . . . .593.50 –12.50 618.00 448.00 SABMiller . . . . . . . . . . . . . . . . .2060.00 –53.00 2165.50 1638.00
COLT Group . . . . . . . . . . . . . . . .122.00 +0.20 144.20 107.70 Jupiter Fnd Mgmt . . . . . . . . . . . .270.00 –14.90 310.00 180.00 Sage . . . . . . . . . . . . . . . . . . . . . .253.90 –6.10 286.80 208.20 www.interactivedata.com

3G 13:05

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FTSE drops to a six-week low as fears Wall Street tumbles on

grow over Eurozone debt and Korea global woes and oil prices
off, down 2.7 per cent, as investors Ireland with an expected €85bn to 2,494.95.

THELONDON already anxious about the Eurozone

debt situation were unnerved by the
Korea situation and sold out of riskier
(£72bn) in loans to tackle a banking
and budget crisis.
“Markets are trading ‘risk off’ today
THENEW YORK The unexpected flare-up in Korea
increased investor anxiety. The CBOE
Volatility Index, Wall Street’s fear
REPORT assets.
North Korea fired dozens of
artillery shells at a South Korean
on a trifecta of different factors; Irish
bailout fears and political uncertain-
ty (and) Korean military tensions,”
REPORT gauge, rose 12.3 per cent, its largest
daily percentage gain in more than
three months.

T
HE leading share index dropped island yesterday, killing two soldiers said Michael Hewson, market analyst Declining stocks far outnumbered

U
to a six-week closing low yester- and prompting a return of fire by the at CMC Markets. “This has made for a S stocks sank yesterday as advancing ones on the NYSE by a ratio
day, weighed down by weak South. rather heady cocktail for investors to investors dumped risky assets on of about seven to two, while three
banks and commodity issues on Meanwhile, Ireland’s government digest, and has caused significant risk escalating tensions in the Korean stocks fell for every share that rose on
worries over the Eurozone debt crisis was on a knife-edge with damaged aversion today, with banks and com- peninsula and as Eurozone debt the Nasdaq.
and rising tensions in the Korean Prime Minister Brian Cowen challeng- modity stocks the primary movers to worries mounted. The energy sector of the S&P 500 led
peninsula. ing the opposition to let an austerity the downside.” The Dow Jones industrial average declines, down 1.9 per cent as US oil
The FTSE 100 ended down 99.55 budget pass and trigger an EU/IMF The geopolitical uncertainty com- lost 142.21 points, or 1.27 per cent, to futures prices fell 0.6 per cent to settle
points or 1.8 per cent at 5,581.28, its bailout before early elections. bined with Eurozone jitters helped 11,036.37. The Standard & Poor’s 500 at $81.25 a barrel.
lowest close since 4 October. European partners and the push the dollar higher, hitting metal fell 17.11 points, or 1.43 per cent, to Oil giants Chevron and Exxon Mobil,
Banks led the blue-chip fallers, International Monetary Fund agreed and crude prices and denting miners 1,180.73. The Nasdaq Composite each down about two per cent, made
with Standard Chartered the worst in principle on Sunday to rescue and energy stocks. dropped 37.07 points, or 1.46 per cent, up 15.5 per cent of the drop in the Dow.
 Investment
CONTAGION IS
STILL A RISK
FOR THE EURO
BORIS SCHLOSSBERG
DIRECTOR OF CURRENCY RESEARCH, GFT
A
FTER several weeks of tense negotia-
tions and turbulence in the credit mar-
kets, Ireland accepted a financial aid
package from EU and the IMF.
Although the size of the deal will not be known
for days, analysts put the total at about
€100bn – 40 per cent of the country’s GDP.
By finally accepting the bailout, if the gov-
ernment survives, Ireland will be able to
address two critical problems posing an enor-
mous threat to its fragile economy. First, by
avoiding the capital markets the Irish govern-
ment will obtain financing beyond the middle
of next year without having to pay punitive
interest rates. Second, the Irish banks, which
are highly vulnerable to a run on deposits, will
receive an infusion of capital. This should hope-
fully restore confidence and allow balance
sheet repair.
Many investors are still worried about con-
tagion as attention shifts to Portugal and
Spain. Even as credit default swap rates on
Irish debt fell, the rates to insure Spanish and
Portuguese bonds rose as concerns grew that
Iberia would be the next hot spot.
It’s almost impossible to imagine what
would happen if Spain needed financial aid.
The country is the fourth largest economy in
Europe and would require capital amounts
that dwarf any efforts so far. As Barclays’
Henk Potts aptly said: “EU officials may have
won the battle, but the war is still to be
fought.” Irrespective of the Irish bailout, euro-
US dollar is unlikely to maintain its rally unless
the economic situation in the Eurozone carries
on improving. That’s why today’s IFO report
could prove to be the make or break event for
the euro this week.
Boris Schlossberg and Kathy Lien are direc-
tors of currency research at GFT. Read com-
mentary at www.GFTUK.com/commentary or
e-mail borisandkathy@gftuk.com.
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21
It’s not easy to price in
the actions of dictators
Traders should steer
clear of the won until
the smoke clears,
says Donata Huggins
Y
EONPYEONG island was obscured by
smoke yesterday after North Korea
launched an shell attack on the
South Korean island, marking the
greatest escalation of violence between the
countries for decades. This is a dismal
reminder that the line drawn between the
two countries is still mired in dispute. It
also caused the line on the graphs of the
South Korean won to plummet after the
news. Those who chased appreciation in
the won could be painfully stung today.
But how long will it last? Will the won
recover?
In the recent past, the market has stoical-
ly ignored the skirmishes between the
North and the South. The box below
demonstrates that until recently the mar-
ket barely reacted to these disputes. This
changed when a South Korean navy vessel Smoke rising from the South Korean Yeonpyeong island yesterday Picture: GETTY
was sunk on 26 March. Initially, the event
only had a limited impact on the market will change the won trade: “Looking ahead selling of the won in the market.”
since it was not clear whether North Korea we see further weakness for the won. Rationalising North Korea’s actions
was complicit. In fact, over the period the Pressure from the South Korean public on requires traders to predict the unpre-
won actually appreciated slightly. It wasn’t the government to take action could quick- dictable. Those looking for a safe haven for
until a multi-national investigation con- ly escalate the situation, leading to heavy their money should look elsewhere.
cluded that a North Korean torpedo sunk
the ship that the won took a dive. The KOREA | MARKET REACTION ANALYSIS l The performance of the dollar
dollar was then pushed up by around nine against the South Korean won
per cent in the following five days and then
1,176 KRW
traded at elevated levels for the next two 30 July 2006: exchange of fire near
months. border post.
The proximity of the two events and 5-day move in dollar-won: +1.1 per cent 1,165
their escalation points to a period of
increased uncertainty ahead for traders in 26 March 2010: sinking of South
1,155
the won. Analysts believe the attacks are Korean naval vessel
being used by the dictator-in-waiting, Kim 5-day move in dollar-won: -1.1 per cent
Jong Il’s third son, to demonstrate his 1,145
strength to his soon-to-be party and army. 20 May 2010: release of multinational
The rating agency Fitch has recognised the report blaming North Korea for sinking
1,135
impact of the leadership transition by stat- of the South Korean naval vessel
ing that the hostilities are now within the 5-day move in dollar-won: +9.1 per cent
Source: Currency Solutions
bounds of “marginally increased risk.”
Duncan Higgins of Caxton FX believes this GMT 12:00 18:00 21:00 00:00 3:00 6:00 9:00 12:00
Get started at
gftuk.com.
 22 Investment | Foreign Exchange CITYA.M. 24 NOVEMBER 2010

Fear and loathing on

the edges of Europe
Worries about the future of the euro are well founded, but
traders mustn’t act like lemmings, writes Daniel Knowles

S
OMETIMES it seems as though
the foreign exchange markets
can only deal with one news
story at a time. Whereas a
month ago, the dollar was being
attacked for quantitative easing, now
the euro is the point of focus. Given
the depth of the fiscal problems in
Ireland and Portugal and even poten-
tially Spain or Italy, that is hardly sur-
prising. A brief relief rally on Monday
morning failed to last into the day,
and the euro kept falling yesterday,
losing 1.7 per cent against the dollar.
An awful lot of commentators are
very pessimistic about the future of
the euro, but with events so uncer-
tain, should traders be?
If the markets are particularly fick-
le right now, it is because there is an
abundance of bad news to choose
from. Until recently, monetary tight-
ening by the European Central Bank
(ECB) was strengthening the euro, and
the single currency hit a high on 4
November of $1.42. With renewed
fears about the solvency of the
European periphery, however, that
sentiment has now reversed, and the
ECB’s plans to wind back liquidity sup-
port to European banks is now seen as
being broadly negative.
As Richard Wiltshire, an analyst at
ETX Markets, put it, “the bullies are
now picking on the euro”, having
interpreted easing in the US to be the
lesser evil relative to the crisis in
Europe. Wiltshire says that though
currency traders have exhibited a
degree of “lemming-like behaviour”
in selling the euro, they have not over-
reacted. He argues that though there
may be a few relief rallies, the euro
ought to keep falling. With traders
likely to “sell the rumour, buy the
fact”, however, those falls are likely to
be unpredictable.
Michael Hewson, of CMC Markets,
is even more bearish. Hewson argues
that the Irish crisis is far from over
and may well break out of Ireland. He
points to the rapidly widening bond
spreads in Portugal and Spain as evi-
dence that contagion will spread.
According to Hewson, bailouts will
only be able to go so far “before the
ECB and the euro lose all credibility”.
As that event appears to get closer, the
euro should only get weaker.
Traders would seem to be wise to go
short on the euro then, but they also
need to avoid becoming victims of
volatility. Instead of trading the euro
directly, it might make sense to buy
safe haven currencies like the Swiss
franc, or currencies with limited expo-
sure to a European crisis, such as the
Australian dollar.
It also makes sense to look at corre-
lations. Over the hour range, for
example, the euro-dollar pairing has
been strongly inversely correlated to
the US dollar-loonie pairing. If those
sorts of correlations last, then curren-
cy traders might be able to profit from
the falling euro without being so vul-
nerable to sudden shifts in sentiment.
And sudden shifts in sentiments
are likely to be the order for the day.
Traders need to be careful not to get
caught out.

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CITYA.M. 24 NOVEMBER 2010 Investment | Foreign Exchange 23

The humble kiwi is losing its edge against sterling Picture: GETTY

THE TIPSTER neckline at around $0.9737. With the

head at $1.0170, a break of the neckline
STERLING IS suggests a possible fall to the meas-
ured-move objective of $0.9290.
CLIMBING UP Spread Co offers a spread on Aussie-US
ON THE KIWI dollar of $0.9726–$0.9728.
The euro is looking stressed as well.
With sovereign debt fears about
Ireland continuing, stability is unlikely

T
HE long sterling-New Zealand to reappear any time soon. If the panic
ANALYSIS l After rallying briefly, the euro fell precipitously yesterday dollar position has already proven spreads east from the emerald isle,
USD to be profitable, and it looks as then things could get a lot worse.
1.375 though we could start to see an Against the dollar, the euro recently
acceleration of gains following the lat- dipped below its 20 and 50 day moving
est surge beyond NZ$2.0700. The fun- averages, and the two currencies have
1.365
Switzerland - a damentals have certainly been crossed to enforce the bearish signal.
potential safe supportive, with a dovish central bank, Capital Spreads quotes a price of
1.355 haven from the col- problems with local fruit, and a ratings $1.3550-$1.3551 on the euro-dollar.
lapsing euro downgrade all helping to strengthen the And if the Eurozone crisis wasn’t
1.345
bullish outlook. As such, we will now enough, North Korea seems to be doing
Picture: look to take advantage of the latest rally its very best to unsettle the entire
17 Nov 18 Nov 19 Nov 22 Nov 23 Nov GETTY and mitigate risk on the trade. A decent world. Safe haven currencies might be
target might be NZ$2.5000. IG especially likely to do well then – with
Markets offers a spread on sterling- lots to be scared about, where better is
ESCAPE ROUTES | AVOIDING THE EURO INFECTION New Zealand dollar NZ$2.07150- there to squirrel away money than safe,
NZ$2.07309. neutral Switzerland? The possible
And just as the Kiwi is falling, so too upside on euro-Swiss franc is proba-
Safe haven currencies: the euro in movements. particularly low correlation to euro-dol- is the Aussie. Traders have been watch- bly limited, while a break below
l The Swiss franc: The traditional place l The Australian dollar: The Australian lar movement - watch out though: corre- ing the Australian dollar-US dollar €1.3265 could signal further euro loss-
pairing very closely as it appears to be es to come. CMC Markets offers a
to hide from European instability, but be economy is rather shielded from lation does not equal causation, and forming a clear head and shoulders spread on the euro-Swiss franc of
careful - the Swiss franc tends to follow Eurozone woe. Against the yen, it shows correlations can break down. pattern with the move lower yesterday. €1.33278-€1.33308.
Late yesterday it was breaking the Daniel Knowles

FOREX ANALYST PICKS

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

My pick: Long sterling-New Zealand dollar at NZ$2.0500
Expertise: Technical analysis
Average time frame of trades: 1 month-12 months
A couple of weeks back we recommended buying this cross with the
market trading at cyclical lows and looking poised for some major
upside. The trade has proven to be profitable and it looks as though
we could see an acceleration of gains following the latest surge
beyond NZ$2.0700. Fundamentals have been supportive. We will now
look to take advantage of the latest rally and mitigate risk on the
trade. Target NZ$2.5000 and revise your stop to NZ$2.0290.
My pick: Stay long dollar-yen from ¥82/short Aussie-Loonie below Ca$0.99
Expertise: Fundamental and technical analysis with risk management
Average time frame of trades: 1 day-1 week
We’ve had some significant technical and fundamental developments this
past week; but this week’s liquidity issues will pose problems for cleanly
trading breakouts and new potential trends. Though I am trading other
dollar pairs, my favorite remains my long dollar-yen from ¥82. I have a
tentative target of ¥85; but it is important to remain flexible. Also, the
best potential trade remains a short Aussie dollar-Canadian dollar on the
completion of a Ca$0.99 break on a head-and-shoulders pattern.
My pick: Stay long dollar-yen, short euro-dollar
Expertise: Global macro
Average time frame of trades: 1 week-6 months
Last week I bought dollar-yen at ¥83.08 and sold euro-dollar at
$1.3762, betting on a correction in the anti-dollar rally built around
QE2 expectations. The Fed delivered just about what had been priced
in, robbing the advance of the impetus to continue. Dollar-yen was to
capture a rebound in US yields while euro-dollar was opened to capi-
talise on a risk appetite reversal. They are behaving as expected and I’ll
keep them open, initially targeting $1.3310 and ¥85.87.
 24 Investment | Fund Management CITYA.M. 24 NOVEMBER 2010

Low correlations and high liquidity

ensure currency’s continued appeal
It’s time to rethink The odds are stacking
up in favour of foreign
your aversion to exchange

Picture: GETTY
FX as an asset class,
writes Jessica Mead

F
OR about a decade before the crisis,
institutional investors were happy to
accept that the currency markets
were an area where active fund man-
agers could add value. But they lost their
faith in the asset class during 2008 when
many currency managers lost money. ANALYSIS l BarclayHedge Currency Index -
Some of those managers who were run- correlations versus other asset classes from
ning quantitative strategies and who were 1987 to the first quarter of 2010.
relying on the continuation of the carry 0.3
trade were particularly badly burned. Hedge Funds
Carry trade strategies tend to suffer at 0.25
times of heightened market uncertainty
and volatility as investors pull out of risky 0.2
currencies.
0.15 US
Although investors are now likely to be Bonds
operating on a once-bitten, twice-shy basis,
0.1
they should be reconsidering currency as a
stand-alone asset class even though volatil- 0.05 MSCI S&P World
ity is higher than it was before the crisis. world 500 Bonds Property
Vineer Bhansali, managing director and 0
portfolio manager at Pimco, explains:
“Greater volatility – as well as political fac- -0.05
tors involving conflicting geographic
blocks – creates risk, certainly, but also cre- shows that the correlations between cur- bine these two into a strategy you will gen- momentum and valuation.
ates a lot of opportunity and that means rencies and various asset classes is still erate performance over market cycles,” he In the search for liquidity and uncorre-
now is a potentially attractive time to extremely low. says. Pimco seeks intelligent carry, which it lated returns, the need for due diligence on
invest in currencies.” The BarclayHedge currency manage- defines as carry that it can understand the fund to understand the investment
He adds: “Certainly, volatility going for- ment index between its inception in 1987 from a macro basis, but also monitors strategy cannot be greater.
ward is likely to be higher than it was in and the first quarter of 2010 shows that the
2005, 2006, and early 2007. Our best esti- highest positive correlation is only 0.26 – PERFORMANCE OF FUNDS IN THE DERIVATIVE CURRENCY SECTOR AVAILABLE FOR SALE IN EUROPE Source: Morningstar
mate is that currency volatility is probably with hedge funds – while currency returns
going to return to where it was in the mid have not moved at all with equities over Name Available 13/08/10 to 13/11/09 to Fund Manager Firm
to early part of the last decade – oscillating this period. (See chart.) for sale 15/11/2010 15/11 2010 Size Name Name
in the neighbourhood of 10 per cent.” But while they are not currently highly in the UK % perf change % perf change £(m)
The FX markets are also still liquid and correlated with other asset classes, you can
highly transparent. Currency markets use currencies to access other assets. For Advantage FX Systematic B - 11.07 LGT Capital Management
retained their liquidity when other finan- example, Henderson’s head of currency ALTEX UCITS – P/E FX - 5.17 Andbanc Asset
cial markets seized up in late 2008. Bob Arends points out that through curren- Conservative A EUR Management Luxembourg
Furthermore, at a time when equity vol- cies, you have very strong access to emerg- BayernInvest FX-Alpha-Fonds 2.50 128.94 Management Team BayernInvest Kapitalanlage
BNY Mellon Evolution YES -1.90 -8.51 3.02 Ronald R. Lagnado; BNY Mellon Asset
umes are still reduced and investors are ing markets. “Of the performance in Lg/Shrt Em Ccy R $ Scott Grimberg Management
still keeping some cash on the sidelines, FX emerging market equities and local curren- Brevan Howard InvestII YES -0.51 6.40 489.33 Brevan Howard Offshore
is looking increasingly appealing. Amos cy denominated debt, 80 to 100 per cent Macro FX I USD Management
Galvin, head of strategy at Macro Currency can come from foreign exchange,” he CitiFX Alpha Strategy 1 I EUR YES 7.31 -2.54 23.21 Ian Henderson Citifirst Investments
Custom Markets Credit Suisse 3.19 -5.80 28.53 Jerome Tan; Custom Markets
Group, says that there has been a renewed explains. FX Factor K Patrick Schegin
interest in foreign exchange because Institutional investors should try to put DB Platinum AIMhedge Index I1C YES 19.54 46.84 DB Platinum Advisors
investors now have a greater appetite for the difficulties of 2008 behind them but DB Platinum Currency Returns Plus I1C 3.95 -3.69 195.68 Management Team DB Platinum Advisors
liquidity and transparency. they must be aware of the range of DB Platinum FX Concepts YES 5.03 4.47 47.12 Management Team DB Platinum Advisors
Macro Currency Group is primarily suit- approaches used by fund managers rang- Global Currency
DB Platinum IV Bal Ccy Har Eur I2C 7.02 -3.89 10.24 Management Team DB Platinum Advisors
ed for institutional investors but head of ing from the purely quantitative and algo- DWS Best Global FX Selection Plus 3.91 -4.06 4.55 Dirk Aufderheide; DWS Investment
distribution Ashley Shaw says that the rithmic to a highly discretionary macro Moritz Rieper
group has seen growing interest from pri- approach. For example, Macro Currency Dynamic Currency Fund 1.47 3.23 Crystal Fund Management
vate banks, big wealth managers and Group has never had any allocation to carry Henderson Horizon Glbl Ccy A1 HGBP Inc YES -2.25 N/S Bob Arends Henderson Management
smaller pension schemes. The firm, which and takes a directional view rather than ING (L) Invest Renta FX Alpha I 3.23 59.98 ING Investment Management
Luxembourg
is part of Principal Global Investors, has a having targets. In contrast at Henderson, Nomura ARCS I EUR YES 5.20 -10.63 18.03 Jean-Philippe Royer; Nomura International
Ucits fund with a minimum investment of Arends’ Horizon Global Currency fund Michael Hall
£10,000 slated for the first quarter of 2011. focuses on delivering absolute returns Nomura C10 Institutional I EUR - 17.39 Nomura International
Even more appealing at the moment is throughout the market cycle and employs Premium Currencies UI I -0.33 18.61 Management Team Universal-Investment
PRIMA Global Currencies I 1.28 7.84 Chris Fellingham PRIMAfunds
foreign exchange’s lack of correlation with a disciplined carry trade investment strate- UBS (Lux) SICAV 1 Ccy Alpha 0.40 19.35 UBS
other asset classes. Research from gy. “What we have seen from academic GBP Hdg QInc
BarclayHedge, a US-based provider of alter- research is that the major source of return V10 Enhanced FX Carry Strategy (EUR) IA 7.40 47.38 UBS
native investment performance data, comes from carry and trend. If you com- Wegelin (LUX) Citi Active Ccy Base EUR - 31.68 Wegelin Fondsleitung

FUND MANAGEMENT NEWS

BY JESSICA MEAD
Funds investing in Hong Kong stocks will get their own sector
IMA ANNOUNCES NEW CHINA SECTORS
The Investment Management Association
(IMA) yesterday announced the creation of
the China/Greater China sector and the new
definition of the Global sector. Both changes
will come into effect from 1 January 2011.
The former will be defined as funds investing
at least 80 per cent of their assets in equities
of China, Hong Kong or Taiwan. The Global
sector will include funds investing at least 80
per cent of their assets globally in equities,
regardless of thematic or industrial focus.
MERRION CUTS ABSOLUTE RETURN FUND FEES
Merrion Investment Managers has cut the
annual management charge on its European
Absolute Return fund to 0.5 per cent from 1
per cent. The reduction, which applies to
investments over €5m, is available to any
investment made before 31 December. The
lower rate will be in effect for the duration of
the investment and will also apply to any
subsequent additional investments in the
fund. The absolute return fund has returned
9.5 per cent since inception in June 2010.
INDXIS UNVEILS MERGENT FUND INDEX
Provider of investment products Indxis has
earlier this week announced the launch of the
first UK Mergent Dividend Achievers Index
for index tracker providers. The index includes
UK firms that have increased their annual reg-
ular cash dividends for the past five or more
consecutive years. The launch of the fund fol-
lows its US counterpart, which has attracted
over $7bn in assets under management to
linked funds offered by investment firms such
as BlackRock and Vanguard.
 City Focus
After-the-event insurance is
an option for City litigants
Corporates can use
ATE too, and it’s
time to dispel some
myths about it
PETER SMITH
T
ROUBLED economic times are typi-
cally marked by a surge in litigation,
even as companies’ budgets and
their ability to fund litigation
remain constrained. Given the imperative
to continue delivering shareholder value
in the face of uncertain market conditions
and an increasingly litigious environ-
ment, it is hardly unexpected that litiga-
tion costs are fast rising to the forefront of
management boards’ concerns. Already in
late 2008, 76 per cent of FTSE350 respon-
dents in a survey run by Ipsos Mori on
behalf of Addleshaw Goddard ranked the
cost of litigation as their number one con-
cern in relation to dispute resolution.
Concerns over costs inevitably hinder
access to justice, as even claimants with a
strong case shy away from the courts for
fear of financial disaster in the event they
lose, however unlikely this might seem.
Alternative funding options that reduce
the financial pressures, such as insurance-
backed Conditional Fee Agreements (CFA),
have already proved a valuable tool in giv-
ing litigants in personal injury or clinical
negligence cases better chances of access
to justice but take-up by corporate UK has
been, somewhat surprisingly, slower. Even
with CFAs under the spotlight as the
Ministry of Justice embarks on its civil liti-
gation shake-up, the option of “after-the-
event” insurance (ATE) remains open to
litigants and has obvious attractions. ATE
– taken out once a dispute has arisen to
insure claimant expenses and opponent
costs and protect litigants against finan-
cial risk if a case is lost – can, contrary to a
popular misconception, be used inde-
pendently of CFAs and has much to offer
litigants seeking certainty in the uncer-
BRIEFS | LEGAL NEWS
CAMERONS OUTSOURCING DEAL
CMS Cameron McKenna is to become
the first major law firm to outsource
its entire backroom operation, Legal
Week has reported. Outsourcing
company Integreon promises that it
can save the top 20 firm 10-15 per
cent on its backroom costs.
Camerons has been in talks with
Integreon since May, but a partner
vote earlier in the week sealed the
deal. Camerons said it was not antici-
pating any redundancies among its
200-member support staff.
| Law
tain process of litigation. What are the rea-
sons for its comparatively slow adoption
in business litigation? As the aftermath of
the recession brings a renewed focus on
cost-control, are we about to witness a
quiet revolution in business litigation
whereby ATE becomes a mainstream fund-
ing option even for complex high-stakes
commercial cases?
With companies (as well as the govern-
ment) keen to minimise legal budgets
where possible, the time certainly seems
right for it. In the past, litigators have
expressed concern about finding the right
sort of ATE policy to cover all eventualities
of a complex case. Today’s insurance prod-
ucts, however, have evolved significantly
and solicitors are often unaware of the
true degree of certainty – an especially
valuable commodity in these economic
times – an ATE policy can offer.
The use of ATE has also been hindered
by some surprisingly enduring myths. The
first of these – that ATE is only available in
personal injury cases and not for business
litigation – seems to be dying out now, but
others persist. One regularly voiced con-
cern is that the financial implications of a
case remain significant even with ATE in
place, as premiums would be payable
BPP PARENT WRITES OFF $176M
The parent of BPP Law School, the
American private education firm
Apollo, has written off nearly $176m
after its British arm underper-
formed. “BPP’s business, which is
heavily dependent upon the
strength of the law and finance sec-
tors in the UK, has been significant-
ly and adversely impacted by the
deep recession in the UK and
throughout Europe,” said Apollo’s
CFO Swartz. BPP won university sta-
tus earlier this year.
HOW TO BE A
BETTER LEADER
SEE TOMORROW’S
CAREERS PAGES
You can still get regardless of the outcome of a case. This is
insurance after a simply not true. Premiums are only
dispute has started payable when a case meets all the condi-
tions of success and thus an unsuccessful
Picture: GETTY case will not lead to any financial liability.
Finally, ATE is no barrier to alternative
dispute resolution. Because of the com-
mon association of ATE with full-scale liti-
gation, many assume it is only available in
these circumstances and would not, for
example, cover mediation fees. This is
another myth. Certain legal insurers will
cover mediation fees under ATE policies,
meaning that a quick out-of-court resolu-
tion to a dispute is not out of the question.
Use of alternative funding methods,
when parties are properly informed about
the costs and benefits of each tool, would
often offer the proverbial win-win solu-
tion for claimants, defendants and
lawyers. It is to be hoped that the recession
will prove to have a silver lining in forcing
different parties to pay closer attention to
different litigation funding options avail-
able, bringing greater peace of mind and
better access to justice for individuals and
businesses.
Peter Smith is managing director for Legal
Expenses Insurance and Head of ATE at
FirstAssist
MORE LEGAL JOB-LOSSES
More redundancies are on the way at
City law firms, just in time for
Christmas. Hogan Lovells is to make
four redundancies in its law depart-
ment, “to better reflect market condi-
tions”, while Barlow Lyde & Gilbert is
to lose people from its corporate and
commercial team – it is thought that
six associates and seven partners will
lose their jobs. Osborne Clark has also
announced that it is to close down its
London real estate business, with the
potential loss of five fee-earners.
25
Get ready for
changes in
bank sector
IAN BENSON
C
USTOMER confidence in the banks is low.
You would therefore think that the time
was ripe for new entrants to the banking
market. There was a time when scarcely
a week went by without somebody saying they
were about to become a bank. Tesco, Virgin and
Metro Bank are lining up to offer the full range
of banking services, but so far we have not seen
anything like the promised number of new
banks appearing on the high street. A look at
the list of authorised banks currently published
by the FSA, and prior to that by the Bank of
England, reveals that there have been very few
new names added to the list in the past decade.
But why? And can we expect the picture to be
any different, say, a decade from now?
Undoubtedly, the main reason is that the
hurdles for potential banks to jump are high.
Any organisation seeking permission from the
FSA to carry out banking activities – broadly,
accepting deposits and calling itself a bank – is
going to face considerable challenges. This
month the OFT published its Review of
Barriers to Entry, Exit and Expansion in Retail
Banking, which reported concerns by those
seeking to enter this market about the difficul-
ties and uncertainties arising from the regula-
tory process of becoming a bank.
The government is considering a radical
reform of financial services regulations.
However, given that banks are systemically
important financial institutions and the fact
that accepting deposits from the public is an
activity underwritten by the UK taxpayer to
the tune of £50,000 per customer per bank,
it’s unlikely that there will be much relaxation
in the regulatory barriers – and sensibly so.
But there’s more to banking in the 21st cen-
tury than accepting deposits, and so there are
alternatives for a business seeking access to
the broad banking sector. Many of the activi-
ties associated with banking – for example
lending, providing payments services, manag-
ing investments and giving investment advice
– require far more achievable regulatory
approvals. For example, businesses seeking to
lend to individuals can obtain a license under
the Consumer Credit Act from the OFT, or they
can get permission from the FSA to carry out
investment activity, if that’s their chosen mar-
ket, without getting authorised to become a
bank. The recent Payment Services
Regulations have also opened up the market
for innovative new entrants who are now able
to seek permission from the FSA to become a
Payment Services Institution and gain new
accreditation and access to payment systems.
As for the future of banking, perhaps we
will see a continuation of the trend for parts of
banks to be sold off, creating new entrants to
the broader retail banking market. The dispos-
al by RBS of its merchant services to Advent
International and Bain Capital is a recent
example of this. However, those seeking to
acquire pure banking businesses with existing
permissions to accept deposits will still have to
clear similar regulatory hurdles as those seek-
ing to start up banking businesses. We are
unlikely to see an explosion in the number of
banks on the high street, but changes are afoot
in the banking sector.
Ian Benson is a finance lawyer at national law
firm Mills & Reeve. ian.benson@mills-
reeve.com
 Lifestyle | Motors
26 CITYA.M. 24 NOVEMBER 2010

WORDS BY
RYAN BORROFF

A car that could be a fighter jet

Nissan has redefined
the term “supercar”
with this roarer

W
HAT exactly is the definition of
a supercar remains a con-
tentious issue. If a sports car is
a powerful car designed for
high speed with great handling and
flashy looks then what is a supercar? And
if a supercar is an exotic sports car with
superior performance and a price tag to
match, what is a saloon car like Nissan’s
GT-R that can outrun many exotics and
cost half as much?
At the very least, the Nissan GT-R has a
right to consider itself a supercar for the
rest of us, though ironically you’re less
likely to see one around than some of the
more “exclusive” sports cars out there.
On paper it’s impressive, a relatively inex-
pensive (for what it is) saloon car with
supercar performance that operates at
the sharp end of automotive engineering.
Just reading through the list of gadgets is
enough to alienate some potential buy- This powerhouse
is for true
ers. But then this car is aimed at the train afficionados.
spotters, the aficionados; owning one
says more about who you are, than who
you aspire to be.
But you couldn’t ignore the GT-R even using the twin clutch gearbox – manual- ing a small and extremely comfortable nee-naws which is one reason, no doubt,
if you were ignorant of its technology. ly operated by paddle shifters for the leather steering wheel and a multi func- why the car tells you when you’re
Looks-wise it positively crouches with a most spirited driving – the car’s clever tion display adds even more information approaching a speed camera. And that’s
pent up raw energy that makes no con- tech pre-selects the next gear – engine temperature, oil temperature, before you even put the thing in race (R)
cession to grace. In fact, this GT-R existed change for you so the car is essen- you get the idea – though I’m too mode. The GT-R is fantastically outra-
virtually in a computer race game before tially ready before you are. This busy to read them. geous and driving it is awesome.
it was ever seen in the metal and there is adds further urgency to the I can’t imagine having a lot
something about it that looks a little gear change, reducing gear more kit on a fighter jet, which
unreal even now. Hit the red start/stop shift time down from the seems coincidental because THE FACTS:
button – in between the front seats on normal mode’s 0.5 seconds I’m sure that the GT-R under NISSAN GT-R BLACK IGNITION
the centre console – and things get trippi- to a near-seamless 0.2 sec- hard acceleration sounds
er, with a healthy roar from the 470bhp onds. And should you find quite a bit like a jet fighter. At PRICE: £61,334
3.8 V6 Twin Turbo engine. Once under- yourself getting into any least to me. It’s a wonderful 0-60MPH: 3.5secs
way, 60mph can be reached in just 3.5 OMG moments, the 4WD sound, it communicates – all TOP SPEED: 194mph
seconds, which is astonishingly fast. system – which drives the at once – that the car’s
And here the technology comes into its rear wheels only, unless the advanced systems are all work- CO2 G/KM: 295g/km
own: the six-speed twin clutch gearbox car loses grip – can instantly ing as instructed, purely for MPG COMBINED: 22.8mpg
has a different clutch for the odd and send 50 per cent of torque to you – yet the noise is also a
even gears. This means gear changes are the front wheels to keep you on reminder than any lapse in atten- THE VERDICT:
much, much quicker as a result, especial- the straight and narrow. This tion could lead to a loss of license. DESIGN hhhii
ly in the high performance R mode. Here means progression is absurdly Things happen very, very quickly in a PERFORMANCE hhhhi
a bank of switches on the dash tighten brisk. GT-R. On a British motorway you can’t PRACTICALITY hhhii
and stiffen the suspension to produce the Inside, the interior is wrapped in stand on the gas for long without fear of VALUE FOR MONEY hhhhi
best handling possible. At the same time, leather with contrasting red trim, includ- hearing the blood-chilling sound of the

CAR TALK BY RYAN BORROFF

NISSAN MURANO CROSSCABRIOLET
It's fair to say that automotive history is not exactly littered with
convertible SUVs so it's a niche that remains broadly unexplored by
most manufacturers. Still, Nissan has just shown its convertible
crossover SUV at the LA Motor Show and here it is. It remains to
be seen whether the only place in the world that Nissan sells its sur-
prisingly stylish Murano CrossCabriolet is in California when it goes
on sale early next year.
BID FOR A BIT OF THE DARKNESS
Fancy owning a piece of rock and roll history? No? Well how about
the next best thing? A Honda CR-Z GT Hybrid Coupé, previously
owned by Justin Hawkins, former frontman of the legendary The
Darkness, is up for auction today and it’s only got 1,400 miles on the
clock. The question of how rock and roll a hybrid CR-Z is is question-
able, but then you can also level the same question at The Darkness.
www.british-car-auctions.co.uk
AUDI’S FIRST RS VERSION A3
For the first time Audi, is introducing an RS version of its compact
A3, powered by a turbo-charged, five cylinder 2.5-litre TFSI engine
which produces 340PS and can accelerate to 62mph in just 4.6 sec-
onds from standstill. Priced at £39,900 on the road, the A3 RS gets
all-wheel quattro drive, lightweight carbon fibre-reinforced plastic
flared wings, a widened track and 19-inch alloy wheels. Order books
open next month.
CITYA.M. 24 NOVEMBER 2010 Lifestyle | TV& Games 27

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

TERRESTRIAL
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10.45pm CHOICE Film 2010
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11.25pm FILM Thirteen Days:
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– It Takes Two
7pm Escape to the Country. A
couple searching for a home.
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10.30pm Newsnight: Weather
11.20pm The Foods That Make
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7pm Emmerdale: Natasha is
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7.30pm CHOICE Live UEFA
Champions League: Rangers v
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UEFA Champions League 10pm
UEFA Champions League Goals
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FIFA Futbol Mundial 12.30am
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3am-4am UEFA Champions
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Tour Weekly 12.30am Sailing
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1.55am Mad About the House
2.55am Russell Howard’s Good
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7pm Hollyoaks 7.30pm Friends
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12am RuPaul’s Drag Race 1am
Scrubs 1.50am Natalie Cassidy:
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Perfect Child Mummies 11pm Real ER 12am Emergency 1am and Andy Townsend.
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3am Prehistoric Megastorms Multiple Mums 4.30am Baby
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8pm How Do They Do It? 8pm The Little Couple 8.30pm
8.30pm How It’s Made 9pm Raising Hope 9pm Bones
Octoboy: Shocking Story 10pm 10pm FILM Demolition Man
Who Killed Meredith Kercher? 1993. 12.15am Road Wars
11pm Frontline Battle Machines 2.10am Ross Kemp: Battle GRAND DESIGNS
with Mike Brewer 12am for the Amazon 3.05am Oops CHANNEL4, 9PM
Deadliest Catch 1am Bear TV 3.30am Lost 4.20am Sell Kevin McCloud revisits Thomas and
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Williams on the Rails 3am Are You Smarter Than a 10 spectacular split-level home cascading
World War Two in HD Colour Year Old? down an almost vertical Belfast hillside.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
5 21 6 34 16 27 13
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none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters N 10 Willpower,
restraint (4-7)
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 Punter
28
CRICKET TRADER CRICKET TRADING EXPERT OLLIE DREW LOOKS AT THE BEST
OF THE ASHES SERIES BETS AND THE FIRST TEST AT THE GABBA
Things looking up for
England down under
AUSTRALIA
ENGLAND
THE ASHES SERIES
MIDNIGHT TONIGHT, SKY SPORTS 1
RITUAL humiliation. For so many years
an England touring party in Australia
suffered nothing else. The visit down
under would be awaited with hope and
expectation – hope of little and expecta-
tion of even less – as they were routinely
outclassed by the rampant Aussies.
Almost a quarter of a century has
passed uninterrupted without the Three
Lions tasting Ashes success in Australia.
They last boarded the flight home to
Heathrow with the urn in 1987 and, since
that historic achievement, have won just
three of the subsequent 25 Tests in Oz.
The most recent chapter in this sorry tale
came when the class of 2006/7 were
pathetically whitewashed.
Why, then, so much optimism in the
England camp this time around?
Australia are, after all, odds-on to win the
series at 10/11 with Paddy Power. However,
the sands are shifting in Australian crick-
et and, after back-to-back Ashes wins on
home soil, this really does look like being
England’s best chance of a series win in
the Baggy Greens’ backyard.
In contrast to the hosts’ troublesome
build-up, Andrew Strauss and Andy
Flower’s preparations have been serene.
Australia’s last three Test matches have
ended in defeat, meaning their two most
recent series ended with a draw to
Pakistan and loss to India. Meanwhile,
England haven’t lost a series in almost
two years, during which time they’ve won
five of six – the only one not ending in vic-
tory was a draw in South Africa.
That Australia picked an initial 17-man
squad shows just how unsettled they have
been by injuries and loss of form. Three
Lions coach Flower knows his best team
and his planning has been meticulous.
Furthermore, England sit above Australia
in the current ICC Test rankings and the
Zimbabwean has instilled a winning men-
tality that has seen his troops perform
strongly in all forms of the game.
England’s last five ODI series have been
won and who can forget the World
Twenty20 victory in West Indies where
England beat Australia in the final by
seven wickets?
For me there’s an anticipation reminis-
AUSTRALIA
ENGLAND
FIRST TEST
MIDNIGHT TONIGHT, SKY SPORTS 1
NOVEMBER 1988 was the last time
Australia lost at the Gabba. Since then
they’ve drawn five Tests and won the
remaining 16, including all of the last six,
three of which came by an innings.
Brisbane Cricket Ground, to give the old
stadium its official name, is the tradition-
| Sports
cent to that before the England rugby
team embarked on their 2003 World Cup
campaign.
Selling Australia’s series supremacy at
2 with Sporting Index looks a great
option where the overall winner gets 10
points and a further five points for each
Test won by. We can also keep the draw
onside by backing England to retain the
Ashes at 5/6 with Paddy Power and that
looks more prudent than taking the 7/4
for England to win the series. For all the
tourists’ positive omens and despite their
relative travails of late, Australia have
only lost one Test series at home in 18
years.
The fact that the make-up of both sides
has changed significantly since England’s
capitulation four years can only be good
for the tourists. Of those returning, Kevin
Pietersen and Paul Collingwood will take
confidence from the fact that they were
their team’s stand-out players, and
Strauss does not carry the burden of hav-
ing captained that side. Ian Bell made a
few decent knocks then and hit a fine 192
in Hobart last week. He looks far tougher
mentally nowadays. Established at No6,
free from injury and an option for higher
up the order if Alastair Cook or KP are
unable to put dodgy periods behind
them, I’ll be buying his runs at 350 with
Sporting Index.
Stuart Broad’s ever-improving ability
with the bat points to a buy of his runs at
175. His average is creeping towards 30
and a high score of 169 against Pakistan is
backed up by five Test fifties.
al home to the opening Ashes fixture and
it is no coincidence England’s previous vic-
tory here came during their last series win
– back in 1986. Four years ago, England
only managed 157 in their first innings
after the Aussies had declared on 602/9.
That match will forever be remembered
for Steve Harmison delivering the first ball
so wide that Andrew Flintoff caught it in
disbelief at second slip. Harmison’s horror
set the tone so the Three Lions must make
a good impression here.
The Gabba is a results pitch and usually
one in Australia’s favour. However, if
England are good enough to retain the
Ashes, then they will need to re-write a
number of records along the way.
CITYA.M. 24 NOVEMBER 2010
Picture: GETTY
Fixed-odds punters might be tempted by
Pietersen at 4/1 to be England’s top bats-
man. OK, this one could go either way, but
no current England man has scored more
Test runs in Australia and he looks as good
a choice as any to topple Strauss, the 7/2
jolly. Jonathan Trott’s immense powers of
concentration make him a runner too at
5/1 but if Pietersen overcomes his demons
and fallibility against slow left-arm spin
then he can top score comfortably.
In the bowling department, Graeme
Swann looks a shoo-in to be England’s top
wicket-taker at 5/4 with Paddy Power. The
world’s best spinner takes wickets on any
track and the 3/1 about him being overall
series top bowler looks good value.
From an Aussie perspective it’s hard to
overlook Ricky Ponting for top Australia
batsman at 4/1 on Betdaq. Whatever his
reputation as captain, he remains in a
class of his own among this team and
scores for fun on all five Ashes grounds.
Mitchell Johnson will be his go-to man
with the ball but he can also handle him-
self at the crease. Sporting Index set his
series performance spread at a hefty 605
yet I’d still be tempted to buy at that price
where runs, catches, wickets and stump-
ings count towards the total.
POINTERS...
Sell Australia supremacy with Sporting Index at 2
Back England to retain the Ashes at 5/6 with Paddy
Power
Buy Ian Bell runs with Sporting Index at 350
Back Graeme Swann to be top bowler at 3/1
Considering the hosts’ current problems,
they look worth laying for the first Test at
around 5/4 on Betdaq.
Brisbane is generally a decent batting
pitch and Ricky Ponting should be backed
at 6/1 with Paddy Power to top score. He’s
accumulated 1196 runs here at an average
of 66 – more than any man in history.
Furthermore, Ponting’s three Ashes
appearances at the Gabba have seen him
hit 403 runs at an average of 100.75.
POINTERS...
Lay Australia to win the first Test at 5/4 on Betdaq
Ricky Ponting to be top batsman at 6/1 with
Paddy Power
 Sport
29
ASHES EXTRAVAGANZA
THREE-PAGE GUIDE CONTINUES WITH
PHIL TUFNELL’S VERDICT: P30-31

Cricket, as hard as it gets

GROUNDS FOR OPTIMISM: The venues that hold the key to retaining the urn

1 5
CRICKET COMMENT
ANDY LLOYD A U S T R A L I A

I
F ANYBODY is wondering how to
fit in watching an Ashes series QUEENSLAND
that will take place almost WESTERN
entirely during our normal AUSTRALIA 5
sleeping hours, I have some advice. If WACA, Perth Gabba, Brisbane
you watch nothing else, watch the Third Test: 16 Dec - 20 Dec SOUTH First Test: 25 Nov - 29 Nov
first session of the first Test – it starts AUSTRALIA
at midnight tonight and it’ll be Capacity: 22,000 1 NEW SOUTH Capacity: 40,000
absolutely essential viewing. England’s Record: W 1; L 7; D 3 WALES England’s Record: W 5; L 10; D 4
So many times the opening session Pitch: A real belter. Loved by the 4 Pitch: Normally green on the first
has dictated how the remainder of quicks and attacking batsmen. 2 morning. Hard toss for captains to
the series unfolds. Whether England Famous Ashes Moment: Adam judge.
bat first or bowl, they’ll need to lay
down a marker in the early stages.
Gilchrist’s century off just 57 balls the
last time England were Down Under
3 Famous Ashes Moment: Steve
Harmison’s wayward first ball of the
As you read this today the England was just about the most destructive 2006-07 series which ended up at
players and management will be Test match innings you’ll see. second slip.
utterly on edge because this is what
they are in cricket for. There is no big-
ger prize for an English player.
All Ashes contests are big, but this 2 3 4
time it’s huge, because England are
in Australia with a brilliant chance of
winning. They haven’t done it yet,
but what a feather in their caps it
would be. The Aussies, after all, have
been virtually invincible in their own
back yard for around the last 25
years.
It’ll also be a pleasure to concen-
trate on some good honest cricket
again, after the suspicions which
dogged Pakistan’s tour of England
earlier this year. No-one in their right Adelaide Oval, Adelaide MCG, Melbourne SCG, Sydney
mind would have the temerity to Second Test: 3 Dec - 7 Dec Fourth Test: 26 Dec - 30 Dec Fifth Test: 3 Jan - 7 Jan
doubt either side’s commitment in
the Ashes. No ground will be given; Capacity: 31,000 Capacity: 100,000 Capacity: 44,002
it’ll be cricket as hard as it gets. England’s Record: W 8; L 16; D 5 England’s Record: W 19; L 25; D 5 England’s Record: W 21; L 23; D 7
Personally I’m staggered Australia Pitch: Traditionally low and slow to start but will Pitch: A seamers’ paradise. Normally has a Pitch: A Bunsen. The place to field two spinners.
are the bookmakers’ favourites. take turn on final day. distinctive green tinge. Famous Ashes Moment: Steve Waugh bringing
Sticking my neck out, I expect Famous Ashes Moment: Aussie batsmen being Famous Ashes Moment: Shane Warne chose his up his record equalling 27th Test ton with the
England to win the first Test and go peppered during the Bodyline series of 1932-33. home ground to bring up his 700th Test wicket. final ball of the day in 2003 was unforgettable.
on to defend the urn by winning the
series 3-0.
 30 Sport | Ashes Guide CITYA.M. 24 NOVEMBER 2010

ALASTAIR COOK
England in fine
Age: 25
In the first of his Ashes columns exclusively
ENGLAND

Caps: 60
Role: Opening batsman
Career Ave: 47.28
Ave v Aus: 26.21
for City A.M. former England spin-bowling
JONATHAN TROTT
hero Phil Tufnell casts his eye over the two
Age: 29
teams as they prepare to cross swords
Caps: 13
Role: No3 batsman
Career Ave: 55.00
Ave v Aus: 80.00
l BOWLING: 9
KEVIN PIETERSEN ANDREW STRAUSS
The line-up is very strong and looks to have all bases England
Age: 30 covered. Anderson brings swing and experience, there are
Caps: 66 two big lads in Broad and Finn, while Swann can play a Age: 33
Role: Middle order batsman dual role, supporting the seam bowler or being aggressive. Caps: 77
Career Ave: 47.80 I’ll be fascinated to see how he performs: rightly billed as Role: Opening batsman
Ave v Aus: 50.72 the best spinner in the world, all eyes are on him to shine in Career Ave: 43.11
this series. His rise has been building to this and I think he’ll Ave v Aus: 38.41
PAUL COLLINGWOOD deliver. Finn is a slight unknown. But he’s young, fit and tall,
and bowls at 90mph. If he’s the weak link they’ll be alright.
Age: 34
Caps: 63
Role: Middle order batsman l BATTING: 8
Career Ave: 42.18
Ave v Aus: 35.00 It was great to see Cook rediscover his form recently
because he is a class player – just look at his stats. Others
IAN BELL have also started the tour well. Bell shone against
Australia A and has found mental toughness. Collingwood
Age: 28 can grind out a score, Trott can build and there’s wag in
Caps: 57 the tail – perhaps unlike when I was playing. Prior looks
Role: Middle order batsman to play shots, Swann and Broad can get runs. Australia
Career Ave: 42.92 will look to target Strauss but he thrives on responsibility
Ave v Aus: 25.68 and I fancy him to relish that challenge.

MATT PRIOR
l CONFIDENCE: 8
Age: 28
Caps: 35 They are justifiably full of belief heading into the series.
Role: Wicketkeeper batsman The bowlers have gelled and work as a unit, as have the
Career Ave: 42.13 batsmen, and the whole squad has been very well
Ave v Aus: 32.62 prepared by Strauss and Flower. Having said that, as
soon as the competition gets underway the pressure
STUART BROAD really ramps up and it’s a different kettle of fish
altogether. A good start is going to be so crucial but if
Age: 24 England can get one then I think they will really have the
Caps: 32 edge over Australia.
Role: Bowling all-rounder
Career Ave: 97 wickets at 34.30
Ave v Aus: 18 wickets at 30.22 l PLAYING IN AUSTRALIA: 7
l CAPTAIN: 8
GRAEME SWANN Conditions will be less familiar for England, so they’ll have
to adapt. But they’ve had a thorough preparation for the Strauss has had his doubters
Age: 31 series and started to practice with the Kookaburra ball, but has made all the right nois-
Caps: 24 which will swing for the first 20 overs and play a signifi- es, all the right moves and has
Role: Off-spinner cant part, months ago. They’ve got a range of bowlers, gone from strength to
Career Ave: 113 wickets at 26.55 while Monty Panesar will show how good he is if they opt strength. He is one of the boys
Ave v Aus: 14 wickets at 40.50 for a second spinner. England may get stick but it’s a but also the right stature to
knowledgeable crowd so if they do well it’ll be recognised. lead the side. While I’m sure he
JAMES ANDERSON can give the hairdryer treat-
ment when necessary, and can
Age: 28 l BIG GAME MENTALITY: 8 be ruthless at times, he’s gen-
Caps: 52 erally a very calm, assured kind
Role: Opening bowler Ruthlessness when it matters is a trait that England have of guy with a rock-solid inner
Career Ave: 188 wickets at 56.17 lacked; they’ve been notorious for not taking the chance to determination and he imbues
Ave v Aus: 17 wickets at 40.50 hammer the final nail into the opposition’s coffin. Now, the team with those qualities.
though, I think they’ve learned how to do that and are bet- He is also very well supported
STEVEN FINN ter than Australia in that respect. Strauss and Flower have by coach Andy Flower and the
made them into a consistent unit that seizes the opportu- pair have struck up a fantastic
Age: 21 nity and, if a Test is there to be won, they go and win it. relationship.
Caps: 8
Role: Opening bowler
Career Ave: 32 wickets at 23.21
Ave v Aus: NA

TIM BRESNAN
THE FIXTURES
Phil Tufnell is part of Paragon Sports Test Starts Date Venue
Age: 25 Management. For all your hospitality First 00:00 25-29 November Brisbane
Caps: 5 and event requirements please Second 00:00 3-7 December Adelaide
Role: Fast medium bowler contact Paragon on 020 83328640 Third 02:30 16-20 December Perth
Career Ave: 14 wickets at 41.66 or visit www.paragonhospitality.co.uk Fourth 23:30 25-29 December Melbourne
Ave v Aus: NA Fifth 23:30 2-7 January Sydney

SERIES TIMELINE 2-1 1-0 3-2 3-2 2-0 1-0 2-1 2-0 2-1 1-0 3-2 2-1 4-1 1-0 4-1 2-1 3-2 2-0 4-1 2-1 4-1 1-0 5-0 3-0 4-1 1-0 4-1 2-0 4-1 2-1 3-2
All-time results
1882/83

1894/95

1907/08

1932/33
1884

1890

1893

1934
1887/88

1901/02

1924/25
1897/98

1905

1909

1921
1886/87

1899

1902

1912
1886

1896

1903/04

1926
1891/92

1920/21
1888

1928/29

1936/37
1884/85

1930
1911/12

31 29 5
Australia England Drawn
 CITYA.M. 24 NOVEMBER 2010 Sport | Ashes Guide 31

form for Ashes glory SIMON KATICH

G
UNG-HO is how I felt when I used different. England have every reason to Australia have come down a couple. The Age: 35

to arrive in Australia for an Ashes feel confident as they prepare for the
series. Outwardly at least, I’d be first Test, which starts at midnight
brimming with confidence. tonight.
‘Come on lads, let’s go and win this’, They are on a fantastic run, everyone
I’d say as I stepped off the plane. But is fit and performing well; the team’s
deep down I think I knew that if we were preparation has been nigh on flawless.
to triumph we’d have to have a good day England seem to have climbed a few
and the Aussies a bad day. This time it’s rungs on the world cricket ladder, while
RICKY PONTING
Australia
Age: 35
Caps: 148
Role: No3 batsman
Career Ave: 54.68
Ave v Eng: 48.22
AUSTRALIA
task can’t be underestimated, though. Caps: 54
Winning at home is one thing, as Role: Opening batsman
England did last year, but repeating the Career Ave: 45.96
trick in their back yard would be an out- Ave v Eng: 33.55
standing achievement. I’m optimistic, if
a little cautious, but, more than that, I’m SHANE WATSON
hugely excited about watching the
biggest series of all. Age: 29
Caps: 22
Role: Opening batsman
Career Ave: 39.94
Ave v Eng: 48.00
l BOWLING: 7
MICHAEL CLARKE
Johnson is a world-class performer but goes through bad
patches. He can be great, or all over the shop, as he was at Age: 29
Lord’s last year. Australia don’t have performers with the Caps: 64
impact of a Shane Warne or a Glenn McGrath any more, and Role: Middle order batsman
I feel England can get stuck into their bowlers. Even if they Career Ave: 48.91
do well you’d still fancy England to have chances. Spinner Ave v Eng: 55.80
Doherty was a surprise choice and the key question for me is
how well he is able to perform. MICHAEL HUSSEY
Age: 35
l BATTING: 7 Caps: 54
Role: Middle order batsman
They always have a decent batting line-up, and this is no Career Ave: 49.75
exception, although they are short of confidence. Watson Ave v Eng: 56.46
is great at getting runs but I’m not sure about him as an
opening batsman. Clarke, an injury doubt, is a good player MARCUS NORTH
and Ponting, whatever anyone says about his skills as a
captain, is undoubtedly a class batsman. But you feel they Age: 31
are susceptible to a collapse and that the middle order can Caps: 19
be got at. England will look to attack the likes of North Role: Batting all-rounder
and Katich. Career Ave: 37.40
Ave v Eng: 52.42

l CONFIDENCE: 7 BRAD HADDIN

l CAPTAIN: 7
A fabulous batsman, Ponting is
Aussie through and through.
He is nuggety, will get stuck in,
scrap, spit and fight for the
cause. His leadership is good
but does get decisions wrong,
such as not playing a spinner
at the Oval in the deciding fifth
Test of the last series. He per-
haps found it easier to lead the
side when he came in – even I
could have captained that
team – but now he faces a
career defining moment. If he
loses this he won’t be remem-
bered as a great skipper but as
one who lost three Ashes
series.
TOTAL
When the two sides meet Down Under England have tra- Age: 33
ditionally been the team with something to prove; this Caps: 27
time, I think the boot is on the other foot and we are the Role: Wicketkeeper batsman
team to beat. They are always supremely confident – Career Ave: 38.62
‘Come on mate, let’s smash the Poms’ – that’s just the way Ave v Eng: 46.33
they are. But if they lose the first Test they’ll be up against
it, and when you slip into that mindset any belief can MITCHELL JOHNSON
erode very, very quickly.
Age: 29
Caps: 38
l PLAYING IN AUSTRALIA: 9 Role: Opening bowler
Career Ave: 166 wickets at 29.06
The Aussies will of course know the surfaces and the Ave v Eng: 20 wickets at 32.55
Kookaburra ball better, and be more familiar with the
weather, so those factors should work in their favour. The PETER SIDDLE
surface at Sydney traditionally spins, Perth is bouncy,
while in Brisbane it’ll swing and bounce. Australia will also Age: 25
have a hostile home crowd on their side. England will get Caps: 17
sledged, they’ll get stick, but then I always quite enjoyed Role: Fast bowler
and relished that, so it can provide extra motivation. Career Ave: 60 wickets at 31.53
Ave v Eng: 20 wickets at 30.80
l BIG GAME MENTALITY: 7 XAVIER DOHERTY
Spectacular collapses used to be the preserve of the Age: 28
English but Australia seem the more likely to do that now, Caps: NA
especially judging by some of their Ashes warm-up match- Role: Left-arm orthodox spin
es. Looking way back, if the Aussies found themselves Career Ave: NA
150-5 they would so often carve out a 320 from some- Ave v Eng: NA
where and get themselves back into the contest. They
seem to have lost that trait while England have found a BEN HILFENHAUS
killer instinct they previously lacked.
Age: 27
Caps: 13
Role: Opening bowler
Career Ave: 48 wickets at 31.06
Ave v Eng: 22 wickets at 27.45
THE VERDICT USMAN KHAWAJA
If England are to win, it will have to be a genuine team effort. The big batsmen like Cook,
Strauss and Pietersen will have to be on top form, an excellent bowling line-up must live up to
its reputation, and the tail will have to chip in with priceless extra runs. The first Test in
Age: 23
Caps: NA

48 - 44
Brisbane will be so important for setting the tone of the entire series. If England hit the ground Role: Upper middle order batsman
running, their already-high confidence will soar while Australia’s belief could quickly disinte- Career Ave: NA
grate. Yet we all know it is not quite as easy as that. I can’t wait. Ave v Eng: NA

1-1 3-0 4-0 4-1 1-0 3-1 2-1 4-0 2-1 1-1 1-0 1-1 1-1 2-0 2-2 4-1 1-0 3-0 5-1 3-1 2-1 3-1 2-1 4-0 3-0 4-1 3-1 3-2 3-1 4-1 4-1 2-1 5-0 2-1
1958/59

1986/87
1950/51

2006/07
1970/71

1977

1993

1997
1990/91

2001

2005
1946/47

1954/55

1956

1964

1974/75

2002/03
1948

1965/66

1972
1938

1981
1962/63

1978/79
1968

2009
1953

1985
1961

1975

1982/83

2010/11
1989

1998/99
1994/95
 32 Sport CITYA.M. 24 NOVEMBER 2010

Results
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BRAGA 2 “What was the fifth official doing?
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▲

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FOOTBALL and that’s where we were punished.”
8:D`cXe%%%%%%%%%%%%%%%%%%%%%%%%%, ) ) ( . , ) / BY JAMES GOLDMAN Braga were hammered 6-0 at
8aXo%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%, ( ( * + (' $- + Emirates Stadium back in September
8lo\ii\%%%%%%%%%%%%%%%%%%%%%%%%%%%%, ( ' + * / $, * ARSENAL manager Arsene Wenger and had clearly learned their lesson.
>IFLG? branded Uefa’s multi-official system Instead of trying to match Arsenal for
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J_Xb_kXi;fe\kjb%%%%%%, + ' ( (' - + () failed to spot Alberto Rodriguez’s trip limiting their more illustrious oppo-
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K<EE@J The Portuguese side, now level on before Matheus’ late double.
8KG98I:C8PJNFIC;KFLI=@E8CJF)8i\eX Ç points with Arsenal, will qualify for Wenger, who saw Cesc Fabregas
J`e^c\j>iflg91) If^\i=\[\i\iJn` Yk, 8e[p the knockout stages should they reg- limp off with a recurrence of his ham-
DliiXp>Yi -$+-$)#+ IfY`eJf[\ic`e^Jn\ Yk.  ister a better result than Wenger’s string strain, was far from impressed
;Xm`[=\ii\iJgX .$,.$,%;flYc\j>iflg81/ Ali^\e
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avoided had Kassa, or his assistant on the counter attack. They used
behind the goal, spotted what every single trick in the book to slow
KF;8PËJ;@8IP appeared a blatant foul on Mexico the game down,” Wenger lamented.
=FFK98CC striker Vela, who was cautioned for “Everybody is free to play the way
L<=8:?8DG@FEJC><.%+, Ç>iflg81@ek\iD`cXem=: simulation, and Wenger was in far they like, and they won.”
Kn\ek\#Kfkk\e_XdmN\i[\i9i\d\e%>iflg91?Xgf\cK\c$ from forgiving mood. Arsenal face group whipping boys
8m`mm9\e]`ZX#JZ_Xcb\mCpfe%>iflg:1IXe^\ijmDXeLk[# He said: “The turning point was the Partizan Belgrade at home in their
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IlY`eBXqXem=::fg\e_X^\e,%*' % penalty – I still cannot understand final fixture and a win would render
how Carlos Vela got a yellow card. It a Braga victory in Donetsk irrelevant.
:I@:B<K
=@IJKK<JKD8K:?9i`jYXe\ 18ljkiXc`Xm<e^cXe[()dk %
remains a complete mystery. The ref- “It is hard to swallow, but now we
eree had some surprising decisions. have to win our last game,” said
SPORTS EDITOR FRANK DALLERES “We are going through a period Wenger (right). “The most important
email sport@cityam.com where we have bad luck, we had had thing for us now is to qualify.”

Ancelotti blast fires Chelsea

SO IS CARLO HAPPY?
The Chelsea boss was typically inscrutable
as he paced the touchline at Stamford
Bridge last night. But were there any clues

fightback and books top spot

to his state of mind?

ensured Ancelotti’s men of top spot
CHELSEA 2 in Group F but the Italian warned
them they would have no chance of
lifting the trophy if they repeated
MSK ZILINA 1 their lacklustre performance in the
opening stages.
“It was a difficult game because we
didn’t start the game well and were
▲
assert themselves, however, and took
a shock lead on 19 minutes when
Bello played a one-two and poked past
stand-in goalkeeper Ross Turnbull.
It stayed that way until six minutes
after the break when the lively
Sturridge took a chance with a back
post run and tapped in a Salomon With Chelsea trailing, Ancelotti casts his

FOOTBALL
BY FRANK DALLERES
CHELSEA gave manager Carlo
Ancelotti something to smile about
by booking a place in the Champions
League last 16, but only after he had
given them a half-time rollicking.
The Blues boss, whose happiness
with behind-the-scenes decisions has
been the subject of intense specula-
tion, tore into his team when they
went in at the break a goal down to
Babatounde Bello’s strike.
But the dressing-room dressing
down worked and Daniel Sturridge
claimed the equaliser an improved
Chelsea performance deserved before
Malouda scored the winner five minutes Florent Malouda grabbed the winner
from time. Picture: GETTY five minutes from time. Victory
1-0 down,” he said. “We had a good Kalou cross. Striker Didier Drogba gaze toward the skies – perhaps looking for
reaction in the second half, with and youngster Patrick van Aanholt divine help in avoiding a third straight loss?
more intensity and good play, and both hit the woodwork before
plenty of opportunities to score. But Malouda side-footed home from
if we play like we did in the first half, Drogba’s knock-down.
it’s impossible to win the Champions Josh McEachran, 17, shone on his
League. If we play like we did in the first start and Ancelotti said: “I think
second then we’ll have a chance.” Josh can play every game. He showed
Of his half-time outburst, Ancelotti his quality. He’s ready to play.”
added: “I was upset because we didn’t
play well. I was disappointed because
this was an important game and an
important moment. We wanted to
GROUP F
TEAM PLD W D L F A PTS
win and finish first in the group.”
Ancelotti came into the match in Chelsea 5 5 0 0 14 3 15
dire need of a morale-boosting win, Marseille 5 3 0 2 11 3 9 He gave his team the hairdrier treatment at
having lost three in four, but gambled Spartak 5 2 0 3 5 9 6 half-time but was still showing frustration
by handing a clutch of youngsters after they levelled. And it worked.
MSK Zilina 5 0 0 5 2 17 0
starting roles. Zilina were quicker to
 CITYA.M. 24 NOVEMBER 2010 Sport 33

GROUP H Fabregas faces Cook stirs Aussie sledgers

THE ASHES
TEAM PLD W D L F A PTS
Shakhtar
Arsenal
5
5
4
3
0
0
1
2
10 6 12
15 6 9
race to be fit in
Braga 5 3 0 2 5 9 9
time for United

▲
CRICKET Cook said: “He’s a fighter, he loves

SPORT
Partizan 5 0 0 5 1 10 9 BY JAMES GOLDMAN that – and his record at the top of the
order is second to none,” said Cook.

Matheus wheels
away in delight
title showdown ENGLAND’S Alastair Cook has told
the Aussie sledgers to do their worst
when the first Ashes Test gets under-
“As England captain he’ll always be
that target. But he’s handled it so
well, and the pressures of being
after opening the way tonight, as his captain Andrew England captain. He’s a fighter and
scoring in the 83rd Strauss will thrive on the verbal joust- he’ll look forward to that challenge.”
minute. ing. Meanwhile, Australia’s vice-captain

Picture: GETTY
ARSENAL captain Cesc Fabregas is
set to miss up to three weeks after
The England skipper has been sin-
gled out for special treatment by
Michael Clarke looks to be winning
his battle to be fit for the start of play OUR THREE-PAGE
suffering yet another hamstring
strain.
Aussie quick Mitchell Johnson, but
Cook believes his opening partner is
in Brisbane.
Clarke batted in the nets for almost GUIDE STARRING
The Spain international was
plagued by a similar injury last sea-
one of the most unflappable batsmen
on the international circuit and
an hour yesterday and played a full
range of shots without any noticeable PHIL TUFNELL
son and has already missed a month
of the current campaign having
won’t be affected the barrage of short
stuff, or the chirping, headed his way.
discomfort from his degenerative
back problem. P29-31
returned late to his club following his
World Cup exploits in South Africa.
The 23-year-old lasted just 69
minutes against Braga last night
before signaling to the bench he was
unable to continue.
“We will have to assess Fabregas
tomorrow. It could be two to three
weeks,” said Wenger. “It is very dis-
appointing because I had a hesitation
to play him before the
match started. I took the
gamble and it backfired.”
Should Fabregas (left) miss
the next three weeks, he
would be absent from his
side’s Premier League
matches against
Aston Villa, Fulham and
Manchester United, the
Carling Cup quarter-final
against Wigan and the
decisive final Champions
League group fixture
against Partizan
Belgrade.
Wenger also revealed
full-back Emmanuel
Eboue is set to be side-
lined for several weeks
with a medial knee lig-
ament injury after
being felled by a poor
tackle.
“Eboue will be out for a
few weeks because he
Malouda & Drogba
took a very bad tackle. It
is a medial knee ligament
injury,” said Wenger.

buy 4 and get 1 free

Van der Vaart and Bale fitness Wednesday 1st December 2010
doubts for Bremen showdown Join us for Chelsea’s first ever Christmas Party at
Stamford Bridge!
▲

FOOTBALL German side, but may have to do so

TOTTENHAM are sweating on the fit-
ness of Gareth Bale and Rafael van
der Vaart ahead of their potentially
decisive Champions League tie at
home to Werder Bremen tonight.
Fresh from their 3-2 victory in the
north London derby, Spurs will be
looking to all but book their place in
the last 16 with a win over the
London crowd disappointed after
without two of their goalscorers from
Whether you’re entertaining friends or clients this will definitely be a party not to be missed…
Saturday. Bale has a shoulder prob-
lem, while the Dutchman has an
ankle knock. After waiting 17 years
for a victory at Arsenal, Redknapp is Tickets are £49 each...
hoping his side carry the euphoria and will include a Christmas buffet, 3 drinks vouchers, a Q&A with first team stars
from that victory into tonight. Drogba and Malouda and an after party in the Great Hall.
“It must give us confidence,” he
said. “Hopefully it will be springboard
for the rest of our season.”
Tickets will sell quickly so book now!
Call 0207 957 8260
or book online at chelseafc.com/specialevents

Federer thrashes Murray at O2

to a bad start in both sets, which does-
▲

TENNIS
BRITAIN’S Andy Murray blamed basic
errors after disappointing the London
crowd with a humbling 6-4 6-2 defeat
to world No2 Roger Federer.
Murray was crushed in 76 minutes
as Federer made it two wins from two
in Group B of the ATP World Tour
Finals, held at the O2 Arena. “I got off
n’t help,” said the Scot. “I returned
poorly, served poorly. Against him,
that’s not going to win you the
match. Last time I played against him,
it worked well. Today I made more
mistakes than normal.”
Meanwhile, in the other Group B
match Robin Soderling beat David
Ferrer 7-5 7-5.
Are they fast enough?
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