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FTSE 100 5,525.54 -22.52 DOW 11,706.62 -207.00 NASDAQ 2,638.42 -61.02 /$ 1.60 unc / 1.15 unc /$ 1.39 unc
Calls grow
for St Pauls
camp to go
THE ANTI-CAPITALIST protesters occu-
pying parts of the City faced growing
pressure to leave last night after it
emerged that the vast majority of
their tents were empty on Monday
evening.
Those with tents outside St Pauls
Cathedral also face a formal call to
leave by the Bishop of London.
The bishop, Richard Chartre,
expressed support for their aims but
said: The time has come for the pro-
testors to leave, before the camps pres-
ence threatens to eclipse entirely the
issues that it was set up to address.
The protest is reportedly costing the
cathedral 16,000 per day in lost rev-
enues, but its officials claim that it has
been shut for health and safety
rather than commercial reasons.
Thermal images of the camp taken
late on Monday suggested that only a
handful of tents had people inside
them, a claim the group vigorously
deny.
The nine out of ten tents are
empty statistic is completely unfound-
ed, the group, OccupyLSX, said last
night. This is simply not the case. We
try to keep vacancy to a minimum.
The protesters also complained of
aggressive press tactics, saying that
the thermal imaging breached their
right to privacy and that they are
ordinary people with jobs and fami-
lies.
Some of the protesters moved from
St Pauls to Finsbury Circus recently in
order to free up space around the
cathedral.
BY JULIET SAMUEL
POLITICS
BY TIM WALLACE AND JULIAN HARRIS

EUROZONE
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30 fell 0.14 per cent to 6,046.75
points. In France the CAC 40 was
down 1.43 per cent to 3,174.29.
Meanwhile Italian Prime Minister
Silvio Berlusconi said the ruling
coalition was at risk of falling apart
over plans to raise the state retire-
ment age. Last night Umberto Bossi,
leader of the Northern League, said
the coalition has come to an agree-
ment on state pension provisions --
yet hinted that it may not be
enough for other European leaders.
And Italian consumer confidence
has sunk to a three year low, data
revealed yesterday, adding further
weight to forecasts that the country
is heading into recession.
Eurozone plans for leveraging the
European Financial Stability Facility
(EFSF) could be thrashed out today,
in a bid to save struggling peripher-
al states. It is likely that a special
purpose investment vehicle (SPIV)
will be established, into which
investors will put money. As private
investors have not yet been
approached, a draft communiqu
suggests it may take until the meet-
ing on 7 November to finalise plans.
Eurozone officials said last night
that the International Monetary
Fund (IMF) might participate in the
EFSF -- a move that would see the UK
contribute to the bailout fund.
MORE: P12, FORUM: P26
Italian Prime Minister Silvio Berlusconi is struggling to deliver plans for reform Picture: REUTERS
EUROPES leaders are grappling to
find a solution to the debt crisis by
the end of today, their latest self-
imposed deadline.
Jittery markets nose-dived yester-
day after news broke that a meeting
of Eurozone finance ministers
known as Ecofin had been can-
celled. Confusion over the
announcement led to false rumours
that the whole crisis-tackling confer-
ence had been scrapped.
The FTSE fell off a cliff, dipping
1.48 per cent to 5,465 points on its
open. Yet the blue-chip index recov-
ered later in the day, as it was con-
firmed that the wider summit of EU
and Eurozone leaders will proceed
as normal.
The FTSE closed down 0.41 per
cent at 5,525.54 points and the DAX
News
2 CITYA.M. 26 OCTOBER 2011
Bonus ban for
French banks
FRENCH banks could face a ban on
paying bonuses and dividends as part
of a European recapitalisation pro-
gramme, finance minister Francois
Baroin said yesterday.
The recapitalisation will be done
with the ban on dividends and bonus-
es under the supervision of the insur-
ance and banking regulator, said
Baroin. We have reached an agree-
ment for the Eurozone last weekend.
It was not clear how the bans will be
enacted, but it is most likely that any
lender deemed to have insufficient
capital after a new round of stress tests
will be forbidden from paying out
rewards to staff or shareholders until
it raises sufficient cash.
The countrys major lenders say
they do not need to find any extra cap-
ital, but French Prime Minister
Francois Fillon suggested yesterday
that they will need to raise in the
order of 10bn (8.7bn), in other words
below their profits, which means that
[they] can recapitalise without need-
ing to ask for public aid.
The estimate is above that of many
analysts. Yesterday, analysts at Bank of
America Merrill Lynch (BAML) pro-
duced a total capital-raising estimate
of 3bn for major French banks.
Analyst Patrick Lerclerc said that
Socit Gnrale would need to raise
1.7bn, Crdit Agricole 1.3bn and
BNP Paribas would not have to tap
investors.
BY JULIET SAMUEL
BANKING
Radical thinking on tax from the US

WHILE the Eurozone moves ever clos-
er to the brink, the US presidential
elections have suddenly become more
interesting. Two of the Republican
candidates former Godfathers Pizza
CEO Herman Cain and Texas governor
Rick Perry have kick-started a major
debate on tax reform and economic
growth. It all started with Cains fasci-
nating 9-9-9 plan: he wants to slash
the federal income and corporate
taxes to 9 per cent (while eliminating
all loopholes) and introduce a 9 per
cent federal sales tax. The poorest peo-
ple (on or below the poverty line)
would pay no income tax, a very sensi-
ble move. The plan which would dra-
matically boost incentives to work and
invest and hence growth but would
increase taxes for millions has pro-
pelled the entrepreneur into pole posi-
tion in the primaries. For the time
being at least, he is the front-runner to
oppose Barack Obama. Cain also backs
opportunity zones that would liber-
alise the poorest parts of America in a
bid to boost growth and jobs. He also
supports zero capital gains tax, the
immediate expensing of business
equipment and no payroll taxes. It is
not the sort of manifesto you would
ever hear from Britains Tory party.
Perrys plan which unfortunately
remains too vague would give tax-
payers the choice of either a 20 per
cent flat tax on income above $12,500
(the new personal allowance) or of
retaining their current tax rates and
rules. Lower-income taxpayers in the
10 and 15 per cent brackets would
keep the current system while those
on higher incomes would switch to
the flat tax. It is unclear how the
maths would work out. The other dan-
ger is that rather than making the sys-
tem simpler, it could actually make it
more complex but Hong Kong
already successfully operates a similar
system. Perrys mistake is that he
would allow those earning under
$500,000 a year to keep tax breaks on
mortgage interest (a break long since
abolished in the UK). His other policies
include cutting company tax from 35
per cent to 20 per cent. Unlike many
Republicans, Perry understands that
tax cuts without spending cuts would
guarantee national bankruptcy. He
backs a law to cap federal spending at
18 per cent of GDP, down from 23.8
per cent today (though while he has
outlined some actual spending pro-
grammes he would cut, his numbers
remain fuzzy). For good measure, he
would also scrap the Dodd-Frank
banking law, the Sarbanes-Oxley
accounting laws and much else
besides.
Neither plan is perfect (though both
are better than the current system
and its myriad loopholes); both candi-
dates have their weaknesses and
would probably be defeated by
Obama. But even Mitt Romney, a lack-
lustre candidate who is vying with
Cain for the opportunity to stand
against Obama, wants to cut corporate
tax from 35 per cent to 25 per cent. To
their great credit, Republicans fully
understand the need to boost incen-
tives and improve the supply-side of
the economy; the UK has much to
learn on this front. But the US elec-
torate increasingly wants ultra-low
taxes combined with European-style
levels of public spending, especially
entitlements for the middle classes, a
sure road to national collapse. Taxes
are far too high in general across the
Western world and especially in the
UK but the adoption of a sustainable
lower-tax model will only become pos-
sible if we move away from our cur-
rent addiction to public spending.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
MIRIAM Gonzalez, the lawyer wife of
deputy Prime Minister Nick Clegg, is
jumping ship from DLA Piper to join
the London office of US law firm
Dechert, where she will head up the
firms EU trade and EU government
affairs practice.
Gonzalez, who worked at the EU
for seven years before joining DLA
Piper in 2006, is an expert in EU and
international trade policy, and is cur-
rently DLAs head of trade and gov-
ernment relations.
She is the third senior DLA Piper
partner to defect to Dechert in recent
months, following litigation head
Neil Gerrard and Europe and Middle
East corporate crime head Jonathan
Pickworth.
Dechert provides an excellent
platform on which to build further
my practice, Gonzalez said yesterday.
I am extremely impressed with the
team there and the resources avail-
able at the firm.
BY ELIZABETH FOURNIER
LEGAL SERVICES
Mrs Clegg takes EU law job

AMERICAN consumer confidence
plummeted to a two and a half year
low this month, in a worrying sign for
the US economy.
Whats more, at 39.8, confidence is
far below the long-term average of
92.8, added Paul Ashworth of Capital
Economics.
Aside from a few months during
the height of the recession between
November 2008 and March 2009, the
index has never been lower in its 40-
year history, he warned.
The main index score lost 6.6 points
from September to October. The pres-
ent situation sub-index fell to 26.3
from 33.3. The expectations sub-index
dropped to 48.7 from 55.1 last month.
Meanwhile, the S&P / Case Shiller
index of prices in 20 American cities,
also released yesterday, showed that
house prices were stagnant in August.
Analysts had hoped for a modest 0.1
per cent month on month rise.
Morale falls in
United States
Miriam Gonzalez will leave DLA Piper for the EU trade division of US law firm Dechert
US ECONOMY
EDITORS LETTER
ALLISTER HEATH
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French finance minister
Francois Baroin said
banks could be banned
from paying bonuses
or dividends
4th Floor, 33 Queen Street, London, EC4R 1BR
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Email: news@cityam.com www.cityam.com
Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Acting Night Editor Marion Dakers
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
Sports Editor Frank Dalleres
Art Director Jo Simpson
Pictures Alice Hepple
Commercial
Sales Director Jeremy Slattery
Commercial Director Harry Owen
Head of Distribution Nick Owen
SHAREHOLDERS IN EVOLUTION BACK
BID BY INVESTEC
Investecs 202m takeover of
Evolution Group will go ahead
despite last-minute resistance from
Evolutions biggest shareholder after
the brokers other big investor backed
the bid. Aberforth Partners, which
owns 10.8 per cent of Evolution, said
last week it had withdrawn its sup-
port for the all-share offer ahead of a
shareholder meeting on Thursday
that will vote on the bid.
WILLIAM HILL IN STRIKES RESPONSE
William Hill said it had sought to
quell a revolt by staff working at its
online gambling business in three
countries after sacking seven senior
managers in its internet venture. The
gambling group said last week it had
taken disciplinary action against sen-
ior managers at William Hill Online
after a strike involving about 180 peo-
ple at the companys marketing busi-
ness in Tel Aviv.
ARCELORMITTAL IN MACARTHUR EXIT
ArcelorMittal has pulled out of a
$5bn joint bid for Macarther Coal
after deciding that the $1.12bn it was
to have spent might have represented
a step too far in light of growing signs
of global economic weakness. The sur-
prise announcement means that
Peabody Energy, the US coal business
that was ArcelorMittals bid partner,
will be free to take 100 per cent con-
trol of the Australian group.
CUMMINS AND 3M REDUCE FORECASTS
Two of the USs biggest manufactur-
ers cut their full-year outlooks, warn-
ing of slumping demand in both the
developed world and emerging
economies. Third-quarter profits at
3M, one of the USs biggest industri-
al conglomerates, missed Wall Street
expectations and the company
slashed its outlook for full-year earn-
ings.
THOMAS COOK VOTE PUTS FLIGHTS IN
JEOPARDY
The spectre of flight disruptions over
Christmas returned yesterday as the
threat of a strike by Thomas Cook
cabin crew moved a step closer. In a
consultative ballot, members of the
Unite union voted overwhelmingly in
favour of taking industrial action
over the companys plans to cut up to
250 jobs. Unite said that 475 cabin
crew had backed action, with 53
against.
TATA CLOSE TO BREAKING UP THE
IMPOSSIBLE JOB
He is the most respected man in
Indian business, overseeing a sprawl-
ing business empire of more than 90
companies. But a selection panel
seeking a replacement for Ratan Tata,
the Tata chairman, is considering
splitting the role for the first time in
the companys 140-year history.
GIVE FIRMS FREEDOM TO SACK THEIR
UNPRODUCTIVE WORKERS, LEAKED
DOWNING STREET REPORT ADVISES
Companies should be given the right to
dismiss unproductive workers without
explanation, a leaked Downing Street
report advises. Britains terrible
employment laws are undermining
economic growth and should be over-
hauled, according to the confidential
report obtained by The Daily
Telegraph.
AVIATION TAX RISE COULD CRIPPLE
BRITISH TOURISM
Further increases to Air Passenger Duty
(APD) could deter foreign visitors to
Britain and cost the economy nearly
1bn in lost revenue, the government
has been warned. Despite the Prime
Minister predicting four million extra
foreign tourists in 2012, a survey has
found that many are anticipating a sig-
nificant drop in visitors.
NOMURA WHETS SCALPEL FOR CUTTING
Scaling back its ambitions to become a
full-service global investment bank,
Nomura is planning a major cost-cut-
ting drive that will likely land heaviest
on its money-losing European opera-
tions, people familiar with the matter
said. Executives inside Nomura are
debating the plan, with some calling
for cutting as much as $1bn a year
while refocusing the bank on prof-
itable businesses in the US, Japan and
the rest of Asia.
DREAMWORKS' NET DROPS 51PC
DreamWorks Animations third-quar-
ter earnings dropped 51 per cent, hurt
by soft sales of DVDs and movie tick-
ets, as the studio didn't release a new
movie in the latest quarter.
DreamWorks Animation reported net
income of $19.7m, or 23 cents a share,
compared with $39.8m, or 47 cents a
share, a year ago.
WHAT THE OTHER PAPERS SAY THIS MORNING
News
SALARIES and bonuses in the hedge
fund industry are set to slump by an
average of 10 per cent this year as
global market turmoil bites.
Some top hedge fund managers
will suffer a cut of up to 30 per cent in
their total compensation packages,
according to research.
The study also showed the typical
compensation of an experienced ana-
lyst at a large hedge fund will decline
by about five per cent to $950,000
(593,496) this year. The average for a
junior analyst at a smaller fund will
drop by the same margin to around
$169,000.
Many of the changes, outlined in
the Glocap hedge fund compensation
report, produced with Hedge Fund
Research (HFR), are due to a dire
third-quarter for the industry. Iconic
managers such as Crispin Odey and
John Paulson have seen sharp
declines in the value of their funds
while weak performance has also
dragged down shares in Man Group.
Adam Zoia, chief executive of
Glocap, said the greatest volatility
had been seen in the pay of the top
hedge fund managers.
Performance suffered, which was
the primary reason compensation
overall fell.
Separate figures for the third quar-
ter showed hedge funds posted their
fourth worst performance since HFR
started tracking their performance in
1990. Total capital under manage-
ment fell 3.43 per cent to $1.97 tril-
lion.
Macro funds performed well, how-
ever, including commodity and dis-
cretionary macro funds, Kenneth J
Heinz, president of HFR, told City A.M.
Ailing hedge
funds forced
to slash pay
THE GOVERNMENT plans to scrap
numerous regulatory bodies and
limit their powers of inspection to
twice a year as part of a deregulation
drive, deputy Prime Minister Nick
Clegg said yesterday.
Employers could also be given a
new legal protection to have frank
conversations with underperform-
ing staff without fear of the content
being eligible as evidence in an
employment tribunal, he said.
Why, for example, should regula-
tors be able to turn up at your door
whenever they want and as often as
they want? Clegg commented, say-
ing that the government is looking at
plans to ensuring these bodies coor-
dinate amongst themselves to stick
within a limit of two visits per year.
He also cited plans already
announced by chancellor George
Osborne to discourage frivolous cases
being brought to employment tri-
bunals both by raising fees for doing
so and by placing an emphasis on
more conciliation.
The British Chambers of
Commerce gave the proposals a cau-
tious welcome but added: At the
local level, the picture can be com-
plex, so we need to see more detail on
the governments proposals... there
needs to be a clear culture change.
ONLINE retailer Amazon shocked
investors last night with a far weaker-
than-expected outlook for the crucial
holiday season quarter as it spent
heavily on its new Kindle Fire tablet
computer.
The stock tumbled 12 per cent in
extended trading as the news raised
concern that Amazon was losing
some of the revenue momentum that
had helped investors overlook its
razor-thin profit margins.
Amazon said yesterday its third-
quarter net income was $63m
(39.4m), versus $231m a year earlier.
Revenue was $10.88m, up 44 per cent
from the third quarter of 2010 but
below analyst estimates.
The company also said it could
report a $200m operating loss to a
$250m operating profit in the com-
ing holiday quarter as it spends on
the Fire and other initiatives.
Government to
clamp down on
regulation visits
Amazon tumbles as Fire
burns through its profits
Amazon chief Jeff Bezos has invested heavily in the new Kindle Fire Picture: REUTERS
BY PETER EDWARDS
HEDGE FUNDS
Hedge funds lost an average of 6.16 per cent

of their value in the third quarter according to
the HFRI fund weighted composite.
Funds have sunk in value by an average of
5.44 per cent so far this year, the HFRI also said.
FAST FACTS | HEDGE FUND WOE
BY HARRY BANKS
TECHNOLOGY
BY JULIET SAMUEL
POLITICS
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PROFITS at troubled Swiss bank UBS
tumbled in the third quarter but came
in above analysts worst fears.
UBS said net profit fell 39 per cent to
SwFr1.018bn (723m) after one-off
items, including a SwFr1.765bn gain
on its own debt. In the investment
banking division, however, where trad-
er Kweku Adoboli is accused of carry-
ing out a SwFr1.85bn fraud, pre-tax
losses hit SwFr2.4bn, excluding the
accounting gain.
The ratio of pay costs to revenue in
the investment banking division hit 94
per cent, up from 59 per cent in the
second quarter, despite the desire to
cut costs. Insiders said the shift reflect-
ed a sharp fall in revenue.
Once the impact of the rogue
trade and one-off gains and charges
were set aside, the division recorded a
pre-tax loss of SwFr566m, compared to
a SwFr19m loss last year, as tough mar-
ket conditions and a strong Swiss
Franc took their toll.
Sergio Ermotti, who was named
interim group chief executive when
Oswald Gruebel quit, said it had been
a very challenging period and
warned that quarter four had begun
with increased evidence of strain to
the financial system. He will present
his restructuring plan for the invest-
ment bank on 17 November.
UBS said SwFr4bn of net inflows in
its US wealth management arm was a
vote of confidence but the full
impact on its reputation from the
rogue trading scandal will only be
seen in the coming months.
Investment
bank loss hits
UBS profits
CREDIT Suisse has been fined 5.95m
by the Financial Services Authority
(FSA) for system failures in its private
bank, the second time it has fallen
foul of the regulator in less than two
years.
The FSA said yesterday it has fined
Credit Suisse for systems and control
failings in relation to sales by its pri-
vate bank of structured capital at risk
products (SCARPs).
Credit Suisse
fined 6m for
system faliure
Interim chief executive Sergio Ermotti will present a restructuring plan Pic: REUTERS
BY PETER EDWARDS
BANKING
ENFORCEMENT
News
ANALYSIS l
CHF
20Oct 21 Oct 24Oct 25Oct 19Oct
11.50
11.00
10.75
11.25
11.11
25 Oct
Effect of rogue trading scandal on
wealth management still not clear
THE IMPACT of the rogue trading
scandal on UBSs investment bank
was laid bare in its third quarter
results. The unit fell to a loss of
SwFr2.4bn once you strip out the
gains it made on the declining value
of its own credit, in large part due to
the SwFr1.8bn lost through unau-
thorised trades.
The investment banks fixed-
income division also performed
poorly, with quarter-on-quarter rev-
enues down by 41 per cent, consider-
ably worse than the kind of declines
seen by US rivals in recent weeks. All
this will give additional ammuni-
tion to those investors who say the
bank should radically scale back
investment banking and focus on
wealth management instead.
Still, its Swiss and international
wealth management is no panacea.
Although net inflows have been pos-
itive for five quarters, they have been
declining steadily since the first
quarter of this year. Worse still, the
rogue trading scandal broke in the
final fortnight of UBSs third quar-
ter, meaning jittery clients havent
had a lot of time to react.
So investors will have to wait until
next quarter to find out if the banks
wealthy clients still believe in the
confidence, security and discretion
symbolised by its three-keys logo.
david.crow@cityam.com
BOTTOMLINE
Analysis by David Crow
THE GOVERNMENT has received its
first bid on bank assets that it bailed
out during the financial crisis.
It is understood that Virgin Money
sent in a bid for the Northern Rock
good bank currently on the block.
City A.M. also understands that NBNK
Investments, Lord Levenes buy-out
vehicle, plans to submit a bid today
before the formal deadline. It is not
clear if JC Flowers will bid, however.
Virgin Money
submits bid for
Northern Rock
BANKING
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DEUTSCHE Banks third-quarter
pre-tax profit beat forecasts as
retail banking and asset manage-
ment offset a drop in investment
banking which it warned was fac-
ing the toughest conditions since
2008 that could lead to more job
cuts.
Weaker market activity forced
Germanys flagship lender to drop
ambitious full-year targets earlier
this month and announce 500 job
cuts. Yesterday the bank said it was
in the process of cutting 10 per cent
of its investment banking staff.
During the third quarter, the
operating environment was more
difficult than at any time since the
end of 2008, driven by a deteriorat-
ing macro-economic outlook, and
significant financial market turbu-
lence, said chief executive Josef
Ackermann.
Finance chief Stefan Krause said
the bank would continue to adjust
Deutsche Bank plans job
cuts as retail lifts profit
Deutsche Bank chief exec Josef Ackerman
has been cutting staff Picture: REUTERS
BY HARRY BANKS
BANKING
News
PART-NATIONALISED bank Lloyds yes-
terday changed the way it reports
funding costs and capital, resulting in
a slightly higher banking net interest
margin target for this year but not
impacting overall group earnings
numbers.
Lloyds said the changes would
mean that net interest income within
its core banking divisions would
increase slightly, while there would
be a small reduction for net interest
income in other non-banking areas.
The net interest margin represents
the gap between what a bank charges
for loans and what it pays to borrow.
Lloyds added it now expected the
net interest margin at its banking
operations to be just above 2.05 per
cent in 2011 a slight rise from the
companys previous target of just
above two per cent.
In August, Lloyds said its half-year
net interest margin shrank to 2.07 per
cent from 2.12 per cent a year earlier
as the bank reported an overall inter-
im loss of 3.25bn.
Lloyds changes
way it reports
its margins
BANKING
headcount if the market environ-

ment persisted, adding that the
outlook for the sector remained
highly dependent on the resolution
of Europes sovereign debt crisis.
The Frankfurt-based bank said its
third-quarter pre-tax profit was
942m (819.3m). Analysts had fore-
cast a figure of 572m, compared
with a year-earlier loss of 1.05bn.
But pre-tax profit from the corpo-
rate and investment bank fell to
329m from 1.3bn in the year-ear-
lier period as trust services, trade
finance and cash management only
partially offset a 34 per cent slump
in debt market sales and trading.
Overall, group results were flat-
tered by a gain in economically
hedged positions and a gain from
the widening of credit spreads on
its own debt as well as a lower-than
expected VAT claim, analysts cover-
ing the firm said.
BP has reached a definite turning
point since last years Gulf of Mexico
disaster, its chief executive said yester-
day as he announced plans to expand
its disposal programme to $45bn
(28bn), double its cash flow, and
boost returns to shareholders.
Chief executive Bob Dudley said the
oil major would sell-off a further
$15bn in assets by the end of 2013
from a previous level of $30bn to
focus [BPs] portfolio on other areas of
growth. But he said there was no
chance of spinning off its down-
stream arm, as some have suggested.
BPs shares rose 3.07 per cent after
the group reported third quarter
replacement profits of $5.1bn down
three per cent on the second quarter
but three times higher than a year ago
when it was impacted by Gulf of
Mexico spill costs.
BP said it expects cashflow to be 50
per cent higher by 2014 and said it
could restart a programme of share
buybacks and from next year begin to
pay investors higher dividends.
BP also announced that chief finan-
cial officer Byron Grote would retire
from his role in January and be
replaced by his deputy Brian Gilvary.
Meanwhile BPs Russian joint-ven-
ture TNK-BP said its third quarter net
profit rose to $2.268bn (1.41bn) from
$1.447bn a year ago thanks to a 48 per
cent rise in the price of Russian Urals
crude and an increase in production.
The board of TNK-BP holding yester-
day voted against joining a minority
shareholder in a lawsuit against BP.
BP puts $15bn
more assets
on the block
BG Group, the UKs third largest oil
and gas explorer, reported better-
than-expected profits yesterday, boost-
ed by a strong performance from its
liquified natural gas business (LNG)
and high energy prices, despite prob-
lems at its North Sea oil fields.
Shares in the group closed 3.84 per
cent higher yesterday after it posted a
four per cent rise in earnings to
$1.02bn for the three months to 30
September compared with the same
quarter last year, beating market esti-
mates of around $971m.
Net profit rose 21 per cent to
$1.06bn from the same period last
year, helped by favourable market
conditions for its LNG arm, which
transports gas by ship across the
world. BG chief executive Frank
Chapman raised profit guidance for
the LNG division, which accounts for
over a quarter of its total operating
profit, to $2.4bn this year, up from a
previous forecast of between $1.9bn
and $2.2bn.
The FTSE 100 firms positive out-
look came despite a slowdown in pro-
duction, which grew by just one per
cent in the quarter, after the groups
North Sea fields were shut down for
maintenance.
BG said it is making material
progress in its growth projects off the
coast of Brazil and in Australia.
High oil prices
and LNG boost
BG Group profit
CEO Bob Dudley said BP had reached a definite turning point Picture: REUTERS
BY KASMIRA JEFFORD
ENERGY
ENERGY
News
ANALYSIS l BP PLC
p
465
460
445
440
435
430
455
450
457.20
25 Oct
ANALYST VIEWS: DO BPS RESULTS SIGNAL A
TURNING POINT FOR THE FIRM? Interviews by Kasmira Jefford
STUART JOYNER | INVESTEC

BP is still bumping along the bottom but as we expected, the divest-
ment target has been increased to $45bn and the chief executive sees 50 per cent
cashflow growth by 2014.. With Anadarko settling its spill bill a few weeks ago,
we are seeing a more confident message from BP on shareholder returns.
JONATHAN JACKSON | KILLIK & CO

Overall, we remain positive on the shares. Recent newsflow has been
more positive, and although there remains limited visibility over a number of
issues, we believe this is more than discounted in the current valuation, both in
price earnings terms (six times 2012 earnings) and relative to net asset
value.
RICHARD GRIFFITH | EVOLUTION SECURITIES

Chief executive Bob Dudley, in his accompanying statement to the third
quarter results, indicated that it is time for BP to start looking forward post
Macondo. This renewed confidence is premised on the completion (almost) of a
major maintenance programme across the groups entire asset base.
Spreads may widen dependent on liquidity and market volatility

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News
RUSSIAS biggest gold miner shelved
its plans to list on the London Stock
Exchange yesterday, saying the
Russian government had delayed giv-
ing its consent to the deal.
Polyus Gold, which is headed by bil-
lionaire oligarch Mikhail Prokhorov,
said it had postponed its main market
listing until a Russian government
commission approved its plans.
The company understands that
consideration of its application for
consent by the government commis-
sionhas been postponed, it said,
without indicating when the commis-
sions next meeting might be.
Concerns remain over the small
proportion of shares Polyus intends to
make public, as it plans to have only a
20 per cent free float but wants a pre-
mium listing and to join the FTSE 100.
Despite raising its free float from
an originally proposed 13 per cent,
Polyus still falls short of UK listing
rules that require a minimum 25 per
cent free float to guarantee investors
can easily trade its stock.
It has applied for a waiver from the
UK Listing Authority to allow it to go
ahead by proving it will list enough
shares to ensure the market is liquid.
Its new UK holding company also
allows it to sidestep the FTSEs rule
that foreign firms must have 50 per
cent free float to be included in
indices such as the FTSE 100.
Critics have warned that minority
investors may be unable to influence
votes if so few shares were listed, but
the UKLA would only be able to refuse
a waiver on liquidity grounds.
Polyus Gold delays London listing
BY ALISON LOCK
MINING
IBMs long-serving chief executive

Sam Palmisano will step down at
the end of the year, the tech giant
said as it unveiled a beefed up buy-
back programme.
Palmisano, credited with helping
transform the once PC-focused com-
pany into a services company dur-
ing a near-decade-long run starting
in 2002, will stay on as chairman.
Global sales head Virginia Rometty
(pictured) will replace him as chief
exec.
IBM also said yesterday it will add
$7bn (4.4bn) to its share buyback
programme in the latest instalment
of its plan to hand back $50bn to
investors.
The computer services giant also
said it will pay a quarterly dividend
of 75 cents, maintaining its contin-
uous run of dividends every
three months since 1916. The buy-
back is in addition to $5.2bn still
outstanding from a prior scheme,
bringing the total to $12.2bn.
It expects to allocate the next
tranche in April 2012.
Shareholders
can expect
that as IBM
enters its
s e c o n d
century we
will contin-
ue to invest
in new
p r o d u c t s
and expand
into new,
e m e r g i n g
mar ke t s ,
Palmisano
said.
Female CEO
for IBM as
Palmisano
steps down
G4S chief in
flurry of ISS
meetings
Polyus boss Mikhail Prokhorov
BY STEVE DINNEEN
TECHNOLOGY
NEWS | IN BRIEF
Intl Personal Finance profits up
Emerging markets lender International
Personal Finance posted higher third-
quarter profit yesterday, helped by
growth in customer numbers and credit
volume issued, and said it could weather
the global economic turmoil. The compa-
ny said pre-tax profits for the third quar-
ter had risen by 11 per cent to 27m,
with revenues rising by nine per cent over
the period. Shares in International
Personal Finance closed up 3.75 per cent
yesterday at 270.8p, valuing the firm at
around 670m.
Greencore gets takeover interest
Shares in Irish food group Greencore
jumped almost 10 per cent yesterday
after it revealed a preliminary takeover
approach from an unnamed company.
Greencore, whose merger with Northern
Foods fell through in March, bought rival
Uniq in July to improve its ties with
Marks & Spencer. The maker of Weight
Watchers meals and Bisto gravy made
the announcement in response to share
movements earlier in the day. The compa-
ny is valued at around 239m based on
yesterdays close of 0.68.
Abu Dhabi bank doubles profits
Abu Dhabi Commercial Bank, the fourth
largest bank in the UAE by market value,
nearly doubled its third-quarter net profit
yesterday to 607.6m dirhams (103.4m),
beating analysts forecasts, helped by
lower impairment provisions and higher
net interest income. Net interest and
Islamic finance income grew to 1.33bn
dirhams in third quarter compared with
877m dirhams in the same period last
year. But smaller rival Abu Dhabi Islamic
Bank reported flat net profits of 319.1m
dirhams yesterday.
Babson fund shelves London IPO
Market turbulence claimed the scalp of
another IPO yesterday, as US fund man-
ager Babson Capital said it was shelving
the imminent 125m float of one of its
funds. Babson said the Global Floating
Rate Loan Fund, which hoped to use the
money raised in London to invest in
European and North American assets,
said that investor interest had been good
but the uncertainty surrounding the
European financial situation had jeopar-
dised its IPO plan for now. Liberum
Capital was acting as sole bookrunner.
EU to lift SME accounting burden
The smallest European businesses will
have to produce smaller and less onerous
financial reports and face less stringent
audits under new proposals tabled by the
European Commission that could save
businesses across the region up to 1.7bn
(1.1bn). EU commissioner for internal
markets, Michel Barnier, said the new
mini-regime would reduce the adminis-
trative burden on small enterprises and
some listed companies. The plans mirror
proposals by the UKs department for
business to reduce audits on small firms.
NICK Buckles, the chief executive
of security group G4S, has held
more than 20 meetings with key
investors over the last fortnight in
an attempt to convince them to
back the 5.2bn takeover of rival
ISS.
City A.M. understands Buckles has
met several institutional investors
more than once and will continue
to hold the sessions until 2
November, when shareholders are
due to vote on the controversial
deal.
Buckles spent Monday in
Copenhagen meeting Scandinavian
investors who remain from the
days before the merger between
Securicor and the security business
of Denmarks Group 4 Falck in
2007.
Last night a person close to the
ISS takeover said the meetings had
gone very well and that G4S
accepts it had to explain the rea-
sons for it to shareholders.
We realise the deal will come as
a surprise because of its size and
also it is very complex, the source
said.
Yesterday it also emerged that
Pirc, the influential shareholder
body, is backing the deal, which
involves a 2bn cash call.
Pirc, which advises investors
with more than 1.5 trillion in
assets, said in a report: Potential
dilution for existing shareholder is
mitigated by the fact that the
financing of the acquisition will be
done via a rights issue.
Shares in G4S closed down 1.44
per cent at 240p yesterday. The
companys stock has tumbled
almost 15 per cent since news of its
plans for ISS first emerged, and
remain at their lowest level in
more than a year.
BY PETER EDWARDS
M&A
A LONG-TERM fix for the Eurozone cri-

sis will not be found at the current
summit, Bank of England governor Sir
Mervyn King predicted yesterday.
The aim of the measures to be
introduced over the next few days is to
create a year or possibly two years
breathing space, he told the Treasury
select committee. The underlying
problems still have to be resolved.
Sir Mervyn pointed to the deteriorat-
ing situation in the Eurozone, and its
impact on the UK economy, as the core
reason for the second round of quanti-
tative easing (QE2) being introduced
earlier this month.
MPs were keen to discuss support
for small businesses.
SMEs are getting no bank lending
but are suffering from the effects of
high inflation, said Stewart Hosie MP,
challenging the success of QE.
Any action to raise the level of
demand helps SMEs, countered King.
He also poured cold water on the
idea that the government could set up
a new bank to lend to SMEs. Only
existing banks have the infrastructure
and experience in judging credit risk
the Treasury does not, I do not.
If a new bank was to be set up,
given the way our bureaucracy works,
I would be surprised to see any action
from a new lender within 18 months.
Banks need incentives to lend to
SMEs, he said, which could mean
either fiscal action or using the two
major banks currently owned by the
government to achieve those ends.
King: Summit
cant fix euro
fundamentals
ENERGY secretary Chris Huhne yester-
day reinforced government support
for the UKs work on renewable ener-
gy projects, just a week after the
future of the costly carbon capture
and storage (CCS) scheme was thrown
into doubt.
Huhne yesterday signed a deal with
Norway to cooperate on carbon cap-
ture and storage projects, as well as
agreeing to continue work on joint
developments of North Sea oil and
gas resources.
The commitment to develop CCS
follows a week in which its future was
thrown into doubt after the British
government scrapped plans to fund a
demonstration project in Longannet
in Scotland, as pledged in the March
Budget.
It is thought that cost constraints
were behind the back-pedal.
And the Energy and Climate
Change Committee warned yesterday
that the UK is unlikely to produce
working CCS projects before 2020.
Huhne backs troubled CCS plan
BY TIM WALLACE
UK ECONOMY
POLITICS
The Bank of Englands Mervyn King defended QE2 when questioned by MPs Pic: REX
News
12
I don't think the scale of how the
problem deteriorated in the Eurozone
was obvious at the start of the summer.
QE1 boosted the economy and QE2 is
needed to prevent inflation from falling
below two per cent in 18 months time.
Only banks are in a position to assess
credit risks for SMEs, he said, adding
that the government owns several.
I can't guarantee QE2 means bank
lending will rise, but I do believe that it
won't fall as far as it might otherwise.
Lending ratios have already come
down from 40 times to 20 times, with
further to fall, he said, as markets are
pressuring banks to up their capital.
We are not at all happy that CPI
inflation is at 5.2 per cent, he said, but
the committee would give him a very
hard time if inflation fell below target.
MERVYN KING | WHAT HE SAID TO THE TREASURY SELECT COMMITTEE
News
13
Yes. Any political leader
that has that number
of his own party
rebelling against him opens
himself up to reputation-
al damage.
TIM KONIG | LEE ADGIE |
In the sense that he has gone against public opinion, yes I do
think he is damaged. But I feel that this is a one-off mistake and it
is possible for him to recover. It isnt often that so many of his
party disagree with him.
FRANK HICKS | UK BORDER AGENCY
TD SECURITIES UBS
CITY VIEWS: HAS DAVID CAMERON BEEN DAMAGED
BY THE TORY REBELLION? By Phoebe Torrance
* These views are those of the individuals above and not necessarily those of their company.
Potentially yes. The fact that so
many Tory MPs defied him will
always have a damaging effect.
Over a matter of time it is
possible he could
bounce back though.
THE GOVERNMENT tried to draw a
line under a humiliating backbench
rebellion over the EU yesterday, claim-
ing it had already begun work on repa-
triating powers from Brussels back to
the UK.
David Cameron, the Prime Minister,
was left politically wounded on
Monday night after 81 of his back-
benchers voted for a referendum on
the EU in defiance of a three-line whip.
Yesterday, Cameron tried to reassert
his authority by sacking two parlia-
mentary aides who joined the rebels.
A spokesman said Stewart Jackson and
Adam Holloway were no longer in
their posts.
But the government simultaneously
tried to repair relations with disgrun-
tled backbenchers, who feel aggrieved
at how Cameron handled the issue.
David Lidington, the Europe minis-
ter, told the Commons that work on
repatriating powers to the UK had
started. Michael Gove, the education
secretary, outlined what powers the
government would try to claw back.
He said: I think we should take
powers back over employment law. I
think we should take powers back that
affect our capacity to grow. There are
some specific regulations which gov-
ern whom we can hire, how we can
hire and how long they work, which
actually hold us back.
However, he was quickly slapped
down by Nick Clegg, the Lib Dem
deputy Prime Minister, who said there
would be no smash and grab repatri-
ation of powers. A government
spokesman said Gove had been talking
for the Conservative party not the
coalition.
But the Eurosceptics refused to be
bowed. Several Tory backbenchers
broke cover to say they would contin-
ue to press the government on the EU,
including George Eustice and David
Nuttall. FORUM: P26
No.10 tries to
move on from
EU rebellion
BY DAVID CROW
POLITICS
Prime Minister David Cameron tried to shrug off Monday nights Commons rebellion, in
which more than 80 Tory MPs defied his three-line whip over an EU referendum
BEAUTIFUL PEOPLE WORK HARD TO WED
BACK ON the soapbox for
BeautifulPeople.com, the dating service
that axed 5,000 members for putting on
weight last Christmas. The site has
launched a comedic YouTube video
(right) to defend its looksist agenda.
You cant argue with millions of years
of evolution, the sites managing direc-
tor Greg Hodge told The Capitalist, speak-
ing from an Los Angeles phone box
following a trip to the gym. Everyone
wants to be with someone they find
attractive. Its natural selection.
So was Hodge accepted by the site he
founded in 2002, which only accepts the
TAX INCENTIVE
TAX must be better understood
thought RLM Finsbury chairman Roland
Rudd as he dreamed up his latest cru-
sade a campaign to persuade the
wealthy to leave 10 per cent of their for-
tune to charity to take advantage of a cut
in inheritance tax from April 2012.
The scheme will be launched on 2
November by chancellor George Osborne
and culture secretary Jeremy Hunt, both
of whom have lent the scheme their full
support. In a personal capacity, The
Capitalist assumes, and not as a generous
redeployment of ministerial budgets.
most genetically blessed people?
I was rejected by the Danish version
of the site that stung, revealed Hodge,
adding that his courtship to his wife
Genevieve took a lot of work as she ini-
tially thought he was an idiot and
thats the polite translation for a serious
financial newspaper.
BANKING ON THE RIVER
IT HAS received its fair share of criticism
so lets hope last nights unveiling of the
first animated fly-by of the London
River Park helps developer Mace get the
planning permission verdict it wants
from the City of London Corporation.
Making the case for the 1km floating
pontoon that will connect Blackfriars to
the Tower of London were deputy
London Mayor Daniel Moylan (below)
and John Naylor, the head of property
and construction at the schemes asset
manager backer Venus Group.
The London River Park will make
the capital even more attractive to
visitors and investors, said the
man whose Singapore-based fund
has pledged 60m if the water-
front dream stays afloat.
The Capitalist
EDITED BY
HARRIET DENNYS
Got A Story? Email
thecapitalist@cityam.com
Follow The Capitalist
on Twitter: @dennysharriet
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7
th
November 5
th
December 2011

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Cineworld
sales in lift
CINEMA chain Cineworld said it
expected a promising line-up of films
in the final quarter to offset weakness
in the wider advertising market.
The company reported a 0.9 per
cent year-on-year increase in total rev-
enues in an interim management
statement covering the 42 weeks to 20
October. Box office revenues were up
1.4 per cent year on year.
Cineworld said its second half saw a
number of strong performing films,
including Harry Potter: Deathly
Hallows Part 2 in 3D -- the biggest film
release in the year to date.
Cineworld also said it was upbeat
about the rest of the year, and is bank-
ing on the success of upcoming releas-
es such as Mission Impossible: Ghost
Protocol, Sherlock Holmes 2, and The
Adventures of Tintin: Secret of the
Unicorn in 3D.
The remaining 2011 film line up ...
gives us confidence in delivering
results for the full year, Cineworld
said, helping to send its shares up
three per cent to 188p yesterday.
BY JOHN DUNNE
LEISURE
MORE NEWS
ONLINE
www.cityam.com
@
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CONSUMER goods giant Reckitt
Benckiser yesterday reported a rise
in profits fuelled by its performance
in emerging markets, but warned
that it faces obstacles to growth.
Reckitt, whose brands include
Cillit Bang and Nurofen, said it was
well positioned to achieve its 2011
targets of a 12 per cent rise in net
revenue and a 10 per cent rise in net
income growth.
Meanwhile third-quarter net prof-
its rose nine per cent to 465m in
the third quarter.
The figures have been buoyed by
the purchase late last year of Durex
condoms and Scholl sandal maker
SSL, while the company said that
the sales of household goods in
emerging markets had also con-
tributed.
But the company warned that its
new version of its key Suboxone
heroine substitute drug, within
Reckitt Benckiser Pharmaceuticals
(RBP), had gained just 44 per cent of
its market.
Total growth will slow. We will
also have a one-off decline in rev-
enue and profit at RBP, said chief
executive Rakesh Kapoor in a state-
ment.
Former chief executive Bart Becht
left in September, surprising
investors with his decision to retire
after leading the group since its cre-
ation in 1999 and making it one of
the FTSE 100s top performers.
The companys shares fell almost
3.4 per cent yesterday, stuck below a
peak experienced before Bechts
shock announcement.
Reckitt boosted by
emerging markets
Fosters board under fire as
it predicts rising beer sales
BY JOHN DUNNE
CONSUMER
FOSTERS Group, Australias largest

brewer, said it expects beer sales to
pick up again when the economy
improves, fuelling small sharehold-
er anger at the companys capitula-
tion to a $10.4bn (6.5bn) takeover
by global giant SABMiller.
Fosters executives were forced to
defend the takeover before around
200 shareholders at the firms
annual meeting, saying the deal
offered the certainty of cash in a
volatile global environment.
You are now presenting us with
a bright future for Fosters and you
are turning around and getting rid
of this company.
It is disgraceful of the board,
said shareholder Douglas Fleming.
Fosters agreed to accept a sweet-
ened A$9.9bn (6.46bn) offer after
an acrimonious three-month battle
by SABMiller to win over manage-
ment.
Fosters, the maker of Victoria
Bitter, Carlton Draught and Pure
Blonde, will also undertake a 30
cents-a-share capital return and pay
a final dividend of 13.25 cents
under the deal.
The takeover, which requires
approval of 75 per cent of votes at a
meeting due in early December, has
wide support from institutional
investors.
Chief executive John Pollaers told
shareholders the company was
planning a massive marketing
campaign over the next few months
to help arrest the slide in volumes.
We believe that once Australia
moves through this period of eco-
nomic uncertainty, the beer catego-
ry will return to the long-term trend
of moderate growth, Pollaers said.
BY HARRY BANKS
CONSUMER
News
Harry Potters magic has helped to boost revenues at the cinema chain
ANALYSIS l Reckitt Benckiser
p
3,475
3,450
3,375
3,350
3,325
3,300
3,425
3,400 3330.00
25 Oct
CARPETRIGHT yesterday said full
year profits would be at the lower
end of forecasts as it announced
another fall in sales.
The group, which has issued a
string of profit warnings in recent
months, said underlying pre-tax
earnings for its full financial year
would be towards the lower end of
a forecast range of 11.8-16.9m.
That would be down from
16.9m in the last financial year.
Carpetright said sales at British
stores open over a year fell three
per cent in the 12 weeks to 22
October worse than a 0.2 per cent
drop in the first quarter.
Like-for-like sales in the rest of
Europe were down 1.7 per cent,
Carpetright said. The companys
strategy to boost falling sales has
been to lower prices, expand into
selling beds, upgrade its range of
laminate flooring and cut around
4m in costs, finance director Neil
Page said.
He added that the group was
pulling out of concessions in
department store chain House of
Fraser, but was interested in more
concessions with home improve-
ments retailer Homebase, which is
looking at selling carpets.
Carpetright has the cash gener-
ation and dominant market posi-
tion to ride out this downturn, but
is a highly geared business, said
Seymour Pierce analyst Kate
Calvert.
The firms shares closed up one
per cent as some of its latest figures
beat dire City forecasts.
Carpetright issues
a fresh profit alert
Volvo says Europe
demand will slow
BY JOHN DUNNE
RETAIL
TRUCKMAKER Volvo said it was

preparing to cut output in anticipa-
tion of lower vehicle demand in
Europe next year as a recovery in sales
in the region runs out of steam.
The group reported a third quarter
operating profit of 5.8bn crowns
(553m), up from last years 4.9bn on
recovering demand but undershoot-
ing a forecast for 6.2bn crowns.
It also warned of slowing growth in
the emerging regions that have boost-
ed truck makers sales since the previ-
ous slowdown, saying the Chinese
construction equipment market
would slow and forecasting a weaker
Brazilian truck market next year.
The company saw overall European
truck sales rising this year to 240,000
units from last years 179,000 units,
before the expected 10 per cent drop
next year.
Overall sales of trucks rose 16 per
cent year on year to 47.7bn crowns in
the quarter while sales of construc-
tion equipment rose 18 per cent year
on year to 14.96bn crowns.
For North America, it expected the
market to sell 210,000 trucks this year,
below a previous forecast, but rising a
further 20 per cent in 2012.
BY HARRY BANKS
INDUSTRY
News
MORE NEWS
ONLINE
www.cityam.com
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@
@
GERMAN sporting goods
maker Puma said it had more
work to do to attract cus-
tomers in the US after sales
there fell in the third quarter.
For the three months to the
end of September Puma
reported sales of 841.6m
(730.8m) and net profit of
81.7m.
Sales in North America fell
by a single-digit amount,
chief executive Franz Koch
said a strong third quarter
last year made for a tough
comparison.
Puma looks
to ramp up
US turnover
RETAIL
ANALYSIS l Carpetright
p
520
510
480
470
460
450
500
490
490.00
25 Oct
COVENT GARDEN SOUP BRAND SOLD TO AMERICAN GROUP
BRITISH food manufacturer the Daniels Group, which owns brands including New Covent Garden soups and Johnsons fruit
juices, has been sold to US group Hain Celestial for around $230m (144m). Nasdaq-listed Hain, run by president and chief
executive Irwin Simon (pictured), owns several brands in the UK, including Linda McCartney frozen vegetarian foods. In the
US it owns Celestial Seasonings teas and Earths Best baby food. Hain was advised on the acquisition by independent adviso-
ry firm Spayne Lindsay, which also helped Uniq on its sale to Greencore. Picture: GETTY
THE firm behind more than 95 per
cent of smartphone chips yesterday
reported a surge in profits, bucking
the industry trend.
ARM Holdings saw its third quarter
sales rise 20 per cent to 120.2m, with
profits jumping 44 per cent to
55.8m.
It sold a greater than expected 28
licenses in the quarter, with new low-
energy chips in high demand by
smartphone makers hoping to
improve battery life and drive down
costs in their devices.
Its shares closed up 2.5 per cent
after fluctuating during the day as
investors digested the results. Some
analysts were put off by the slower
than expected growth in royalty pay-
ments which are accrued for every
chip shipped. This was offset by
lumpier licensing revenue, which
takes the form of up-front payments
that can stack up during some quar-
ters.
Altogether 1.9bn ARM-based chips
were shipped in the three months,
with almost half going into devices
other than smartphones tradition-
ally its core market.
The group recently unveiled its
new Cortex-A7 processor, which it
said will use five times less energy
than todays top-end processors in
smartphones from 2013 and keep it
ahead of U.S. company Intel in the
mobile sector.
Chief executive Warren East told
City A.M. there were no nasty surprises
for the firm, despite the macroeco-
nomic uncertainty.
East said his firm is likely to have
taken a small hit from the Thai floods
but only in the region of 600,000.
He also told City A.M. the firm could
benefit from new patent box legisla-
tion being discussed that could mean
patented inventions, such as its chips,
may be taxed at a more attractive rate.
WARREN EAST INTERVIEW: P23
OLYMPUS has grabbed the headlines
for all the wrong reasons, but it is not
the only struggling Japanese camera-
maker.
Canon was yesterday forced to
slash its outlook following damage to
its supply chain caused by the Thai
floods. Thailand has become a major
manufacturing base for Japan's high-
tech sector, with rivals like Sony Corp
and Nikon Corp both forced to close
their plants.
Canon said its exposure will hit its
full year revenues by more than
410m and profits by 164m.
Canon cut its annual operating
profit forecast by five per cent to
2.94bn, blaming a combination of
the floods and the strong yen, as well
as the bleak economic outlook in the
US and Europe. The figure was par-
tially offset by cost-cutting and a
faster-than-expected recovery from
the March earthquake.
Nikon, which has been hit even
harder by the flooding, is due to
announce earnings next month.
Meanwhile, the former chief execu-
tive of Olympus said yesterday he is in
contact with the FBI, which is prob-
ing massive advisory fees linked to
the Japanese companys takeover of a
British rival.
Since being ousted as chief execu-
tive, Michael Woodford has called on
authorities in both the UK and Japan
to investigate the payments. The scan-
dal has wiped out more than half of
the firms market value.
Misery mounts for Japanese camera
industry as flood effects start to bite
THE MONARCHYS 7bn portfolio of
land and property has hired Alison
Nimmo as its new chief executive.
The Crown Estate, known for own-
ing most of Regent Street, several
London housing estates and 144,000
hectares of agricultural land and
forests, has never had a woman as
chief exec or chairman since it was
established in its current form in
1961.
Nimmo is currently director of
design and regeneration at the
Olympic Delivery Authority and was
one of the people responsible for the
design of the London 2012 Olympics
venues.
She is also a non-executive director
of Berkeley Group and a visiting
Professor at Sheffield Hallam
University.
Her previous roles include chief
executive of the Sheffield One regen-
eration scheme and project director
of Manchester Millennium.
Crown Estate picks first
woman chief executive
ACCOUNTANCY firm Blick
Rothenberg yesterday became the lat-
est professional services firm to join
the growing technology hub in
Londons east end.
The dedicated office at the Silicon
Roundabout site will service the tech
start-ups attracted to the site. The
firm says a team based there will pro-
vide specialist tax and accounting
support.
On Monday law firm Taylor
Wessing said it will set up a dedicated
team at the site.
The project was boosted last month
when Google announced it has
signed a ten-year lease on a Tech City
property. It is hoped large companies
like Google will help to spawn an
ecosystem where firms emerge to pro-
vide support services.
Tech City, which encompasses
developments at Old Street and
Stratford, is also home to promising
start-ups including Last FM, Huddle,
and SoundCloud.
Accountancy firm joins
the Tech City revolution
TECHNOLOGY
ZYNGAhopes to begin trading follow-

ing its upcoming IPO in mid
November, before the US holiday sea-
son begins with Thanksgiving.
Sources close to the plans said the
social gaming companys plan has
not been finalised and could yet
change.
All eyes are on Zyngas debut,
which will be followed by a glut of
highly anticipated dotcom IPOs.
Groupon launched its own roadshow
this week and hopes to price its
shares in early November.
If it goes ahead, Groupon will
become the first major IPO since the
market slump that began in the sum-
mer, serving as a lit-
mus test for future
offerings.
Roadshows typi-
cally take two weeks.
That means Zynga is
looking to start its IPO
marketing effort close
on the heels of
Groupons market
debut.
Zyngas flotation has
been the source of much
speculation, with leaked
reports last month speculating it
could be delayed until next year amid
the market turmoil. US mar-
kets have since rallied,
gaining 11 per cent this
month and giving
faith to IPO hopefuls.
The social gaming
giant behind
FarmVille plans to
raise up to $2bn
(1.25bn) from floating
around 10 per cent of its
shares, giving it a sky-high
market capitalisation of
as much as $15bn to
$20bn.
Zynga gears up for flotation
BY STEVE DINNEEN
TECHNOLOGY
PENSION provider Legal & General

yesterday penned a deal to take over a
1.1bn pension scheme for former
staff of defunct asbestos manufactur-
er Turner & Newall, in the biggest
deal of its kind in the UK.
L&G has taken over the running of
the T&N pension scheme after the
UKs pension bailout fund, the
Pension Protection Fund, concluded
that the scheme had enough assets to
continue supplying annuities to its
30,000 members.
The T&N scheme has been closed
to new members for years and L&G
will gradually wind it up while pro-
viding all members with an annuity
that pays more than they currently
receive. L&G is not receiving a fee, but
aims to profit from the transaction
through managing the T&N assets
more efficiently.
The schemes trustee, Tim
Culverhouse of Alexander Forbes
Trustee Services, said he hoped L&Gs
management would allow it to
apply a small one-off uplift to mem-
bers annual pensions.
T&N was sold to US carmaker
Federal-Mogul in 1998 but the buyer
filed for bankruptcy protection in
2001 after being hit with $11bn
(6.9bn) in asbestos legal claims.
By 2004 the pension scheme had
an 875m deficit. The deal just beats
the 1.1bn buyout of the Thorn pen-
sion fund by Pension Corporation in
2008.
L&G signs UKs
largest pension
scheme buyout
ARM results
buck gloomy
sector trend
BY STEVE DINNEEN
TECHNOLOGY
BY STEVE DINNEEN
TECHNOLOGY
News
ANALYSIS l ARM Holdings
p
600
580
570
560
590
590.00
25 Oct
ARM THIRD QUARTER RESULTS
Chips shipped
1.9bn
41%
Profit
55.8M
44%
Revenue
120.2m
20%
BY PHOEBE TORRANCE
PROPERTY
BY ALISON LOCK
INSURANCE
THE CITY took an upbeat view of F&C

Asset Management after its new chair-
man wielded the axe on its back office
functions.
Shares closed up 2.65 per cent as
Edward Bramson, the activist investor
who took the post in February after
winning a bitter boardroom battle,
announced plans to nearly treble cost-
savings to 33.2m by 2013.
The asset manger will lay off 65 per
cent of its IT and back office workers,
more than a third of corporate staff
and seven per cent of its investment
professionals.
It will mean between 50 and 75 jobs
are cut, City A.M. understands. F&C
needs fewer staff to support its
investors after outsourcing 100 jobs in
July. The latest cull is also driven, how-
ever, by Bramsons belief that F&C is
underperforming.
Bramson, whose Sherborne
Investors has a stake in F&C of nearly
20 per cent, took over as executive
chairman earlier this month when
chief executive Alain Grisay
announced his retirement, a decision
widely blamed on conflicts between
the two men.
Now F&C wants to focus on institu-
tional business, which serves mainly
insurance and pension clients and
accounts for around 60 per cent of its
revenues and 80 per cent of its assets.
It represents a change of focus for the
company, which has spent recent years
trying to re-position itself towards
higher-margin retail flows.
Yesterday the manager also said
insurance and institutional fund
clients pulled 1.8bn in the three
months to 30 September. Assets fell to
105.8bn at the end of September,
down two per cent from June.
Exclusivity periods for contracts
with several of F&Cs biggest institu-
tional clients will expire over the next
few years, but low-margins mean few
firms will compete for them when
they are up for grabs.
The second phase of Bramsons
review, covering the retail side of the
business, will be published next year.
City backing
for Bramsons
cuts at F&C
My bank comes highly
recommended. By me.
More people would recommend us than any other High Street bank.
And you can also bank with us in 245 branches of
Change to a bank you can bank on by calling 0800 169 9369.
Independent data shows that we have a higher proportion of current account customers that would recommend us than any other High Street bank*. Source: GfK NOP
Financial Research Survey (FRS) 12 months ending June 2011. NPS score calculated on main current account holders. 55,199 GB adults interviewed. *High Street
bank definition includes: Bank of Scotland, Barclays, Clydesdale, Halifax, HSBC, Lloyds TSB, Metro Bank, Nationwide, NatWest, Northern Rock, Royal Bank of Scotland,
Santander, Yorkshire Bank. Lines are open from 8am until 9pm, Monday to Friday and 9am until 6pm, Saturday and Sunday. Calls may be monitored or recorded for security
and training purposes. For BT customers, calls to 0800 numbers are free. Call charges from other providers may vary. Current account applicants must be a UK resident and
18 years or over. Credit facilities provided by The Co-operative Bank are subject to status and our lending policy. The Co-operative Bank is authorised and regulated by the
Financial Services Authority (No. 121885), subscribes to the Lending Code and the Financial Ombudsman Service and is licensed by the Office of Fair Trading (No. 006110).
The Co-operative Bank p.l.c., P.O. Box 101, 1 Balloon Street, Manchester M60 4EP. Registered in England and Wales No. 990937. Britannia is a trading name used by
The Co-operative Bank p.l.c.
BY PETER EDWARDS
FUND MANAGEMENT
FINANCE firms are sitting on far

smaller pension deficits than their
peers in other sectors after spending a
year right-sizing their schemes,
research out today shows.
More than half of FTSE 350 finan-
cial firms now hold negligible deficits
and most could pay their deficits off
with just six days of earnings, pen-
sions specialist Hymans Robertson
found in its latest analysis.
In contrast, the total pension deficit
of all FTSE 350 companies is 43bn
and four firms have unhedged liabili-
ties of more than twice their market
capitalisation. The position is still bet-
ter than at the start of 2010, though,
when the total deficit was 142bn.
More than 90 per cent of finance
firms have cut their pension deficits
to under 10p in the pound of their
market capitalisation.
Finance firms better than rest at
slashing pension deficits to zero
UK ECONOMY
News
ANALYSIS l F&C Asset Management
p
70
66
64
62
68
64.00
25 Oct
Polar Capital
Ton Tjia has been hired to establish a
European market neutral franchise for
the investment manager. Tjia joins from
Ratio Asset Management where he man-
aged the $15m ratio European opportu-
nities fund, which has transferred to
Polar Capital. Tjia will be joined at Polar
by his Ratio colleague Bradley Reynolds.
Lombard Medical Technologies
Tim Hall will step down as finance direc-
tor of the medical technology company
on 31 December to join Oxford Gene
Technology in the same role. Lombard
has appointed Edwin Lloyd, a chartered
accountant with ten years experience at
blue-chip companies including BT and
BSkyB, as financial controller.
Grainger
The residential property firm has
appointed Tony Wray to the board as a
non-executive director. Wray has been
the chief executive of Severn Trent since
2007; prior to that, he worked in senior
management positions at British Gas
and Transco.
Osborne Clarke
The law firm has strengthened its bank-
ing team by hiring two Taylor Wessing
partners, Dominic Ross and Akmal
Ghauri, who will join the firms finance
group in January. Both lawyers specialise
in leveraged finance and real estate
finance.
Metro Bank
James Reuben, managing partner of
Melbury Capital, has been appointed as a
non-executive director. Reuben is the for-
mer board director of Motcomb Estates,
a property advisory business specialising
in urban regeneration.
CBRE
The real estate firm has hired Robyn
Blackburn and Vicky Thomas as senior
planner and planner respectively.
Blackburn joins from Planning Potential
and Thomas joins from regeneration con-
sultancy Hunt Dobson Stringer.
Cushman & Wakefield
The property consultant has appointed
Asia retail expert Tracy Lu to its cross-
border retail team in London. Tracy pre-
viously worked in the retail teams of
Savills, JLL in Beijing and mostly recently
for Swire Properties, a major landlord in
Hong Kong and China.
CITY MOVES | WHOS SWITCHING JOBS Edited by Harriet Dennys
+44 (0)20 7092 0053
morganmckinley.com
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
in association with
Pemberton Capital Advisors
The private equity firm has appointed
Christopher Higgins as chief operating officer
and Sarah Whitehead (pictured) as internal
legal council. Prior to joining Pemberton,
Higgins was chief adminstration officer of the
non-core division of RBS and held a number of
management roles in the debt and credit mar-
kets businesses of RBSs global banking and
markets division. Whitehead previously
worked for ING in Moscow as managing direc-
tor, head of debt capital markets Russia.
BHP BILLITONS chief commercial offi-
cer dismissed speculation that China
is facing a downturn yesterday, saying
the country could continue to grow at
around seven to eight per cent.
Everything we see points to the fact
that China, without doing anything
extraordinary, can continue to grow at
around seven to eight per cent,
Alberto Calderon said at the
Commonwealth Business Forum in
Perth.
Earlier in the day, economist
Nouriel Roubini flagged a downturn
in China as one of the risks facing the
global economy.
Calderon said if Roubini was cor-
rect, then iron ore and copper markets
would clearly be affected, but if
Europe resolves its debt crisis, then
demand and markets would improve.
Rio Tinto also said at the conference
it remains confident in the long-term
drivers of economic growth, and
specifically iron ore, demand in China.
The issue is contagion. Its percep-
tion, its fears, said Rios iron ore divi-
sion head and Australian chief
executive Sam Walsh. When you look
at the fundamentals of China, India,
South Asia, North Asia, we find its
very robust.
Spot iron ore prices have shed 19 per
cent so far this month in a sell-off
largely fuelled by slower construction
steel demand in China, the worlds
biggest buyer of imported iron ore at
around 400m tonnes a year.
BHP Billiton
still looking to
China growth
BY ELIZABETH FOURNIER
MINING
News
CITYA.M. 26 OCTOBER 2011 21
ANALYSIS l BHP Billiton PLC
p
2,000
1,960
1,920
1,880
1,860
1,840
1,820
1,960.50
25 Oct
1,940
1,900
1,980
NEWS | IN BRIEF
Bunzl boosted by North America
British-based business supplies distribu-
tor Bunzl said its third-quarter revenue
rose as strong growth in its North
American and continental European mar-
kets outweighed a weaker performance
in Britain where economic conditions
remain tough. FTSE 100-listed Bunzl,
which supplies supermarkets, hospitals
and hotels with products ranging from
carrier bags to toilet rolls, said yesterday
that group revenue for the quarter was
up six per cent compared with the same
period last year.
Senior upbeat on 2012 demand
Senior said yesterday it had not seen any
material change in underlying orders
since the end of June, despite an uncer-
tain economy, as the engineering compa-
nys most important end market the
commercial aircraft industry continued
to grow. Senior, which designs and man-
ufactures technology components and
systems for original equipment produc-
ers in aerospace, diesel engine, and ener-
gy markets, said it expected 2011
adjusted profit before tax to be in line
with earlier estimates.
Novartis plans further job cuts
Swiss drugmaker Novartis said yesterday
it is slashing 2,000 jobs in Switzerland
and the US to keep costs under control in
the face of growing price pressures and
the strong Swiss franc. The Basel-based
group has already cut thousands of jobs
and shut several sites, notably in Britain.
The latest measures, which affect 1.7 per
cent of Novartis' global workforce and
involve moving more commoditised busi-
ness activities to less expensive countries,
should allow the group to rake in annual
savings of more than $200m (125m).
SERCO WINS NEW BORIS BIKE CONTRACT
Support services
firm Serco yester-
day signed a
50m agreement
to support the
expansion of
TfLs Barclays
Cycle Hire
scheme into East
London. The con-
tract will run
until 2015 and
include the
design, operation
and installation
of the scheme in
Tower Hamlets,
plus new dock-
ing stations to
serve the
Westfield shop-
ping centre in
West London.
Serco already
holds a 140m
contract relating
to the scheme,
which it won in
2009 ahead of
the launch.
Picture:
Laura Lean /
CITY A.M.
MORTGAGE lending rose over the
twelve months to September, accord-
ing to figures out yesterday from the
British Bankers Association, though
at a slowing rate.
Growth of 1.6 per cent was record-
ed in net mortgage lending over the
last year. Gross mortgage lending
came in seven per cent higher in
September than a year ago, at 8.4bn.
However, analysts believe the over-
all trend in the housing market is
one of stagnation, as mortgage
approvals fell from 35,069 in August
to 33,130 in September.
There is little evidence that hous-
ing market activity is really shifting
up a gear even though it has
improved since the start of 2011,
said Howard Archer of IHS Global
Insight.
Meanwhile, credit card debts have
risen in every month since May.
Although repayments exceeded new
borrowing by 219m last month, net
debts actually rose by 196m due to
interest being added to accounts.
However, the decline in borrowing
by non-financial corporates slowed.
From July 2009, borrowing levels
fell by up to 5.8 per cent annually.
That decline has slowed, falling to 3.5
per cent in the year to September.
There is low demand for credit
and many companies are looking to
pay down debt, said Archer.
BRITAINS current account deficit nar-
rowed to its smallest in more than
three years in the second quarter, the
Office for National Statistics (ONS)
revealed yesterday.
The gap between imports and
exports fell to 2.02bn between April
and June from 4.12bn in the previous
three months. The figure represents
just a quarter of analysts forecasts for
a deficit of 9.3bn.
The gap was equivalent to 0.5 per
cent of GDP, its smallest since in the
third quarter of 1998.
These figures do point to the
prospect of slightly faster growth in
UK private domestic demand in 2012,
said Lombard Street Researchs Jamie
Dannhauser. However, the major
risks to the UK economy are external
not just from the ongoing Eurozone
farce but also from a policy-induced
slowdown in the emerging world.
Rising investment income from
abroad drove the drop, while the out-
flow of investment revenue fell.
Household savings data, mean-
while, showed the highest rate of sav-
ings in almost a year. The ratio rose to
7.4 per cent in the second quarter, up
from 5.9 per cent in quarter one.
Analysts warned that squeezed
households may not be able to main-
tain a higher level of savings. With
the labour market deteriorating rapid-
ly and the fiscal squeeze still intensify-
ing, we think further sharp falls in
incomes, saving and spending are like-
ly, said Capital Economics.
Rising investment income drives fall in
UK current account deficit, says ONS
HALF of parents in the UK have no
financial plans for retirement, sick-
ness and unemployment, according to
a survey published today by HSBC.
Forty-eight per cent have no life
insurance, whilst 59 per cent of child-
less adults are in the same position.
Medical expenses come even lower
down the list of priorities, with only 18
per cent having plans in place.
Children also reduce focus on sav-
ing for a pension, the survey found
56 per cent of parents have financial
plans in place for retirement, com-
pared to 67 per cent of childless adults.
The fact that such large numbers
of households are not planning ahead
is leaving families greatly exposed to
unforeseen events, said HSBCs
Christine Foyster.
Protecting the households finan-
cial assets during parents working
lives will not only ensure that families
can cope if circumstances change, but
should also be seen as an important
part of preparing for retirement.
Families failing to plan for
retirement or joblessness
PENSIONS
Bank lending
on mortgages
is on the rise
BY TIM WALLACE
UK ECONOMY
BY TIM WALLACE
UK ECONOMY
News
INDIA RAISES RATES YET GETS SET TO HOLD NEWS | IN BRIEF
Bearish Canada keeps rates low
The Bank of Canada took the prospect
of interest rate hikes off the table yes-
terday with downgraded forecasts that
showed some of the gloss coming off an
economic recovery touted as the
strongest in the G7. The central bank
held its key interest rate steady at an
ultra-low one per cent, as expected, but
said the European debt crisis and weak-
ness in its top trade partner, the US
meant the outlook for the Canadian
economy had weakened.
Cautious Hungary maintains rate
The central bank of Hungary left its
interest rates unchanged at six per cent
yesterday. The monetary board has kept
rates at six per cent since the end of
January this year. The bank released a
cautious statement, warning of econom-
ic risks to Hungary.
Business morale down in Belgium
Business confidence in Belgium has con-
tinued to tumble, according to data
released yesterday. Registering a sev-
enth straight month of decline, the
National Bank of Belgiums confidence
index dropped one point to -10.4. A
breaching of the -10 level is generally
consistent with a contraction in eco-
nomic activity, commented BNP
Paribas in a note.
UK inflation expectations ease
Inflation expectations have edged down
to 3.4 per cent for the coming year,
despite the consumer price index (CPI)
spiking to 5.2 per cent in September. A
YouGov survey also showed a decline in
medium term (five to 10 year) expecta-
tions, to 3.4 per cent also.
Can BlackBerry bury the hatchet over outage?
L
AST week I looked at YouGovs
BrandIndex data to see the imme-
diate impact on consumer percep-
tion of the outage that caused a
blackout of BlackBerrys email, web
and Messenger services. Now two
weeks on from the crisis we can return
to BrandIndex for signs of recovery.
Focusing firstly on buzz, BlackBerrys
dramatic fall does appear to have bot-
tomed out, but the ground regained
has so far been limited from a score
of +11 on the day of the crash, it fell as
far as -56 on 18 October and has since
moved back to -40.
Diving further into the data, the key
perception measures reveal some
interesting findings. General impres-
sion, for both customers and non-cus-
tomers, follows a similar pattern to
buzz, showing a steep decline that bot-
tomed out last week, and which has
since recovered a small proportion of
lost ground (now at -9). Satisfaction,
which is more closely tied to current
customers, also fell but crucially not as
steeply (from +10 to +5) and has since
recovered two thirds of its lost score.
This is positive for BlackBerry as it
suggests that once customers came to
terms with the initial annoyance,
their views didnt alter much.
However there are still two big areas
for concern. Firstly, BlackBerry does
need to recover that final third of lost
customer sentiment and, as we have
seen from crises that have hit other
brands in recent years, that is not easy.
Secondly, although customer senti-
ment is recovering well, general
impression is still a long way down on
where it was. The biggest impact of the
outage may not turn out to be specific
customer dissatisfaction, but more a
general feeling that BlackBerry is just
not as good as its competitors. Stephan
Shakespeare is the chief executive of YouGov
ECONOMICS
INDIAS central bank raised interest rates yesterday for the 13th time since early 2010 but
gave a strong signal it may be finished with its current tightening cycle as growth slows
and it expects high inflation to ease from December. The Reserve Bank of India raised its
policy lending rate, the repo rate, by 25 basis points to 8.5 per cent. It also revised down
its growth forecast for the current fiscal year ending in March to 7.6 per cent from eight
per cent. Picture: REUTERS
BRAND INDEX
STEPHAN SHAKESPEARE
ANALYSIS l Buzz Chart
8Oct 11 Oct 14Oct 17Oct
20
10
0
-10
-20
-30
-40
-50
-60
Buzz
ANALYSIS l Index Chart
8Oct 11 Oct 14Oct 17Oct
30
20
10
0
-10
-30
-20
Impression
Satisfaction
ANALYSIS l Annual growth rates
Sep2008 June 2009March2010Dec 2010 Sep2011
16%
8%
0%
-8%
non-financial companies
unsecured lending
personal deposits
mortgages
News
Words by STEVE DINNEEN
ARM boss Warren East plans to take
over the world one chip at a time
The Cambridge-based
firm dominates the
mobile chip market.
City A.M. asks the
boss how he did it
A
few years ago a friend of mine
tipped a little-known chip designer
called ARM Holdings. He said it was
going to be the next big thing. A
year later, after its shares had shot up, he
cursed his luck for not taking his own
advice. But he prudently decided not to
invest while it was trading so strongly. Buy
at the bottom, sell at the top. The next year
he once again regretted his decision. And
the year after that. And the year after that.
In five years ARMs stock has increased five-
fold. My friend didnt get rich off ARM but
plenty of other people did.
Yesterday it bucked an industry slow-
down with yet another robust set of results:
profits and revenues surged and the num-
ber of ARM chips shipped this quarter
jumped 40 per cent to almost 2bn. If you
look inside a smartphone today and lots
of people do, just check Google you are
almost certain to find at least one ARM
chip. A conservative estimate places them
inside 95 per cent of handsets but the true
figure is closer to 99 per cent. High end
models will contain as many as six.
Altogether, more than 6bn were shipped
last year, each one bringing home a royalty
payment. The tech start-up from
Cambridge dominates the fastest growing
sector in the industry, having stolen the ini-
tiative from under the nose of established
US rival Intel.
Chief executive Warren East admits
there has been an element of luck in his
firms success. Nobody not even ARM
predicted the meteoric rise of the smart-
phone. We knew phones were going to be
high volume, he tells me. But we didnt
expect them to be as high volume as they
turned out to be.
Despite its blistering rise, ARM tries to
keep a low profile. It has, for instance, resis-
ted the temptation to open a London office:
Cambridge is just up the road, says East
when we meet in the West End offices of
his PR firm.
He has been at ARM for 17 years, with
over a decade spent as chief executive, mak-
ing him, in some respects, the archetypal
Company Man. But he is refreshingly open,
very much from the British rather than
American school of management, willing
to discuss the thornier issues (he calls
Autonomy boss Mike Lynchs spat with
Oracle astonishing).
East is slight and unassuming; smart
but not showy he still carries an iPhone
3, which seems a tad incongruous for one
of the telecoms industrys most influen-
tial men. He is also half Welsh, although
you wouldnt guess from talking to him
he is still bitter after visiting his home
country to watch his side lose to France in
the rugby last week. He joined ARM from
chip maker Texas Instruments and his
engineering background lends him an
infectious fascination for his industry:
Ive spent my life in semiconductors and
quite a lot of it in microprocessors.
Engineering is very satisfying, its funda-
mentally a creative thing.
ARM put its eggs in the mobile basket as
early as the mid 1990s, buoyed by a con-
tract with then-market leader Nokia for an
new digital handset. Now every major man-
ufacturer, from RIM to Samsung to
Motorola, uses its chips. The real driver,
though, the thing that transformed smart-
phones from a promising experiment to
the forefront of consumer electronics was,
of course, the iPhone.
It was such a big step forward, in terms
of where the market was, that it stimulated
a huge amount of competition. Without
the iPhone we wouldnt have things like
the Samsung Galaxy S2 and clearly we have
benefited from the smartphone evolution.
ARM designed the processors inside
Apples iPhone and iPad, a deal that has cat-
apulted it into the spotlight. East is, howev-
er, reticent about his relationship with the
Cupertino-based firm: They really dont
like people talking about them.
He also praises Googles Android for con-
tributing to the astonishing acceleration of
the industry, with the number of smart-
phones now expected to reach 2bn within
the next five years.
Intel has belatedly woken up to the reali-
ty that it was still sitting on the beach
when the big wave broke and has ploughed
its vast resources into breaking ARMs
mobile stranglehold. But it has a mountain
to climb. Last week ARM announced a new
chip it says is five times more energy effi-
cient than that used in the iPhone. East
describes the launch as a gigantic step,
bringing the reality of the $100 smart-
phone one step closer.
Yet despite these successes, ARM is still
seen as the underdog a label you get the
impression East has long grown tired of. It
isnt without some justification though:
ARM employs 2,000 people, which sounds
like a lot until you put it alongside Intel,
with its payroll of more than 80,000. Its
market cap is almost 8bn considerably
more than fellow Cambridge-based tech
firm Autonomy prior to its takeover by HP
but Intel sits at 126bn.
Intel is a much bigger company, says
East. But its a much bigger company
because its doing a lot more. They have
their microprocessor architecture as we do
but they also make the chips, sell, supply
and market the chips and distribute the
chips. We dont. We just design them.
If you look at the chip sales then were
about the same size and same value. Last
year both were about $30bn. The reason
were different sizes is we only do a small
portion of what Intel does. It isnt really a
big-little situation.
ARMs success has inevitably led to
takeover rumours not least that Apple
may be interested. East, though, sees little
value for his would-be suitors. I dont
think it would be a very sensible economic
decision. ARM is a hugely influential com-
pany in our sector. But that isnt a reason
on its own for buying the business. You can
benefit from its influence for a tiny frac-
tion of the cost of buying the company.
He says his task is to concentrate on
ARMs future to both entrench its success-
es and continue its growth. The first is a no
brainer: We just have to keep coming up
with superior technology. Someone has
always got to have the better mousetrap.
The second will see a further branching
out from its core market. Last year 40 per
cent of ARMs chips went into devices
other than smartphones and East sees this
as a tremendous growth area for the
business. If you can perfect a chip for a
phone then you have a great solution for
TVs, digital cameras anything you can
think of. He sets out a vision where ARM
chips are incorporated into everything
from medical implants to smart meters; a
whole world powered by his firms archite-
cure.
If he can achieve a fraction of this, per-
haps its time for my friend to finally make
that investment.
Warren East says the
firms success is due,
in part, to an element
of luck
Pictures: Laura Lean /
City A.M
The iPhone
was a huge
step forward.
Without it we
wouldnt have
things like the
Samsung
Galaxy S2
Born: Wales
Education: Engineering at Oxford
Career: Joined ARM from Texas
Instruments in 1994 to set up ARMs con-
sulting business. He was vice president of
business operations from 1998. In 2000
he was appointed to the board as chief
operating officer and in 2001 was
appointed chief executive.
Notable achievements and hobbies:
Winner of the City A.M. business of the
year award with ARM. Fellow of the
Institution of Engineering, fellow of the
Royal Academy of Engineering
CV | WARREN EAST
U
S stocks fell yesterday on
doubts European leaders can
agree on a plan to end the
Eurozone debt crisis, while
major corporations disappointed
investors with their outlooks.
Though EU and Eurozone leaders
still planned to hold a summit today,
markets were spooked by news that a
meeting by Eurozone finance minis-
ters was cancelled.
The news fed fears that leaders will
be unable to come up with the
detailed plan for ending the crisis
that investors want.
That alone has added a big wave of
disappointment to todays market.
The S&P 500 has rallied nearly nine
per cent for the month on optimism
European leaders will succeed in tack-
ling the regions debt crisis.
Yesterday the Dow Jones industrial
average lost 205.18 points, or 1.72 per
cent, to 11,708.44. The Standard &
Poors 500 Index fell 24.96 points, or
1.99 per cent, to 1,229.23. The Nasdaq
Composite Index dropped 61.02
points, or 2.26 per cent, to 2,638.42.
After hours, Amazon slumped 15 per
cent on weak results.
M
INERS and banks retreated as
Britains FTSE 100 fell yester-
day after comments from the
German chancellor led to con-
cerns over how far European leaders
would go to solve the regions debt cri-
sis.
Chancellor Angela Merkel said
Germany opposes a phrase in a draft
conclusion for todays EU summit that
calls for the European Central Bank to
continue buying bonds in the second-
ary market.
Adding to the downbeat sentiment
was news that a meeting of EU finance
ministers this week was cancelled, but
analysts noted the meeting is not the
EU summit, which is still on.
The UKs benchmark index fell
22.52 points, or 0.4 per cent to
5,525.54, having closed at a two-and-a-
half month high on Monday, tracking
losses across Europe and in the US.
A London-based trader said that,
should an agreement be reached, the
market could rally up by a further 300
points, with most gains already built
in to the market.
If an agreement fell short of expec-
tations the market could retreat 10 per
cent, the trader added.
Further eroding investor confi-
dence, US consumer confidence unex-
pectedly dropped in October to its
lowest level in two-and-a-half years,
again raising concerns over the health
of the worlds biggest economy.
That led to profit taking in riskier
assets such as mining and banking
stocks, which have had a minor recov-
ery over the past month as the market
has moved higher.
Glencore fell 2.6 per cent as analysts
at Jefferies said the outperformance of
the shares has improved the econom-
ics of a bid for miner Xstrata and
means a deal could be win-win.
Banks took more than seven points
off the index, while real estate invest-
ment trusts Hammerson and British
Land shed 4.2 per cent each.
Merkel helps send
FTSE into retreat
THELONDON
REPORT
THENEW YORK
REPORT
News
BEST OF THE BROKERS
To appear in Best of the Brokers email your research to notes@cityam.com
ANALYSIS l Electrocomponents PLC
230
220
210
200
190
180
Aug Sep Oct
p
218.00
25 Oct
ELECTROCOMPONENTS
UBS rates the electrical component distrib-
utor as neutral with a target price of
205p, ahead of a first half report on 14
November. With sales growth of 11 per
cent year-on-year already reported, the
broker expects profit before tax and amor-
tisation to rise 19 per cent to 59.9m, and
earning per share up 18 per cent to 9.3p. It
expects management to raise the dividend
by four per cent to 5.2p.
ANALYSIS l Admiral Group PLC
1,500
1,400
1,300
1,200
Aug Sep Oct
p
1,220.00
25 Oct
ADMIRAL
Nomura rates the insurance group as a
buy with a target price of 1900p, after
chief executive Henry Engelhardt gave an
upbeat outlook on the companys UK oper-
ations. The brokers says management is
confident on growth prospects, with posi-
tive trends in Italian insurance, its Spanish
price comparison business, and in the US,
with the latter the most exciting prospect.
ANALYSIS l Pernod Ricard SA
70
68
66
64
62
60
58
Aug Sep Oct
66.62
25 Oct
PERNOD RICARD
Goldman Sachs reiterates its buy rating
on the French drinks group with a target
price of 85.50, following a very positive
trading update. Sales growth of 10.5 per
cent was ahead of the brokers expecta-
tions, and it now expects full year organic
profit growth of 10.5 per cent for 2012,
ahead of the companys guidance of six
per cent.
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20Oct 19Oct 21 Oct 24Oct 25Oct
5,600
5,400
5,450
5,500
5,550
ANALYSIS l FTSE
5,525.54
25 Oct
US rally broken
by cancelled
euro summit
BAE Systems . . . . . .281.2 -3.5 361.1 248.1
Chemring Group . . . .522.5 0.5 736.5 485.0
Cobham . . . . . . . . . . .180.0 -2.4 245.5 168.5
Meggitt . . . . . . . . . . . .372.6 1.2 397.6 304.9
QinetiQ Group . . . . . .116.9 -0.1 136.3 96.7
RoIIs-Royce Group . .723.0 18.0 726.5 557.5
Senior . . . . . . . . . . . . .160.5 -0.2 190.6 131.1
UItra EIectronics . . .1600.0 7.0 1895.0 1305.0
GKN . . . . . . . . . . . . . .194.7 0.7 245.0 157.0
BarcIays . . . . . . . . . . .180.0 -6.7 333.6 138.9
HSBC HoIdings . . . . .525.0 -5.0 730.9 473.6
LIoyds Banking Gr . . .35.0 0.4 70.3 27.6
RoyaI Bank of Sco . . .25.1 0.1 49.0 19.7
Standard Chartere .1412.5 -14.5 1950.0 1169.5
AG Barr . . . . . . . . . .1235.0 9.0 1395.0 1031.0
Britvic . . . . . . . . . . . . .335.0 -5.0 503.5 289.9
Diageo . . . . . . . . . . .1307.0 -37.0 1344.0 1112.0
SABMiIIer . . . . . . . . .2262.0 -44.5 2340.0 1979.0
AZ EIectronic Mat . . .236.5 -3.5 338.1 206.1
Croda Internation . .1895.0 0.0 2081.0 1367.0
EIementis . . . . . . . . . .136.3 -1.7 187.4 104.8
Johnson Matthey . .1833.0 19.0 2119.0 1523.0
Victrex . . . . . . . . . . .1218.0 19.0 1590.0 1025.0
YuIe Catto & Co . . . . .172.8 4.3 253.0 148.0
LON GD ONCE FIX AM...........1656.25 5.25
SILVER LDN FIX AM ..................32.23 0.41
MAPLE LEAF 1 OZ ....................35.88 1.71
LON PLATINUM AM................1554.00 32.00
LON PALLADIUM AM...............643.00 21.00
ALUMINIUM CASH .................2158.00 48.50
COPPER CASH ......................7380.00 381.50
LEAD CASH...........................1940.00 99.50
NICKEL CASH......................19030.00 360.00
TIN CASH.............................21800.00 50.00
ZINC CASH ............................1840.00 47.50
BRENT SPOT INDEX................110.84 0.33
SOYA .....................................1226.75 14.50
COCOA..................................2627.00 61.00
COFFEE...................................250.80 5.95
KRUG.....................................1744.40 10.20
WHEAT ....................................152.25 0.62
AIR LIQUIDE........................................92.12 -1.29 100.65 80.90
ALLIANZ..............................................79.82 -0.50 108.85 56.16
ANHEUS-BUSCH INBEV ....................39.65 -0.59 46.33 33.85
ARCELORMITTAL...............................14.14 -0.29 28.55 10.47
AXA......................................................10.90 -0.20 16.16 7.88
BANCO SANTANDER...........................6.07 -0.06 9.37 5.05
BASF SE..............................................51.85 0.22 70.22 42.19
BAYER.................................................44.62 -0.25 59.44 35.36
BBVA......................................................6.31 -0.09 9.52 4.94
BMW ....................................................57.80 -0.08 73.85 43.49
BNP PARIBAS.....................................30.80 -1.20 59.93 22.72
CARREFOUR ......................................18.21 -0.41 34.29 14.66
CRH PLC .............................................13.65 -0.51 17.40 10.28
DAIMLER.............................................37.75 0.45 59.09 30.52
DANONE..............................................47.94 0.11 53.16 41.92
DEU.BOERSE OFFRE ........................40.18 -0.46 55.75 35.46
DEUTSCHE BANK..............................28.55 0.08 48.70 20.79
DEUTSCHE TELEKOM.........................9.11 -0.04 11.38 7.88
E.ON.....................................................17.33 -0.05 25.54 12.50
ENEL......................................................3.37 -0.07 4.86 2.81
ENI .......................................................15.93 -0.17 18.66 11.83
FRANCE TELECOM............................13.02 -0.01 17.45 11.12
GDF SUEZ ...........................................21.08 -0.51 30.05 18.32
GENERALI ASS...................................12.75 0.05 17.05 10.34
IBERDROLA..........................................5.20 -0.09 6.50 4.29
INDITEX ...............................................68.04 -0.33 69.34 50.92
ING GROEP CVA...................................6.49 -0.08 9.50 4.21
INTESA SANPAOLO.............................1.27 -0.02 2.52 0.85
KON.PHILIPS ELECTR.......................14.98 -0.52 25.45 12.01
L'OREAL..............................................78.90 -0.87 91.24 68.83
LVMH..................................................117.40 -0.45 132.65 94.16
MUNICH RE.........................................97.98 -0.72 126.00 77.80
NOKIA....................................................4.83 -0.06 8.49 3.33
REPSOL YPF.......................................21.89 -0.06 24.90 17.31
RWE.....................................................30.61 -0.55 55.88 21.22
SAINT-GOBAIN...................................32.92 -1.30 47.64 26.07
SANOFI ................................................50.23 -1.26 56.82 42.85
SAP......................................................42.84 0.26 46.15 32.88
SCHNEIDER ELECTRIC.....................42.79 -0.80 61.83 35.94
SIEMENS .............................................75.51 -0.03 99.39 62.13
SOCIETE GENERALE.........................19.00 -0.75 52.70 14.32
TELECOM ITALIA..................................0.91 0.01 1.16 0.70
TELEFONICA ......................................15.14 -0.21 19.69 12.50
TOTAL..................................................37.74 -0.20 44.55 29.40
UNIBAIL-RODAMCO SE...................140.70 -2.75 162.95 124.05
UNICREDIT............................................0.87 -0.03 2.03 0.64
UNILEVER CVA...................................24.36 -0.25 24.90 20.90
VINCI ....................................................35.09 -0.67 45.48 29.49
VIVENDI ...............................................16.02 -0.45 22.07 14.10
VOLKSWAGEN VORZ ......................120.65 -2.10 152.20 86.40
Price Chg High Low
EUSHARES
WORLD INDICES
FTSE 100 . . . . . . . . . . . . . . 5525.54 -22.52 -0.41
FTSE 250 INDEX . . . . . . . 10428.37 -40.72 -0.39
FTSE UK ALL SHARE . . . . 2849.96 -11.47 -0.40
FTSE AIMALL SH . . . . . . . . 714.89 1.37 0.19
DOWJONES INDUS 30 . . 11706.62 -207.00 -1.74
S&P 500 . . . . . . . . . . . . . . . 1229.05 -25.14 -2.00
NASDAQ COMPOSITE . . . 2638.42 -61.02 -2.26
FTSEUROFIRST 300 . . . . . . 982.57 -6.42 -0.65
NIKKEI 225 AVERAGE. . . . 8762.31 -81.67 -0.92
DAX 30 PERFORMANCE. . 6046.75 -8.52 -0.14
CAC 40 . . . . . . . . . . . . . . . . 3174.29 -46.17 -1.43
SHANGHAI SE INDEX . . . . 2409.67 39.34 1.66
HANG SENG. . . . . . . . . . . 18968.20 196.38 1.05
S&P/ASX 20 INDEX . . . . . . 2551.60 -11.70 -0.46
ASX ALL ORDINARIES . . . 4287.70 -25.90 -0.60
BOVESPA SAO PAOLO. . 56285.99 -605.98 -1.07
ISEQ OVERALL INDEX . . . 2654.78 -36.52 -1.36
STI . . . . . . . . . . . . . . . . . . . . 2778.97 34.80 1.27
IGBM. . . . . . . . . . . . . . . . . . . 892.48 -7.99 -0.89
SWISS MARKET INDEX. . . 5708.79 -79.84 -1.38
Price Chg %chg
3M........................................................77.04 -5.14 98.19 68.63
ABBOTT LABS ...................................52.99 -0.46 55.61 45.07
ALCOA ................................................10.14 -0.44 18.47 8.45
ALTRIA GROUP..................................27.00 -0.31 28.14 23.20
AMAZON.COM..................................227.15 -10.46 246.71 156.77
AMERICAN EXPRESS........................49.42 -0.50 53.80 38.88
AMGEN INC.........................................56.47 -2.48 61.53 47.66
APPLE...............................................397.77 -8.00 426.70 297.76
AT&T....................................................28.41 -0.47 31.94 27.20
BANK OF AMERICA.............................6.46 -0.26 15.31 5.13
BERKSHIRE HATAW B.......................75.74 -1.50 87.65 65.35
BOEING CO.........................................63.72 -1.03 80.65 56.01
BRISTOL MYERS SQUI ......................32.11 -0.42 33.20 20.05
CATERPILLAR....................................89.89 -1.88 116.55 67.54
CHEVRON.........................................104.50 -1.77 109.94 80.41
CISCO SYSTEMS................................17.62 0.08 24.60 13.30
CITIGROUP.........................................30.90 -0.70 51.50 21.40
COCA-COLA.......................................66.95 -0.92 71.77 60.30
COLGATE PALMOLIVE......................89.98 -1.26 94.89 74.39
COMCAST CLASS A..........................24.21 -0.46 27.16 19.17
CONOCOPHILLIPS.............................70.68 -1.44 81.80 58.37
DU PONT(EI) DE NMR........................44.94 -1.15 57.00 37.10
EXXON MOBIL....................................79.44 -0.73 88.23 63.47
GENERAL ELECTRIC.........................16.22 -0.23 21.65 14.02
GOOGLE A........................................583.16 -13.26 642.96 473.02
HEWLETT PACKARD.........................25.03 -0.99 49.39 19.92
HOME DEPOT.....................................36.04 -0.66 39.38 28.13
IBM.....................................................180.36 -1.89 190.53 138.53
INTEL CORP .......................................24.63 0.04 26.78 19.16
J.P.MORGAN CHASE.........................33.49 -1.08 48.36 27.85
JOHNSON & JOHNSON.....................63.69 -1.04 68.05 57.50
KRAFT FOODS A................................34.93 -0.35 36.30 24.30
MC DONALD'S CORP ........................91.77 -0.24 92.86 72.14
MERCK AND CO. NEW......................32.91 -0.62 37.68 29.47
MICROSOFT........................................26.81 -0.38 29.46 23.65
OCCID. PETROLEUM.........................85.14 -2.17 117.89 66.36
ORACLE CORP...................................32.37 -0.50 36.50 24.72
PEPSICO.............................................61.82 -0.28 71.89 58.50
PFIZER ................................................18.87 -0.49 21.45 16.25
PHILIP MORRIS INTL .........................68.84 -0.64 72.74 55.85
PROCTER AND GAMBLE ..................64.51 -0.86 67.72 56.57
QUALCOMM INC ................................52.32 -1.29 59.84 43.21
SCHLUMBERGER ..............................68.03 -1.85 95.64 54.79
TRAVELERS CIES..............................56.34 -1.28 64.17 45.97
UNITED TECHNOLOGIE ....................75.28 -1.37 91.83 66.87
UNITEDHEALTH GROUP...................48.76 -0.27 53.50 34.50
VERIZON COMMS ..............................36.19 -0.74 38.95 31.60
WAL-MART STORES..........................56.71 -0.07 57.90 48.31
WALT DISNEY CO ..............................34.49 -0.88 44.34 28.19
WELLS FARGO & CO.........................25.55 -0.97 34.25 22.58
COMMODITIES CREDIT & RATES
BoE IR Overnight ............................0.500 0.00
BoE IR 7 days.................................0.500 0.00
BoE IR 1 month ..............................0.500 0.00
BoE IR 3 months ............................0.500 0.00
BoE IR 6 months ............................0.500 0.00
LIBOR Euro - overnight ..................0.855 0.00
LIBOR Euro - 12 months ................2.073 0.00
LIBOR USD - overnight...................0.142 0.00
LIBOR USD - 12 months.................0.925 0.00
HaIifax mortgage rate .....................3.990 0.00
Euro Base Rate ...............................1.500 0.00
Finance house base rate................1.000 0.00
US Fed funds...................................0.250 0.00
US Iong bond yieId .........................3.750 0.00
European repo rate.........................0.736 0.00
Euro Euribor ....................................1.151 0.00
The vix index ...................................31.98 2.72
The baItic dry index ........................2.153 0.00
Markit iBoxx...................................234.39 0.99
Markit iTraxx..................................172.13 -3.16
Price Chg High Low
Price Chg %chg Price Chg %chg Price Chg %chg
USSHARES
C/$ 1.3904 0.0027
C/ 0.8690 0.0021
C/ 105.66 0.3835
/C 1.1508 0.0028
/$ 1.6000 0.0007
/ 121.60 0.1804
FTSE 100
5525.54
22.52
FTSE 250
10428.37
40.72
FTSE ALLSHARE
2849.96
11.47
DOW
11706.62
207.00
NASDAQ
2638.42
61.02
S&P 500
1229.05
25.14
RPC Group . . . . . . . .350.0 5.5 384.8 215.4
Smiths Group . . . . . .971.0 7.0 1429.0 907.5
Brown (N.) Group . . .261.9 -0.4 311.2 252.5
Carpetright . . . . . . . . .490.0 5.0 835.5 445.2
Debenhams . . . . . . . . .68.3 -0.2 77.4 51.2
Dignity . . . . . . . . . . . .809.0 -21.0 854.5 640.0
Dixons RetaiI . . . . . . .12.1 0.2 28.5 10.6
DuneImGroup . . . . . .499.0 -4.0 550.0 383.9
HaIfords Group . . . . .328.9 -0.8 459.7 268.6
Home RetaiI Group . .102.3 -2.4 235.0 99.5
Inchcape . . . . . . . . . .326.2 -3.2 425.4 268.1
JD Sports Fashion . .809.0 -25.5 1030.0 753.5
Kesa EIectricaIs . . . .102.6 -8.0 174.0 80.0
Kingfisher . . . . . . . . .262.0 -6.7 287.1 217.0
Marks & Spencer G . .332.2 -2.9 427.5 301.8
Mothercare . . . . . . . .182.0 -9.0 627.5 179.6
Next . . . . . . . . . . . . .2611.0 -39.0 2679.0 1868.0
Sports Direct Int . . . .236.9 -0.7 266.2 125.5
WH Smith . . . . . . . . . .544.5 -13.5 563.5 433.8
Smith & Nephew . . . .569.5 -13.0 742.0 521.0
Synergy HeaIth . . . . .844.5 6.0 981.0 747.5
Barratt DeveIopme . . .90.8 -1.4 119.0 67.5
BeIIway . . . . . . . . . . . .723.5 3.5 753.5 511.0
BaIfour Beatty . . . . . .257.6 -4.5 357.3 228.6
GaIIiford Try . . . . . . . .453.2 4.6 530.0 276.5
Kier Group . . . . . . . .1410.0 -16.0 1426.0 1097.0
Drax Group . . . . . . . .517.0 -13.0 537.5 353.6
SSE . . . . . . . . . . . . . .1345.0 -4.0 1423.0 1108.0
Domino Printing S . .553.0 3.0 705.0 434.3
HaIma . . . . . . . . . . . . .338.1 -0.6 429.6 306.3
Laird . . . . . . . . . . . . . .138.9 1.2 207.0 127.9
Morgan CrucibIe C . .276.8 3.8 357.1 222.3
Oxford Instrument . .766.5 -5.5 1010.0 495.0
Renishaw . . . . . . . . . .921.0 -26.0 1886.0 862.0
Spectris . . . . . . . . . .1216.0 -7.0 1679.0 1039.0
Aberforth SmaIIer . . .544.5 7.5 714.0 508.5
AIIiance Trust . . . . . .336.9 -0.1 392.7 310.2
Bankers Inv Trust . . .396.0 1.2 428.0 346.5
BH GIobaI Ltd. GB .1190.0 -3.0 1210.0 1058.0
BH GIobaI Ltd. US . . . .11.8 0.1 12.2 10.4
BH Macro Ltd. EUR . . .19.1 -0.1 20.1 15.8
BH Macro Ltd. GBP 1970.0 -15.0 2070.0 1630.0
BH Macro Ltd. USD . . .18.8 -0.1 20.1 15.8
BIackRock WorId M .623.0 -8.5 815.5 574.5
BIueCrest AIIBIue . . .169.0 0.0 176.2 162.4
British Assets Tr . . . .120.0 0.3 140.5 109.0
British Empire Se . . .453.4 -6.6 533.0 409.9
CaIedonia Investm .1540.0 -15.0 1928.0 1470.0
City of London In . . .287.4 -2.6 306.9 257.0
Dexion AbsoIute L . .134.4 0.4 151.0 130.0
Edinburgh Dragon . .220.7 -3.3 262.1 201.4
Edinburgh Inv Tru . . .473.6 -1.1 492.2 414.9
EIectra Private E . . .1460.0 10.0 1755.0 1287.0
F&C Inv Trust . . . . . .287.1 -2.8 327.9 261.5
FideIity China Sp . . . . .78.5 -0.3 128.7 70.0
FideIity European . .1016.0 -11.0 1287.0 912.0
HeraId Inv Trust . . . . .469.0 3.5 545.5 419.0
HICL Infrastructu . . . .117.7 -0.1 121.3 112.7
Impax Environment . .91.0 0.0 130.5 88.5
JPMorgan American .826.5 5.5 916.0 721.5
JPMorgan Asian In . .187.9 1.4 250.8 170.1
JPMorgan Emerging .523.0 1.0 639.0 480.1
JPMorgan European .758.0 0.0 983.5 692.5
JPMorgan Indian I . . .365.0 5.9 502.0 350.0
JPMorgan Russian .510.0 -7.0 755.0 415.1
Law Debenture Cor . .351.0 1.0 385.0 309.8
MercantiIe Inv Tr . . . .920.5 -6.0 1137.0 856.5
Merchants Trust . . . .376.1 -5.3 431.8 347.0
Monks Inv Trust . . . .318.5 -7.5 367.9 298.1
Murray Income Tru . .626.0 -7.0 673.0 568.0
Murray Internatio . . .893.0 -9.0 991.5 818.5
PerpetuaI Income . . .252.5 -1.8 276.0 234.8
PersonaI Assets T .33370.0 170.0 33725.030210.0
PoIar Cap TechnoI . .343.0 0.0 391.2 299.5
RIT CapitaI Partn . . .1322.0 2.0 1334.0 1130.0
Scottish Inv Trus . . . .451.0 -4.0 524.0 417.0
Scottish Mortgage . .664.0 2.5 781.0 586.5
SVG CapitaI . . . . . . . .208.1 -1.9 279.8 187.9
TempIe Bar Inv Tr . . .880.0 2.0 952.0 791.0
TempIeton Emergin .540.0 -2.0 689.5 497.0
TR Property Inv T . . .167.8 -1.5 206.1 150.0
TR Property Inv T . . . .74.9 -0.3 94.0 69.5
Witan Inv Trust . . . . .449.9 1.9 533.0 401.5
3i Group . . . . . . . . . . .208.2 -0.2 340.0 184.1
3i Infrastructure . . . .120.0 0.3 125.2 113.1
Aberdeen Asset Ma .186.1 -2.0 240.0 167.8
Ashmore Group . . . .328.8 2.1 420.0 301.5
Brewin DoIphin Ho . .119.1 -0.4 185.4 113.7
CameIIia . . . . . . . . . .8845.0 45.010950.0 8800.0
CharIes TayIor Co . . .141.3 2.8 193.0 122.0
City of London Gr . . . .70.0 0.5 93.6 68.3
City of London In . . .340.0 9.5 461.5 321.3
CIose Brothers Gr . . .713.0 -4.0 888.5 656.5
CoIIins Stewart H . . . .60.3 1.3 90.8 59.0
EvoIution Group . . . . .81.8 1.3 94.0 62.3
F&C Asset Managem .64.0 1.7 92.9 56.1
Hargreaves Lansdo .501.0 -8.5 646.5 402.5
HeIphire Group . . . . . . .2.9 -0.1 31.8 2.2
Henderson Group . . .122.1 -0.3 173.1 95.1
Highway CapitaI . . . . .14.5 0.0 21.0 6.5
ICAP . . . . . . . . . . . . . .410.8 -16.4 570.5 383.7
IG Group HoIdings . .472.6 -3.3 548.0 393.6
Intermediate Capi . . .234.2 -10.1 360.3 197.9
InternationaI Per . . . .270.8 9.8 388.8 196.5
InternationaI Pub . . . .115.8 0.0 118.3 108.6
Investec . . . . . . . . . . .375.7 -0.1 538.0 331.8
IP Group . . . . . . . . . . . .66.5 -1.1 68.2 27.9
Jupiter Fund Mana . .224.3 -1.8 337.3 184.9
Liontrust Asset M . . . .60.0 1.3 94.3 57.3
LMS CapitaI . . . . . . . . .60.3 -1.3 64.8 44.8
London Finance & . . .22.5 0.0 23.5 16.5
London Stock Exch .906.5 4.5 1076.0 717.0
Lonrho . . . . . . . . . . . . .13.8 -0.5 19.8 12.5
Man Group . . . . . . . . .156.0 -0.6 311.0 150.0
Paragon Group Of . .161.3 0.2 206.1 134.6
Provident Financi . .1089.0 -4.0 1124.0 728.5
Rathbone Brothers .1068.0 12.0 1257.0 866.5
Record . . . . . . . . . . . . .23.8 0.0 45.5 20.3
RSM Tenon Group . . .23.8 -0.3 66.3 20.3
Schroders . . . . . . . .1363.0 13.0 1922.0 1183.0
Schroders (Non-Vo .1164.0 1.0 1554.0 970.0
TuIIett Prebon . . . . . .367.0 -14.2 428.6 327.8
WaIker Crips Grou . . .46.0 0.0 51.5 45.0
BT Group . . . . . . . . . .183.9 0.3 204.1 152.1
CabIe & WireIess . . . .35.2 -1.9 54.1 31.3
CabIe & WireIess . . . .27.4 -0.3 76.9 26.3
COLT Group SA . . . .100.6 5.6 156.2 91.6
KCOM Group . . . . . . . .71.0 -1.5 84.0 47.5
TaIkTaIk TeIecom . . .133.0 -2.2 168.3 119.8
TeIecomPIus . . . . . . .740.0 12.0 740.0 379.8
Booker Group . . . . . . .76.4 -2.8 80.0 53.4
Greggs . . . . . . . . . . . .501.0 -7.0 550.5 429.1
Morrison (Wm) Sup .300.7 -1.1 308.3 262.7
Ocado Group . . . . . . . .90.4 1.1 285.0 84.8
Sainsbury (J) . . . . . . .303.0 -3.5 391.5 263.5
Tesco . . . . . . . . . . . . .403.0 -2.3 439.0 356.3
Associated Britis . .1085.0 -9.0 1182.0 940.0
Cranswick . . . . . . . . .683.0 3.0 895.0 588.5
Dairy Crest Group . . .346.5 -0.4 424.9 325.0
Devro . . . . . . . . . . . . .234.0 -3.0 296.9 218.0
Premier Foods . . . . . . . .4.1 0.0 35.1 3.8
Tate & LyIe . . . . . . . . .652.0 -1.5 658.5 490.2
UniIever . . . . . . . . . .2079.0 -22.0 2109.0 1777.0
Mondi . . . . . . . . . . . . .474.5 1.9 664.0 448.4
Centrica . . . . . . . . . . .301.5 -7.3 345.8 282.6
InternationaI Pow . . .332.4 3.1 448.6 279.4
NationaI Grid . . . . . . .634.0 4.5 649.5 530.0
Pennon Group . . . . . .694.0 -5.0 737.5 584.5
Severn Trent . . . . . .1516.0 -9.0 1571.0 1359.0
United UtiIities . . . . .613.0 -3.0 631.5 543.5
Cookson Group . . . . .495.7 -20.3 724.5 395.8
DS Smith . . . . . . . . . .205.0 -5.6 266.2 164.4
Rexam . . . . . . . . . . . .338.7 0.1 400.0 299.8
Price Chg High Low
BerkeIey Group Ho .1219.0 -9.0 1299.0 789.5
Bovis Homes Group .467.1 -7.9 476.0 326.5
Persimmon . . . . . . . .507.0 4.0 509.5 336.5
Reckitt Benckiser . .3330.0-116.0 3648.0 3015.0
Redrow . . . . . . . . . . . .121.4 -1.6 139.0 98.4
TayIor Wimpey . . . . . . .37.2 -0.2 43.3 22.3
Bodycote . . . . . . . . . .277.8 -4.5 397.7 225.6
Charter Internati . . . .860.0 0.0 876.5 538.5
Fenner . . . . . . . . . . . .343.3 5.3 422.5 259.3
IMI . . . . . . . . . . . . . . . .796.5 -2.5 1119.0 636.5
MeIrose . . . . . . . . . . .327.1 -0.4 365.4 265.7
Northgate . . . . . . . . . .252.4 3.6 346.7 202.0
Rotork . . . . . . . . . . .1665.0 5.0 1858.0 1501.0
Spirax-Sarco Engi . .1858.0 -3.0 2063.0 1649.0
Weir Group . . . . . . .1870.0 27.0 2218.0 1375.0
Ferrexpo . . . . . . . . . . .307.8 -2.5 499.0 238.7
TaIvivaara Mining . . .225.2 -5.7 622.0 205.0
BBAAviation . . . . . . .182.4 -0.3 240.8 156.0
Stobart Group Ltd . . .125.9 -0.1 163.6 122.0
AdmiraI Group . . . . .1220.0 1.0 1754.0 1203.0
AmIin . . . . . . . . . . . . .304.0 -1.0 427.0 270.6
Huntsworth . . . . . . . . .57.0 -0.5 85.0 55.3
Informa . . . . . . . . . . . .356.1 2.2 461.1 313.9
ITE Group . . . . . . . . . .176.5 -0.5 258.2 157.7
ITV . . . . . . . . . . . . . . . . .62.1 -0.2 93.5 51.7
Johnston Press . . . . . . .4.3 -0.0 13.5 4.1
MecomGroup . . . . . .149.0 -2.5 310.0 134.5
Moneysupermarket. .104.2 0.3 120.4 75.7
Pearson . . . . . . . . . .1174.0 0.0 1207.0 926.0
PerformGroup . . . . .200.0 -4.0 234.5 150.0
Reed EIsevier . . . . . .540.0 -2.0 590.5 461.3
Rightmove . . . . . . . .1344.0 -7.0 1364.0 736.5
STV Group . . . . . . . . .111.3 1.3 168.0 90.3
Tarsus Group . . . . . .136.3 3.8 165.0 114.0
Trinity Mirror . . . . . . . .46.0 0.5 106.5 37.5
UBM . . . . . . . . . . . . . .509.5 -9.0 725.0 416.0
UTV Media . . . . . . . . .117.3 -3.8 150.0 101.0
WiImington Group . . .87.0 -0.5 183.0 82.5
WPP . . . . . . . . . . . . . .650.5 3.0 846.5 578.0
YeII Group . . . . . . . . . . .3.8 0.1 16.1 3.5
African Barrick G . . .525.5 -1.5 618.5 393.5
AIIied GoId Minin . . .152.9 4.6 281.3 34.4
AngIo American . . .2299.5 -16.0 3437.0 2138.5
AngIo Pacific Gro . . .273.9 14.0 369.3 237.9
Antofagasta . . . . . . .1152.0 -26.0 1634.0 900.5
Aquarius PIatinum . .178.4 1.2 419.0 163.1
BeazIey . . . . . . . . . . . .127.0 0.0 139.2 109.6
CatIin Group Ltd. . . .392.3 -2.7 421.4 331.5
Hiscox Ltd. . . . . . . . . .389.6 8.9 424.7 340.5
Jardine LIoyd Tho . . .712.0 -5.5 723.5 571.5
Lancashire HoIdin . . .729.0 -18.5 748.5 529.0
RSA Insurance Gro . .111.9 -0.9 143.5 106.0
Aviva . . . . . . . . . . . . . .340.7 -6.0 477.9 275.3
LegaI & GeneraI G . . .105.2 -1.1 123.8 89.8
OId MutuaI . . . . . . . . .109.5 -1.1 144.8 98.1
Phoenix Group HoI . .525.0 6.0 688.0 451.1
PrudentiaI . . . . . . . . .649.0 -9.5 777.0 509.0
ResoIution Ltd. . . . . .281.7 4.5 316.1 211.3
St James's PIace . . . .364.2 5.7 376.0 236.2
Standard Life . . . . . . .213.8 -1.8 244.7 172.0
4Imprint Group . . . . .225.0 5.0 295.0 200.0
Aegis Group . . . . . . .136.8 0.8 158.5 115.7
BIoomsbury PubIis . . .98.5 -1.0 138.0 95.1
British Sky Broad . . .721.5 -13.5 850.0 618.5
Centaur Media . . . . . . .38.8 -0.3 73.0 36.0
Chime Communicati .199.0 1.5 298.5 173.0
Creston . . . . . . . . . . . .86.0 1.8 121.0 72.0
DaiIy MaiI and Ge . . .409.5 -8.5 594.5 343.4
Euromoney Institu . .613.0 -5.0 736.0 522.5
Future . . . . . . . . . . . . . .11.0 0.0 30.0 9.8
Haynes PubIishing . .220.0 5.0 257.0 203.5
BHP BiIIiton . . . . . . .1960.5 -35.5 2631.5 1667.0
Centamin Egypt Lt . .106.9 0.4 197.1 89.7
Eurasian NaturaI . . .676.5 -8.0 1125.0 522.0
FresniIIo . . . . . . . . . .1584.0 28.0 2150.0 1247.0
GemDiamonds Ltd. .216.0 4.5 306.0 179.8
GIencore Internat . . .408.0 -10.9 531.1 348.0
HochschiId Mining . .441.5 -10.9 680.0 397.0
Kazakhmys . . . . . . . .918.5 -6.5 1671.0 730.0
Kenmare Resources . .41.3 1.3 59.9 18.9
Lonmin . . . . . . . . . . .1080.0 -32.0 1983.0 974.5
New WorId Resourc .511.5 -13.5 1060.0 410.5
PetropavIovsk . . . . . .761.0 -6.0 1165.0 543.5
RandgoId Resource 6710.0 275.0 7215.0 4425.0
Rio Tinto . . . . . . . . .3302.5 -71.0 4712.0 2712.5
Vedanta Resources 1263.0 34.0 2559.0 948.0
Xstrata . . . . . . . . . . .1014.5 -1.5 1550.0 764.0
Inmarsat . . . . . . . . . . .478.4 -9.7 719.5 389.7
Vodafone Group . . . .174.1 -1.8 182.8 155.1
Genesis Emerging . .453.2 -7.6 568.0 430.0
Afren . . . . . . . . . . . . . . .90.6 -1.4 171.2 73.6
BG Group . . . . . . . . .1378.0 51.0 1564.5 1144.0
BP . . . . . . . . . . . . . . . .457.2 19.1 509.0 363.2
Cairn Energy . . . . . . .297.0 -2.5 469.7 261.4
EnQuest . . . . . . . . . . .104.5 -1.5 158.5 86.6
Essar Energy . . . . . .293.3 2.8 589.5 235.1
ExiIIon Energy . . . . . .267.6 -0.4 469.7 184.2
Heritage OiI . . . . . . . .231.3 -6.4 486.0 190.0
Ophir Energy . . . . . . .247.9 -0.4 299.0 184.5
Premier OiI . . . . . . . . .377.1 9.0 535.0 310.0
RoyaI Dutch SheII . .2231.0 -11.5 2326.5 1883.5
RoyaI Dutch SheII . .2293.5 -9.5 2336.0 1890.5
SaIamander Energy .195.0 1.0 317.6 182.3
Soco Internationa . . .342.3 7.4 400.0 279.8
TuIIow OiI . . . . . . . . .1423.0 10.0 1493.0 945.5
Amec . . . . . . . . . . . . .911.5 3.5 1251.0 740.5
Hunting . . . . . . . . . . .681.0 3.0 817.0 530.0
Kentz Corporation . .495.0 -5.0 503.0 275.5
LampreII . . . . . . . . . . .227.9 0.9 395.2 220.7
Petrofac Ltd. . . . . . .1407.0 11.0 1685.0 1108.0
Wood Group (John) .605.5 10.0 715.8 432.5
Burberry Group . . . .1276.0 30.0 1600.0 996.0
PZ Cussons . . . . . . . .360.8 3.9 409.0 320.5
Supergroup . . . . . . . .647.0 -2.0 1820.0 634.5
AstraZeneca . . . . . .3017.0 -29.0 3300.0 2543.5
BTG . . . . . . . . . . . . . .270.2 -2.7 309.7 210.1
Genus . . . . . . . . . . . . .996.0 1.0 1111.0 800.0
GIaxoSmithKIine . . .1382.0 -9.5 1400.5 1127.5
Hikma Pharmaceuti .630.0 -9.0 900.0 555.5
Shire PIc . . . . . . . . . .1952.0 -31.0 2136.0 1454.0
CapitaI & Countie . . .173.2 -0.8 203.7 142.5
Daejan HoIdings . . .2740.0 0.0 2954.0 2282.0
F&C CommerciaI Pr .100.2 0.2 108.0 88.0
Grainger . . . . . . . . . . . .89.5 3.2 133.2 77.3
London & Stamford .116.0 -2.0 140.0 112.9
SaviIIs . . . . . . . . . . . . .288.2 8.2 427.1 256.2
UK CommerciaI Pro . .77.5 -0.3 85.5 70.4
Unite Group . . . . . . . .178.0 0.0 224.1 152.9
Big YeIIow Group . . .255.0 -5.3 352.2 234.2
British Land Co . . . . .498.7 -21.8 629.5 452.0
CapitaI Shopping . . .328.3 -11.2 424.8 296.4
Derwent London . . .1626.0 -21.0 1880.0 1400.0
Great PortIand Es . . .355.4 -9.2 445.0 317.4
Hammerson . . . . . . . .392.0 -17.3 490.9 353.0
Hansteen HoIdings . . .77.9 0.6 89.5 70.0
Land Securities G . . .668.0 -24.5 885.0 616.0
SEGRO . . . . . . . . . . . .237.3 -8.8 331.3 210.1
Shaftesbury . . . . . . . .489.3 -7.5 539.0 431.7
Aveva Group . . . . . .1520.0 -13.0 1799.0 1298.0
Computacenter . . . . .375.2 -0.2 490.0 354.8
Fidessa Group . . . . .1655.0 -6.0 2109.0 1409.0
Invensys . . . . . . . . . . .212.8 -2.0 364.3 199.6
Logica . . . . . . . . . . . . .92.5 -0.9 147.2 73.9
Micro Focus Inter . . .337.0 -1.2 426.2 239.4
Misys . . . . . . . . . . . . .271.2 3.1 420.2 214.9
Sage Group . . . . . . . .277.6 -1.0 302.0 231.7
SDL . . . . . . . . . . . . . . .648.0 -12.5 711.5 555.0
TeIecity Group . . . . . .595.5 -1.5 602.5 430.0
Aggreko . . . . . . . . . .1710.0 -4.0 2034.0 1394.5
Ashtead Group . . . . .164.8 0.3 207.9 99.4
Atkins (WS) . . . . . . . .559.0 8.5 820.0 490.2
Babcock Internati . . .695.0 -1.0 733.0 513.5
Berendsen . . . . . . . . .445.9 5.6 568.0 391.3
BunzI . . . . . . . . . . . . .813.5 2.0 818.0 676.5
Cape . . . . . . . . . . . . . .486.4 11.4 591.5 358.3
Capita Group . . . . . . .730.5 16.5 786.5 635.5
CariIIion . . . . . . . . . . .345.0 -0.9 403.2 298.8
De La Rue . . . . . . . . .840.0 2.0 854.5 549.5
DipIoma . . . . . . . . . . .312.0 3.6 414.3 258.0
EIectrocomponents .218.0 -1.1 294.9 182.2
Experian . . . . . . . . . . .780.5 -5.0 833.5 665.0
FiItrona PLC . . . . . . . .358.0 2.2 385.5 227.5
G4S . . . . . . . . . . . . . . .240.0 -3.5 291.0 219.9
Hays . . . . . . . . . . . . . . .78.5 -0.2 133.6 66.6
Homeserve . . . . . . . .470.7 0.1 532.0 408.0
Howden Joinery Gr . .117.1 -0.2 127.5 76.1
Interserve . . . . . . . . . .319.7 4.8 341.3 183.5
Intertek Group . . . . .1971.0 -5.0 2148.0 1715.0
MichaeI Page Inte . . .388.6 -5.9 567.0 338.7
Mitie Group . . . . . . . .246.3 2.5 246.5 194.1
Premier FarneII . . . . .174.6 -4.0 308.8 144.5
Regus . . . . . . . . . . . . . .78.8 1.1 119.0 64.0
RentokiI InitiaI . . . . . . .72.4 0.5 104.9 64.8
RPS Group . . . . . . . . .173.0 -0.6 253.0 156.6
Serco Group . . . . . . .518.5 -4.5 633.0 490.9
Shanks Group . . . . . .109.7 -0.1 130.9 103.0
SIG . . . . . . . . . . . . . . . .97.5 -2.4 153.5 83.8
SThree . . . . . . . . . . . .269.6 -0.6 447.6 213.2
Travis Perkins . . . . . .864.5 -15.0 1127.0 715.0
WoIseIey . . . . . . . . .1816.0 -24.0 2261.0 1404.0
ARM HoIdings . . . . . .590.0 14.5 651.0 338.9
CSR . . . . . . . . . . . . . .184.2 -1.8 447.0 178.7
Imagination Techn . .456.6 -2.4 502.0 296.9
Pace . . . . . . . . . . . . . . .77.3 -0.2 231.8 76.0
Spirent Communica .129.2 0.2 160.3 109.5
British American . .2852.5 0.0 2880.0 2282.5
ImperiaI Tobacco . .2209.0 -25.0 2248.0 1784.0
Betfair Group . . . . . . .805.5 25.5 1550.0 567.0
Bwin.party Digita . . . .115.0 3.8 280.9 100.6
CarnivaI . . . . . . . . . .2277.0 -36.0 3153.0 1742.0
Compass Group . . . .562.5 -3.0 612.0 511.5
Domino's Pizza UK . .459.4 9.4 586.0 377.0
easyJet . . . . . . . . . . . .358.3 -2.5 479.0 301.0
FirstGroup . . . . . . . . .331.9 -0.1 412.6 301.8
Go-Ahead Group . . .1393.0 -16.0 1598.0 1203.0
Greene King . . . . . . .452.1 0.4 518.0 410.0
InterContinentaI . . .1123.0 -1.0 1435.0 955.0
InternationaI Con . . .165.3 0.6 305.0 141.6
JD Wetherspoon . . . .436.2 -8.0 468.3 380.5
Ladbrokes . . . . . . . . .139.0 -0.3 155.3 114.0
Marston's . . . . . . . . . . .97.0 -1.2 117.1 84.6
MiIIennium& Copt . .434.0 -0.2 600.5 375.6
MitcheIIs & ButIe . . . .240.1 -0.5 361.0 216.4
NationaI Express . . .229.0 -1.5 270.2 219.6
Rank Group . . . . . . . .129.0 1.6 153.7 109.5
Restaurant Group . . .294.7 4.8 335.0 254.9
Stagecoach Group . .245.6 -3.3 272.4 200.0
Thomas Cook Group .56.7 0.1 204.8 33.7
TUI TraveI . . . . . . . . . .167.9 -4.7 271.9 137.2
Whitbread . . . . . . . .1696.0 0.0 1887.0 1409.0
WiIIiamHiII . . . . . . . . .228.1 0.0 244.1 155.5
Abcam . . . . . . . . . . . .344.5 5.8 460.0 307.0
AIbemarIe & Bond . .312.0 -3.0 400.1 272.0
Amerisur Resource . .12.8 -0.3 29.0 9.5
Andor TechnoIogy . .500.0 0.0 685.0 370.0
ArchipeIago Resou . . .65.1 -0.1 79.0 40.3
ASOS . . . . . . . . . . . .1484.0 14.0 2468.0 1234.0
AureIian OiI & Ga . . . .17.3 -0.3 92.0 16.0
Avanti Communicat .307.0 -10.0 735.0 248.5
Avocet Mining . . . . . .241.3 5.8 286.8 173.8
BIinkx . . . . . . . . . . . . .146.5 -5.5 158.0 70.5
Borders & Souther . . .47.8 -0.3 72.3 43.5
BowLeven . . . . . . . . .104.3 0.0 398.0 74.5
Brooks MacdonaId 1320.0 40.0 1372.5 940.0
Cove Energy . . . . . . . .86.8 0.8 112.8 61.0
Daisy Group . . . . . . .106.0 -3.8 127.0 88.0
EMIS Group . . . . . . . .535.0 -12.5 580.0 406.0
Encore OiI . . . . . . . . . .78.5 1.0 151.5 40.8
Faroe PetroIeum . . . .162.0 4.0 218.3 130.0
GuIfsands PetroIe . . .191.0 4.0 401.5 142.5
GWPharmaceuticaI . .93.0 0.0 130.0 83.0
H&T Group . . . . . . . . .324.0 4.0 395.0 277.0
Hamworthy . . . . . . . .510.5 -1.5 705.0 373.8
Hargreaves Servic .1180.0 130.0 1185.7 683.0
HeaIthcare Locums . . . .6.1 -0.1 6.4 5.9
Immunodiagnostic . .908.5 46.5 1218.0 768.5
ImpeIIamGroup . . . .305.0 -15.0 387.5 177.5
James HaIstead . . . . .467.5 0.0 495.0 345.5
KaIahari MineraIs . . .237.0 -4.0 301.0 168.0
London Mining . . . . .321.8 0.5 436.5 283.0
Lupus CapitaI . . . . . .101.8 -0.5 150.0 86.0
M. P. Evans Group . .405.0 5.0 500.5 371.0
Majestic Wine . . . . . .424.0 6.5 510.0 352.0
May Gurney Integr . .285.3 -8.8 300.0 211.0
Monitise . . . . . . . . . . . .35.5 0.5 39.0 18.5
MuIberry Group . . . .1420.0 2.0 1920.0 530.0
Nanoco Group . . . . . . .42.8 1.5 114.3 40.0
NauticaI PetroIeu . . . .311.3 -1.3 547.0 223.5
NichoIs . . . . . . . . . . . .515.0 -19.8 579.0 410.0
Numis Corporation . . .91.5 -1.0 137.8 89.0
Pan African Resou . . .12.5 0.0 14.5 9.4
Patagonia GoId . . . . . .57.0 0.8 70.0 20.3
Prezzo . . . . . . . . . . . . .54.8 0.4 71.5 53.3
Pursuit Dynamics . . .204.0 -5.0 700.0 160.5
Rockhopper ExpIor .206.8 4.8 386.0 141.0
RWS HoIdings . . . . . .427.0 1.0 479.8 266.5
Songbird Estates . . .121.3 -0.8 160.3 110.3
VaIiant PetroIeum . . .493.0 20.3 750.0 435.0
Young & Co's Brew . .625.0 2.5 712.0 535.0
COLT Group SA . . . .100.6 5.8
AngIo Pacific Grou . .273.9 5.4
BP . . . . . . . . . . . . . . . .457.2 4.4
RandgoId Resources6710.0 4.3
BG Group . . . . . . . . .1378.0 3.8
InternationaI Pers . . .270.8 3.8
Grainger . . . . . . . . . . . .89.5 3.7
Bwin.party DigitaI . . .115.0 3.4
Betfair Group . . . . . . .805.5 3.3
Kenmare Resources . .41.3 3.2
Kesa EIectricaIs . . . .102.6 -7.2
CabIe & WireIess C . . .35.2 -5.2
Mothercare . . . . . . . .182.0 -4.7
Hammerson . . . . . . . .392.0 -4.2
British Land Co . . . . .498.7 -4.2
Intermediate Capit . .234.2 -4.1
Cookson Group . . . . .495.7 -3.9
ICAP . . . . . . . . . . . . . .410.8 -3.8
TuIIett Prebon . . . . . .367.0 -3.7
BarcIays . . . . . . . . . . .180.0 -3.6
Risers FaIIers
MAIN CHANGES UK 350
Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low
Price Chg High Low Price Chg High Low
GILTS
AEROSPACE & DEFENCE
CONSTRUCTION & MATERIALS
ELECTRICITY
ELECTRONIC & ELECTRICAL EQ.
EQUITY INVESTMENT INSTRUM.
FINANCIAL SERVICES
FIXED LINE TELECOMS
FOOD & DRUG RETAILERS
FOOD PRODUCERS
FORESTRY & PAPER
GAS, WATER & MULTIUTILITIES
GENERAL RETAILERS
HEALTH CARE EQUIPMENT & S.
HHOLD GDS & HOME CONSTR.
INDUSTRIAL ENGINEERING
INDUSTRIAL TRANSPORTATION
MEDIA
LIFE INSURANCE
PERSONAL GOODS
PHARMACEUTICALS & BIOTECH
REAL ESTATE INVEST. & SERV.
SOFTWARE & COMPUTER SERV.
SUPPORT SERVICES
TECHNOLOGY HARDW. & EQUIP.
TOBACCO
TRAVEL & LEISURE
AIM 50
NON LIFE INSURANCE
REAL ESTATE INVEST. TRUSTS
http://corporate.webfg.com
mailto:
globaltechsales@webfg.com
AUTOMOBILES & PARTS
BANKS
CHEMICALS
BEVERAGES
GENERAL INDUSTRIALS
MOBILE TELECOMS
OIL & GAS PRODUCERS
OIL EQUIPMENT & SERVICES
MINING
NONEQUITY INVESTM. COMM.
Tsy 3.250 11 . . . . .100.18 -0.14 103.0 100.2
Tsy 9.000 12 . . . .106.52 0.00 114.4 105.8
Tsy 5.000 12 . . . .101.62 -0.04 105.9 101.6
Tsy 5.250 12 . . . .102.89 -0.01 107.3 102.9
Tsy 4.500 13 . . . .105.34 0.01 108.7 105.3
Tsy 2.500 13 . . . .284.60 0.01 287.7 277.6
Tsy 8.000 13 . . . . .114.10 0.01 120.5 114.0
Tsy 5.000 14 . . . . .111.81 0.10 113.9 109.2
Tsy 4.750 15 . . . . .113.85 0.12 114.8 108.6
Tsy 8.000 15 . . . .127.54 0.12 131.0 123.7
Tsy 7.750 15 . . . .101.25 -0.53 108.6 101.0
Tsy 4.000 16 . . . . .112.31 0.16 113.4 104.9
Tsy 2.500 16 . . . .339.39 0.06 342.2 310.2
Tsy 8.750 17 . . . .139.10 -0.01 141.9 132.9
Tsy 12.000 17 . . .125.40 1.31 133.8 122.5
Tsy 1.250 17 . . . . .113.82 0.09 115.3 106.7
Tsy 5.000 18 . . . . .119.46 0.33 121.0 109.7
Tsy 4.500 19 . . . . .116.94 0.39 118.8 105.4
Tsy 3.750 19 . . . . .111.55 0.42 113.5 99.4
Tsy 2.500 20 . . . .350.64 0.12 355.6 312.4
Tsy 4.750 20 . . . . .119.10 0.39 121.4 106.6
Tsy 8.000 21 . . . .147.55 0.32 151.8 133.8
Tsy 1.875 22 . . . .121.68 -0.05 125.4 111.3
Tsy 4.000 22 . . . . .113.36 0.42 115.6 99.0
Tsy 2.500 24 . . . .310.33 0.09 320.1 273.5
Tsy 5.000 25 . . . .124.58 0.59 126.9 107.4
Tsy 4.250 27 . . . . .115.72 0.71 118.1 97.9
Tsy 1.250 27 . . . . .114.88 -0.12 121.0 104.6
Tsy 6.000 28 . . . .139.97 0.69 142.9 119.5
Tsy 4.750 30 . . . .123.25 1.03 125.6 103.0
Tsy 4.125 30 . . . .292.95 0.26 305.4 261.2
Tsy 4.250 32 . . . . .115.33 1.08 117.9 96.0
Tsy 4.250 36 . . . . .115.50 1.30 117.6 95.0
Tsy 4.750 38 . . . .124.93 1.44 126.9 102.8
Tsy 4.500 42 . . . .121.52 1.67 123.0 98.9
% %
ALTERNATIVE ENERGY
Wealth Management | Markets
CITYA.M. 26 OCTOBER 2011 25
A
MID the gloom that permeates most
economic and financial commentary
at the moment, a rather more positive
development has become apparent
over the past few weeks, but has received
scant attention.
When revised data were released for the
second quarter of 2011, on 5 October, most
analysis concentrated on the recent deceler-
ation in the economy. However, hidden
within the data was other information
with significantly more positive implica-
tions. More recently, further data releases
have confirmed this view.
A worrying feature of the economys recent
performance has been that the UKs trade
accounts showed only a temporary improve-
ment in 2009, before deteriorating massively
again in 2010. While some of this could be
attributed to the process of rebuilding inven-
tories, it seemed that we had lapsed into a sim-
ilar state of excess demand as existed prior to
the recession. The data showed that after con-
tracting to 29.7bn in 2009, the trade deficit
(which reflects the gap between domestic
demand and the countrys output) surged
to 49.3bn in 2010 alarmingly, the high-
est figure on record.
But what a difference a set of revisions
can make. The reduction by the Office of
National Statistics of the published
number for last years trade deficit was
highly significant: the gap was cut to
39.7bn. Furthermore, the deficit for
the first half of 2011 is now stated at
12.6bn, as opposed to the prior esti-
mate of 19.8bn.
Now, it is fair to ask whether
current data are any more reli-
able than previous numbers. On
this score, the only reasonable
assumption is that they are,
and that as the ONS gets more
information and improves its
techniques, so its key data
estimates get closer to the
truth. So, lets take the latest data at face value.
For the UK to move back onto a sustainable
growth path, it is vital that the trade and cur-
rent account deficits should contract.
Reinforcing the message from the earlier
trade data revisions, the latest current
account figures show a similar-sized reduction
in earlier deficit estimates. So, rather than a
current account deficit of 46.3bn in 2010, we
are now told it was 36.7bn, and a mere
6.1bn in the first half of 2011. The fact that
the ONS is now reporting that exports last
year grew by 6.2 per cent in real (volume)
terms, rather than by the 5.2 per cent previ-
ously estimated, is important, as is the smaller
downwards revision to growth in imports
from 8.8 per cent to 8.5 per cent. As a percent-
age of GDP, the trade deficit in 2010 is now
estimated at 2.7 per cent (meaningfully lower
than the previous estimate of 3.4 per cent). As
a rule of thumb, deficits below 3 per cent are
normally regarded as manageable. What is
more, current trends for 2011 imply that the
deficit could fall to just 1.7 per cent of GDP.
Say the words alarming deficit to some-
one, and they will immediately assume that
you are referring to the public sector imbal-
ance. However, I have long been of the view
that what made the UKs previous (pre-reces-
sion) growth path unsustainable was the trade
and current account deficits. The latter, in
effect, represents the difference between
spending in the economy and the countrys
national income. The change in the overall
magnitude of indebtedness within the econo-
my in any period is a reflection of the gap
between total private and public spending and
national income. The government can run a
deficit so long as there is sufficient private sec-
tor saving to compensate. On this score, the
revision in the estimate for the household sec-
tors savings ratio to 7.5 per cent (from 5.3 per
cent) in 2010 also points to the economy
achieving a better balance.
Clearly, eighteen months data do not neces-
sarily make a trend. Even so, in a world in
which there is precious little good news, the
reported improvement in the UKs trade
deficit deserved more attention than it
received.
That still leaves other issues to be resolved. A
cut in the governments deficit (through a
contraction in its expenditure) is vital if the
public sector is not to crowd out private sector
wealth-creating activity. Households still need
to reduce total indebtedness as a proportion of
income, or domestic demand growth will
remain highly vulnerable to an eventual tight-
ening in monetary policy. And we have yet to
prove that the reduction in the trade deficit
can be maintained if domestic demand
(including capital investment) resumes a
stronger growth trajectory. All the same, for
all the caveats, lets not ignore some unequivo-
cally good news.
Richard Jeffrey is chief investment officer at
Cazenove Capital.
26
The Forum
CITYA.M. 26 OCTOBER 2011
The reduction of last years
trade deficit number by the
ONS was highly significant
At last, a sign of good news
in the economic data the
UKs trade deficit is falling
cityam.com/forum
RICHARD JEFFREY
Agree? Disagree? Got a sharp comment?
The Forum wants you to join the debate.
COMMENT NOW ON
Twitter: @cityamforum;
on the web: cityam.com/forum;
or by email: theforum@cityam.com.
Top responses will be reprinted in The Forum.
27
A controversial
view on how to
break free from
monetary union
It is a myth that
there is no way
to quit the euro
I
N 2010, the economist Barry Eichengreen
wrote: The decision to join the euro area
is effectively irreversible. Thats certainly
the view of Europes politicians, busy
again today with their latest plan to save the
euro intact. They seem to think that any exit
from the euro would bring chaos, not only to
the exiting country but to the rest of Europe as
well. That may be more scare story than reality.
The lack of detailed work on euro exit pro-
posals has led Lord Wolfson to announce a
250,000 prize for the best suggestion. It is a
timely intervention: the costs and risks of
remaining within the Eurozone are rising day
by day. The two bailouts of Greece (110bn and
109bn), together with Ireland (85bn) and
Portugal (78bn) total 362bn (315bn). The res-
cue fund, destined to be increased again today,
is currently at 440bn. It starts to add up to a
strong case for exiting the euro in theory.
Yet an exit does pose technical problems. A
consideration of the legal issues demonstrates
this, but also shows that such problems are not
insurmountable.
The key legal difficulty with a euro exit is
the Maastricht Treatys lack of an exit mecha-
nism. In a European Central Bank (ECB) work-
ing paper from 2009, Phoebus Anthanassiou
claimed that a country that exited the euro
would have to leave the EU as well. The Lisbon
Treaty allows for secession from the EU, so
withdrawal from the EU seems the only way to
get rid of the euro.
A solution to this legal problem could be an
exit from both the euro and the EU, followed
by immediate reentry into the EU. In the case
of a net contributor to the EU budget such as
Germany, other members seem unlikely to
quibble over readmission.
Another legal obstacle results from the pos-
sible redenomination of contracts in the wake
of an exit from the euro. A government may
redenominate euro contracts into the new cur-
rency (applying the legal principle of lex mon-
etae that the state determines its own curren-
cy). It may do so without problems if the
contracts were contracted in its territory or
under its law. But private and public bonds
issued in foreign countries would be ruled on
by foreign courts, who may decide that repay-
ment must be in euros. That would mean one-
time losses or profits for the involved parties.
However, it is hard to see that these court rul-
ings would constitute important disturbances
or insurmountable obstacles for a euro exit.
While the practical complexity of any real
world euro exit certainly justifies Wolfsons
prize, my recent survey of all the challenges
found that the problems of a euro exit have
been exaggerated. Introduction costs, wage
inflation, trade losses, political costs, legal
problems, procedural costs, problems with
disentangling of the ECB none are insur-
mountable. With reforms and careful negoti-
ation, these problems are all manageable. It is
unpalatable to Europes leaders, but exit from
the euro is a real option.
Philipp Bagus is the author of The Tragedy of the
Euro and an associate professor of economics at the
University Rey Juan Carlos in Madrid. His paper
Practical Steps to Withdraw from the Euro was pre-
sented at the European Parliament on 12 October.
Define discussion
Nick Clegg announced plans yes-
terday for a new law that will
allow protected conversations
between bosses and employees.
This is a small step in the right
direction. My firm advises
employers all the time who are
genuinely afraid of having frank
discussions with their staff
about retirement in case what
they say is used against them in
an employment tribunal claim
based on age discrimination.
However, the risk in trying to
legislate for protected discus-
sions is that the government
will do more harm than good.
The government is supposed to
be reducing red tape and simpli-
fying employment law. If the
concept of a protected discus-
sion turns out to be as difficult
to define as a protected disclo-
sure in the law relating to whis-
tle-blowing, nothing constructive
will have been achieved.
Ronnie Fox, principal, Fox
Lawyers
Speak your mind
The Forum is open for you to
take part. Got a sharp comment
on one of todays columns or
rapid response topics? Do you
have another subject relating to
business and the economy you
want to share your opinion on?
We want to hear your views.
Readers are invited to comment
on the web: cityam.com/forum;
by email: theforum@cityam.com;
and on Twitter: @cityamforum.
The best responses will be
reprinted in The Forum.
RAPID RESPONSES
PHILIP BAGUS
BY JAMIE WHYTE
The Forum
U
NIVERSITY appli-
cations are 12 per
cent down on last
year. Some are
blaming the govern-
ments lifting of the fee
cap from 3,375 to
9,000 a year. Sally Hunt,
general secretary of the
University and College Union, the trade union for lectur-
ers, claims that this shows the increase to have been a
disaster from the start.
She is wrong. When university education is sub-
sidised, some people study even when the education
they receive is worth less to them than it costs to pro-
vide. This means that the resources devoted to their
education have been wasted. By lifting the fee cap, the
government has reduced its subsidy for attending uni-
versity, reducing the amount of wasteful education. A
decline in applications is evidence the policy is work-
ing.
Many will object to my reasoning because they
believe education produces positive externalities: its
benefits accrue not only to the educated person but to
others as well. This means if students must pay the full
cost of their education, they will buy too little of it. We
get the optimal amount of education only when it is
subsidised. This is the standard view, but it is wrong.
Educating someone does indeed benefit others. For
example, an educated person is not only more efficient
himself but, because he is easier to communicate with,
quicker to adapt, more likely to solve problems and so
on, he also improves the efficiency of others who work
with him. Nor are the beneficial spillovers all commer-
cial. Educated people make good company and are less
likely to commit crimes, among other pleasant effects.
But it does not follow that subsidies are warranted.
The first reason is that the value of many such
spillovers redounds upon the educated person. For
example, if you make those you work with more effi-
cient, you can expect to be paid more. This internalises
the external benefit of your education and obviates the
need for a subsidy. Similarly, if you are good company,
you benefit along with those who like you. We like to
be liked. Again, no subsidy is required.
More importantly, however, the quick argument
from positive externalities to the need for subsidies
fails to take account of an important distinction drawn
by the economist James Buchanan. He showed that
certain actions that are socially desirable do not need
subsidies.
Oral hygiene is an example. Not all of the benefits of
oral hygiene accrue to the clean-mouthed person.
Everyone who sees his teeth and smells his breath gets
some upside. Nevertheless, the benefits that do accrue
to the orally clean suffice to get people to wash their
mouths and deliver the external benefits. A toothpaste
subsidy would thus be wasteful.
The same goes for education. Research shows that
its positive externalities come mainly from pretty basic
education and that people are willing to pay for this
privately. Subsidising university degrees so that we get
yet more graduates in post-modern hermeneutics or
whatever adds nothing to the external benefits that
private spending on education would deliver.
Of course, even if subsidies for university education
are wasteful, reducing them will look like a disaster to
their recipients, such as Sally Hunt and the members
of her union. But we should be no more swayed by
rent-seeking educators than we are by rent-seeking
farmers, green energy producers or bankers.
Jamie Whyte is a senior fellow of the Cobden
Centre and author of Crimes Against Logic
(McGraw Hill 2004).
Hooray for a decline in
university applications
Email: theforum@cityam.com
Twitter: @cityamforum
In association with
28
Wealth Management | Foreign Exchange
F
OREX conditions are choppy for euro
traders, with yesterdays moves indica-
tive of the jittery markets. Upon the
news that the Ecofin conference wont
take place, euro-dollar quickly dropped 0.6
per cent. Twitter feeds across the world
were swamped with presumptions that the
full emergency heads-of-government sum-
mit was also cancelled. Euro-dollar
rebounded, as it became clear that this was-
nt the case. This drop shows what political
failure today will do to the single currency
and expectations remain high that todays
solution will be significant. This is unlikely.
HOPE OVER EXPERIENCE
In the topsy-turvy world of the euro crisis,
hope springs eternal. Kathleen Brooks of
Forex.com says the markets are still count-
ing down to the conclusion of todays EU
summit and the announcement of a pack-
age of goodies from Europes high com-
mand. She notes that markets expect a
confirmation of the bank re-capitalisation
plan worth 108bn at least, Greek haircuts
up to 60 per cent of net asset value, an
enlargement of the EFSF to 1trillion and
agreement and harmony from all
Eurozone leaders and a commitment to
implement these changes quickly. Lets
hope Santa Claus is feeling generous.
Excepting yesterdays intraday panic,
euro-dollar has been trading around $1.39,
as market participants wait for todays
announcement. In fact, market commen-
tary is for the most part upbeat, says
Alparis George Tchetvertakov. He notes
that risk tolerance has been rising and
pushing emerging market currencies high-
er. However, Tchetvertakov warns: The
long wait for good news and the strong
expectation of a silver bullet solution may
result in investors being underwhelmed
once an announcement is made.
There are plenty of hurdles to jump.
From the July agreement, it took until earli-
er this month for the now redundant 21
per cent agreement on a Greek haircut to
be agreed, notes CMCs Michael Hewson.
Failed Italian reforms
are one of many tests
of Eurozone solidarity,
writes Philip Salter
EU summit optimism
W
HILE euro-dollar has taken all the spotlight
recently, the yen quietly made a fresh post-war
high against the dollar with dollar-yen drop-
ping into the 75.00s last week. The move has
elicited further cries of frustration from Japanese offi-
cials and some head scratching from speculators.
The downward move in dollar-yen is especially sur-
prising given the relatively upbeat recent economic
data from the US. In contrast to Europe, latest meas-
ures of US economic activity show that consumer
demand has picked up and the labour situation remains
stable. The much feared double-dip recession is
nowhere in sight. Yet this uptick in economic perform-
ance is not reflected in US bonds, as yields remain low,
weighing on the dollar-yen pair.
The main reason for this weakness in US rates is the
persistently dovish rhetoric from US monetary officials.
Last weekend, Fed vice chair Janet Yellen intimated
that she was open to the possibility of QE3, stating that:
Securities purchases across a wide spectrum of matu-
rities might become appropriate if evolving economic
conditions called for significantly greater monetary
accommodation. On Monday, New York Fed president
William Dudley echoed those sentiments stating that:
Its possible we can do another round of quantitative
easing. Such talk has clearly affected the currency
markets as traders fear further dilution of the dollar.
Japanese officials are becoming increasingly con-
cerned with this price action. Last Friday, finance minis-
ter Jun Azumi told reporters that the yens move was
an absolutely speculative movement and did not reflect
economic fundamentals at all. If this becomes exces-
sive, we must take decisive steps in the currency mar-
ket.
Although I sometimes joke that short of Japan
defaulting on her own sovereign bonds nothing will
stop yen strength, I think it would be dangerous to test
the mettle of the Japanese authorities this week. If dol-
lar-yen drops through the 75.00 level, intervention is
sure to follow. Despite its recent ineffectiveness, the
Japanese will have no choice but to step into the mar-
kets to protect their export sector. Thats why shorting
the pair at these levels is fraught with danger.
BET AGAINST
YEN STRENGTH
AT YOUR PERIL
BORIS SCHLOSSBERG
DIRECTOR OF CURRENCY RESEARCH, GFT
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Agreeing on 60 per cent wont be easy the
Institute of International Finance, which
represents 450 of the worlds largest institu-
tions, is pushing for 40 per cent. Brooks
says the stage is set for a clash between
lawmakers and bankers when it comes to
private sector involvement.
Chancellor Angela Merkel will also likely
present her 1trillion plan to increase the
EFSF to the Bundestag today. Brooks
ANALYSIS l Euro-dollar with Fibonacci lines
Nov2010
100.0%(1.4940)
76.4%(1.4451)
61.8%(1.4148)
38.2%(1.3559)
23.6%(1.3356)
0.0%(1.2867)
50.0%(1.3903)
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct 2011
1.5000
1.4500
1.4000
1.3500
1.3000

Lets face the music and dance Picture: REUTERS
29
FOREX ANALYST PICKS
FOREX STRATEGIST
JOEL KRUGER
My pick: Sell Aussie dollar-dollar
Expertise: Technical analysis
Average time frame of trades: 1 day to 1 week
FOREX STRATEGIST
ILYA SPIVAK
My pick: Stay short euro-dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
I sold euro-dollar at $1.4328 on 29 July, expecting the deepening EU
debt crisis to hurt the euro coupled with safe-haven buying of the US
dollar. I expect the 26 October EU summit to disappoint judging by
the lacklustre progress made in talks over the weekend. On the lat-
ter, I suspect US third quarter GDP data will reinforce the likelihood
that growth will slow on a yearly basis in 2011. I will remain short,
with a stop-loss triggered on a daily close above $1.3975.
We continue to classify the current market rally as corrective, with the
move still capped below the daily Ichimoku cloud. The market is now
near the bottom of the cloud, so we would expect to see a topside failure
to keep the downtrend intact and open a bearish resumption. While sell-
ing rallies is probably too aggressive, we recommend being slightly more
cautious and looking for confirmation on a break back below $1.0315.
Ultimately, only a sustained break back above the cloud would negate.
FOREX STRATEGIST
JOHN KICKLIGHTER
My pick: Short sterling-yen, Aussie dollar-dollar and dollar-Canadian dollar
Expertise: Fundamental analysis with risk management
Average time frame of trades: 1 day to 1 week
The markets are at a crossroads. Risk appetite is pushing higher; but
conviction is notably absent. Either risk trends will reverse or the
markets will capitulate with a bigger rally. For capitulation, I like dol-
lar-Canadian dollar closing below Ca$0.9970. Should sentiment fal-
ter, sterling-yen is worked into a tight range (with a floor at 1.21).
At the same time, Aussie dollar-dollar moving below $1.0400 would
have to be from a more definitive risk collapse.
I
N RECENT days, dollar weakness
has set in, allowing cable to recap-
ture the $1.6000 level. But the
gains to here seem to have come
up against some resistance and volatil-
ity meaning the rally to this six week
high could be coming to an end. Sellers
crept into cable expecting that this
trend would soon be finished. Capital
Spreads quotes $1.6014-$1.6016 for
sterling-dollar.
The euro is trading against the dol-
lar in a tight range, as its likely that a
lot of traders are looking toward the
EU summit later today. Looking at the
ten-minute chart, the pair is trading
within a bullish channel, which could
signal some upside. Look for $1.3955
and $1.3985 after that. Capital
Spreads quotes $1.3938-$1.3939 for
euro-dollar.
The Australian dollar has rallied
strongly in the past couple of weeks,
as fears about a hard landing in China
have slowly diminished. Todays CPI
figures could well see some of these
gains pared back especially if they
come in lower than expected.
Expectations are for the CPI to slip
back, which in turn could prompt a
slightly easier tone to monetary policy
going forward. CMC Markets quotes
Australian dollar-dollar at $1.04719-
$1.04726.
Dollar-Canadian dollar is at an
interesting point, with the dollar see-
ing support at parity. However, with
investors confident a deal will be
reached today to support the euro,
spread betters are contemplating
whether the greenback will lose
ground against the Loonie. Spreadex
quotes a spread of Ca$1.0011-
Ca$1.0015.
Since suggesting selling sterling-
yen at 122.0 last week, there have
been three opportunities to sell at
122.00, which resulted in a 120, 100
and 80 pip falls each time in just a
matter of hours. This may well contin-
ue to be a profitable play, but note the
higher lows of a rising wedge, which
may see it pop higher soon. Spread Co
offers a spread on sterling-yen of
121.22-121.30.
Philip Salter
THE TIPSTER
CABLE STRENGTH COULD
SNAP UNDER FRICTION wont last for long
explains: Since the plan cant go ahead
without German backing, this vote is
absolutely crucial. Carl Astorri of Coutts
thinks if the EFSF is increased in size
either by using leverage or accounting
tricks, such as those used in the US mort-
gage market prior to the financial crisis,
then any initial positive market response is
likely to prove short lived.
Businesses are starting to doubt the euro.
Polling from an Investec briefing shows
that 53 per cent of UK senior executives
expect the euro will be down against ster-
ling in the next twelve months, with only
3.3 per cent expecting it to be up (30 per
cent thought it would be around the same
level and 13.3 per cent said they had no
idea). While those admitting ignorance are
arguably closest to the truth, it is a bad sign
that business confidence is turning against
the single currency. Speaking at the event,
Sir Howard Davies, formerly of the Bank of
England and FSA said: If Greece can be iso-
lated from the rest of the Eurozone, the
implications for UK companies and the
wider economy should not be as damaging
as some are predicting. Without ring-fenc-
ing Italy and Spain, the results could be cat-
astrophic. Italy is justifiably a major con-
cern.
Many are calling on Germany to play
banker to the Eurozones troubled nations.
A glance at Italys mercurial Prime Minister
Silvio Berlusconi makes it easy to sympa-
thise with Angela Merkels hesitancy. The
Italian governments latest failure to
reform the pension system is telling and
these are testing times. Fabio Fois of
Barclays Capital Research notes that 17bn
of Italys debt is to be auctioned between
today and Friday, and much more worri-
some, Italy could become the scapegoat for
any underachievement of the EU meeting,
with the effect of placing further unpleas-
ant pressures on Italys shoulders. Rome
wasnt built in a day, but it wont take
much longer to go the ways of Greece.
The graph (opposite page) shows the key
Fibonacci targets and resistances. However,
as Brooks says, yesterdays price action illus-
trates how difficult it is to trade in these
markets. Better to wait until success, or
more likely failure, is confirmed. This is a
slow motion currency crash.
Wealth Management | Foreign Exchange
Bearish Aussie avoided
by pandering to China
Australian dollar
strength has relied
on anticipation of a
Chinese soft landing,
writes Craig Drake
T
HE Australian dollar has been trad-
ing around its six-week high this
week, receiving a boost from
encouraging data coming out of
China a country upon which its econo-
my relies on heavily. At the same time, it
has benefited from a strong commodity
market. The Aussie dollar was trending
around the $1.0400 area yesterday, but
according to Stephen Gallo, head of mar-
ket analysis for Schneider FX, any contin-
uation of this strong run is dependent
on a Chinese soft landing: Ultimately,
this means less chance of aggressive
tightening, says Gallo. This is bullish
for base metals, its bullish for risk
appetite and therefore it is supportive of
a higher Australian dollar.
CHINESE SOFT LANDING
Though it may seem slightly odd to
spend so much time focusing on the
Chinese economy, but then trade the
Australian dollar, it does make sense. As
a closed currency, the Chinese renminbi
does not react to the perceived health of
the Chinese economy as it would in nor-
mal circumstances. But Australia does
most of its trading with China, rather
than the US. As a result, the Australian
dollar acts as a good proxy for forex
traders wishing to take a position on
China. While this may make Aussies
squeal during a Chinese downturn, they
are currently enjoying the benefits of
Chinese demand for Australian com-
modities. Octobers HSBC purchasing
managers index report released on
Monday showed that Chinese manufac-
turing activity had hit a five-month
high, contributing to the dollar-
Australian dollar highs. In China, there
are many domestic issues that the cen-
tral government needs to deal with, but
these issues are not the same kind of
T
HE first step in trading a breakout is
identifying support and resistance levels.
These levels are identified by looking at
the high and low of market price action
over a specific time frame; intraday, daily,
weekly, monthly or annually. A breakout
occurs when the price of a currency moves
above support or below resistance. A selling
opportunity emerges on price breaks below
support. A buying opportunity emerges when
the price level breaks above resistance. The
breakout of these levels may begin to establish
a trend in the direction of the breakout. The
goal is to enter the trade when the market
breaks out and to profit from the new market
trend.
For example, lets assume that euro-dollar
traded in a channel last week, oscillating
between $1.3650 and $1.3710. A channel is
formed by two parallel trend lines that con-
nect the highs and lows of a price pattern. In
this case, the low of the range, $1.3650, is
support and the high of the range, $1.3710, is
resistance. Once the support and resistance
levels are established, you can buy the market
on a break above $1.3710 or sell the market
on a break of $1.3650.
The next step is the placement of a stop
loss order. Breakouts often fail this is
known as a false breakout. False breakouts
can create whipsaw price action and rapid
reversal in price direction. Placing a tight stop
close to the level of the breakout will help
avoid a substantial trading loss should the
breakout prove false. Using a breakout strate-
gy for placement of stops is an excellent
money management tool and helps preserve
capital until a sustainable trend emerges.
Once the trend starts, there are a number
of technical tools that can be used to set a
profit target and exit point for the trade. The
most common tool to stay with the trend is
to use a moving average that helps identify
the strength of the trend along with the
placement of a trailing stop to protect a per-
centage of profit.
THREE STEPS
FOR TRADING
A BREAKOUT
NICOLAS SHAMTANIS
DEALING ROOM MANAGER, EASY-FOREX

| |

|

Aussie dollar bears may predict a Chinese slump Picture: ALAMY
structural issues facing the US and cer-
tain European countries at present, says
Christina Chung, senior portfolio man-
ager for the Allianz RCM China fund.
Chung says that China is not burdened
with external debt, has large foreign
exchange reserves, high domestic sav-
ings, a controlled currency and largely
closed capital accounts. All of which sug-
gest that there will be no forced currency
devaluation by hedge funds or capital
flight by domestic citizens which would
typically drive a downward spiral at
times of crisis.
CLOSER TO HOME
Though the Aussie dollar is reliant on
Chinese strength, it is of course also
influenced by its domestic economy.
Climbs against the dollar and euro have
been kept in check by the anticipation of
a possible interest rate cut by the Reserve
Bank of Australia (RBA) after third quar-
ter producer prices under-shot expecta-
tions, rising only 0.6 per cent.
Traders should look to continued long
term strengthening of the Aussie dollar
but should be careful not to be caught
on the wrong side of an RBA rate change.
AU$
2011 3Oct 10Oct 17Oct 24Oct
1.39
1.38
1.37
1.36
1.35
1.34
ANALYSIS l Euro-Australian dollar
WINTER TYRE SERVICES LAUNCHED
After two bad winters, Citron, Peugeot and Skoda have each
announced a winter tyre service. Winter tyres provide greater grip
in rain, slush, ice and snow and can reduce stopping distance in
such conditions by 20 per cent. A swap and store service means
your summer tyres will be looked after too in the cold months.
CAR TALK BY RYAN BORROFF
VETTELS INFINITI GOES TO PRODUCTION
The Infiniti FX Vettel supercar SUV which has been designed and
engineered with the help of F1 World Champion Sebastian Vettel
is to make production. The Vettel edition is based on a standard
FX50 S but adds carbon fibre to reduce weight and has an upgrad-
ed 5.0-litre V8 capable of 414bhp and 186mph. Prices TBD.
ORDER NOW: VWS NEW BEETLE
The order books have opened for VWs new Beetle. Two engines
will be available at launch: a 1.2-litre TSI 105 PS (47.9mpg,
137g/km CO2) and a 1.4-litre 160 PS TSI (42.8mpg, 153g/km CO2).
Three others a 1.6-litre diesel, 2.0-litre diesel and 2.0-litre petrol
will join later in 2012. Prices start from 16,490.
A high-speed slice of pure heaven
T
HE Porsche Im driving has no air
conditioning and no audio system.
The last time I drove a car without
HVAC and an audio system was in
1987, and it was a Mini built 15 years ear-
lier. It didnt usually manage to go very
far and certainly not anywhere fast.
Which isnt the case with the Porsche
Cayman R Im sitting in. Ive been virtual-
ly sleeping in it. My backside is taking on
the form of its sports bucket seat. You
see, I havent really wanted to get out of
it. Ive found the most ludicrous excuses
to drive it. Ive driven to Saffron Walden
for dinner, to Peterborough for a newspa-
per and to Cambridge for a coffee. I even
decided to travel 40 miles to fill up on
fuel. And all from my house in North
London.
The car Ive been driving is painted in a
kind of semi-luminous lime green colour.
On the side are the least understated let-
tering decals possible. They spell out
Porsche just in case anyone hasnt
noticed. The only way it could attract
more attention would be if Scarlett
Johansson was topless in the passenger
seat next to me yelling at gawping
bystanders.
Which is unnecessary because this car
is so good it was always going to get
talked about. Sure, its shape is imperfect.
Its domed roof is a little too tall and its
gills too prominent to be considered a
truly handsome beast. But beast it is
just look at the figures. Porsche has
reduced the weight, increased the horse-
power and improved the agility and han-
dling to create the Cayman R. It weighs
55kg less than the regular Cayman S.
There is no air conditioning, no audio
(though they can be ordered as options),
and it has a bunch of lightweight parts
including slimmer, lighter wheels, and
seats that weigh less. The doors are made
of alloy and there are no door handles,
just some fetching red door straps.
Together these weight savings mean the
Cayman R is more agile than the already
very nimble Cayman S. Also its more
powerful. Its 3.5-litre flat six engine and
what a noise it makes is now 330hp, up
from 320hp. Add to that a 20mm lower
ride and a remapped engine plus a
bunch of other important tweaks too
dull to list unless youre absolutely into
the minutia of petrolhead geekery and
you have one very special car.
Porsches Cayman R
is such a treat to drive,
our writer has trouble
leaving the wheel
THE VERDICT:
DESIGN hhhhi
PERFORMANCE hhhhh
PRACTICALITY hhhii
VALUE FOR MONEY hhhhi
THE FACTS: PORSCHE
CAYMAN R
PRICE: 51,728
0-62MPH: 5.0secs
TOP SPEED: 175mph
CO2 G/KM: 221g/km
MPG COMBINED: 29.1mpg
The cars performance hits something
of a sweet spot for me too. This manual
Cayman R has a 0-62mph acceleration
time of 5.0 seconds, the steering is utterly
direct and the car feels perfectly bal-
anced. Its eminently chuckable thanks
to so much grip and though Porsches sta-
bility management system kicks in in the
end, it doesnt feel like its snatching
your enjoyment away with it first.
In short, the Cayman R is brilliant. I
cannot work out why anyone would ever
buy a 911 when the Cayman R is this
good, and frankly easier to drive. Im
wondering if I would ever need a 911. And
the answer is no. The Porsche Cayman R
is everything I need. Just please, not in
lime.
The lime colour wont be to everyones taste, but the car is superb.
Lifestyle | Motoring
WORDS BY
RYAN BORROFF
31
1. Rapha jeans, 150, www.rapha.cc
2. Surface Pertex Jacket, 49.99,
www.evanscycles.com
3. Dromarti Corio gloves, 112.97 includes
P&P, www.dromarti.com
4. Brooks Islington rucksack, 249.99,
www.evanscycles.com
5. Dromarti Classic Sportivo shoes,
159.67, www.dromarti.com
T
HERE used to be three choices
when it came to City bike-wear:
highlighter neon, racing Lycra or
crumpled suit with sweat patches.
But bike fashion has evolved. And with
many more of us cycling to work, thanks
to Boris bikes and increasing take up of
corporate bike schemes, theres demand
for kit that actually looks good.
The smart bikers range of sartorial
options now includes breathable jeans,
quaint stylish jackets and clothes you
wont be embarrassed to wear as you
stroll into the office. Not only will you
look fetching, but youll be sweat-free
and comfortable as well. Guy Andrews,
editorial director of the quarterly cycling
magazine Rouleur, says: When I started
30 years ago, it was all woollen shorts,
and leather hats that looked like a bunch
of bananas on your head. But now, the
technology and fabrics are amazing and
have maximised the combination of com-
fort and style.
Brands such as Rapha take the technol-
ogy of bike fabrics and craft them for the
stylish man. Its pair of breathable jeans is
now a cycling cult classic and the compa-
nys best-selling item. Dromatis shoes
look old school because they are made
with beautiful Italian leather, but their
soles are packed with new technology (a
2-point SPD fixing system allows the
wearer to click into the pedal). Dromati
also offers a gentlemanly twist on the
cyclists glove. And then theres Surface,
which makes urban-wear for the grittier
cyclist, and Dashing Tweed who caters to
the more genteel man with tweed that is
woven with practical reflective strips.
Here are the items that will help you ride
in style.
Lifestyle | Fashion
Helena Lee discovers
clothes that are both
fashionable and
road-worthy for the
gentleman cyclist
How to look good cycling
HOW TO GET
DRESSED
Q.
Ive got a million invitations
piling up on my mantelpiece!
What are the trends I should
pay attention to for this seasons party
wardrobe?
A.
Flesh-baring is strictly reserved
for the summer; stay chic (and
warm) by covering up. Long fitted
sleeves and higher necklines are given a
glamorous update with luxe fabrics,
embellishment and winter floral prints
Project D has a fabulous selection in flat-
tering cuts. For maximum impact, opt for
the new ankle-skimming lengths, which
are easier to move in than a full length
gown, but just as glamorous and just right
to flash your shoes. Ginger & Smarts teal
dress is an easy option. For modern ele-
gance and comfort, try a cut-out style
supporting the front of your foot for a
long night rather than the traditional toe-
lacerating sandal. One-shouldered dresses
are flattering and continue their modern
classic status by emphasising a fine collar
bone and shoulders rather than obvious
cleavage. Alternatively, channel the Great
Gatsby with a 1920s aesthetic shorter
hemlines but looser fitting shift shapes
adorned with delicate sequins and bead-
ing. Rachel Gilberts party dresses are
high-end embellishment without the cou-
ture price tag.
For added warmth try a mohair cape
a more bohemian alternative to fur. If you
have the height, then make an entrance in
an evening jumpsuit. Make sure you define
your figure in a tailored
version to keep your
silhouette sleek.
Finish the look with
a sparkling over-
sized clutch.
Ditch the deli-
cate pearls and
diamond sets by
drawing atten-
tion to one strong
accessory. If in
doubt, an embel-
lished cuff rather
than a necklace
will keep your
neckline subtle
and more com-
fortable than
heavy earrings.
For a selection of
options, visit mem-
bers fashion bou-
tique, ROUS
ILAND at 11-12
Dover Street. www.rousiland.com
Q A
&
Clare Rous &
Kara Iland
FOUNDERS OF ROUS
ILAND MEMBERS
BOUTIQUE
1
GET THE LOOK
2
3
4
5
Far left: Bespoke tweed cycle suit made by Henry Poole (15 Savile Row, 020 7734 5985) with Lumatwill McDougall Check
(85/m. Available from DashingTweeds.co.uk). Suit requires 3.5m of cloth. Bespoke tailoring ranges from 1,500 to 3,500.
Centre: Reflective tank top, 180. Cycling plus fours in the Yellow Peak cloth: available as a bespoke item.
Far right: Lumatwill cycle jacket: 850. All available from DashingTweeds.co.uk.
FIVE MINUTES WITH JONATHAN SAUNDERS | BY HELENA LEE
Jonathan Saunders, the Scottish fashion
designer, and Grey Goose vodka have teamed
up to help raise money for the Elton John
AIDS foundation. The designer, who has pre-
viously worked with Alexander McQueen,
Christian Lacroix and Phoebe Philo at Chloe,
has created outfits for staff at the Grey Goose
Winter Ball, which is on Saturday. Saunders
has also donated a dress that will be on auc-
tion that night, and created a pre-dinner cock-
tail. In previous years, Grey Goose has
collaborated with Sam Taylor-Wood, Dinos
Chapman, Patrick Cox and Elizabeth Hurley.
Why did you decide to get involved in the
Grey Goose Winter Ball?
It is such a renowned event in the London cal-
endar and I am very excited to be able to be
involved in helping raise awareness and much
needed funds for Eltons AIDS foundation.
What is your personal style?
Its a mixture of both the classic and the exces-
sive, saturating even the most simple silhou-
ettes with print and colour to create something
truly unique. The Blue Print cocktail that I have
designed with the Grey Goose mixologists defi-
nitely encapsulates this passion for print and
colour, which was key to my autumn/winter 11
collection.
What has inspired your service outfit designs?
My autumn/winter 11 collection. I applied this
seasons signature bird print to the 1940s sil-
houette that was on the runway in February.
Who inspires you?
I take inspiration from a range of sources
including art, books, colour and film, but my
dear friend and managing director Yvie always
inspires me with her creativity and advice.
Are you pleased with the reaction
to your spring/summer 12
collection at London Fashion Week?
Im overwhelmed and extremely
pleased. We actually just took the
range to LA with the British
Fashion Council last week and had a
great response over there. The
feedback only makes me strive to
create something new, and for each
season to outdo the last.
Do you like the London fashion scene?
Its ever growing and changing. Thats
why I decided to return to showing
my collection here after a few a sea-
sons in New York. London still feels
young and fresh. People are much
more willing to take risks or explore
their own style.
What brands would you love to
collaborate with?
Ive just launched a collaboration with
Smythson, which was an amazing experi-
ence. But its tough to name just one other
label that Id like to work with. Stay tuned
and you might see it over the coming sea-
sons.
Which places in London are exciting you
at the moment?
My studio is in East London and Im still
excited by this area. It has changed so much
in the time I have been here and I love the
cultural richness found in the food, streets
and stores.
The Grey Goose Winter Ball is on 29 October.
Tickets available to buy from the Elton John
AIDS Foundation on 020 7603 9996.
T
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FROZEN PLANET
BBC1, 9PM
David Attenborough travels to the
Arctic and Antarctic to explore the
wildernesses at the Earths poles,
investigating the wildlife found there.
MIDSOMER MURDERS
ITV1, 8PM
Barnaby and Jones investigate the
cloistered world of Midsomer Priory
when a nun is found strangled. Neil
Dudgeon stars.
DANGEROUS DRIVERS SCHOOL
CHANNEL5, 8PM
Two fans of fast driving receive a lesson
in slowing down, while a grandmother
who struggles to get above 15mph tries
to overcome her problems.
BBC1
SKY SPORTS 1
7pmSky Sports News at Seven
7.30pmSoccer Special 10.30pm
Youre on Sky Sports! 11.30pm
Footballs Greatest 12amFIFA
Futbol Mundial 12.30amCarling
Cup Football 2amSpanish
Football 4.05amFIFA Futbol
Mundial 4.35am-6amCarling Cup
Football
SKY SPORTS 2
7pmFIFA Futbol Mundial 7.30pm
Live Carling Cup Football 10pm
Trans World Sport 11pmNFL:
Total Access 12amTotal Rugby
12.30am-1.30amTrans World
Sport
SKY SPORTS 3
7pmPGA EuroPro Tour Golf
8.55pmLive Spanish Football
11pmAsian Tour Golf Show12am
Inside the PGA Tour 12.30am
European Tour Weekly 1am
Ultimate Challenge MMA 2.30am
PGA EuroPro Tour Golf
4.30am-5.30amAsian Tour Golf
Show
BRITISH EUROSPORT
3pmLive WTA Tennis 8.50pm
Wednesday Selection 9.10pm
Equestrian 10.10pmRiders Club
10.15pmEuropean Tour Golf
10.45pmGolf Club 10.50pm
Yacht Club 11pmSport Traveller
11.15pmOlympic Magazine
11.45pm-12.45amWTA Tennis
ESPN
7pmSerie A Rivals 7.30pm
ESPN Kicks: Extra 7.45pmLive
Serie A 9.45pmPremier League
10.15pmUFC 11.15pmESPN
Kicks: Extra 11.30pmESPN Press
Pass 12amWorld Series of Poker
1amLive College Football 4am
DTM Review Show5am-6am
Formula 3 Euroseries Review
SKY LIVING
7pmCriminal Minds 8pmThe
Secret Circle 9pmPushy & Proud
10pmSupernatural 11pmBones
12amCriminal Minds 1amCSI:
Crime Scene Investigation
2.40amMaury 3.30amBones
4.20amNothing to Declare UK
5.10am-6amJerry Springer
BBC THREE
7pmHotter Than My Daughter
7.30pmSnog, Marry, Avoid? 8pm
The Worlds Strictest Parents
9pmThe Fades 10pmFILM
Severance 2006. 11.30pmFamily
Guy 12.15amAmerican Dad! 1am
The Fades 2amHotter Than My
Daughter 2.30amSnog, Marry,
Avoid? 3amWorlds Strictest
Parents 4amSmall Teen, Bigger
World 4.55am-5.25amThe Real
Hustle: New Recruits
E4
7pmHollyoaks 7.30pmHow I Met
Your Mother 8pmFILMX-Men
2000. 10pmFILMTeam America:
World Police 2004. 12amThe
Big Bang Theory 1amScrubs
2amHow I Met Your Mother
2.20amUgly Betty 3.05amRules
of Engagement 3.25amDesperate
Housewives 4.10am-6am
Switched
HISTORY
7pmAmerica: The Story of the US
8pmAx Men 9pmSwamp People
10pmMounted in Alaska 11pm
Seven Deadly Sins 12amSwamp
People 1amAx Men 2amSeven
Deadly Sins 3amAmerica: The
Story of the US 4amPawn Stars
5am-6amAncient Discoveries
DISCOVERY
7pmMythbusters 8pmFactory
Line 9pmAlone in the Wild 10pm
Top 10 Predators 11pmWheeler
Dealers 12amBear Grylls: Born
Survivor 1amAlone in the Wild
2amTop 10 Predators 3am
Deadliest Catch 3.50amMutant
Planet 4.40amHow the Universe
Works 5.30am-6amDestroyed in
Seconds
DISCOVERY HOME &
HEALTH
7pmBirth Days 8pmIm
Pregnant and a Nudist 8.30pm
Im Pregnant and Have Cancer
9pmUntold Stories of the ER. A
patient is diagnosed with
pneumonia. 10pmA&E 11pm
Hospital Sydney 12amUntold
Stories of the ER 1amA&E 2am
Hospital Sydney 3amIm
Pregnant and a Nudist 3.30am
Im Pregnant and Have Cancer
4amA Baby Story 5am-6am
Quint-Essential
SKY1
8pmThe Middle 8.30pmModern
Family 9pmTrollied. Comedy set
in a budget supermarket. 10pm
FILMMichael Jacksons This Is It
2009. 12.10amStrike Back:
Project Dawn 1.10amRoad Wars
2amUK Border Force 2.50am
Lost 4.20amA Different Breed
5.10am-6amTop Design
BBC2 ITV1 CHANNEL4 CHANNEL5
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TVPICK
6pmBBC News 6.30pmBBC
London News 7pmThe One Show
7.30pmWaterloo Road: BBC News:
Regional News 8.30pmThe
Impressions Show with Culshaw
and Stephenson:
9pmCHOICE Frozen Planet
10pmBBC News
10.25pmRegional News
10.35pmThe National Lottery
Wednesday Night Draws
10.45pmAsk Rhod Gilbert
11.20pmThe League Cup Show:
National Lottery Update 12.30am
Weatherview12.35amSign Zone:
See Hear 1.05amWatchdog
2.05amCountry Tracks 3amMade
In Britain 4am-6amBBC News
6pmEggheads:
6.30pmStrictly Come Dancing
It Takes Two:
7pmCelebrity Antiques Road
Trip: Dragons Dens Theo
Paphitis and Deborah Meaden
hunt for antiques.
8pmGreat British Food
Revival:
9pmSecret Pakistan:
10pmRab C Nesbitt:
10.30pmNewsnight: Weather
11.20pmJames Mays Man
Lab:
12.20amDamages
1amBBC News 4am-6amBBC
Learning Zone
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale:
7.30pmCoronation Street:
8pmCHOICE Midsomer
Murders
10pmITV News at Ten
10.30pmLondon News
10.35pmCops with Cameras:
11.35pmLadette to Lady:
Australia:
12.30amThe Zone; ITV News
Headlines
2.35amFILMThe War Wagon:
Western, starring John Wayne and
Kirk Douglas. 1967. 4.15am-5.30am
ITV Nightscreen
6pmThe Simpsons 6.30pm
Hollyoaks 6.55pmHippo: Wild
Feast Live 7pmChannel 4 News
7.55pmChannel 4 Presents
Jonnie Peacock Hit the Ground
Running 8pmKirsties Handmade
Britain: 9pmGrand Designs 10pm
Fresh Meat 10.50pmShameless
11.55pmRandom Acts 12amMusic
on 4: On Track 12.30amMusic on
4: Album Chart Show: Spotlight
12.45amMusic on 4: Live and Lost:
Chipmunk 1.15amMusic on 4:
4Play: Lisa Hannigan 1.25amMusic
on 4: 4Play: Sam Gray 1.40am
FILMMean Creek 2004. 3.15am
Accidentally on Purpose 3.40am
Without a Trace 4.30amHill Street
Blues 5.25am-6.10amCountdown
6pmHome and Away
6.25pmOK! TV
7pm5 News at 7
7.30pmNew Highland
Emergency: 5 News Update
8pmCHOICE Dangerous
Drivers School: 5 News at 9
9pmPaul Mertons Adventures
10pmBig Brother
11pmBanged Up Abroad
12amPoker: The Big Game
12.55amSuperCasino
4amThe Family Recipe 4.05am
Michaelas Wild Challenge
4.55amAnimal Rescue Squad
5.10amHouse Doctor
5.35am-6amHouse Doctor
1 2 3 4 5
6
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10 11 12 13
14 15
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17 23
21 8 14
12 21
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10
20
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9
4
11
28
35
29
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Fill the grid so that each block
adds up to the total in the box
above or to the left of it.
You can only use the digits 1-9
and you must not use the
same digit twice in a block.
The same digit may occur
more than once in a row or
column, but it must be in a
separate block.
COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
SUDOKU
Place the numbers from 1 to 9 in each empty cell so that each
row, each column and each 3x3 block contains all the numbers
from 1 to 9 to solve this tricky Sudoku puzzle.
SUDOKU
QUICK CROSSWORD
ACROSS
1 Of-colour (5)
3 State in north-
eastern India (5)
7 Fit for cultivation (6)
9 Elaborate song for
a solo voice (4)
10 Excessively
sentimental tale (4-6)
14 Mineral (3)
16 Faint star of
enormous
density (5,5)
19 Being in a tense
state (4)
20 Fortress (6)
22 Leisurely walk (5)
23 Swamped with
water (5)
DOWN
1 Lacking in quantity (6)
2 Present a knighthood (3)
4 Cut of meat from the
upper part of the leg (5)
5 Intend to express
or convey (4)
6 Veneration (9)
8 Cause to feel self-
conscious (5)
11 Speck (3)
12 Flushed (3)
13 Accurate (5)
15 Again but in a new
or diferent way (6)
17 Short descriptive
poem of rural life (5)
18 Catherine ___
Jones, actress (4)
21 Female pig (3)
N
A
C
I
N H
R
E
D
4
4

4
4

F L O R A T O U C H
R S C B O
E V I C T S S W A B
E E L I C I T
S C R I B E U N I T
I N N R A
A C N E D E E P E N
H O R D E L N
C A R T R E L A T E
S I L C R
P E N A L F I E R Y
9 7 8 4 6 6 3 1
4 2 7 1 3 8 7 9
8 9 3 3 5 1 2
6 9 2 3 8 9
2 4 7 4 9 3 1
1 6 9 8 2 5 3 7 4
3 5 2 1 8 9 6
8 7 6 9 6 2
1 7 6 9 8 1 5
2 1 4 6 7 3 8 9
5 8 9 1 5 2 4 3
4
4
4
4
4
4
4
4
4
WORDWHEEL
The nine-letter word was
PERPETUAL
Lifestyle | TV&Games
Sport 34 CITYA.M. 26 OCTOBER 2011
L
UKE DONALD summed it up per-
fectly after his scintillating final
round swept him to the Disney
Classic, and first place in the
PGA Tour money list, on Sunday.
He called it one of the most satisfy-
ing wins of his career, and he has
every reason to feel delighted with
what he has achieved this season on
both sides of the Atlantic.
Dividing your schedule between
the PGA and European Tours of
course limits the number of events
you can play in each, so its a great
accomplishment to win either title,
and would be magnificent to do both
simultaneously.
With such a big lead in the
European Tour money list he looks
certain to complete the double he
might even end up further ahead
than he is now which is extraordi-
nary in this day and age, when you
consider the amount of competition
on both circuits.
Equally remarkable was the way in
which he won at the weekend need-
ing to win the tournament to over-
haul money list leader Webb Simpson
and trailing overnight, he swept his
rivals aside with six successive birdies
on the back nine.
DOMINANCE
I watched it unfold on television, and
I knew one thing for sure: that he was
not going to make a mistake or drop a
shot.
Donalds consistency is remark-
able, and his dominance of both tours
is all down to his quality; there has
certainly been no shortage of able
challengers.
Magnificent though it is to be No1
in the world, Europe and the US all at
once, it will not silence those who
criticise the Englishmans failure, as
yet, to win a Major. Until he wins one
that will be the case and there is
nothing you can do about that; the
Majors are another level.
And taking absolutely nothing
away from the wonderful achieve-
ment of winning both tours, I would
stop short of calling Donald the first
to achieve it.
Tiger Woods topped both lists sever-
al times but did not officially win the
European Tour because he had not
played the minimum number of
events.
Another man enjoying a fine week-
end was Sergio Garcia, who romped
to his first victory for three years by a
phenomenal 11 shots at the Castello
Masters.
Its important to remember that
this was the Spaniards home course:
the one he was brought up on, played
all of his golf on and where his father
was a pro. But to bring out that level
of play was still staggering; he played
beautifully. While his form has
always been good, his putting has let
him down in recent times, but hes
now holing some of them again.
I definitely expect Garcia to go
from strength to strength and in fact
I fancy him to have a great chance at
Valderrama this week, another course
he knows very well.
Its great to see him back lets
hope he can challenge Luke.
Cool hand Lukes double triumph would cap an
extraordinary year, and Sergio is back on the rise
GOLF COMMENT
SAM TORRANCE
ENGLAND captain Alastair Cook
admitted he was shell-shocked after
an almighty batting collapse saw
India complete a 5-0 series white-
wash with a 95-run victory in
Kolkata.
After winning the toss and opting
to field first, Englands bowlers
repaid Cooks faith by restricting the
hosts to 162-5, but a late onslaught
led by MS Dhoni, who finished
unbeaten on 75 from 69 balls, meant
India posted a competitive total of
271-8.
A century opening stand between
Cook and Craig Kieswetter meant
England looked on course to seal a
consolation victory, but the skippers
dismissal for 60 triggered a stagger-
ing demise from 129-0 to 176 all out
in the space of just 16 overs.
Its a bit of a shock, that, said
Cook. We were in with a shout at
120-odd for nought and just got
blown away at the end. It was very
disappointing.
We know you can lose wickets in
clusters and we seem to have lost 10
there in a cluster.
We set up the game beautifully to
go on and win that but credit to the
way they bowled and we played a
couple of poor shots. It was a bit of a
disappointing end and a bit of a com-
mon theme.
Of Englands last eight batsmen
only Samit Patel and Graeme Swann
made it to double figures, with a
middle order of Jonathan Trott, Ian
Bell, Ravi Bopara and Johnny
Bairstow contributing just 13 runs
between them.
When you lose 10 for 50 youre
not going to win anything, added
Cook. We havent batted well
enough on this tour, and that really
just caps it off.
We bowled really well. We know
how hard it is against Dhoni, and
credit to him again for getting them
to probably a slightly above-par total.
But I thought the way Steven
Finn bowled especially was outstand-
ing again, as he has been on this
tour. Then at 130 for nought, their
total almost looked quite a long way
short.
But our batting hasnt been good
enough, and thats why weve lost
these games.
England beat India 3-0 in the same
format just last month. But the
memory of that apparent superiority
has fast become faint and distant.
Cook said: Possibly back in the
summer, if things were going well at
130 for nought wed have probably
walked that. But when the confi-
dence isnt great and you lose a cou-
ple of quick wickets its hard to stem
their flow especially when their
confidence is so high.
There was certainly no throwing
in of the towel, the way we handled
ourselves and kept trying.
Unfortunately, our skills werent
good enough out there.
Whitewashed: India
humiliate England
BY JAMES GOLDMAN
CRICKET
Cooks departure
for 60 triggered
Englands collapse
Picture: GETTY
MANCHESTER CITY last night threw
the book at Carlos Tevez, fining the
striker 800,000 after finding him
guilty of refusing to play in last
months match against Bayern
Munich.
City chiefs concluded a month of
investigations into the unsettled
Argentinians conduct in the
Champions League fixture by finding
him guilty of five separate breaches of
contract.
The Premier Leagues runaway lead-
ers fined Tevez (below) four weeks
wages equivalent to around
800,000 and banned him for two
weeks, a suspension deemed to have
already been served.
Tevez, however, was last night
thought to be considering legal action
of his own with City manager Roberto
Mancini, who could yet be
sued for defamation of
character, his target.
City, though, maintain
the 27-year-old had
breached an obligation
to participate in any
matches in which the play-
er is selected to play for the
club when directed by a
club official.
He was also found guilty
of failing in his obligations
as a player; failing to obey
instructions from club
officials; and two charges
relating to bringing the
game or club into disre-
pute.
Tevez has the right to
appeal to the clubs board
and is expected to do so. If
he were to fail, he has the
option of taking his case to
the Premier League.
Regardless, the development
appears to be another nail in the cof-
fin of his City career.
It will be seen as a victory for City
manager Roberto Mancini, who adopt-
ed a hard line straight after the inci-
dent, announcing in post-match
interviews that Tevez was finished
at the club. The row flared up during
the second half of the European
match in Germany on 27 September,
when Mancini looked to bring on sub-
stitute Tevez in a bid to overturn his
teams deficit.
Tevez appeared to refuse and imme-
diately afterwards said in Spanish: I
didnt feel right to play so I didnt.
The following day he insisted he had
not refused to play, while his adviser
Kia Joorabchian subsequently said
Tevez had been mistranslated initially.
The former Manchester United play-
er agitated for a move over the sum-
mer but a transfer failed to
materialise, with City asking 40m for
a player who scored 53 goals for them
in two seasons.
Uncertainty over his future con-
tributed to Citys decision to spend
35m on his Argentina team-mate
Sergio Aguero in August, and the
new mans incredible start he
has scored nine goals in eight
games helped keep Tevez
sidelined until the Bayern
incident.
Aguero scored the
third goal on Sunday
as City crushed
champions, bitter
rivals and nearest
c h a l l e n g e r s
Ma n c h e s t e r
United 6-1 at Old
Trafford to
increase their
lead at the top of
the table to five
points.
BY FRANK DALLERES
FOOTBALL
City hit Tevez with

800,000 fine
and find him guilty
of refusing to play
Sport
fulhamfc.com/hospitality 020 8336 7555
hospitality@fulhamfc.com. Matchday Experience

Results
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email sport@cityam.com
Arshavins leveller came six minutes after Bolton had taken the lead Picture: GETTY
ARSENAL manager Arsene Wenger
believes Park Chu-Young is ready to
make a significant impact in the
Premier League after the Korea inter-
national struck his first goal for the
club in last nights Carling Cup win
over Bolton.
The Trotters stunned an impressive
crowd of over 56,000 at Emirates
Stadium with a goal two minutes
after half-time from their former
Arsenal midfielder Fabrice Muamba.
But Andrey Arshavin equalised
almost immediately and Park, a 6m
summer arrival from Monaco,
ensured Arsenals place in the quar-
ter finals soon after with a fabulous
curling finish.
For me I am very pleased with his
performance, beamed Wenger after-
wards. He had a very, very good
game. He has shown intelligence in
his link play with others. The quality
of his movement was exceptional and
his finishing is absolutely fantastic.
He has shown tonight that he is a
very, very good player. He is ready to
play in league games, yes.
Arshavin, meanwhile, has endured
a difficult start to the season but the
Russian demonstrated his worth last
night in a more central role and
capped an uplifting performance
with a well taken goal.
Wenger said: Andrey is a player
who of course takes a bit gamble on
nearly every ball he plays.
Sometimes he loses balls he
shouldnt lose but when you look at
the end of the game he has always
had a big impact. Tonight he scored
and made an assist.
Thomas Vermaelen, making his
first appearance since August, lasted
84 minutes on his comeback before
being withdrawn with a tight calf as a
precaution ahead of Saturdays
London derby against Chelsea.
Eastern promise
offered by Park
and Arshavin
MANCHESTER UNITED striker
Michael Owen admitted his side were
still coming to terms with the 6-1
mauling they suffered at the hands of
Manchester City on Sunday after he
contributed to the first step on the
road to recovery with a goal in last
nights Carling Cup win at Aldershot.
In front of a record 7,044 crowd at
The Recreation Ground, Dimitar
Berbatov opened the scoring in the
15th minute with his first goal of the
season and the Bulgarian laid on the
second for Owen shortly before the
break.
Sir Alex Ferguson introduced
youngsters Michael Keane, Paul Pogba
and Ravel Morrison after the interval,
but it was the more experienced Luis
Antonio Valencia who completed the
scoring with his first goal since last
seasons Champions League semi-
final second leg victory over Schalke.
Owen (inset), meanwhile,
who wasnt involved against
City at the weekend admit-
ted it was important the
second string ensured a
return to winning ways
for United so soon after
Sundays humiliation.
We were a little bit
under pressure with the
result at the weekend, he
said. Although no-one here start-
ed at the weekend you still have
Manchester Uniteds reputation to
look after. So whatever side was put
out we wanted to bounce back
and thankfully we got the
win.
As you can imagine the
laughs and jokes have
quietened down a little
bit since Sunda).
Sometimes you need a
kick in the teeth to get
going and it was a big kick
in the teeth, as everybody
knows, and we were eager to
bounce back.
Owen responds to Uniteds kick in the teeth
FOOTBALL
0
3
ALDERSHOT
MAN UNITED
BY JAMES GOLDMAN
FOOTBALL
2
1
ARSENAL
BOLTON
SPORT | IN BRIEF
France fined for Haka response
RUGBY UNION: France have been fined
2,500 for advancing towards the All
Blacks haka in the build-up to Sundays
World Cup final. The International Rugby
Board imposed the punishment after Les
Bleus encroached within the required
distance behind the 10-metre line in their
own half.
Gresini Honda sit out Valencia GP
MOTOR SPORT: Gresini Honda have
withdrawn from the Valencia MotoGP
next month following the death of their
rider Marco Simoncelli on Sunday. The
24-year-old Italian was killed when he
was struck by Colin Edwards and
Valentino Rossi after a crash in Malaysia.
Team boss Fausto Gresini said: The only
certainty is my team wont participate.
Texas close to world series glory
BASEBALL: The Texas Rangers now lead
3-2 in the seven-game World Series
against St Louis Cardianals after Mike
Napoli hit a two-run double in the eighth
inning to secure a 4-2 victory.
ENGLAND and Chelsea captain John
Terry last night vowed to clear his
name after being placed under inves-
tigation by the Football Association
over allegations he racially abused
QPR defender Anton Ferdinand.
The FA announced they would
begin to make enquiries after receiv-
ing a complaint about the alleged
incident (right) in Sundays west
London derby between the teams.
QPR released a statement in which
chairman Tony Fernandes con-
demned racism and promised to sup-
port any of their players subjected to
it, although the club declined to clar-
ify if they or Ferdinand had made the
complaint.
Terry, who has emphatically denied
the allegations since they surfaced
hours after Sundays match, said: I
welcome the FA enquiry and look for-
ward to clearing my name as soon as
possible.
The serious nature of the accu-
sation has demanded that the
FA, QPR and Ferdinand handle
the matter delicately. A com-
plaint has also been made to
police, who said on
Monday it was being
assessed.
The FA investiga-
tion came after 48
hours of specula-
tion over
whether the
matter would
be pursued.
Ferdinand
brother of
Terrys England
colleague Rio
met with QPR
officials yester-
day for the first
time since the
game in order to discuss his next step.
Television footage from
the fixture at Loftus
Road, which QPR won
1-0 and in which Chelsea
had two men sent off,
appears to show Terry, 30,
shouting the word black
followed by a four-letter
insult.
However the 71-cap
England defender
explained in a statement
on Sunday that he had
been repeat-
i n g
t h e
t e r m
because he wrongly
believed Ferdinand had
accused him of using it. I
thought Anton was
accusing me of using a
racist slur against him,
Terry said on Sunday.
I responded aggressively, saying that
I never used that term. I would never
say such a thing, and Im saddened
that people would think so.
Earlier yesterday, Chelsea manager
Andre Villas-Boas gave his unequivo-
cal backing to Terrys explanation
that the incident had been a misun-
derstanding that got out of hand,
adding for us the matter is over.The
FA said in a statement: The FA can
confirm it has received a complaint
relating to an alleged incident of
racist abuse in the QPR versus
Chelsea fixture at Loftus Road on 23
October 2011. The FA will now begin
to make enquiries into this matter.
QPR, in their statement, said they
were aware of an alleged racist inci-
dent.
Fernandes added: QPR does not
condone racism in any way. We will
provide our players with our unequiv-
ocal support when alleged incidents
like this occur.
Park provides the
spark as Arsenal
edge past Bolton
in Carling Cup
Sport
36
BY FRANK DALLERES
FOOTBALL
FA investigate Terry racism claim

Villas-Boas sticks
by ref criticism
CHELSEA boss Andre Villas-Boas is
unrepentant over his criticism of refer-
ee Chris Foy in Sundays defeat at QPR,
despite being asked to explain his
remarks to the Football Association.
Villas-Boas insists Foy, who sent off
Didier Drogba and Jose Bosingwa and
booked seven Chelsea players, was
card happy and extremely unfair. I
dont think I said anything I shouldnt
have, he said. I would never question
the referees integrity. But the fact is
that, at the moment, we are paying
heavily in terms of major decisions.
Villas-Boas has until Friday to respond
to the FA, as do the club over a charge
of failing to control their players.
Korean striker seals comeback win as Gunners
advance to the quarter-final: Report page 35
ITS A BIT OF A
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